Short Title

1 These Regulations may be cited as the Reinsurance (Canadian Companies) Regulations.

Interpretation

2 In these Regulations,

Act

Act means the Insurance Companies Act; (Loi)

gross premium income

gross premium income, in respect of a company, means the premium income of the company from its policies, calculated without reduction in respect of reinsurance premiums paid or payable by the company; (produit brut)

non-approved insurer

non-approved insurer means a body corporate that is incorporated for the purpose of insuring risks but not authorized under the Act to insure risks, but does not include

• (a) the Insurance Corporation of British Columbia,

• (b) The Manitoba Public Insurance Corporation,

• (c) Saskatchewan Government Insurance,

• (d) a body corporate incorporated by or under the laws of a province where the Superintendent determines, by order, pursuant to subsection 465(2) of the Act, that the financial condition of the body corporate is satisfactory and that its operations are conducted in accordance with sound business and financial practices, and

• (e) a body corporate that is not incorporated under the laws of Canada or a province where, in respect of risks insured by a company in policies other than in the company’s policies in Canada against which it has caused itself to be reinsured by the body corporate, the Superintendent determines, by order, pursuant to subsection 465(2) of the Act, that the financial condition of the body corporate is satisfactory and that its operations are conducted in accordance with sound business and financial practices; (assureur non agréé)

year

year, in respect of a company, means the financial year of the company. (année)

Application

• 3 (1) Subject to subsection (2), these Regulations apply in respect of all companies authorized under the Act to insure risks in respect of any class of insurance other than marine insurance and life insurance.

• (2) These Regulations do not apply in respect of a company that is authorized under the Act only to reinsure risks.

Maximum Percentage of Reinsurance

• 4 (1) Subject to subsection (2), a company shall not cause itself in any year to be reinsured against more than seventy-five per cent of the risks insured by it in its policies.

• (2) A company that was registered under the Canadian and British Insurance Companies Act before January 1, 1990 that caused itself to be reinsured against more than seventy-five per cent of the risks insured by it in its policies in 1989, may cause itself in 1992 to be reinsured to an extent up to and including the lesser of

  • (a) eighty per cent of the risks insured by it in its policies in 1992, and

  • (b) the percentage of the risks insured by it in its policies against which it caused itself to be reinsured in 1989.

Calculation of Percentage of Reinsurance

5 The percentage of risks insured by a company in its policies against which the company causes itself to be reinsured in a year shall be calculated by multiplying 100 by the quotient obtained by dividing

• (a) the total premiums paid or payable by the company in that year in respect of the reinsurance of the risks insured by the company in its policies, without reduction in respect of commissions, expense allowances and other considerations received or receivable by the company

by

• (b) the gross premium income of the company for that year.

Reinsurance with Non-approved Insurers

• 6 (1) A company shall not cause itself in any year to be reinsured by non-approved insurers against more than twenty-five per cent of the risks insured by it in its policies.

• (2) The percentage of risks insured by a company in its policies against which the company causes itself to be reinsured by non-approved insurers in a year shall be calculated by multiplying 100 by the quotient obtained by dividing

  • (a) the total premiums paid or payable by the company in that year to non-approved insurers in respect of the reinsurance of the risks insured by the company in its policies, without reduction in respect of commissions, expense allowances and other considerations received or receivable by the company

  by

  • (b) the gross premium income of the company for that year.

• (3) Where, in accordance with subsection 4(2), a company has caused itself to be reinsured against more than seventy-five per cent of the risks insured by it in its policies in 1992, the company shall not cause itself to be reinsured by non-approved insurers in that year to an extent greater than the amount of the risks insured by it in its policies in that year against which it has not caused itself to be reinsured.

Reinsurance Not in the Ordinary Course of Business

7 For the purposes of section 5 and subsection 6(2), where the agreement by which a company causes itself in any year to be reinsured against risks insured by it in its policies is not made in the ordinary course of its business, the total premiums referred to in paragraphs 5(a) and 6(2)(a) and the gross premium income referred to in paragraphs 5(b) and 6(2)(b) shall be reduced by an amount equal to the premiums paid or payable by the company in that year under that agreement.

Pooling Agreements

• 8 (1) In this section,

  party

  party means a party to a pooling agreement who is an insurer; (partie)

  pooling agreement

  pooling agreement means a written agreement entered into on or before June 26, 1986, where

  • (a) each of the parties

    • (i) is incorporated by or under the laws of a province for the purpose of carrying on the business of insurance in Canada or is authorized under an order of the Superintendent pursuant to section 53, 59, 574 or 586 of the Act to insure in Canada risks falling within a class of insurance, and

    • (ii) is controlled by the same person or has entered into a written agreement with the same person pursuant to which that person agrees to manage the Canadian business of the party,

  • (b) a party, in this subsection called the “reinsuring party”, agrees to reinsure wholly each of the other parties against some or all of the risks insured by those other parties and not otherwise reinsured,

  • (c) the reinsuring party agrees to cause itself to be reinsured wholly or partly by the other parties against

    • (i) the risks referred to in paragraph (b), and

    • (ii) some or all of the risks insured by the reinsuring party other than the risks referred to in paragraph (b) that are not otherwise reinsured,

  • (d) on that date, the pooling agreement was not subject to any unfulfilled condition, and

  • (e) being a party to the agreement would have caused at least one of the parties on June 26, 1986 to be reinsured against more than seventy-five per cent of the risks insured by it in its policies. (entente de regroupement)

• (2) Where, on application in writing by a company that was a party to a pooling agreement on or before June 26, 1986 and that made an application under subsection 8(2) of the Reinsurance (Canadian Insurance Companies) Regulations in respect of the 1990 calendar year, the Superintendent is satisfied that the financial condition of all of the parties is satisfactory and that their operations are conducted in accordance with sound business and financial practices, the Superintendent may, by order, pursuant to subsection 465(2) of the Act, determine, subject to terms and conditions imposed by the Superintendent in the order in respect of a year, for the purposes of section 5, that

  • (a) the premiums referred to in paragraph 5(a) be reduced by the premiums paid or payable by the company in that particular year under the pooling agreement to the other parties; and

  • (b) the gross premium income referred to in paragraph 5(b) be reduced by the premiums paid or payable to that company in that year under the pooling agreement by the other parties.

• (3) An application referred to in subsection (2) shall be made not later than September 30 of the year immediately preceding the year in respect of which the application is made.