Winding-up and Restructuring Act (R.S.C., 1985, c. W-11)

Marginal note:Transfer and reinsurance of policies by liquidator

• 162 (1) The liquidator may, with the approval of the court and without the consent of the policyholders, arrange for the transfer or reinsurance of

  • (a) all or a portion of the policies of the company, in the case of a company other than a foreign company, or

  • (b) all or a portion of the policies in respect of a foreign company’s insurance business in Canada

  in a company, society, foreign company or provincial company within the meaning of subsection 2(1) of the Insurance Companies Act or an insurance company incorporated by or under an Act of a legislature of a province and authorized under the laws of the province to issue policies of the class being transferred or reinsured, if the terms of the transfer or reinsurance are, in the opinion of the court having regard to the priorities set out in this Part, fair and equitable to

  • (c) the policyholders whose policies are being transferred or reinsured,

  • (d) the estate of the company as a whole, and

  • (e) the remaining policyholders of the company.

• Marginal note:Transfer and reinsurance of policies by liquidator

  (2) The liquidator may, with the approval of the court and without the consent of the policyholders, arrange for the transfer or reinsurance of all or a portion of the policies of the company, other than policies in respect of its insurance business in Canada, in any body corporate if the terms of the transfer or reinsurance are, in the opinion of the court, having regard to the priorities set out in this Part, fair and equitable to

  • (a) the policyholders whose policies are being transferred or reinsured;

  • (b) the estate of the company as a whole; and

  • (c) the remaining policyholders of the company.

• Marginal note:Transfer or reinsurance is in lieu of claim on policy

  (3) The transfer or reinsurance of policies referred to in subsections (1) and (2) shall be in lieu of the claim for the value of those policies computed as provided in section 163.

• Marginal note:Mortgage insurance policies

  (4) The liquidator of a company, society or foreign company within the meaning of subsection 2(1) of the Insurance Companies Act may, with the approval of the court and the consent of the Canada Mortgage and Housing Corporation, and without the consent of the policyholders, arrange for the transfer to that corporation of all or a portion of the company’s, society’s or foreign company’s policies of mortgage insurance, or arrange for the reinsurance of all or a portion of those policies by that corporation.

Marginal note:Partial payment or reinsurance

162.1 Where the liquidator estimates that the assets of the company are insufficient to provide for the payment in full of the preferred claims specified in section 72, for the payment in full of claims referred to in subparagraphs 161(1)(c)(i) or (ii) and for the transfer or reinsurance in full of policies of the company, the claims referred to in subparagraphs 161(1)(c)(i) or (ii) may be paid at, and the transfer or reinsurance may be effected at, such percentage of the full amount of the policies as may be approved by the court.

Marginal note:Modification of policies

162.2 The court may, on the application of the liquidator, without the consent of the policyholders concerned but on such notice to them as the court considers appropriate, modify the terms of all or any of the policies of insurance of the company held by those policyholders if the court is satisfied that the modification will have no adverse material impact on the policyholders under the terms of the policies.

Marginal note:Computation of claims

• 163 (1) Claims of policyholders of the company to the value of their policies referred to in subparagraphs 161(1)(c)(i) or (ii) shall be computed by the liquidator in accordance with such methods of computation as the Superintendent may deem fair and reasonable, less any amount previously advanced by the company on the security of the policies.

• Marginal note:Amendment thereof

  (2) The methods of computation established by the Superintendent are binding on all concerned, subject only to modification by the Superintendent.

Marginal note:Transfer of assets to the liquidator

• 164 (1) The assets of the company in Canada that may be on deposit with any government in Canada or with trustees or otherwise held for the company or for the protection of the policyholders of the company of the class or classes that are affected by the winding-up order shall, on order of the court having jurisdiction, be transferred to the liquidator.

• Marginal note:Assets on deposit outside Canada

  (2) If the company is a Canadian company that has deposited with the government of any state or country outside Canada, or with any trustee or other person in that state or country, any of its assets for the protection of the company’s policyholders in that state or country, the liquidator may request that government, trustee or other person to transfer those assets to the liquidator and on the transfer being made, those assets shall be used for the benefit of all the company’s policyholders in the same manner as any other assets of the company.

• Marginal note:Consequence of non-transfer of assets

  (3) If a government, trustee or other person referred to in subsection (2) does not transfer the assets deposited with it within the period commencing with the date of the liquidator’s request for the transfer of those assets that the Court may fix, the policyholders of the company, for whose protection the deposit was made, are deemed to have refused the reinsurance, if any, arranged by the liquidator, and, whether transfer or reinsurance has been arranged or not, to have forfeited all right and claim to any share of the assets of the company other than the assets so deposited for their protection outside Canada.

Marginal note:Transfer to foreign liquidator

165 If a foreign company is in liquidation in the country in which its head office is situated, the Superintendent may, if the Superintendent considers it advisable and in the interests of policyholders in respect of the foreign company’s insurance business in Canada, authorize the liquidator, subject to the approval of the court, to transfer the assets of the foreign company to the liquidator in that country.

Marginal note:Liquidator to prepare statement of claimants and creditors

• 166 (1) The liquidator shall, without the filing of any claim, notice or evidence or the taking of any action by any person, prepare a statement of all the persons appearing by the books and records of the company to be creditors of the company or to be claimants under any policy including any matured, valued or cancelled policy, taking cognizance in that connection of all claims that have arisen in accordance with the terms of the policies of which the liquidator has notice.

• Marginal note:Collocation

  (2) The statement referred to in subsection (1) shall show the amount, determined as provided in section 161 in respect of policyholders, for which each person is to rank as a claimant or a creditor and every such person shall be collocated and ranked as, and is entitled to the right of, a claimant or a creditor for the amount so ascertained by the liquidator, without filing any claim, notice or evidence, or taking any action.

• Marginal note:Objections

  (3) Any collocation made pursuant to subsection (2) may be contested by any person interested, and any person who is not collocated, or who is dissatisfied with the amount for which the person is collocated, may file a claim.

• Marginal note:Amendment of statement

  (4) The liquidator or the court may rectify any statement prepared under subsection (1) on account of omissions or errors therein notified to the liquidator or discovered by the liquidator at any time before the completion of the liquidation, and only the claims appearing in the statement or amended statement shall be regarded in the distribution of the assets.

Marginal note:Right of action not debarred

167 Where the assets are not sufficient to cover in full all claims appearing in the statement or amended statement described in section 166, the policyholders are not barred from any recourse they have, either in law or equity, against the company issuing the policy or against any shareholder or director thereof, except in respect of the share, if any, received in the distribution of those assets.

Marginal note:Copy of statement filed in Office of the Superintendent

• 168 (1) A copy of the statement referred to in subsection 166(1), certified by the liquidator, shall be filed in the Office of the Superintendent, after not less than 30 days’ notice of the liquidator’s intention to do so has been given by the liquidator by notice in the Canada Gazette and in the official gazette of each province, and in two newspapers published at or nearest the place where the head office of the company or the chief agency of the company, as the case may be, is situated.

• Marginal note:When policyholder to rank as creditor

  (2) Any claim that has arisen under the terms of a policy of which notice is received by the liquidator after the date of the filing of a statement referred to in subsection 166(1) or an amended statement referred to in subsection 166(4) shall rank on the assets only for the value entered in the statement, unless the assets are sufficient to pay all claimants in full, and in that case the policyholder shall rank as a creditor for the balance of the policyholder’s claim.

Marginal note:Notice of filing

169 The liquidator shall send by prepaid mail a notice of the filing of the statement under subsection 168(1) to each claimant or creditor named in the statement, addressed to the latest address on record with the company, stating therein the amount for which the creditor or claimant is entitled to rank against the assets of the company.

Marginal note:Report to Superintendent

170 Where the company is a company, society, foreign company or provincial company within the meaning of subsection 2(1) of the Insurance Companies Act, the liquidator shall report to the Superintendent once in every six months, or more often, as the Superintendent may require, on the condition of the affairs of the company, with such particulars as the Superintendent may require.

Marginal note:Publication of notice of proceedings

171 Publication in the Canada Gazette, in the official gazette of each province and in two newspapers published at or nearest the place where the head office of the company or chief agency of the company, as the case may be, is situated, of notice of any proceedings of which, under this Act, creditors should be notified, is sufficient notice to holders of policies in respect of which no notice of claim has been received.

Marginal note:Priority of certain claims

172 Nothing in this Part prejudices or affects the priority of any mortgage, lien or charge on the property of the company.