Bill C-8

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	DIVISION 3
	INCORPORATION, CONTINUANCE AND DISCONTINUANCE
	Formalities of Incorporation
Incorporation of insurance holding company	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.
Restrictions on incorporation	709. Letters patent incorporating an insurance holding company may not be issued if the application therefor is made by or on behalf of
	(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;
	(b) the government of a foreign country or any political subdivision thereof;
	(c) an agency of the government of a foreign country or any political subdivision thereof; or
	(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.
National treatment	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.
Part XII of the Bank Act	(2) Nothing in subsection (1) affects the operation of Part XII of the Bank Act.
Application for incorporation	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.
Matters for consideration	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
	(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;
	(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;
	(c) the business record and experience of the applicant or applicants;
	(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;
	(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;
	(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
	(g) the best interests of the financial system in Canada.
Contents of letters patent	713. (1) There shall be set out in the letters patent incorporating an insurance holding company
	(a) the name of the insurance holding company;
	(b) the place in Canada where the head office of the insurance holding company is to be situated; and
	(c) the date that the insurance holding company came, or is to come, into existence.
Provisions in letters patent	(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.
Terms and conditions	(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.
Letters patent of incorporation on application of life company	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.
Effect of provision	(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.
Effect of provision	(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.
Transfer and voting of company shares	(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.
Shareholder and policyholder approval	(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.
Exchange of share certificates	(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.
Proposal involving fundamental change	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,
	(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
	(b) despite any provision of the Act specified in regulations made under paragraph (2)(e), give any approval that the Minister considers necessary.
Regulations	(2) The Governor in Council may make regulations
	(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;
	(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;
	(c) respecting the procedures to be followed by the company that makes an application under subsection (1);
	(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
	(e) specifying provisions of the Act for the purpose of paragraph (1)(b).
Notice of issue of letters patent	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.
First directors	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.
Effect of letters patent	718. An insurance holding company comes into existence on the date provided therefor in its letters patent.
	Continuance
Federal corporations	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.
Other corporations	(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.
Application for continuance	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.
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.
Copy of special resolution	(3) A copy of the special resolution referred to in subsection (2) shall be filed with the application.
Power to issue letters patent	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.
Issue of letters patent	(2) Section 713 applies in respect of the issue of letters patent under subsection (1), with such modifications as the circumstances require.
Effect of letters patent	722. On the day set out in the letters patent continuing a body corporate as an insurance holding company under subsection 721(1),
	(a) the body corporate becomes an insurance holding company as if it had been incorporated under this Part; and
	(b) the letters patent are deemed to be the incorporating instrument of the continued insurance holding company.
Copy of letters patent	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.
Notice of issuance of letters patent	(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.
Effects of continuance	724. Where a body corporate is continued as an insurance holding company under this Part,
	(a) the property of the body corporate continues to be the property of the insurance holding company;
	(b) the insurance holding company continues to be liable for the obligations of the body corporate;
	(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;
	(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;
	(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;
	(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
	(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.
Transitional	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
	(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;
	(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;
	(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;
	(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
	(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.
Duration	(2) The permission granted under subsection (1) shall be expressed to be granted for a period specified in the order not exceeding
	(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;
	(b) with respect to any matter described in paragraph (1)(b), ten years; and
	(c) with respect to any matter described in any of paragraphs (1)(c) to (e), two years.
Renewal	(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.
Limitation	(4) The Minister shall not grant to an insurance holding company any permission
	(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
	(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.
	Discontinuance
Transferring to other Acts	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.
Conditions for approval	(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.
Meaning of ``insurance holding company without a life company subsidiary''	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.

Bill C-8

DIVISION 3

INCORPORATION, CONTINUANCE AND DISCONTINUANCE