Bill C-38

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First Reading

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	(a.2) cause itself to be reinsured, on an assumption basis, against all or any portion of the risks undertaken by it in respect of its policies in Canada by any body corporate incorporated under the laws of a province that is authorized to transact the classes of insurance to be reinsured if the Superintendent has entered into satisfactory arrangements concerning the reinsurance with
	(i) the appropriate official or public body responsible for the supervision of the body corporate,
	(ii) the body corporate, or
	(iii) the appropriate official or public body and the body corporate;
	427.1 Section 598 of the Act, as enacted by section 307 of An Act to amend certain laws relating to financial institutions, being chapter 15 of the Statutes of Canada, 1997, is replaced by the following:
Definition of ``cost of borrowing''	598. For the purposes of this section and sections 598.1 to 605, ``cost of borrowing'' means, in respect of a loan or an advance on the security or against the cash surrender value of a policy made by a foreign company,
	(a) the interest or discount applicable to the loan or advance;
	(b) any amount charged in connection with the loan or advance that is payable by the borrower to the foreign company; and
	(c) any charge prescribed to be included in the cost of borrowing.
	For those purposes, however, ``cost of borrowing'' does not include any charge prescribed to be excluded from the cost of borrowing.
	428. (1) Sections 604 and 605 of the Act are replaced by the following:
	Complaints
Procedures for dealing with complaints	604. (1) A foreign company shall
	(a) establish procedures for dealing with complaints made by persons in Canada having requested or received products or services in Canada from the foreign company ;
	(b) designate an officer or employee of the foreign company to be responsible for implementing those procedures; and
	(c) designate one or more officers or employees of the foreign company to receive and deal with those complaints.
Procedures to be filed with Commissioner	(2) A foreign company shall file with the Commissioner a copy of its procedures established under paragraph (1)(a) .
Obligation to be member of complaints body	604.1 In any province, if there is no law of the province that makes a foreign company subject to the jurisdiction of an organization that deals with complaints made by persons having requested or received products or services in the province from a foreign company, the foreign company shall be a member of an organization that is not controlled by it and that deals with those complaints that have not been resolved to the satisfaction of the persons under procedures established by foreign companies under paragraph 604(1)(a).
Information on contacting Agency	605. (1) A foreign company shall, in the prescribed manner, provide a person in Canada requesting or receiving a product or service in Canada from it with prescribed information on how to contact the Agency if the person has a complaint about an arrangement referred to in subsection 601(3), a payment, credit or charge card referred to in subsection 601(2) , the disclosure of or manner of calculating the cost of borrowing in respect of a loan repayable in Canada or an advance on the security or against the cash surrender value of a policy in Canada, or about any other obligation of the foreign company under a consumer provision.
Report	(2) The Commissioner shall prepare a report, to be included in the report referred to in section 34 of the Financial Consumer Agency of Canada Act , respecting
	(a) procedures for dealing with complaints established by foreign companies pursuant to paragraph 604(1)(a); and
	(b) the number and nature of complaints that have been brought to the attention of the Agency by persons who have requested or received a product or service from a foreign company.
	(2) If this section comes into force before paragraph 604(1)(a) and subsection 605(1) of the Act, as enacted, respectively, by sections 311 and 312 of An Act to amend certain laws relating to financial institutions, being chapter 15 of the Statutes of Canada, 1997, come into force, then sections 311 and 312 of that Act are repealed.
	429. The Act is amended by adding the following after section 607:
Regulations re disclosure	607.1 The Governor in Council may, subject to any other provisions of this Act relating to the disclosure of information, make regulations respecting the disclosure of information by foreign companies or any prescribed class of foreign companies, including regulations respecting
	(a) the information that must be disclosed, including information relating to
	(i) any product or service or prescribed class of products or services offered by them,
	(ii) any of their policies, procedures or practices relating to the offer by them of any product or service or prescribed class of products or services,
	(iii) anything they are required to do or to refrain from doing under a consumer provision, and
	(iv) any other matter that may affect their dealings with customers or the public;
	(b) the manner, place and time in which, and the persons to whom, information is to be disclosed; and
	(c) the content and form of any advertisement by foreign companies or any prescribed class of foreign companies relating to any matter referred to in paragraph (a).
1996, c. 6, ss. 87(2), (3), (4)(F)	430. Subsections 608(2) to (4) of the Act are replaced by the following:
Adequacy of assets and liquidity - foreign property and casualty companies	(2) A foreign property and casualty company shall, in relation to its insurance risks in Canada, maintain an adequate margin of assets in Canada over liabilities in Canada and adequate and appropriate forms of liquidity and shall comply with any regulations in relation to an adequate margin of assets in Canada over liabilities in Canada and adequate and appropriate forms of liquidity.
Liabilities	(3) For the purposes of subsections (1) and (2) , the liabilities in Canada of a foreign company include the reserve included in the annual return required under subsection 665(2).
Guidelines	(4) The Superintendent may make guidelines in respect of any matter referred to in paragraph 610(1)(a).
Directives	(5) Notwithstanding that a foreign company is complying with regulations made under paragraph 610(1)(a) or guidelines made under subsection (4) , the Superintendent may, by order, direct the foreign company to increase the margin of its assets in Canada over its liabilities in Canada or to provide additional liquidity in the forms and the amounts that the Superintendent requires.
Compliance	(6) A foreign company shall comply with an order made under subsection (5) within the time that the Superintendent specifies in the order .
	431. Paragraph 610(1)(a) of the English version of the Act is replaced by the following:
	(a) respecting the maintenance by foreign companies of adequate margins of assets in Canada over liabilities in Canada and adequate and appropriate forms of liquidity;
	432. Subsections 611(1) and (2) of the Act are replaced by the following:
Vesting in trust	611. (1) The assets that a foreign company is required to maintain in Canada under sections 608 and 609 and the regulations made under section 610 must be vested in trust in a Canadian financial institution chosen by the foreign company.
Conflict of interest	(2) No Canadian financial institution may be appointed as trustee if at the time of the appointment there is a material conflict of interest between the Canadian financial institution's role as trustee and any other of its roles.
	433. Paragraph 647(1)(b) of the Act is replaced by the following:
	(b) accounting records respecting its insurance business in Canada; and
	434. Paragraphs 660(2)(a) and (b) of the Act are replaced by the following:
	(a) require the management of the provincial company to establish procedures for complying with Part XI;
	(b) review those procedures and their effectiveness in ensuring that the provincial company is complying with Part XI;
	(b.1) if an insurance holding company or a bank holding company that is widely held has a significant interest in any class of shares of the provincial company, establish policies for entering into transactions referred to in section 528.1; and
	435. The title of Part XV of the Act is replaced by the following:
	REGULATION OF COMPANIES, SOCIETIES, FOREIGN COMPANIES AND PROVINCIAL COMPANIES - SUPERINTENDENT
	436. Section 669 of the Act is replaced by the following:
Copy of by-laws	669. A company shall send to the Superintendent within thirty days after the coming into effect of a by-law or an amendment to a by-law, a copy of the by-law or amendment.
1997, c. 15, s. 324	437. (1) Subsection 670(2) of the Act is amended by adding the word ``and'' at the and of paragraph (a), by striking out the word ``and'' at the end of paragraph (b) and by repealing paragraph (c).
1997, c. 15, s. 324	(2) Subsection 670(3) of the Act is amended by adding the word ``and'' at the and of paragraph (a), by striking out the word ``and'' at the end of paragraph (b) and by repealing paragraph (c).
1997, c. 15, s. 324	(3) Subsection 670(4) of the Act is replaced by the following:
Form	(4) The register may be maintained in
	(a) a bound or loose-leaf form or a photographic film form; or
	(b) a system of mechanical or electronic data processing or any other information storage device that is capable of reproducing any required information in intelligible written form within a reasonable time.
Access	(5) Persons are entitled to reasonable access to the register and may make copies of or take extracts from the information in it.
Evidence	(6) A statement containing information in the register and purporting to be certified by the Superintendent is admissible in evidence in all courts as proof, in the absence of evidence to the contrary, of the facts stated in the statement without proof of the appointment or signature of the Superintendent.
	438. Subsection 672(1) of the Act is replaced by the following:
Confidential information	672. (1) Subject to section 673, all information regarding the business or affairs of a company, society, foreign company or provincial company, or regarding a person dealing with any of them , that is obtained by the Superintendent, or by any person acting under the direction of the Superintendent, as a result of the administration or enforcement of any Act of Parliament, and all information prepared from that information , is confidential and shall be treated accordingly.
1996, c. 6, s. 93	439. Section 673.3 of the Act is replaced by the following:
Report respecting disclosure	673.3 The Superintendent shall prepare a report, to be included in the report referred to in section 40 of the Office of the Superintendent of Financial Institutions Act, respecting the disclosure of information by companies, societies, foreign companies or provincial companies and describing the state of progress made in enhancing the disclosure of information in the financial services industry.
	440. Subsections 674(1) and (2) of the Act are replaced by the following:
Examination of companies, etc.	674. (1) The Superintendent, from time to time, but at least once in each calendar year, shall make or cause to be made any examination and inquiry into the business and affairs of each company, society, foreign company and provincial company that the Superintendent considers to be necessary or expedient to determine whether the company, society, foreign company or provincial company is complying with the provisions of this Act and whether the company, society or provincial company or the insurance business in Canada of the foreign company is in a sound financial condition and, after the conclusion of each examination and inquiry, shall report on it to the Minister.
Examination need not be made annually	(2) If , in the opinion of the Superintendent, the circumstances so warrant in the case of a company, a provincial company or a foreign company that is not a fraternal benefit society , the examination and inquiry may be made less frequently than annually but not less frequently than triennially.
Examination need not be made annually	(2.1) If, in the opinion of the Superintendent, the circumstances so warrant in the case of a society or a foreign company that is a fraternal benefit society, the examination and inquiry may be made less frequently than annually.
	*441. The Act is amended by adding the following after the heading ``Remedial Powers'' after section 675:*
	Prudential Agreements
Prudential agreement	675.1 The Superintendent may enter into an agreement, called a ``prudential agreement'', with a company, society or provincial company for the purposes of implementing any measure designed to maintain or improve its safety and soundness or with a foreign company for the purposes of implementing any measure designed to protect the interests of its policyholders and creditors in respect of its insurance business in Canada.
	442. Subsection 678(1) of the Act is replaced by the following:
Court enforcement	678. (1) Where a company, society, foreign company, provincial company or person
	(a) is contravening or has failed to comply with a prudential agreement entered into under section 675.1 or a direction of the Superintendent issued to the company, society, foreign company, provincial company or person pursuant to subsection 676(1) or (3),
	(b) is contravening this Act, or
	(c) has omitted to do any thing under this Act that is required to be done by or on the part of the company, society, foreign company, provincial company or person,
	the Superintendent may, in addition to any other action that may be taken under this Act, apply to a court for an order requiring the company, society, foreign company, provincial company or person to comply with the prudential agreement or direction, cease the contravention or do any thing that is required to be done, and on such application the court may so order and make any other order it thinks fit.
1996, c. 6, s. 95	443. The heading before section 678.1 of the Act is replaced by the following:
	Disqualification and Removal
Meaning of ``senior officer''	678.01 In sections 678.1 and 678.2, ``senior officer'' means the chief executive officer, secretary, treasurer, controller or actuary of a company, society or provincial company, or any other officer reporting directly to its board of directors or chief executive officer.
1996, c. 6, s. 95	444. (1) Paragraphs 678.1(1)(a) and (b) of the Act are replaced by the following:
	(a) that has been notified by the Superintendent that this section applies to it where the company, society or provincial company is subject to measures designed to maintain or improve its safety and soundness, which measures
	(i) have been specified by the Superintendent by way of conditions or limitations in respect of the order approving the commencement and carrying on of its business, or
	(ii) are contained in a prudential agreement entered into under section 675.1 or an undertaking given by the company, society or provincial company to the Superintendent; or
	(b) that is the subject of a direction made under section 676 or an order made under subsection 515(3) or 516(4).
1996, c. 6, s. 95	(2) Paragraph 678.1(2)(b) of the Act is replaced by the following:

Bill C-38

Complaints

REGULATION OF COMPANIES, SOCIETIES, FOREIGN COMPANIES AND PROVINCIAL COMPANIES - SUPERINTENDENT