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(3) Section 499 of the Act is amended by
adding the following after subsection (5):
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Exception
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(6) Where under subsection (1) a company
acquires a substantial investment in an entity
that it would otherwise be permitted to acquire
or increase under section 495, the company
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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268. Subsections 500(2) to (4) of the Act
are replaced by the following:
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Disposition
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(2) Subject to subsection 77(2), where a
company acquires a substantial investment in
an entity by way of the realization of a security
interest held by the company, the company
shall, within five years after the day on which
the substantial investment is acquired, do all
things necessary to ensure that the company
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 company
had an investment in an entity that is a
substantial investment within the meaning of
section 10 and the company later increases
that substantial investment by way of the
realization of a security interest under
subsection (1), the company 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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(4) The Superintendent may, in the case of
any particular company, extend the period of
five years referred to in subsections (2) and (3)
for any further period or periods, and on any
terms and conditions, that the Superintendent
considers necessary.
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269. (1) Paragraph 501(a) of the English
version of the Act is replaced by the
following:
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(2) Paragraph 501(b) of the Act is
replaced by the following:
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270. (1) Paragraph 502(1)(b) of the Act is
replaced by the following:
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(2) Subsection 502(3) of the Act is
replaced by the following:
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Exception
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(3) Subsection (1) does not apply to an
investment or interest described in that
subsection if the investment or interest is
defined by a regulation made under section
507 to be an interest in real property and
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271. Paragraph 508(d) of the Act is
replaced by the following:
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272. Subparagraph 509(a)(ii) of the Act is
replaced by the following:
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273. Section 511 of the Act is renumbered
as subsection 511(1) and is amended by
adding the following:
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Approved
holding of
investment
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(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.
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274. Section 512 of the Act is replaced by
the following:
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Assets
transactions
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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
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A + B > C
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where
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A is the value of the assets;
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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
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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.
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Exception
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(2) Subsection (1) does not apply to
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275. The portion of subsection 516(1) of
the Act before paragraph (a) is replaced by
the following:
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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:
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276. The Act is amended by adding the
following before section 518:
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Definition of
``senior
officer''
|
517.1 For the purposes of this Part, a
``senior officer'' of a body corporate is a
person who is
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277. (1) Paragraph 518(1)(b) of the Act is
replaced by the following:
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(2) Paragraph 518(1)(d) of the Act is
replaced by the following:
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(3) Paragraphs 518(1)(f) to (h) of the Act
are replaced by the following:
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(4) Subsection 518(2) of the Act is
replaced by the following:
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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.
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(5) Subsections 518(7) to (9) of the Act are
replaced by the following:
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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.
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Determi- nation of substantial investment
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(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.
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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)''.
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1991, c. 48,
par. 495(1)(b)
|
278. Subsections 519(4) and (5) of the Act
are replaced by the following:
|
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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
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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.
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279. Subsection 528(3) of the Act is
replaced by the following:
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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).
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280. (1) Paragraphs 529(1)(a) and (b) of
the Act are replaced by the following:
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(2) Subsection 529(2) of the Act is
replaced by the following:
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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.
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(3) Subsections 529(4) to (6) of the Act are
replaced by the following:
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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.
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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.
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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
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281. Subparagraph 530(1)(d)(ii) of the
Act is replaced by the following:
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282. Section 531 of the Act is replaced by
the following:
|
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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.
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283. Sections 535 and 536 of the Act are
repealed.
|
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|
284. Section 538 of the Act is replaced by
the following:
|
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Notice to
Superin- tendent
|
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.
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1996, c. 6,
par. 167(1)(h)
|
285. Section 542 of the Act is replaced by
the following:
|
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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.
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