Insurance Companies Act (S.C. 1991, c. 47)

Miscellaneous

Marginal note:Divestment order

• 567 (1) The Superintendent may, by order, direct a society to dispose of, within such period as the Superintendent considers reasonable, any loan, investment or interest made or acquired in contravention of this Part.

• Marginal note:Idem

  (2) Where

  • (a) a society

    • (i) fails to provide or obtain within a reasonable time the undertakings referred to in section 556, or

    • (ii) is in default of an undertaking referred to in section 556 and the default is not remedied within ninety days after the day of receipt by the society of a notice from the Superintendent of the default, or

  • (b) a body corporate referred to in section 556 is in default of an undertaking referred to in section 556 and the default is not remedied within ninety days after the day of receipt by the society of a notice from the Superintendent of the default,

  the Superintendent may, by order, require the society, within such period as the Superintendent considers reasonable, to do all things necessary to ensure that the society no longer has a substantial investment in the body corporate to which the undertaking relates.

Marginal note:Deemed temporary investment

568 If a society controls or has a substantial investment in an entity as permitted by this Part and the society 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 554(5), the society is deemed to have acquired, on the day the society becomes aware of the change, a temporary investment in respect of which section 557 applies.

Marginal note:Asset transactions

• 569 (1) A society 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

  A + B > C

  where

  A

  is the value of the assets;

  B

  is the total value of all assets that the society and its subsidiaries acquired from or transferred to that person in the twelve months ending immediately before the acquisition or transfer; and

  C

  is ten per cent of the total value of the assets of the society, as shown in the last annual statement of the society prepared before the acquisition or transfer.

• Marginal note:Approval of series of transactions

  (1.1) The Superintendent may, for the purposes of subsection (1), approve a transaction or series of transactions relating to the acquisition or transfer of assets that may be entered into with a person, or with persons of any class of persons, regardless of whether those persons are known at the time of the granting of the approval or not.

• Marginal note:Exception

  (2) Subsection (1) does not apply in respect of

  • (a) an asset that is a debt obligation referred to in subparagraphs (b)(i) to (v) of the definition “commercial loan” in subsection 490(1); or

  • (b) a transaction or series of transactions by a society with another financial institution as a result of the society’s participation in one or more syndicated loans with that financial institution.

• Marginal note:Exception

  (3) The approval of the Superintendent under this section is not required if

  • (a) the society sells or transfers assets under a transaction that is approved by the Minister or the Superintendent under subsection 254(2) or (2.01);

  • (b) the society or its subsidiary acquires shares of, or ownership interests in, an entity for which the approval of the Minister under Part VII or subsection 554(5) is required.

• Marginal note:Value of assets

  (4) For the purposes of “A” in subsection (1), the value of the assets is

  • (a) in the case of assets that are acquired, the purchase price of the assets or, if the assets are shares of, or ownership interests in, an entity the assets of which will be included in the annual statement of the society after the acquisition, the fair market value of the assets; and

  • (b) in the case of assets that are transferred, the value of the assets as reported in the last annual statement of the society prepared before the transfer or, if the value of the assets is not reported in that annual statement, the value of the assets as it would be reported in the annual statement of the society if the annual statement had been prepared, in accordance with the accounting principles referred to in subsection 331(4), immediately before the transfer.

• Marginal note:Total value of all assets

  (5) For the purposes of subsection (1), the total value of all assets that the society 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 society, the fair market value of the assets of the entity at the date of the acquisition.

• Marginal note:Total value of all assets

  (6) For the purposes of subsection (1), the total value of all assets that the society or any of its subsidiaries has transferred during the 12-month period referred to in subsection (1) is the total of the value of each of those assets as reported in the last annual statement of the society prepared before the transfer of the asset or, if the value of any of those assets is not reported in that annual statement, as it would be reported in the annual statement of the society if the annual statement had been prepared, in accordance with the accounting principles referred to in subsection 331(4), immediately before the transfer of the asset.

Saving

Marginal note:Saving

570 Nothing in this Part requires

• (a) the termination of a loan or a commitment to make a loan or investment or to increase a loan or investment, or

• (b) the disposal of an investment

made before the coming into force of this Part but, if the loan or investment would be precluded or limited by this Part, the amount of the loan or investment shall not, except as provided in sections 557, 558 and 559, or pursuant to a commitment referred to in paragraph (a), be increased after the coming into force of this Part.

Marginal note:Saving

570.001 A loan or investment referred to in section 570 is deemed not to be prohibited by the provisions of this Part.

Liquidation and Dissolution of a Society

Interpretation

Definition of court

570.01 In sections 570.02 to 570.3, court means a court having jurisdiction in the place where the society has its head office.

Application

Marginal note:Application of sections 570.03 to 570.3

• 570.02 (1) Sections 570.03 to 570.3 do not apply to a society that is insolvent within the meaning of the Winding-up and Restructuring Act.

• Marginal note:Staying proceedings on insolvency

  (2) Any proceedings taken under sections 570.04 to 570.3 to dissolve or to liquidate and dissolve a society shall be stayed if the society is at any time found to be insolvent within the meaning of the Winding-up and Restructuring Act.

Duty to Provide Information

Marginal note:Returns to Superintendent

570.03 A liquidator appointed under this Part to wind up the business of a society shall provide the Superintendent with such information relating to the business and affairs of the society as the Superintendent requires, in such form as the Superintendent requires.

Simple Liquidation

Marginal note:No property and no liabilities

• 570.04 (1) A society that has no property and no liabilities may, if authorized by a special resolution or, if there are no members, by a resolution of the society’s supreme governing body, apply to the Minister for letters patent dissolving the society.

• Marginal note:Dissolution by letters patent

  (2) Where the Minister has received an application under subsection (1) and is satisfied that all the circumstances so warrant, the Minister may issue letters patent dissolving the society.

• Marginal note:Effect of letters patent

  (3) A society in respect of which letters patent are issued under subsection (2) is dissolved and ceases to exist on the day stated in the letters patent.

Marginal note:Proposing liquidation

• 570.05 (1) The voluntary liquidation and dissolution of a society, other than a society referred to in subsection 570.04(1),

  • (a) may be proposed by its supreme governing body; or

  • (b) may be initiated by way of a proposal made in accordance with the society’s by-laws by a member who is entitled to vote at a meeting of the society’s members at which the proposal may be voted on.

• Marginal note:Terms must be set out

  (2) A notice of any meeting of members at which the voluntary liquidation and dissolution of a society is to be proposed shall set out the terms of the proposal.

Marginal note:Members’ resolution

570.06 Where the voluntary liquidation and dissolution of a society is proposed, the society may apply to the Minister for letters patent dissolving the society if authorized by a special resolution.

Marginal note:Approval of Minister required

• 570.07 (1) No action directed toward the voluntary liquidation and dissolution of a society shall be taken by a society, other than as provided in sections 570.05 and 570.06, until an application made by the society under section 570.06 has been approved by the Minister.

• Marginal note:Conditional approval

  (2) If the Minister is satisfied, on the basis of an application made under section 570.06, that the circumstances warrant the voluntary liquidation and dissolution of a society, the Minister may, by order, approve the application.

• Marginal note:Effect of approval

  (3) If the Minister approves an application made under section 570.06 with respect to a society, the society shall not carry on business except to the extent necessary to complete its voluntary liquidation.

• Marginal note:Liquidation process

  (4) If the Minister approves an application made under section 570.06 with respect to a society, the society shall

  • (a) cause notice of the approval to be sent to each known claimant, except members, against the society and to each known creditor of the society;

  • (b) publish notice of the approval once a week for four consecutive weeks in the Canada Gazette and once a week for two consecutive weeks in one or more newspapers in general circulation in each province in which the company transacted any business within the preceding twelve months;

  • (c) proceed to collect its property, dispose of property that is not to be distributed in kind to its members, discharge or provide for all its obligations and do all other acts required to liquidate its business; and

  • (d) after giving the notice required under paragraphs (a) and (b) and adequately providing for the payment or discharge of all its obligations, distribute its remaining property, either in money or in kind, among its members according to their respective rights.

Marginal note:Dissolution instrument

• 570.08 (1) Unless a court has made an order in accordance with subsection 570.09(1), the Minister may, if satisfied that the society has complied with subsection 570.07(4) and that all the circumstances so warrant, issue letters patent dissolving the society.

• Marginal note:Society dissolved

  (2) A society in respect of which letters patent are issued under subsection (1) is dissolved and ceases to exist on the day stated in the letters patent.

Court-supervised Liquidation

Marginal note:Application for court supervision

• 570.09 (1) The Superintendent or any interested person may, at any time during the liquidation of a society, apply to a court for an order for the continuance of the voluntary liquidation under the supervision of the court in accordance with this section and sections 570.1 to 570.21. On that application, the court may so order and make any further order it thinks fit.

• Marginal note:Application to state reasons

  (2) An application under subsection (1) to a court to supervise a voluntary liquidation shall state the reasons, verified by an affidavit of the applicant, why the court should supervise the liquidation.

• Marginal note:Notice to Superintendent

  (3) Where a person, other than the Superintendent, makes an application under subsection (1), the person shall give the Superintendent notice of the application and the Superintendent may appear and be heard in person or by counsel at the hearing of the application.

Marginal note:Court supervision

• 570.1 (1) If a court makes an order under subsection 570.09(1), the liquidation of the society shall continue under the supervision of the court.

• Marginal note:Beginning of liquidation

  (2) The supervision of the liquidation of a society by the court under an order made under subsection 570.09(1) begins on the day the order is made.

Marginal note:Powers of court

570.11 In connection with the liquidation and dissolution of a society, if the court is satisfied that the society is able to pay or adequately provide for the discharge of all its obligations and to make satisfactory arrangements for the protection of its policyholders, the court may make any order it thinks fit, including

• (a) an order to liquidate;

• (b) an order appointing a liquidator, with or without security, fixing a liquidator’s remuneration and replacing a liquidator;

• (c) an order appointing inspectors or referees, specifying their powers, fixing their remuneration and replacing inspectors or referees;

• (d) an order determining the notice to be given to any interested person, or dispensing with notice to any person;

• (e) an order determining the validity of any claims made against the society;

• (f) an order, at any stage of the proceedings, restraining the directors and officers of the society from

  • (i) exercising any of their powers, or

  • (ii) collecting or receiving any debt or other property of the society, and from paying out or transferring any property of the society, except as permitted by the court;

• (g) an order determining and enforcing the duty or liability of any present or former director, officer or member

  • (i) to the society, or

  • (ii) for an obligation of the society;

• (h) an order approving the payment, satisfaction or compromise of claims against the society and the retention of assets for that purpose, and determining the adequacy of provisions for the payment, discharge or transfer of any obligation of the society, whether liquidated, unliquidated, future or contingent;

• (i) with the concurrence of the Superintendent, an order providing for the disposal or destruction of the documents, records or registers of the society;

• (j) on the application of a creditor, an inspector or the liquidator, an order giving directions on any matter arising in the liquidation;

• (k) after notice has been given to all interested parties, an order relieving the liquidator from any omission or default on such terms as the court thinks fit and confirming any act of the liquidator;

• (l) subject to sections 570.18 to 570.2, an order approving any proposed, interim or final distribution to members, if any, or to incorporators, in money or in kind;

• (m) an order disposing of any property belonging to creditors, members and incorporators who cannot be found;

• (n) on the application of any director, officer, member, incorporator or creditor or the liquidator,

  • (i) an order staying the liquidation proceedings on such terms and conditions as the court thinks fit,

  • (ii) an order continuing or discontinuing the liquidation proceedings, or

  • (iii) an order to the liquidator to restore to the society all of its remaining property; and

• (o) after the liquidator has rendered the liquidator’s final account to the court, an order directing the society to apply to the Minister for letters patent dissolving the society.