Policyholders Disclosure Regulations (SOR/2010-234)

Interpretation

1 The following definitions apply in these Regulations.

Act

Act means the Insurance Companies Act. (Loi)

closed block

closed block means an account or sub-account that was created by a company as part of a conversion under section 237 of the Act and is closed to new business and maintained exclusively with respect to participating policies of eligible policyholders. (bloc fermé)

PART 1Participating Policies Disclosure

Content of Policy Respecting Participating Policy Dividends and Bonuses

2 A policy respecting participating policy dividends and bonuses established under paragraph 165(2)(e) of the Act shall include the following information:

• (a) a statement indicating

  • (i) that the dividends or bonuses are declared at the discretion of the board of directors of the company, and

  • (ii) that the company’s policy respecting participating policy dividends and bonuses may be amended from time to time at the discretion of the board of directors of the company;

• (b) the frequency with which experience and dividend and bonus scales are examined and, if necessary, adjusted, and the principal factors that, in the opinion of the board of directors of the company, would be expected to affect the amount of the dividends and bonuses declared under section 464 of the Act;

• (c) the principal factors that might cause the board of directors of the company to review its policy respecting participating policy dividends and bonuses;

• (d) a description of the basis upon which dividends and bonuses are allocated among different classes of participating policies;

• (e) a description of the principal sources of income considered for the purpose of declaring dividends and bonuses and, in the case of a mutual company, if income other than income derived from the participating business of the company is not considered, the use to which that other income is put; and

• (f) a description of how specific policyholder behaviour is reflected in the dividend or bonus scale.

Content of Management Policy

3 A participating account management policy established under paragraph 165(2)(e.1) of the Act shall include the following information:

• (a) a description of the participating account and its associated policies;

• (b) a description of the investment policy for the participating account;

• (c) a description of the method, under section 457 of the Act, for allocating investment income to the participating account;

• (d) a description of the method, under section 458 of the Act, for allocating expenses, including taxes, to the participating account;

• (e) a description of the company’s approach in respect of managing and using the surplus, if any, in the participating account;

• (f) the principal factors that might cause the board of directors of the company to change the policy;

• (g) if the company does not accept new business in the participating account, information on how the company would manage and dispose of the surplus, if any, in the participating account;

• (h) in the case of a converted company under section 237 of the Act, the measures taken by the company to ensure fairness to participating policyholders whose policies form part of a closed block; and

• (i) the percentage that the amount that the company intends to transfer to shareholders or a shareholder account of the company out of the company’s participating accounts in a financial year in accordance with section 461 of the Act represents of the total amount that the company intends to transfer to shareholders or a shareholder account of the company and participating policyholders from those participating accounts in that year in accordance with that section.

Information Required to Be Provided at Annual Meeting

4 For the purpose of paragraph 331(1)(a.1) of the Act, a company that has participating policyholders must provide the following information:

• (a) a summary of all the information required under sections 2 and 3;

• (b) a statement of changes for each participating account for the two financial years immediately preceding the annual meeting, showing such information and particulars as in the opinion of the directors of the company are necessary to present fairly, in accordance with the accounting principles referred to in subsection 331(4) of the Act, the financial position of the account as at the end of each financial year to which the statement relates and the results of the operations and changes in the financial position of the account for each financial year;

• (c) the surplus in each participating account of the company for the two financial years immediately preceding the annual meeting;

• (d) in the case of a converted company under section 237 of the Act, the amount by which the value of the assets in a closed block exceeds the amount of the policy liabilities in that closed block;

• (e) the amounts from each participating account that are invested in segregated funds of the company or its subsidiaries, and the performance of those funds for the two financial years immediately preceding the annual meeting, if applicable;

• (f) the actual amounts that have been transferred to shareholders or a shareholder account of the company out of the company’s participating accounts in accordance with section 461 of the Act in the two financial years immediately preceding the annual meeting;

• (g) the percentage that the amounts referred to in paragraph (f) represent of the total amount paid to shareholders or a shareholder account of the company and participating policyholders from the company’s participating accounts in accordance with section 461 of the Act, which, in the case of a converted company under section 237 of the Act, shall be calculated without taking into account any amounts paid out of a closed block, in the corresponding financial year;

• (h) a statement that the company’s policies referred to in sections 2 and 3 are available on request to a shareholder or participating policyholder and, on payment of a reasonable fee, to any other person; and

• (i) information on the manner in which the company’s policies referred to in sections 2 and 3 may be obtained from the company.

Additional Information Included with the Annual Financial Statement

5 If a company sends to participating policyholders the information required under section 4 it must include, with its annual financial statement to shareholders, a notice indicating how to proceed if the shareholder wishes to obtain a copy of the information from the company.

PART 2Adjustable Policies Disclosure

Interpretation

6 For the purpose of the definition adjustable policy in subection 2(1) of the Act, that term means an individual life insurance policy, other than a participating policy, that is issued by a life company and for which the company may at its sole discretion directly or indirectly change the premium or charge for insurance, the amount of insurance or the policy’s surrender value, but does not include

• (a) a policy under which the premium or charge for insurance, amounts of insurance and surrender values are stated in the policy or a schedule to the policy, or can be determined under the terms of the policy or a schedule to the policy;

• (b) a group insurance policy including a creditor’s group insurance policy;

• (c) an annuity contract, including a deferred annuity or a savings, investment or capital accumulation plan under which the life company has undertaken to provide an annuity; or

• (d) a reinsurance policy.

Information to the Policyholder

7 For the purpose of subsection 464.1(2) of the Act, where a change has been made in an adjustable policy in the preceding 12 months, the company shall, no later than the end of the 30-day period following the policy anniversary that falls immediately after that 12-month period, send a notice to the policyholder containing a brief summary of the change.

Coming into Force

8 These Regulations come into force on June 1, 2011.