(b) the company or the subsidiary acquired the investment or interest under section 499 as a result of a default referred to in that section in respect of a loan that was defined by a regulation made under section 507 to be an interest in real property.
	271. Paragraph 508(d) of the Act is replaced by the following:
	(d) all ownership interests in unincorporated entities, other than ownership interests acquired under section 495 in entities in which the company has a substantial investment,
	272. Subparagraph 509(a)(ii) of the Act is replaced by the following:
	(ii) ownership interests in an unincorporated entity, other than ownership interests acquired under section 495 in an entity in which the company has a substantial investment , or
	273. Section 511 of the Act is renumbered as subsection 511(1) and is amended by adding the following:
Approved holding of investment	(2) The company may continue to hold the substantial investment after the end of the period referred to in subsection 498(1) or (2) that applies in respect of the investment, including any extension of the period granted under subsection 498(4), with the approval in writing of the Minister obtained before the end of that period or extended period.
	274. Section 512 of the Act is replaced by the following:
Assets transactions	512. (1) A company shall not at any time, without the prior written approval of the Superintendent, directly or indirectly acquire assets from a person, or directly or indirectly transfer assets to a person, if
	A + B > C
	where
	A is the value of the assets;
	B is the total value of all assets that the company directly or indirectly acquired from, or directly or indirectly transferred to, that person in the twelve months ending immediately before that time; and
	C is ten per cent of the total value of the assets of the company, as shown in the last annual financial statement of the company prepared before that time.
Exception	(2) Subsection (1) does not apply to
	(a) an asset that is a debt obligation referred to in subparagraphs (b)(i) to (v) of the definition ``commercial loan'' in subsection 490(1); or
	(b) a transaction or series of transactions by a company with another financial institution as a result of the company's participation in one or more syndicated loans with that financial institution.
	275. The portion of subsection 516(1) of the Act before paragraph (a) is replaced by the following:
Adequacy of assets - property and casualty companies	516. (1) A property and casualty company shall, in relation to its operations, maintain assets the total value of which, when determined in accordance with the accounting principles referred to in subsection 331(4) , or when determined on the basis of the market value of those assets, whichever way produces the greater total value, is at least equal to the amount calculated by subtracting from the total of the following amounts an amount in respect of risks against which the company is reinsured that is determined in accordance with the prescribed formula:
	276. The Act is amended by adding the following before section 518:
Definition of ``senior officer''	517.1 For the purposes of this Part, a ``senior officer'' of a body corporate is a person who is
	(a) a director of the body corporate who is a full-time employee of the body corporate;
	(b) the chief executive officer, chief operating officer, president, secretary, treasurer, controller, chief financial officer, chief accountant, chief auditor or chief actuary of the body corporate;
	(c) a natural person who performs functions for the body corporate similar to those performed by a person referred to in paragraph (b);
	(d) the head of the strategic planning unit of the body corporate;
	(e) the head of the unit of the body corporate that provides legal services or human resources services to the body corporate; or
	(f) any other officer reporting directly to the body corporate's board of directors, chief executive officer or chief operating officer.
	277. (1) Paragraph 518(1)(b) of the Act is replaced by the following:
	(b) is a director or senior officer of the company or of a body corporate that controls the company or is acting in a similar capacity in respect of an unincorporated entity that controls the company;
	(2) Paragraph 518(1)(d) of the Act is replaced by the following:
	(d) is an entity that is controlled by a person referred to in any of paragraphs (a) to (c) ;
	(3) Paragraphs 518(1)(f) to (h) of the Act are replaced by the following:
	(f) is an entity in which the spouse, or a child who is less than eighteen years of age, of a person who controls the company has a substantial investment; or
	(g) is a person, or a member of a class of persons, designated under subsection (4) or (5) as, or deemed under subsection (6) to be, a related party of the company.
	(4) Subsection 518(2) of the Act is replaced by the following:
Exception - subsidiaries and substantial investments of companies	(2) If an entity in which a company has a substantial investment would, but for this subsection, be a related party of the company only because a person who controls the company controls the entity or has a substantial investment in the entity, and the person does not control the entity or have a substantial investment in the entity otherwise than through the person's controlling interest in the company, the entity is not a related party of the company.
	(5) Subsections 518(7) to (9) of the Act are replaced by the following:
Holders of exempted shares	(7) The Superintendent may, by order, designate a class of non-voting shares of a company for the purpose of this subsection. If a class of non-voting shares of a company is so designated , a person is deemed, notwithstanding paragraph (1)(a), not to be a related party of the company if the person would otherwise be a related party of the company only because the person has a significant interest in that class.
Determi- nation of substantial investment	(8) For the purpose of determining whether an entity or a person has a substantial investment for the purposes of paragraph (1)(e) or (f), the references to ``control'' and ``controlled'' in section 10 shall be construed as references to ``control, within the meaning of section 3, determined without regard to paragraph 3(1)(d)'' and ``controlled, within the meaning of section 3, determined without regard to paragraph 3(1)(d)'', respectively.
Determi- nation of control	(9) For the purposes of paragraph (1)(d) , ``controlled'' means ``controlled, within the meaning of section 3, determined without regard to paragraph 3(1)(d)''.
1991, c. 48, par. 495(1)(b)	278. Subsections 519(4) and (5) of the Act are replaced by the following:
Exception for holding body corporate	(4) A holding body corporate of a company is not a related party of the company if the holding body corporate is
	(a) a Canadian financial institution that is referred to in any of paragraphs (a) to (d) of the definition ``financial institution'' in subsection 2(1); or
	(b) a central cooperative credit society for which an order has been made under subsection 473(1) of the Cooperative Credit Associations Act.
Substantial investment - related party exception	(5) Where a holding body corporate of a company is, because of subsection (4), not a related party of the company, any entity in which the holding body corporate has a substantial investment is not a related party of the company if no related party of the company has a substantial investment in the entity otherwise than through the control of the holding body corporate.
	279. Subsection 528(3) of the Act is replaced by the following:
Service corporations	(3) Notwithstanding subsection 521(2), a company is deemed not to have indirectly entered into a transaction in respect of which this Part applies if the transaction is entered into by a service corporation, as defined in subsection 490(1) , that is controlled by the company and the transaction is on terms and conditions at least as favourable to the company as market terms and conditions, as defined in subsection 534(2).
	280. (1) Paragraphs 529(1)(a) and (b) of the Act are replaced by the following:
	(a) a natural person who is a related party of the company only because the person is
	(i) a director or senior officer of the company or of an entity that controls the company, or
	(ii) the spouse, or a child who is less than eighteen years of age, of a director or senior officer of the company or of an entity that controls the company; or
	(b) an entity that is a related party of the company only because the entity is controlled by
	(i) a director or senior officer of the company or of an entity that controls the company, or
	(ii) the spouse, or a child who is less than eighteen years of age, of a director or senior officer referred to in subparagraph (i) .
	(2) Subsection 529(2) of the Act is replaced by the following:
Loans to full-time officers	(2) A company may, with respect to a related party of the company referred to in subsection (1) who is a full-time senior officer of the company, make, take an assignment of or otherwise acquire a loan to the related party only if the aggregate principal amount of all outstanding loans to the related party that are held by the company and its subsidiaries, together with the principal amount of the proposed loan, does not exceed the greater of twice the annual salary of the related party and $100,000.
	(3) Subsections 529(4) to (6) of the Act are replaced by the following:
Preferred terms - loan to senior officer	(4) Notwithstanding section 534, a company may make a loan, other than a margin loan, to a senior officer of the company on terms and conditions more favourable to the officer than market terms and conditions, as defined in subsection 534(2) , if the terms and conditions of the loan have been approved by the conduct review committee of the company.
Preferred terms - loan to spouse of senior officer	(5) Notwithstanding section 534, a company may make a loan referred to in paragraph 525(b) to the spouse of a senior officer of the company on terms and conditions more favourable to the spouse of that officer than market terms and conditions, as defined in subsection 534(2) , if the terms and conditions of the loan have been approved by the conduct review committee of the company.
Preferred terms - other financial services	(6) Notwithstanding section 534, a company may offer financial services, other than loans or guarantees, to a senior officer of the company, or to the spouse, or a child who is less than eighteen years of age, of a senior officer of the company, on terms and conditions more favourable than market terms and conditions, as defined in subsection 534(2), if
	(a) the financial services are offered by the company to employees of the company on those favourable terms and conditions; and
	(b) the conduct review committee of the company has approved the practice of making those financial services available on those favourable terms and conditions to senior officers of the company or to the spouses, or the children under eighteen years of age, of senior officers of the company.
	281. Subparagraph 530(1)(d)(ii) of the Act is replaced by the following:
	(ii) if the related party is a full-time senior officer of the company, loans to the related party that are permitted by subsection 529(2),
	282. Section 531 of the Act is replaced by the following:
Margin loans	531. The Superintendent may establish terms and conditions with respect to the making by a company of margin loans to a director or senior officer of the company.
	283. Sections 535 and 536 of the Act are repealed.
	284. Section 538 of the Act is replaced by the following:
Notice to Superinten- dent	538. If a company has entered into a transaction that the company is prohibited by this Part from entering into, or a company has entered into a transaction for which approval is required under subsection 530(1) without having obtained the approval, the company shall, on becoming aware of that fact, notify the Superintendent without delay .
1996, c. 6, par. 167(1)(h)	285. Section 542 of the Act is replaced by the following:
Society's business	542. (1) Except as otherwise permitted by this Act, a society shall not carry on a business that does not relate to the business of the insuring of risks in respect of its members or the spouses or children of its members.
Additional activities	(2) A society may
	(a) with the consent of the Minister, engage in activities that are reasonably ancillary to the society's insurance business;
	(b) engage in fraternal, benevolent or religious activities;
	(c) hold, manage and otherwise deal with real property;
	(d) act as an agent for a person, or enter into any other arrangement with a person, in respect of the provision of a service by
	(i) a financial institution that is primarily engaged in an insurance business, or
	(ii) a body corporate in which a society is permitted by section 554 to have a substantial investment; and
	(e) refer persons to a financial institution or body corporate described in paragraph (d).
By-law required	(3) A society shall not carry on the business of insuring risks unless it is authorized to do so by a by-law of the society passed on the recommendation of the society's actuary and approved by the Superintendent.
Classes of insurance	(4) A society shall not insure a risk that is not within a class of insurance that is specified in the order of the Superintendent approving the commencement and carrying on of business by the society. The classes that may be specified in that order are the class of life insurance, the class of accident and sickness insurance or both of those classes.
Restriction on leasing	(5) A society shall not engage in Canada in any financial leasing of personal property.
Separate accounts	542.01 A society shall maintain a separate account in respect of each class of insurance in which it is authorized to insure risks.
Actuary's certificate	542.02 A society's actuary shall certify whether the society's rates of benefit are reasonable, and whether the amounts of insurance to be issued by the society are reasonable, having regard to
	(a) the conditions and circumstances for the issuance of policies by the society;
	(b) the sufficiency of the rates of contribution to provide for those benefits and those amounts of insurance; and
	(c) the reasonableness of the loan values, cash values and other equities that may be provided under the policies.
Segregated fund restriction	542.03 (1) Only a society that is authorized to insure risks within the class of life insurance may