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Segregated
funds required
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(2) A society that issues policies described
in paragraph (1)(a) or accepts or retains
amounts described in paragraph (1)(b) shall
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Creation and
maintenance
of segregated
funds
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(3) For the purpose of establishing or
maintaining a segregated fund required by
subsection (2), a society may, subject to the
regulations, transfer an amount to the separate
account maintained in respect of the
segregated fund.
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Transfers
from
segregated
funds
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(4) A society may, with the approval of the
Superintendent, return the current value of an
amount transferred under subsection (3) to the
account from which the amount was
transferred.
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Claims against
segregated
funds
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(5) A claim against a segregated fund
maintained under subsection (2) under a
policy, or for an amount in respect of which the
fund is maintained, has priority over any other
claim against the assets of that fund, including
the claims referred to in section 161 of the
Winding-up and Restructuring Act, except to
the extent that the payment of that other claim
is secured by a security interest in or on a
specific, identifiable asset of the segregated
fund.
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Where fund
can satisfy
claim
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(6) The liability of a society under a policy
or for an amount in respect of which a
segregated fund is maintained under
subsection (2) does not, except to the extent
that the assets of the fund are insufficient to
satisfy a claim for any minimum amount that
the society agrees to pay under the policy or in
respect of the amount, give rise to a claim
against any assets of the society, other than the
assets of that fund.
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Where fund
cannot satisfy
claim
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(7) To the extent that the assets of the fund
are insufficient to satisfy the liability of a
society under a policy or for an amount in
respect of which a segregated fund is
maintained under subsection (2), that liability
gives rise to a claim against the assets of the
society, other than the assets of that fund, and
that claim has the priority referred to in
subsection 161(2) of the Winding-up and
Restructuring Act.
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Regulations
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542.04 (1) The Governor in Council may
make regulations limiting the extent to which
a society may cause itself to be reinsured
against risks undertaken by it.
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Regulation
may delegate
to Superinten- dent
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(2) A regulation made under subsection (1)
may provide that the Superintendent may, by
order, determine the matters or exercise the
discretion that the regulation specifies.
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Annuities
restriction
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542.05 A society may issue annuities in
Canada only if it is authorized to insure risks
within the class of life insurance.
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Residential
mortgages
restriction
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542.06 (1) A society shall not make a loan
in Canada on the security of residential
property in Canada for the purpose of
purchasing, renovating or improving the
property, if the amount of the loan, together
with the amount then outstanding of any
mortgage having an equal or prior claim
against the property, would exceed
seventy-five per cent of the value of the
property at the time of the loan.
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Exception
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(2) Subsection (1) does not apply in respect
of
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Restriction on
security
interests
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542.07 (1) Subject to subsection (3), a
society shall not create a security interest in
any property of the society as security for an
obligation of the society unless
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Encumbered
property
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(2) A society shall notify the
Superintendent in writing of any beneficial
interest in real and personal property acquired
by the society, other than by way of
realization, that is subject to a security
interest.
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Exceptions
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(3) Subsection (1) does not apply in respect
of security interests created on
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Restriction on
receivers
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542.08 A society shall not grant to a person
the right to appoint a receiver or a receiver and
manager of the property or business of the
society.
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Restriction on
partnerships
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542.09 Except by order of the
Superintendent, a society shall not be a
general partner in a limited partnership or a
partner in any partnership other than a limited
partnership.
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General
restriction
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542.1 (1) A society shall not, and shall not
permit its prescribed subsidiaries to, enter into
any debt obligation, within the meaning
assigned to that expression by the regulations,
or permit its prescribed subsidiaries to issue
any share, other than a common share, if as a
result the aggregate of the total debt
obligations of the society, determined in the
prescribed manner, and the stated capital of
the society would exceed the prescribed
percentage of the total assets of the society.
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Exception
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(2) A society need not include in the
aggregate amount calculated for the purpose
of subsection (1) the value of any debt
obligation or the stated capital of any shares if
the value of the debt obligation or the stated
capital of the shares is included as part of the
regulatory capital of the society.
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Restriction on
guarantees
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542.11 (1) A society shall not guarantee on
behalf of any person other than itself the
payment or repayment of any sum of money
unless
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Exception
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(2) Paragraph (1)(a) does not apply where
the person on whose behalf the society has
undertaken to guarantee a payment or
repayment is a subsidiary of the society.
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Regulations
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(3) The Governor in Council may make
regulations imposing terms and conditions in
respect of guarantees permitted by this
section.
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Prepayment
protected
|
542.12 (1) A society shall not make a loan
to a natural person if the loan would be
repayable in Canada and the terms would
prohibit prepayment of the money advanced
or any instalment of that money before its due
date.
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Non-appli- cation of subsection (1)
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(2) Subsection (1) does not apply in respect
of a loan
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286. (1) Subsection 544(1) of the French
version of the Act is replaced by the
following:
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Siège
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544. (1) La société de secours maintient en
permanence un siège au Canada, au lieu
indiqué dans son acte constitutif ou ses
règlements administratifs.
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(2) Section 544 of the Act is amended by
adding the following after subsection (2):
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Change of
head office
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(2.1) The supreme governing body of a
society may, by resolution passed and
approved by at least two-thirds of the votes
cast at a meeting, change the address of the
head office within the place specified in the
society's by-laws.
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Notice of
change of
address
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(2.2) If there is a change of address of the
head office of a society, the society shall send
a notice of the change to the Superintendent
within fifteen days after the change.
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287. Section 548 of the Act is amended by
adding the following after subsection (2):
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Copies to
Superinten- dent
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(3) Within thirty days after a by-law of a
society comes into effect or is amended, the
society shall send a copy of the by-law or the
amendment to the Superintendent. A society
shall send to the Superintendent, within six
months after the coming into force of this
subsection, its by-laws that are in effect on the
coming into force of this subsection.
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288. The portion of subsection 549(1) of
the Act before paragraph (a) is replaced by
the following:
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Return
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549. (1) Every society shall, each year
before June 30 of that year, provide the
Superintendent with a return showing
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289. Section 550 of the Act is amended by
striking out the word ``or'' at the end of
paragraph (a), by adding the word ``or'' at
the end of paragraph (b) and by adding the
following after paragraph (b):
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290. (1) Subsection 552(1) of the Act is
replaced by the following:
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Restriction on
substantial
investments
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552. (1) Subject to subsections (1.1) and
(2), no society shall acquire or increase a
substantial investment in any entity, other than
an entity referred to in section 554 or 555.
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Exception -
indirect
investment
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(1.1) A society may acquire or increase a
substantial investment in an entity, other than
an entity referred to in section 554 or 555, by
way of
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(2) The portion of subsection 552(2) of the
Act before paragraph (a) is replaced by the
following:
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Exception -
temporary
investments,
realizations
and loan
work-outs
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(2) A society may acquire or increase a
substantial investment in an entity by way of
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291. (1) Paragraph 554(1)(a) of the Act is
replaced by the following:
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(2) Subsection 554(1) of the Act is
amended by adding the following after
paragraph (e):
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(3) Subsection 554(1) of the Act is
amended by adding the following after
paragraph (g):
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(4) Paragraph 554(2)(b) of the Act is
replaced by the following:
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(5) Section 554 of the Act is amended by
adding the following after subsection (2):
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Approval for
indirect
investments
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(2.1) For the purpose of paragraph (2)(a), if
a society obtains the prior written approval of
the Minister for the society to acquire or
increase a substantial investment in a body
corporate that is engaged in an insurance
business and through that acquisition or
increase the society indirectly acquires or
increases a substantial investment in another
body corporate referred to in any of
paragraphs (1)(b) to (i), and that indirect
acquisition or increase is disclosed in writing
to the Minister before that approval is
obtained, the society is deemed to have
obtained the prior written approval of the
Minister for that indirect acquisition or
increase.
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Other
permitted
substantial
investments
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(2.2) Subject to any terms and conditions
that may be imposed by the Minister, a society
may, with the approval of the Minister, acquire
or increase a substantial investment in an
entity that is not a body corporate if the
activities of the entity are the same as or
substantially similar to those of a body
corporate referred to in any of paragraphs
(1)(b) to (i).
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(6) Subsection 554(4) of the Act is
repealed.
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292. (1) The portion of subsection 558(1)
of the Act after paragraph (d) is replaced by
the following:
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but the society shall, within five years after
acquiring the shares or ownership interests, do
all things necessary to ensure that the society
does not have a substantial investment in any
entity referred to in paragraphs (a) to (d).
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(2) Subsections 558(2) and (3) of the Act
are replaced by the following:
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Transitional
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(2) Notwithstanding subsection (1), where
on September 27, 1990 a former-Act society
had an investment in an entity that is a
substantial investment within the meaning of
section 10 and the society later increases that
substantial investment by way of an
investment made under subsection (1), the
society shall, within five years after
increasing the substantial investment, do all
things necessary to ensure that its substantial
investment in the entity is no greater than it
was on September 27, 1990.
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Extension
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(3) The Superintendent may, in the case of
any particular society, extend the period of
five years referred to in subsections (1) and (2)
for such further period or periods, and on such
terms and conditions, as the Superintendent
considers necessary.
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Exception
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(4) Where under subsection (1) a society
acquires a substantial investment in an entity
that it would otherwise be permitted to acquire
or increase under section 554, the society may
continue to hold the substantial investment if
the approval in writing of the Minister is
obtained before the end of the period referred
to in subsection (1) or (2), including any
extension of it granted under subsection (3).
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293. Subsections 559(2) to (4) of the Act
are replaced by the following:
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Disposition
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(2) Where a society acquires a substantial
investment in an entity through the realization
of a security interest held by the society, the
society shall, within five years after the day on
which the substantial investment is acquired,
do all things necessary to ensure that the
society no longer has a substantial investment
in the entity.
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Transitional
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(3) Notwithstanding subsection (2), where
on September 27, 1990 a former-Act society
had an investment in an entity that is a
substantial investment within the meaning of
section 10 and the society later increases that
substantial investment by way of the
realization of a security interest pursuant to
subsection (1), the society shall, within five
years after increasing the substantial
investment, do all things necessary to ensure
that its substantial investment in the entity is
no greater than it was on September 27, 1990.
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