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Formalities of Incorporation
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| Incorporation
of insurance
holding
company
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708. On the application of one or more
persons made in accordance with this Part, the
Minister may, subject to this Division, issue
letters patent incorporating an insurance
holding company.
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| Restrictions
on
incorporation
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709. Letters patent incorporating an
insurance holding company may not be issued
if the application therefor is made by or on
behalf of
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(a) Her Majesty in right of Canada or in
right of a province, an agency of Her
Majesty in either of those rights, or an entity
controlled by Her Majesty in either of those
rights;
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(b) the government of a foreign country or
any political subdivision thereof;
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(c) an agency of the government of a foreign
country or any political subdivision thereof;
or
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(d) an entity, other than a foreign institution
or any subsidiary of a foreign institution,
that is controlled by the government of a
foreign country or any political subdivision
thereof.
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| National
treatment
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710. (1) If a proposed insurance holding
company would be a subsidiary of a foreign
institution that is engaged in the insurance
business, letters patent to incorporate the
insurance holding company may not be issued
unless the Minister is satisfied that, if the
application is made by a non-WTO Member
foreign institution, treatment as favourable for
insurance holding companies to which this
Act applies exists or will be provided in the
jurisdiction in which the foreign institution
principally carries on business, either directly
or through a subsidiary.
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| Part XII of the
Bank Act
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(2) Nothing in subsection (1) affects the
operation of Part XII of the Bank Act.
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| Application
for
incorporation
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711. An application for letters patent to
incorporate an insurance holding company
setting out the names of the first directors of
the insurance holding company shall be filed
with the Superintendent, together with such
other information, material and evidence as
the Superintendent may require.
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| Matters for
consideration
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712. Before issuing letters patent to
incorporate an insurance holding company,
the Minister shall take into account all matters
that the Minister considers relevant to the
application, including
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(a) the nature and sufficiency of the
financial resources of the applicant or
applicants as a source of continuing
financial support for the company that is
proposed to be its subsidiary;
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(b) the soundness and feasibility of the
plans of the applicant or applicants for the
future conduct and development of the
business of the company that is proposed to
be its subsidiary;
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(c) the business record and experience of
the applicant or applicants;
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(d) the character and integrity of the
applicant or applicants or, if the applicant or
any of the applicants is a body corporate, its
reputation for being operated in a manner
that is consistent with the standards of good
character and integrity;
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(e) whether the insurance holding company
will be operated responsibly by persons
with the competence and experience
suitable for involvement in the operation of
a financial institution;
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(f) the impact of any integration of the
businesses and operations of the applicant
or applicants with those of the insurance
holding company and its affiliates on the
conduct of those businesses and operations;
and
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(g) the best interests of the financial system
in Canada.
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| Contents of
letters patent
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713. (1) There shall be set out in the letters
patent incorporating an insurance holding
company
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(a) the name of the insurance holding
company;
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(b) the place in Canada where the head
office of the insurance holding company is
to be situated; and
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(c) the date that the insurance holding
company came, or is to come, into
existence.
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| Provisions in
letters patent
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(2) The Minister may set out in the letters
patent incorporating an insurance holding
company any provision not contrary to this
Act that the Minister considers advisable in
order to take into account the particular
circumstances of the proposed insurance
holding company.
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| Terms and
conditions
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(3) The Minister may impose such terms
and conditions in respect of the issuance of
letters patent incorporating an insurance
holding company as the Minister considers
necessary or appropriate.
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| Letters patent
of
incorporation
on application
of life
company
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714. (1) If the Minister, under section 708,
issues letters patent incorporating an
insurance holding company on the application
of a life company, including a converted
company, there may, on the request of the
company, and with the approval of the
Minister, be included in the letters patent of
incorporation of the insurance holding
company a provision deeming shares of the
insurance holding company to be issued, on a
share for share basis, to all shareholders of the
company in exchange for all the issued and
outstanding shares of the company.
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| Effect of
provision
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(2) Shares of an insurance holding company
deemed to be issued under subsection (1) are
subject to the same designation, rights,
privileges and restrictions or conditions and,
subject to any agreement to the contrary, to the
same charges, encumbrances and other
restrictions as the shares of the company for
which they are exchanged and the shares of the
company, on the issuance of the letters patent,
become the property of the insurance holding
company free and clear of any charge,
encumbrance or other restriction.
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| Effect of
provision
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(3) An exchange of shares of a company
referred to in subsection (1) under a provision
included in the letters patent incorporating an
insurance holding company does not deprive
a person who was a holder of shares of the
company immediately before the exchange of
any right or privilege with respect to the shares
or relieve the person of any liability in respect
of the shares, but that right or privilege must
be exercised in accordance with this Act.
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| Transfer and
voting of
company
shares
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(4) Despite subsection (3), no share of an
insurance holding company that is deemed to
be issued under a provision included in the
letters patent incorporating an insurance
holding company may subsequently be
transferred or voted contrary to this Act.
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| Shareholder
and
policyholder
approval
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(5) No provision described in subsection (1)
may be included in letters patent issued under
section 708 unless the application for the
letters patent is accompanied by evidence that
the request for the provision was approved by
a special resolution of the shareholders and the
policyholders of the company who are entitled
to vote at a meeting of shareholders and
policyholders called to consider the
application.
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| Exchange of
share
certificates
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(6) If, under a provision included in the
letters patent incorporating an insurance
holding company, a share exchange is deemed
to have taken place, the insurance holding
company shall, within ninety days after the
issuance of the letters patent, make provision
for the issue of share certificates representing
shares of the insurance holding company and
for the exchange of those certificates for share
certificates representing the shares of the
company that were outstanding on the
effective date of the letters patent.
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| Proposal
involving
fundamental
change
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715. (1) On application, made in
accordance with the regulations, by a life
company, including a converted company, to
give effect to a proposal to incorporate an
insurance holding company as the holding
body corporate of the company, to continue a
body corporate as an insurance holding
company of the company or to amalgamate
two or more bodies corporate and continue
those bodies corporate as an insurance holding
company of the company - and to make any
other fundamental change to the company,
including an exchange of any or all of the
shares of the company for shares of the
insurance holding company -, the Minister
may, to give effect to the proposal,
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(a) include in the letters patent of the
insurance holding company issued under
section 708, 721 or 863 any provision the
Minister considers necessary; or
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(b) despite any provision of the Act
specified in regulations made under
paragraph (2)(e), give any approval that the
Minister considers necessary.
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| Regulations
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(2) The Governor in Council may make
regulations
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(a) respecting applications referred to in
subsection (1), including their form and the
information to be contained in them, and
authorizing the Superintendent to require
additional information in respect of such
applications;
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(b) respecting proposals to which
subsection (1) applies, including the
information to be contained in the proposals
and the times within which the transactions
involved in them must occur;
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(c) respecting the procedures to be followed
by the company that makes an application
under subsection (1);
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(d) respecting the approval, confirmation or
authorization, if any, of all or any portion of
proposals to which subsection (1) applies,
and including the approval of shareholders
and policyholders and including the terms
and conditions of those approvals,
confirmations or authorizations and their
effect; and
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(e) specifying provisions of the Act for the
purpose of paragraph (1)(b).
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| Notice of
issue of letters
patent
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716. The Superintendent shall cause to be
published in the Canada Gazette a notice of
the issuance of letters patent incorporating an
insurance holding company.
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| First directors
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717. The first directors of an insurance
holding company are the directors named in
the application for letters patent to incorporate
the insurance holding company.
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| Effect of
letters patent
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718. An insurance holding company comes
into existence on the date provided therefor in
its letters patent.
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Continuance
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| Federal
corporations
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719. (1) A body corporate incorporated
under the Canada Business Corporations Act
or any other Act of Parliament, including a
company, may apply to the Minister for letters
patent continuing the body corporate as an
insurance holding company under this Part.
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| Other
corporations
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(2) A body corporate incorporated
otherwise than by or under an Act of
Parliament may, if so authorized by the laws
of the jurisdiction where it is incorporated,
apply to the Minister for letters patent
continuing the body corporate as an insurance
holding company under this Part.
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| Application
for
continuance
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720. (1) Where a body corporate applies for
letters patent under subsection 719(1) or (2),
sections 709 to 712 apply in respect of the
application, with such modifications as the
circumstances require.
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| Special
resolution
approval
|
(2) Where a body corporate applies for
letters patent under subsection 719(1) or (2),
the application must be duly authorized by a
special resolution.
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| Copy of
special
resolution
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(3) A copy of the special resolution referred
to in subsection (2) shall be filed with the
application.
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| Power to issue
letters patent
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721. (1) On the application of a body
corporate under subsection 719(1) or (2), the
Minister may, subject to this Division, issue
letters patent continuing the body corporate as
an insurance holding company under this Part.
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| Issue of letters
patent
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(2) Section 713 applies in respect of the
issue of letters patent under subsection (1),
with such modifications as the circumstances
require.
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| Effect of
letters patent
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722. On the day set out in the letters patent
continuing a body corporate as an insurance
holding company under subsection 721(1),
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(a) the body corporate becomes an
insurance holding company as if it had been
incorporated under this Part; and
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(b) the letters patent are deemed to be the
incorporating instrument of the continued
insurance holding company.
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| Copy of
letters patent
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723. (1) Where a body corporate is
continued as an insurance holding company
under this Part, the Superintendent shall
without delay send a copy of the letters patent
to the appropriate official or public body in the
jurisdiction in which the body corporate was
authorized to apply to be continued under this
Part.
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| Notice of
issuance of
letters patent
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(2) The Superintendent shall publish in the
Canada Gazette a notice of the issuance of
letters patent continuing a body corporate as
an insurance holding company under this Part.
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| Effects of
continuance
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724. Where a body corporate is continued
as an insurance holding company under this
Part,
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(a) the property of the body corporate
continues to be the property of the insurance
holding company;
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(b) the insurance holding company
continues to be liable for the obligations of
the body corporate;
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(c) an existing cause of action or claim by
or against the body corporate or any
liability of the body corporate to
prosecution is unaffected;
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(d) a civil, criminal or administrative action
or proceeding pending by or against the
body corporate may continue to be
prosecuted by or against the insurance
holding company;
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(e) a conviction against, or any ruling, order
or judgment in favour of or against, the
body corporate may be enforced by or
against the insurance holding company;
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(f) a person who, on the day the body
corporate becomes an insurance holding
company, is the holder of a security issued
by the body corporate is not deprived of any
right or privilege available to the person at
that time in respect of the security or
relieved of any liability in respect of it, but
any such right or privilege may be exercised
only in accordance with this Act; and
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(g) the by-laws of the body corporate,
except those that are in conflict with this
Act, continue as the by-laws of the
insurance holding company.
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| Transitional
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725. (1) Despite any other provision of this
Act or the regulations, the Minister may, on
the recommendation of the Superintendent, by
order, grant to an insurance holding company
in respect of which letters patent were issued
under subsection 721(1) permission to
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(a) engage in a business activity specified in
the order that the insurance holding
company would not otherwise be permitted
by this Act to engage in and that the body
corporate continued as the insurance
holding company was engaging in at the
time the application for the letters patent
was made;
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(b) continue to have issued and outstanding
debt obligations the issue of which is not
authorized by this Act if the debt
obligations were outstanding at the time the
application for the letters patent was made;
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(c) hold assets that the insurance holding
company would not otherwise be permitted
by this Act to hold, if the assets were held
by the body corporate continued as the
insurance holding company at the time the
application for the letters patent was made;
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(d) acquire and hold assets that the
insurance holding company would not
otherwise be permitted by this Act to
acquire or hold, if the body corporate
continued as the insurance holding
company was obliged, at the time the
application for the letters patent was made,
to acquire those assets; and
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(e) maintain outside Canada any records or
registers required by this Act to be
maintained in Canada and maintain and
process outside Canada information and
data relating to the preparation and
maintenance of such records or registers.
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| Duration
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(2) The permission granted under
subsection (1) shall be expressed to be granted
for a period specified in the order not
exceeding
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(a) with respect to any activity described in
paragraph (1)(a), thirty days after the
effective date of the letters patent or, where
the activity is conducted pursuant to an
agreement existing on the effective date of
the letters patent, the expiration of the
agreement;
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(b) with respect to any matter described in
paragraph (1)(b), ten years; and
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(c) with respect to any matter described in
any of paragraphs (1)(c) to (e), two years.
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| Renewal
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(3) Subject to subsection (4), the Minister
may, on the recommendation of the
Superintendent, by order, renew a permission
granted by order under subsection (1) with
respect to any matter described in paragraphs
(1)(b) to (d) for such further period or periods
as the Minister considers necessary.
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| Limitation
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(4) The Minister shall not grant to an
insurance holding company any permission
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(a) with respect to matters described in
paragraph (1)(b), that purports to be
effective more than ten years after the
effective date of the letters patent of
continuance issued to continue the
insurance holding company under this Part,
unless the Minister is satisfied on the basis
of evidence on oath provided by an officer
of the insurance holding company that the
insurance holding company will not be able
at law to redeem at the end of the ten years
the outstanding debt obligations to which
the permission relates; and
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(b) with respect to matters described in
paragraphs (1)(c) and (d), that purports to be
effective more than ten years after the
effective date of the letters patent of
continuance issued to continue the
insurance holding company under this Part.
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Discontinuance
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| Transferring
to other Acts
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726. (1) An insurance holding company
may, with the approval in writing of the
Minister, apply to be continued as a body
corporate under any other Act of Parliament or
any Act of the legislature of a province.
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| Conditions for
approval
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(2) No approval referred to in subsection (1)
may be given to an insurance holding
company unless the Minister is satisfied that
the application of the insurance holding
company has been authorized by a special
resolution.
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| Meaning of
``insurance
holding
company
without a life
company
subsidiary''
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727. (1) For the purpose of this section,
``insurance holding company without a life
company subsidiary'' means an insurance
holding company that does not, at any time
within one year after it came into existence,
have a subsidiary that is a life company or that
does not, for a period of one year, have a
subsidiary that is a life company.
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