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

Marginal note:Cessation of business and powers

• 570.12 (1) Where a court makes an order for the liquidation of a society,

  • (a) the society continues in existence but shall cease to carry on business, except the business that is, in the opinion of the liquidator, required for an orderly liquidation; and

  • (b) the powers of the directors and members, if any, are vested in the liquidator and cease to be vested in the directors or members, except as specifically authorized by the court.

• Marginal note:Delegation by liquidator

  (2) A liquidator may delegate any of the powers vested by paragraph (1)(b) to the directors or members, if any.

Marginal note:Appointment of liquidator

570.13 When making an order for the liquidation of a society or at any later time, the court may appoint any person, including a director, an officer or a member of the society or any other society, as liquidator of the society.

Marginal note:Vacancy in liquidator’s office

570.14 Where an order for the liquidation of a society has been made and the office of liquidator is or becomes vacant, the property of the society is under the control of the court until the office of liquidator is filled.

Marginal note:Duties of liquidator

• 570.15 (1) A liquidator shall

  • (a) without delay after appointment, give notice of the appointment to the Superintendent and to each claimant and creditor of the society known to the liquidator;

  • (b) without delay after appointment, publish notice of the appointment 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 society has transacted any business within the preceding twelve months, requiring

    • (i) any person indebted to the society to render an account and pay to the liquidator at the time and place specified in the notice any amount owing,

    • (ii) any person possessing property of the society to deliver it to the liquidator at the time and place specified in the notice, and

    • (iii) any person having a claim against the society, whether liquidated, unliquidated, future or contingent, other than a policyholder having an unliquidated claim, to present particulars of the claim in writing to the liquidator not later than sixty days after the first publication of the notice;

  • (c) take into custody and control the property of the society;

  • (d) open and maintain a trust account for the money received by the liquidator in the course of the liquidation of the society;

  • (e) keep accounts of the money received and paid out by the liquidator in the course of the liquidation of the society;

  • (f) maintain separate lists of each class of creditors, members and other persons having claims against the society;

  • (g) if at any time the liquidator determines that the society is unable to pay or adequately provide for the discharge of its obligations, apply to the court for directions;

  • (h) deliver to the court and to the Superintendent, at least once in every twelve-month period after the liquidator’s appointment or more often as the court requires, the society’s financial statements prepared in such manner as the liquidator thinks proper or as the court requires; and

  • (i) after the final accounts are approved by the court, distribute any remaining property of the society among the members, if any, or incorporators, according to their respective rights.

• Marginal note:Powers of liquidator

  (2) A liquidator may

  • (a) retain actuaries, lawyers, notaries, accountants, appraisers and other professional advisers;

  • (b) bring, defend or take part in any civil, criminal or administrative action or proceeding in the name of, and on behalf of, the society;

  • (c) carry on the business of the society as required for an orderly liquidation;

  • (d) sell by public auction or private sale any property of the society;

  • (e) do all acts and execute documents in the name of, and on behalf of, the society;

  • (f) borrow money on the security of the property of the society;

  • (g) settle or compromise any claims by or against the society; and

  • (h) do all other things necessary for the liquidation of the society and distribution of its property.

Marginal note:Reliance on statements

570.16 A liquidator is not liable if the liquidator relies in good faith on

• (a) financial statements of the society represented to the liquidator by an officer of the society, or on a written report of the auditor of the society, to reflect fairly the financial condition of the society; or

• (b) an opinion, report or statement of an actuary, lawyer, notary, accountant, appraiser or other professional adviser retained by the liquidator.

Marginal note:Examination of others

• 570.17 (1) If a liquidator has reason to believe that any property of the society is in the possession or under the control of a person or that a person has concealed, withheld or misappropriated the property, the liquidator may apply to the court for an order requiring that person to appear before the court at the time and place designated in the order and to be examined.

• Marginal note:Restoration and compensation

  (2) If an examination conducted under subsection (1) discloses that a person has concealed, withheld or misappropriated any property of the society, the court may order that person to restore the property or pay compensation to the liquidator.

Marginal note:Costs of liquidation

570.18 A liquidator shall pay the costs of liquidation out of the property of the society and shall pay or make adequate provision for all claims against the society.

Marginal note:Final accounts

• 570.19 (1) Within one year after the appointment of a liquidator and after paying or making adequate provision for all claims against the society, the liquidator shall apply to the court

  • (a) for approval of the final accounts of the liquidator and for an order permitting the distribution, in money or in kind, of the remaining property of the society to its members, if any, or to the incorporators, according to their respective rights; or

  • (b) for an extension of time, setting out the reasons for the extension.

• Marginal note:Member application

  (2) If a liquidator fails to make the application required by subsection (1), a member of the society or, if there are no members of the society, an incorporator may apply to the court for an order for the liquidator to show cause why a final accounting and distribution should not be made.

• Marginal note:Notification of final accounts

  (3) A liquidator who intends to make an application under subsection (1) shall give notice of that intention to the Superintendent, to each inspector appointed under section 570.11, to each member of the society or, if there are no members, to each incorporator and to any person who provided a security or fidelity bond for the liquidation.

• Marginal note:Publication

  (4) The liquidator shall publish the notice required under subsection (3) 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 society has transacted any business within the preceding twelve months, or as otherwise directed by the court.

Marginal note:Final order

• 570.2 (1) If the court approves the final accounts rendered by a liquidator, the court shall make an order

  • (a) directing the society to apply to the Minister for letters patent dissolving the society;

  • (b) directing the custody or disposal of the documents, records and registers of the society; and

  • (c) discharging the liquidator except in respect of the duty of a liquidator under subsection (2).

• Marginal note:Delivery of order

  (2) The liquidator shall without delay send a certified copy of the order referred to in subsection (1) to the Superintendent.

Marginal note:Right to distribution of money

• 570.21 (1) A member or incorporator may apply to the court for an order requiring the distribution of the remaining property of a society to be in money if, in the course of the liquidation of the society, the members resolve to, or the liquidator proposes to,

  • (a) exchange all or substantially all of the remaining property of the society for securities of another entity that are to be distributed to the members or to the incorporators; or

  • (b) distribute all or part of the remaining property of the society to the members or to the incorporators in kind.

• Marginal note:Powers of court

  (2) On an application under subsection (1), the court may order

  • (a) all of the remaining property of the society to be converted into and distributed in money; or

  • (b) the claim of any member or incorporator applying under this section to be satisfied by a distribution in money.

• Marginal note:Order by court

  (3) Where an order is made by a court under paragraph (2)(b), the court

  • (a) shall fix a fair value on the share of the property of the society attributable to the member or incorporator;

  • (b) may in its discretion appoint one or more appraisers to assist the court in fixing a fair value in accordance with paragraph (a); and

  • (c) shall render a final order against the society in favour of the member or incorporator for the amount of the share of the property of the society attributable to the member or incorporator.

Marginal note:Dissolution by letters patent

• 570.22 (1) On an application made under an order under paragraph 570.2(1)(a), the Minister may 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 date of the issuance of the letters patent.

General

Marginal note:Definitions

570.23 In sections 570.25 and 570.26, member and incorporator include the heirs and personal representatives of a member or incorporator.

Marginal note:Continuation of actions

• 570.24 (1) Even if a society has been dissolved under this Part,

  • (a) a civil, criminal or administrative action or proceeding brought by or against the society before its dissolution may be continued as if the society had not been dissolved;

  • (b) a civil, criminal or administrative action or proceeding may be brought against the society within two years after its dissolution as if the society had not been dissolved; and

  • (c) any property that would have been available to satisfy any judgment or order if the society had not been dissolved remains available for that purpose.

• Marginal note:Service on society

  (2) Service of a document on a society after its dissolution may be effected by serving the document on a person shown as a director in the incorporating instrument of the society or, if applicable, in the latest return sent to the Superintendent under subsection 549(1).

Marginal note:Limitations on liability

• 570.25 (1) Even if a society has been dissolved, a member or incorporator to whom any of its property has been distributed is liable to any person claiming under subsection 570.24(1), to the extent of the amount received by that member or incorporator on the distribution.

• Marginal note:Limitation

  (2) An action to enforce liability under subsection (1) may not be commenced more than two years after the date of the dissolution of the society.

• Marginal note:Action against class

  (3) A court may order an action referred to in subsections (1) and (2) to be brought against the persons who were members or incorporators as a class, subject to such conditions as the court thinks fit.

• Marginal note:Reference

  (4) If the plaintiff establishes a claim in an action under subsection (3), the court may refer the proceedings to a referee or other officer of the court who may

  • (a) add as a party to the proceedings each person found by the plaintiff to have been a member or incorporator;

  • (b) determine, subject to subsection (1), the amount that each person who was a member or incorporator must contribute towards satisfaction of the plaintiff’s claim; and

  • (c) direct payment of the amounts so determined.

Marginal note:Where creditor cannot be found

570.26 If a creditor, member or incorporator to whom property is to be distributed on the dissolution of a society cannot be found, the portion of the property to be distributed to that creditor, member or incorporator shall be converted into money and paid in accordance with section 570.28.

Marginal note:Vesting in Crown

570.27 Subject to subsection 570.24(1) and sections 570.28 and 570.29, property of a society that has not been disposed of at the date of the dissolution of the society vests in Her Majesty in right of Canada.

Marginal note:Unclaimed money on winding-up

• 570.28 (1) Where the business of a society is being wound up under this Part, the liquidator or the society shall pay to the Minister on demand, and in any event before the final winding-up of that business, any amount that is payable by the liquidator or the society to a creditor, member or incorporator of the society and that has not, for any reason, been paid.

• Marginal note:Records

  (2) If a liquidator or a society makes a payment to the Minister under subsection (1) with respect to a creditor, member or incorporator, the liquidator or society shall at the same time forward to the Minister all documents, records and registers in the possession of the liquidator or society that relate to the entitlement of the creditor, member or incorporator.

• Marginal note:Payment to Receiver General

  (3) The Minister shall pay to the Receiver General all amounts paid to the Minister under subsection (1).

• Marginal note:Liquidator and company discharged

  (4) Payment by a liquidator or a society to the Minister under subsection (1) discharges the liquidator and the society in respect of which the payment is made from all liability for the amount so paid, and payment by the Minister to the Receiver General under subsection (3) discharges the Minister from all liability for the amount so paid.