Bill C-8
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Portfolio Limits |
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Exclusion
from portfolio
limits
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502. (1) Subject to subsection (3), the value
of all loans, investments and interests
acquired by a company and any of its
prescribed subsidiaries under section 499 or as
a result of a realization of a security interest is
not to be included in calculating the value of
loans, investments and interests of the
company and its prescribed subsidiaries under
sections 503 to 508
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Extension
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(2) The Superintendent may, in the case of
any particular company, extend any period
referred to in subsection (1) for any further
period or periods, and on any terms and
conditions, that the Superintendent considers
necessary.
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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
509 to be an interest in real property and
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Commercial Lending by Life Companies |
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Lending limit:
companies
with
regulatory
capital of $25
million or less
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503. Subject to section 504, a life company
that has twenty-five million dollars or less of
regulatory capital shall not, and shall not
permit its prescribed subsidiaries to, make or
acquire a commercial loan or acquire control
of a permitted entity that holds commercial
loans if the aggregate value of all commercial
loans held by the company and its prescribed
subsidiaries exceeds, or the making or
acquisition of the commercial loan or
acquisition of control of the entity would
cause the aggregate value of all commercial
loans held by the company and its prescribed
subsidiaries to exceed, 5 per cent of the total
assets of the company.
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Lending limit:
regulatory
capital over
$25 million
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504. A life company that has twenty-five
million dollars or less of regulatory capital
that is controlled by a financial institution that
has the equivalent of more than twenty-five
million dollars of regulatory capital or a life
company that has more than twenty-five
million dollars of regulatory capital may make
or acquire commercial loans or acquire
control of a permitted entity that holds
commercial loans if the aggregate value of all
commercial loans held by the company and its
prescribed subsidiaries would thereby exceed
the limit set out in section 503 only with the
prior approval in writing of the
Superintendent and in accordance with any
terms and conditions that the Superintendent
may specify.
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Consumer and Commercial Lending by Property and Casualty Companies |
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Lending
limit -
property and
casualty
companies
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505. A property and casualty company shall
not, and shall not permit its prescribed
subsidiaries to,
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if the aggregate value of all such loans held by
the company and its prescribed subsidiaries
exceeds, or the making or acquisition of the
loan or the acquisition of control of the
permitted entity would cause the aggregate
value of all such loans held by the company
and its prescribed subsidiaries to exceed, the
prescribed percentage of the total assets of the
company.
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Real Property |
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Limit on total
property
interest
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506. A company shall not, and shall not
permit its prescribed subsidiaries to, purchase
or otherwise acquire an interest in real
property or make an improvement to any real
property in which the company or any of its
prescribed subsidiaries has an interest if the
aggregate value of all interests of the company
in real property exceeds, or the acquisition of
the interest or the making of the improvement
would cause that aggregate value to exceed,
an amount determined in accordance with the
regulations.
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Equities |
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Limits on
equity
acquisitions
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507. A company shall not, and shall not
permit its prescribed subsidiaries to,
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if the aggregate value of
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beneficially owned by the company and its
prescribed subsidiaries exceeds, or the
purchase or acquisition would cause that
aggregate value to exceed, an amount
determined in accordance with the
regulations.
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Aggregate Limit |
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Aggregate
limit
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508. A company shall not, and shall not
permit its prescribed subsidiaries to,
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if the aggregate value of
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exceeds, or the acquisition or the making of
the improvement would cause that aggregate
value to exceed, an amount determined in
accordance with the regulations.
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Miscellaneous |
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Regulations
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509. For the purposes of this Part, the
Governor in Council may make regulations
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Divestment
order
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510. (1) The Superintendent may, by order,
direct a company to dispose of, within any
period that the Superintendent considers
reasonable, any loan, investment or interest
made or acquired in contravention of this Part.
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Divestment
order
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(2) If, in the opinion of the Superintendent,
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the Superintendent may, by order, require the
company, within any period that the
Superintendent considers reasonable, to do all
things necessary to ensure that the company
no longer controls the body corporate or
unincorporated entity or has the ability to veto
or otherwise defeat any proposal referred to in
paragraph (b).
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Divestment
order
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(3) If
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the Superintendent may, by order, require the
company, within any period that the
Superintendent considers reasonable, to do all
things necessary to ensure that the company
no longer has a substantial investment in the
entity to which the undertaking relates.
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Exception
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(4) Subsection (2) does not apply in respect
of an entity in which a company has a
substantial investment permitted by this Part.
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Deemed
temporary
investment
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511. If a company controls or has a
substantial investment in an entity as
permitted by this Part and the company
becomes aware of a change in the business or
affairs of the entity that, if the change had
taken place before the acquisition of control or
of the substantial investment, would have
caused the entity not to be a permitted entity
or would have been such that approval for the
acquisition would have been required under
subsection 495(7) or (8), the company is
deemed to have acquired, on the day the
company becomes aware of the change, a
temporary investment in respect of which
section 498 applies.
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Asset
transactions
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512. (1) A company shall not, and shall not
permit its subsidiaries to, without the approval
of the Superintendent, acquire assets from a
person or 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 and its subsidiaries acquired
from or transferred to that person in the
twelve months ending immediately before
the acquisition or transfer; 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 statement of the company prepared
before the acquisition or transfer.
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Exception
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(2) The prohibition in subsection (1) does
not apply in respect of
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Exception
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(3) The approval of the Superintendent is
not required if
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Value of
assets
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(4) For the purposes of ``A'' in subsection
(1), the value of the assets is
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Total value of
all assets
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(5) For the purposes of subsection (1), the
total value of all assets that the company or
any of its subsidiaries has acquired during the
period of twelve months referred to in
subsection (1) is the purchase price of the
assets or, if the assets are shares of, or
ownership interests in, an entity the assets of
which immediately after the acquisition were
included in the annual statement of the
company, the fair market value of the assets of
the entity at the date of the acquisition.
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Total value of
all assets
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(6) For the purposes of subsection (1), the
total value of all assets that the company or
any of its subsidiaries has transferred during
the period of twelve months referred to in
subsection (1) is the book value of the assets
as stated in the last annual statement of the
company prepared before the transfer or, if the
assets are shares of, or ownership interests in,
an entity the assets of which were included in
the last annual statement of the company
before the transfer, the value of the assets of
the entity as stated in the annual statement.
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Transitional
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513. Nothing in this Part requires
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But if the loan or investment would be
precluded or limited by this Part, the amount
of the loan or investment may not, except as
provided in subsections 498(2), 499(3) and
500(3), be increased after that date.
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1996, c. 6,
s. 81
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427. Section 515 of the Act is replaced by
the following:
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Adequacy of
capital and
liquidity -
companies
and societies
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515. (1) A company and society shall, in
relation to its operations, maintain adequate
capital and adequate and appropriate forms of
liquidity and shall comply with any
regulations in relation to adequate capital and
adequate and appropriate forms of liquidity.
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Regulations
and guidelines
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(2) The Governor in Council may make
regulations and the Superintendent may make
guidelines respecting the maintenance by
companies and societies of adequate capital
and adequate and appropriate forms of
liquidity.
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Directives
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(3) Notwithstanding that a company or
society is complying with regulations or
guidelines made under subsection (2), the
Superintendent may, by order, direct the
company or society to increase its capital or to
provide additional liquidity in any forms and
amounts that the Superintendent may require.
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Compliance
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(4) A company and society shall comply
with an order made under subsection (3)
within the time that the Superintendent
specifies in the order.
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428. (1) Subsection 519(2) of the Act is
amended by striking out the word ``or'' at
the end of paragraph (c) and by adding the
following after paragraph (d):
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