Corporate Interrelationships (Insurance Companies and Insurance Holding Companies) Regulations

Corporate Interrelationships (Insurance Companies and Insurance Holding Companies) Regulations Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to sections 76.01a and 755.1b and subsection 1021(1)c of the Insurance Companies Actd, hereby makes the annexed Corporate Interrelationships (Insurance Companies and Insurance Holding Companies) Regulations. S.C. 2007, c. 37, s. 197 S.C. 2007, c. 37, s. 316 S.C. 2005, c. 54, s. 364 S.C. 1991, c. 47 The following definitions apply in these Regulations. Act means the Insurance Companies Act. (Loi) delivery shares means shares issued by an insurance company or an insurance holding company to a particular subsidiary for the purpose of an acquisition made under subsection 76.01(1) or 755.1(1) of the Act, respectively. (actions remises) particular subsidiary means a subsidiary body corporate referred to in subsections 76.01(1) and 755.1(1) of the Act. (filiale visée) For the purpose of subsections 76.01(1) and 755.1(1) of the Act, the prescribed conditions are that the consideration received by the insurance company or the insurance holding company for the delivery shares is equal to the fair market value of those shares at the time of their issuance; the class of shares of which the delivery shares are a part is widely held and shares of that class are actively traded on any of the following stock exchanges in Canada, namely, the Canadian Venture Exchange, The Montreal Exchange, or the Toronto Stock Exchange; the sole purpose of effecting the acquisition by the particular subsidiary of delivery shares is to transfer them, as set out in paragraph 3(b), to the shareholders of another body corporate; immediately before the acquisition of the delivery shares by the particular subsidiary, the other body corporate and its shareholders deal at arm’s length, to be determined in accordance with the Income Tax Act, with the insurance company or the insurance holding company and the particular subsidiary; and immediately before the acquisition of the delivery shares by the particular subsidiary, the particular subsidiary and the other body corporate are not resident in Canada, for the purposes of the Income Tax Act. For the purpose of subsections 76.01(2) and 755.1(2) of the Act, the prescribed conditions are that the particular subsidiary does not acquire a beneficial interest in the delivery shares as a result of its acquisition of those shares and the beneficial interest is acquired by the shareholders of the other body corporate; the acquisition by the particular subsidiary of the delivery shares is followed immediately by a transfer of the delivery shares by the particular subsidiary to shareholders of the other body corporate; immediately after the transfer of the delivery shares to the shareholders of the other body corporate, the particular subsidiary and the other body corporate are not resident in Canada, for the purposes of the Income Tax Act; and after the transfer of the delivery shares to the shareholders of the other body corporate, the other body corporate is a subsidiary body corporate of the particular subsidiary. For the purpose of subsections 76.01(3) and 755.1(3) of the Act, the prescribed requirements are that, within 30 days after one of the conditions described in section 2 or 3 is not met or ceases to be met, the insurance company or insurance holding company shall cancel the delivery shares on the condition that, if the by-laws limit the number of authorized shares, the delivery shares may be restored to the status of authorized but unissued shares; return the consideration received by the insurance company or insurance holding company for the delivery shares to the particular subsidiary; and cancel the entry for the consideration in the stated capital account of the insurance company or insurance holding company. These Regulations come into force on the day on which section 197 of An Act to amend the law governing financial institutions and to provide for related and consequential matters, chapter 6 of the Statutes of Canada, 2007, comes into force or, if it is later, on the day on which they are registered. [Note: Regulations in force March 8, 2008, see SI/2008-33.]