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This enactment amends the Insurance Companies Act to facilitate
the establishment of a demutualization regime for mutual insurance
companies proposing to convert to companies with common shares.
The amendments set out the framework governing an application by a
mutual insurance company to the Minister of Finance for approval of a
conversion proposal and for the issuance of letters patent of conversion,
including requirements governing the holding of a special meeting of
policyholders.
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This enactment also amends provisions of the Insurance Companies
Act concerning the preparation of policyholder lists and reinsurance
transactions entered into by foreign companies in the ordinary course
of business.
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Clause 1: The relevant portion of subsection 142(1)
reads as follows:
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0142. (1) For the purpose of determining
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(d) who is a policyholder for any other purpose except
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the directors may fix in advance a date as the record date for the
determination of shareholders or policyholders, but the record date so
fixed shall not precede by more than fifty days the particular action to
be taken.
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Clause 2: (1) and (2) The relevant portion of
subsection 143(1) reads as follows:
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143. (1) Notice of the time and place of a meeting of shareholders or
policyholders of a company shall be sent not less than twenty-one days
or more than fifty days before the meeting to
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(b) each policyholder who is determined under subsection (1.4) or
(1.6) to be a policyholder entitled to notice under this paragraph, if
no business referred to in any of subparagraphs (c)(i) to (iv) is to be
dealt with at the meeting;
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(c) each policyholder entitled to vote at the meeting, if any of the
following business is to be dealt with at the meeting:
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(iv) approving a proposal to convert the company from a mutual
company into a company with common shares;
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Clause 3: Subsection 149(1.2) reads as follows:
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(1.2) If a record date is fixed under subsection 142(2.1), the list
referred to in paragraph (1)(b) shall be prepared not later than the day
on which the meeting is held. If no record date is fixed under that
subsection, the list shall be prepared
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(a) at the close of business on the day before the day on which the
notice of the meeting is given; or
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(b) if no notice is given, on the day on which the meeting is held.
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Clause 4: New.
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Clause 5: (1) Subsections 237(1.1) to (1.5) are new.
Subsection 237(1) reads as follows:
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237. (1) On the application of a mutual company made in accordance
with the regulations, the Minister may approve a proposal to convert the
company into a company with common shares.
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(2) and (3) Paragraphs 237(2)(a.1), (a.2) and (c.1) to
(c.4) are new. The relevant portion of subsection 237(2)
reads as follows:
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(2) The Governor in Council may make regulations
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(a) respecting the form and content of an application referred to in
subsection (1);
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(b) concerning the fair and equitable treatment of policyholders
under a proposal referred to in subsection (1);
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(4) Subsection 237(3) reads as follows:
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(3) A regulation made under subsection (2) may provide that the
Superintendent may, by order, on such terms and conditions as the
Superintendent considers appropriate, exempt a company from
prescribed requirements of that regulation.
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Clause 6: Section 237.1 reads as follows:
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237.1 Letters patent issued to effect a proposal to convert a company
from a mutual company into a company with common shares become
effective on the day stated in the letters patent, and on that day
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(a) the company ceases to be a mutual company; and
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(b) the policyholders of the company cease to have any rights with
respect to the company as a mutual company or any interest in the
company as a mutual company.
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Clause 7: Subsection 407(4) reads as follows:
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(4) Notwithstanding subsection (1), no person, or entity controlled
by a person, shall purchase or otherwise acquire any share of a company
that has been converted from a mutual company into a company with
common shares, or purchase or acquire control of any entity that holds
any share of such a company, if the result thereof would be that the
company would not be widely held within the meaning of the
regulations.
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Clause 8: New. The relevant portion of section 462
reads as follows:
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462. The only transfers that may be made from a participating
account maintained pursuant to section 456 are
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Clause 9: New.
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