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Assessment of Financial Institutions Regulations, 2017 (SOR/2016-297)

Regulations are current to 2024-05-28 and last amended on 2017-04-01. Previous Versions

Assessment of Financial Institutions Regulations, 2017

SOR/2016-297

OFFICE OF THE SUPERINTENDENT OF FINANCIAL INSTITUTIONS ACT

Registration 2016-11-18

Assessment of Financial Institutions Regulations, 2017

P.C. 2016-985 2016-11-18

His Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to subsection 23(3)Footnote a and section 38Footnote b of the Office of the Superintendent of Financial Institutions ActFootnote c, makes the annexed Assessment of Financial Institutions Regulations, 2017.

Interpretation

Marginal note:Definitions

 The following definitions apply in these Regulations.

Act

Act means the Office of the Superintendent of Financial Institutions Act. (Loi)

approved mortgage insurer

approved mortgage insurer means an approved mortgage insurer within the meaning of section 2 of the Protection of Residential Mortgage or Hypothecary Insurance Act or a corporation or company that is treated as if it were an approved mortgage insurer in accordance with subsection 6(4) or 7(1) of that Act, respectively. (assureur hypothécaire agréé)

authorized foreign bank

authorized foreign bank has the same meaning as in section 2 of the Bank Act. (banque étrangère autorisée)

capital

capital means the amount determined in respect of a financial institution in accordance with section 4. (fonds propres)

cooperative credit association

cooperative credit association means an association, other than a retail association, to which the Cooperative Credit Associations Act applies and includes a central cooperative credit society for which an order has been made under subsection 473(1) of that Act. (association coopérative de crédit)

foreign fraternal benefit society

foreign fraternal benefit society has the same meaning as in section 571 of the Insurance Companies Act. (société de secours étrangère)

foreign life company

foreign life company has the same meaning as in section 571 of the Insurance Companies Act. (société d’assurance-vie étrangère)

life company

life company has the same meaning as in subsection 2(1) of the Insurance Companies Act. (société d’assurance-vie)

minimum assessment

minimum assessment means the amount determined in accordance with subsection 3(1) in respect of a financial institution, as adjusted in accordance with subsection 3(2). (cotisation minimale)

mortgage insurance company

mortgage insurance company means a company to which the Insurance Companies Act applies and whose activities are restricted to insuring risks within the class of mortgage insurance. (société d’assurance hypothécaire)

property and casualty insurer

property and casualty insurer means a company, provincial company or foreign company to which the Insurance Companies Act applies — other than a life company, society, foreign life company, foreign fraternal benefit society or mortgage insurance company — or Green Shield Canada. (assureur multirisque)

retail association

retail association has the same meaning as in section 2 of the Cooperative Credit Associations Act. (association de détail)

society

society has the same meaning as in subsection 2(1) of the Insurance Companies Act. (société de secours)

trust and loan company

trust and loan company means a company to which the Trust and Loan Companies Act applies. (société de fiducie et de prêt)

Determination of Assessment Amount

Marginal note:Calculation

  •  (1) For the purpose of subsection 23(3) of the Act and subject to subsection (2), the amount assessed by the Superintendent against each financial institution in respect of any fiscal year is equal to the aggregate of the base assessment amount determined for the financial institution in accordance with sections 5 to 9 and any applicable assessment surcharge determined for the financial institution in accordance with section 10, less any interim assessment prepared against the financial institution under subsection 23(4) of the Act.

  • Marginal note:No assessment payable

    (2) No assessment is payable in any fiscal year by a financial institution with respect to which, before the beginning of that fiscal year,

    • (a) the Superintendent did not make an order to commence and carry on business or, in the case of a foreign company to which the Insurance Companies Act applies, an order to insure in Canada risks;

    • (b) the Minister approved an application for voluntary liquidation and dissolution; or

    • (c) a court made a winding-up order under the Winding-up and Restructuring Act.

Determination of Base Assessment Amount

Minimum Assessment

Marginal note:Applicable amount

  •  (1) For the purpose of determining, under sections 5 to 9, the base assessment amount for a financial institution, the minimum assessment applicable to the financial institution is

    • (a) $30,000, in the case of a bank;

    • (b) $30,000, in the case of an authorized foreign bank that is not subject to the restrictions and requirements referred to in subsection 524(2) of the Bank Act;

    • (c) $15,000, in the case of an authorized foreign bank that is subject to the restrictions and requirements referred to in subsection 524(2) of the Bank Act;

    • (d) $15,000, in the case of a trust and loan company whose activities are restricted to carrying on any of the fiduciary activities referred to in section 412 of the Trust and Loan Companies Act and any ancillary activities;

    • (e) $30,000, in the case of a trust and loan company not referred to in paragraph (d);

    • (f) $30,000, in the case of a retail association;

    • (g) $15,000, in the case of a cooperative credit association;

    • (h) $15,000, in the case of a company, a provincial company or a foreign company to which the Insurance Companies Act applies; or

    • (i) $2,000, in the case of a society or a foreign fraternal benefit society.

  • Marginal note:Adjustment

    (2) Subject to subsections (3) and (6), each minimum assessment referred to in subsection (1) is to be adjusted for inflation in respect of each fiscal year in accordance with the following formula, with the result being rounded to the nearest multiple of 10:

    A × (B/C)

    where

    A
    is the minimum assessment that was applicable for the previous fiscal year;
    B
    is the Consumer Price Index for the 12-month period that ends on December 31 immediately preceding that fiscal year; and
    C
    is the Consumer Price Index for the 12-month period immediately preceding the period referred to in the description of B.
  • Marginal note:No adjustment

    (3) If the amount determined by dividing B by C in subsection (2) is less than 1 in respect of a fiscal year, no adjustment is to be made to the minimum assessment applicable for that year and the minimum assessment applicable for the preceding fiscal year continues to apply.

  • Marginal note:Consumer Price Index

    (4) In subsection (2), the Consumer Price Index for any 12-month period is the amount determined by aggregating the Consumer Price Index for all items for Canada, as published by Statistics Canada under the authority of the Statistics Act, for each month in that period and dividing the aggregate by 12.

  • Marginal note:Publication

    (5) The Superintendent must, before the beginning of each fiscal year, publish on the Office’s website each of the minimum assessments adjusted in accordance with subsection (2) that are applicable in respect of that year.

  • Marginal note:No adjustment in first year

    (6) Subsection (2) does not apply in respect of the fiscal year that begins on April 1, 2016.

Capital

Marginal note:Amount

 For the purpose of determining, under sections 5 to 9, the base assessment amount for a financial institution, the capital of the financial institution in respect of a fiscal year is

  • (a) in the case of a bank, a trust and loan company or a retail association, the total risk-weighted assets that it reported during the preceding fiscal year in the financial return prepared in respect of the fourth quarter of its financial year in accordance with section 628 of the Bank Act, section 495 of the Trust and Loan Companies Act or section 431 of the Cooperative Credit Associations Act, respectively;

  • (b) in the case of an authorized foreign bank, the minimum capital equivalency deposit that it reported during the preceding fiscal year in its annual return prepared in accordance with section 601 of the Bank Act;

  • (c) in the case of a cooperative credit association, an amount equal to 1/20 of the total borrowings that it reported during the preceding fiscal year in the financial return prepared in respect of the fourth quarter of its financial year in accordance with section 431 of the Cooperative Credit Associations Act;

  • (d) in the case of a company, society or provincial company to which the Insurance Companies Act applies, the minimum required capital that it reported during the preceding fiscal year in its annual return prepared in accordance with subsection 665(1) of that Act; and

  • (e) in the case of a foreign company to which the Insurance Companies Act applies, the minimum required margin of assets in Canada that it reported during the preceding fiscal year in its annual return prepared in accordance with subsection 665(2) of that Act.

Banks, Authorized Foreign Banks, Trust and Loan Companies and Retail Associations

Marginal note:Calculation

 The base assessment amount for a financial institution that is a bank, an authorized foreign bank, a trust and loan company or a retail association is, for any fiscal year, equal to

  • (a) the minimum assessment applicable to the institution, if it is greater than the amount determined by the formula

    A/B × C

    where

    A
    is the capital of the institution in respect of that fiscal year,
    B
    is the aggregate of the amounts determined for A for all banks, authorized foreign banks, trust and loan companies and retail associations, other than those referred to in subsection 2(2), and
    C
    is the amount by which the amount of expenses, ascertained under subsection 23(1) of the Act, incurred for or in connection with the administration of the Bank Act, the Trust and Loan Companies Act and the Cooperative Credit Associations Act and attributable to banks, authorized foreign banks, trust and loan companies and retail associations in respect of that fiscal year exceeds the total of any service charges, assessment surcharges and other revenues relating to the administration of those Acts and attributable to those institutions in respect of that fiscal year; or
  • (b) in any other case, the aggregate of the minimum assessment and the amount determined by the formula

    D/E × (C - F)

    where

    C
    is as described in paragraph (a),
    D
    is the amount by which the amount determined by the formula in paragraph (a) exceeds the minimum assessment applicable to the institution in respect of that fiscal year,
    E
    is the aggregate of the amounts determined for D for all banks, authorized foreign banks, trust and loan companies and retail associations, other than those referred to in subsection 2(2), and
    F
    is the aggregate of the minimum assessments applicable to all banks, authorized foreign banks, trust and loan companies and retail associations, other than those referred to in subsection 2(2).

Cooperative Credit Associations

Marginal note:Calculation

 The base assessment amount for a financial institution that is a cooperative credit association is, for any fiscal year, equal to

  • (a) the minimum assessment applicable to the institution, if it is greater than the amount determined by the formula

    A/B × C

    where

    A
    is the capital of the institution in respect of that fiscal year,
    B
    is the aggregate of the amounts determined for A for all cooperative credit associations, other than those referred to in subsection 2(2), and
    C
    is the amount by which the amount of expenses, ascertained under subsection 23(1) of the Act, incurred for or in connection with the administration of the Cooperative Credit Associations Act and attributable to cooperative credit associations in respect of that fiscal year exceeds the total of any service charges, assessment surcharges and other revenues relating to the administration of that Act and attributable to those institutions in respect of that fiscal year; or
  • (b) in any other case, the aggregate of the minimum assessment and the amount determined by the formula

    D/E × (C - F)

    where

    C
    is as described in paragraph (a),
    D
    is the amount by which the amount determined by the formula in paragraph (a) exceeds the minimum assessment applicable to the institution in respect of that fiscal year,
    E
    is the aggregate of the amounts determined for D for all cooperative credit associations, other than those referred to in subsection 2(2), and
    F
    is the aggregate of the minimum assessments applicable to all cooperative credit associations, other than those referred to in subsection 2(2).

Insurance Companies

Life Companies, Societies, Foreign Life Companies and Foreign Fraternal Benefit Societies

Marginal note:Calculation

 The base assessment amount for a financial institution that is a life company, a society, a foreign life company or a foreign fraternal benefit society is, for any fiscal year, equal to

  • (a) the minimum assessment applicable to the institution, if it is greater than the amount determined by the formula

    A/B × C

    where

    A
    is the capital of the institution in respect of that fiscal year,
    B
    is the aggregate of the amounts determined for A for all life companies, societies, foreign life companies and foreign fraternal benefit societies, other than those referred to in subsection 2(2), and
    C
    is the amount by which the amount of expenses, ascertained under subsection 23(1) of the Act, incurred for or in connection with the administration of the Insurance Companies Act and attributable to life companies, societies, foreign life companies and foreign fraternal benefit societies in respect of that fiscal year exceeds the total of any service charges, assessment surcharges and other revenues relating to the administration of that Act and attributable to those institutions in respect of that fiscal year; or
  • (b) in any other case, the aggregate of the minimum assessment and the amount determined by the formula

    D/E × (C - F)

    where

    C
    is as described in paragraph (a),
    D
    is the amount by which the amount determined by the formula in paragraph (a) exceeds the minimum assessment applicable to the institution in respect of that fiscal year,
    E
    is the aggregate of the amounts determined for D for all life companies, societies, foreign life companies and foreign fraternal benefit societies, other than those referred to in subsection 2(2), and
    F
    is the aggregate of the minimum assessments applicable to all life companies, societies, foreign life companies and foreign fraternal benefit societies, other than those referred to in subsection 2(2).

Property and Casualty Insurers

Marginal note:Calculation

 The base assessment amount for a financial institution that is a property and casualty insurer is, for any fiscal year, equal to

  • (a) the minimum assessment applicable to the institution, if it is greater than the amount determined by the formula

    A/B × C

    where

    A
    is the capital of the institution in respect of that fiscal year,
    B
    is the aggregate of the amounts determined for A for all property and casualty insurers, other than those referred to in subsection 2(2), and
    C
    is the amount by which the amount of expenses, ascertained under subsection 23(1) of the Act, incurred for or in connection with the administration of the Insurance Companies Act and the Green Shield Canada Act and attributable to property and casualty insurers in respect of that fiscal year exceeds the total of any service charges, assessment surcharges and other revenues relating to the administration of those Acts and attributable to those institutions in respect of that fiscal year; or
  • (b) in any other case, the aggregate of the minimum assessment and the amount determined by the formula

    D/E × (C - F)

    where

    C
    is as described in paragraph (a),
    D
    is the amount by which the amount determined by the formula in paragraph (a) exceeds the minimum assessment applicable to the institution in respect of that fiscal year,
    E
    is the aggregate of the amounts determined for D for all property and casualty insurers, other than those referred to in subsection 2(2), and
    F
    is the aggregate of the minimum assessments applicable to all property and casualty insurers, other than those referred to in subsection 2(2).

Mortgage Insurance Companies

Marginal note:Calculation

  •  (1) Subject to subsection (2), the base assessment amount for a financial institution that is a mortgage insurance company is, for any fiscal year, equal to

    • (a) the minimum assessment applicable to the institution, if it is greater than the amount determined by the formula

      A/B × C

      where

      A
      is the capital of the institution in respect of that fiscal year,
      B
      is the aggregate of the amounts determined for A for all mortgage insurance companies, other than those referred to in subsection 2(2), and
      C
      is the amount by which the amount of expenses, ascertained under subsection 23(1) of the Act, incurred for or in connection with the administration of the Insurance Companies Act and attributable to mortgage insurance companies in respect of that fiscal year exceeds the total of any service charges, assessment surcharges and other revenues relating to the administration of that Act and attributable to those institutions in respect of that fiscal year; or
    • (b) in any other case, the aggregate of the minimum assessment and the amount determined by the formula

      D/E × (C - F)

      where

      C
      is as described in paragraph (a),
      D
      is the amount by which the amount determined by the formula in paragraph (a) exceeds the minimum assessment applicable to the institution in respect of that fiscal year,
      E
      is the aggregate of the amounts determined for D for all mortgage insurance companies, other than those referred to in subsection 2(2), and
      F
      is the aggregate of the minimum assessments applicable to all mortgage insurance companies, other than those referred to in subsection 2(2).
  • Marginal note:Exception — approved mortgage insurers

    (2) The base assessment amount for a financial institution that is an approved mortgage insurer is, for any fiscal year, equal to the aggregate of the amount determined under subsection (1) and the amount determined by the formula

    A/B × C

    where

    A
    is the capital of the institution in respect of that fiscal year;
    B
    is the aggregate of the amounts determined for A for all approved mortgage insurers, other than those referred to in subsection 2(2); and
    C
    the amount of expenses, ascertained under subsection 23(1) of the Act, incurred for or in connection with the administration of the Protection of Residential Mortgage or Hypothecary Insurance Act in respect of that fiscal year.

Assessment Surcharge

Marginal note:Stage rating assigned

  •  (1) Subject to subsections (2) and (4), the amount of the surcharge to be assessed for any fiscal year in respect of a financial institution that has been assigned a stage rating in accordance with the Office’s guides to intervention for federally regulated financial institutions is equal to the aggregate of

    • (a) for each month during which the institution was rated at stage 1, the aggregate of $3,000 and an amount equal to 1/12 of 10% of its base assessment amount for the preceding fiscal year; and

    • (b) for each month during which the institution was rated at stage 2, stage 3 or stage 4, the aggregate of $5,000 and an amount equal to 1/12 of 15% of its base assessment amount for the preceding fiscal year.

  • Marginal note:Affiliates

    (2) Subject to subsection (4), the amount of the surcharge to be assessed for any fiscal year in respect of a financial institution that has been assigned a stage rating for the sole reason that it is an affiliate within the meaning of section 2 of the Bank Act of another financial institution that has also been assigned a stage rating is equal to the aggregate of

    • (a) for each month during which the institution was rated at stage 1, an amount equal to 1/12 of 10% of its base assessment amount for the preceding fiscal year; and

    • (b) for each month during which the institution was rated at stage 2, stage 3 or stage 4, an amount equal to 1/12 of 15% of its base assessment amount for the preceding fiscal year.

  • Marginal note:If no base assessment

    (3) If no base assessment was made against a financial institution for the preceding fiscal year, the surcharge referred to in subsection (1) or (2) is to be calculated using the minimum assessment that would have been applicable to that institution for that year.

  • Marginal note:Maximum

    (4) The amount of the surcharge to be assessed for any fiscal year in respect of a financial institution must not exceed an amount equal to

    • (a) in the case of a surcharge referred to in paragraph (1)(a) or (2)(a), 0.2% of the assets of the institution as reported during the preceding fiscal year in the financial or annual return referred to in paragraphs 4(a) to (e); and

    • (b) in the case of a surcharge referred to in paragraph (1)(b) or (2)(b), 0.4% of the assets of the institution as reported during the preceding fiscal year in the financial or annual return referred to in paragraphs 4(a) to (e).

  • Marginal note:Multiple stage ratings

    (5) The maximum amount referred to in paragraph (4)(b) is to be applied if a financial institution was assigned more than one stage rating during a fiscal year.

Notice of Assessment

Marginal note:Written notice

 The Superintendent must send to each financial institution a notice in writing of the assessment against it.

Repeal

 [Repeal]

Coming into Force

Marginal note:April 1, 2017

 These Regulations come into force on April 1, 2017.


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