name: Insurance Companies Act
unofficial_text: # Insurance Companies Act
  
  SC 1991, c 47
  
  An Act respecting insurance companies and fraternal benefit societies
  
  Assented to 1991-12-13
  
  Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows: 
  
  ## Short Title 
  
  ### Short title
  
  1 This Act may be cited as the Insurance Companies Act.  
  
  # PART I 
  
  ## Interpretation and Application 
  
  ## Definitions 
  
  ### Definitions
  
  2 (1) In this Act,  
  *actuary* means a Fellow of the Canadian Institute of Actuaries; (actuaire)   
  *adjustable policy* means an adjustable policy as defined in the regulations; (police ajustable)   
  *affairs*, with respect to a company, means the relationships among the company and its affiliates and the shareholders, policyholders, directors and officers of the company and its affiliates, but does not include the business of the company or any of its affiliates; (affaires internes)   
  *affiliate* means an entity that is affiliated with another entity within the meaning of section 6; (groupe)   
  *Agency* means the Financial Consumer Agency of Canada established under section 3 of the Financial Consumer Agency of Canada Act ; (Agence)   
  *annual return* means a return prepared in accordance with subsection 665(1) or (2); (état annuel)   
  *annual statement*, in relation to a company, means the annual financial statement of the company within the meaning of paragraph 331(1)(a) and, in relation to an insurance holding company, means the annual financial statement of the insurance holding company within the meaning of paragraph 887(1)(a); (rapport annuel)   
  *assets in Canada* means the assets that have been vested in trust for a foreign company under Part XIII; (actif au Canada)   
  *auditor* includes a firm of accountants; (vérificateur)   
  *bank holding company* means a body corporate that is incorporated or formed under Part XV of the Bank Act ; (société de portefeuille bancaire)   
  *bearer*, in relation to a security, means the person in possession of a security payable to bearer or endorsed in blank; (porteur)   
  *bearer form*, in respect of a security, means a security in bearer form as determined in accordance with subsection 87(2); (titre au porteur)   
  *beneficial ownership* includes ownership through one or more trustees, legal representatives, agents or other intermediaries; (véritable propriétaire et propriété effective)   
  *body corporate* means an incorporated body wherever or however incorporated; (personne morale)   
  *Canadian financial institution* means a financial institution that is incorporated or formed by or under an Act of Parliament or of the legislature of a province; (institution financière canadienne)   
  *central securities register* or 
  *securities register*, in relation to a company or an insurance holding company, means the register referred to in section 271; (registre central des valeurs mobilières ou registre des valeurs mobilières)   
  *class*, in respect of insurance or an insurance policy, means a class determined in accordance with section 12; (branche)   
  *Commissioner* means the Commissioner of the Financial Consumer Agency of Canada appointed under section 4 of the Financial Consumer Agency of Canada Act ; (commissaire)   
  *common-law partner*, in relation to an individual, means a person who is cohabiting with the individual in a conjugal relationship, having so cohabited for a period of at least one year; (conjoint de fait)   
  *company* means a body corporate referred to in subsection 13(1); (société)   
  *complainant*, in relation to a company or any matter concerning a company, means  
  (a) a registered holder or beneficial owner, and a former registered holder or beneficial owner, of a security of the company or any of its affiliates, 
  (a.1) a policyholder entitled to vote at a meeting of policyholders or shareholders and policyholders of the company, 
  (b) a director or an officer, or a former director or officer, of the company or any of its affiliates, or 
  (c) any other person who, in the discretion of a court, is a proper person to make an application under section 371, 375 or 1031; ( plaignant)   
  *consumer provision* means a provision referred to in paragraph (c) or (c.1) of the definition consumer provision in section 2 of the Financial Consumer Agency of Canada Act ; (disposition visant les consommateurs)   
  *converted company* means a mutual company that has been converted under this Act into a company with common shares; (société transformée)   
  *court* means  
  (a) in the Province of Ontario, the Superior Court of Justice, 
  (b) in the Province of Quebec, the Superior Court of the Province, 
  (c) in the Provinces of Nova Scotia, British Columbia and Prince Edward Island, the Supreme Court of the Province, 
  (d) in the Provinces of New Brunswick, Manitoba, Saskatchewan and Alberta, the Court of Queen’s Bench for the Province, 
  (e) in the Province of Newfoundland and Labrador, the Trial Division of the Supreme Court of the Province, and 
  (f) in Yukon and the Northwest Territories, the Supreme Court, and in Nunavut, the Nunavut Court of Justice; ( tribunal)   
  *court of appeal* means the court to which an appeal lies from a decision or order of a court; (cour d’appel)   
  *debt obligation* means a bond, debenture, note or other evidence of indebtedness of an entity, whether secured or unsecured; (titre de créance)   
  *director* means a natural person occupying the position of director, by whatever name called, of a body corporate, and 
  *board of directors* or 
  *directors* refers to the directors of a body corporate as a body and, in the case of a society, refers to the supreme governing body of the society; (administrateur, conseil d’administration ou conseil)   
  *equity*, in respect of a company or an insurance holding company, means its equity as determined in accordance with the regulations; (capitaux propres)   
  *entity* means a body corporate, trust, partnership, fund, an unincorporated association or organization, Her Majesty in right of Canada or of a province, an agency of Her Majesty in either of such rights and the government of a foreign country or any political subdivision thereof and any agency thereof; (entité)   
  *federal credit union* has the same meaning as in section 2 of the Bank Act ; (coopérative de crédit fédérale)   
  *federal financial institution* means  
  (a) a company or a society, 
  (b) a bank, 
  (c) a body corporate to which the Trust and Loan Companies Act applies, or  
  (d) an association to which the Cooperative Credit Associations Act applies; (institution financière fédérale)   
  *fiduciary* means any person acting in a fiduciary capacity and includes a personal representative of a deceased person; (représentant)   
  *financial institution* means  
  (a) a company or a society, 
  (b) a bank or an authorized foreign bank within the meaning of section 2 of the Bank Act,  
  (c) a body corporate to which the Trust and Loan Companies Act applies,  
  (d) an association to which the Cooperative Credit Associations Act applies,  
  (e) a trust, loan or insurance corporation incorporated by or under an Act of the legislature of a province, 
  (f) a cooperative credit society incorporated and regulated by or under an Act of the legislature of a province, 
  (g) an entity that is incorporated or formed by or under an Act of Parliament or of the legislature of a province and that is primarily engaged in dealing in securities, including portfolio management and investment counselling, and 
  (h) a foreign institution; ( institution financière)   
  *financial year*, in respect of a foreign company, means a calendar year; (exercice)   
  *foreign company* means an entity that is the subject of an order made under subsection 574(1); (société étrangère)   
  *foreign institution* means an entity that is  
  (a) engaged in the business of banking, the trust, loan or insurance business, the business of a cooperative credit society or the business of dealing in securities or is otherwise engaged primarily in the business of providing financial services, and 
  (b) incorporated or formed otherwise than by or under an Act of Parliament or of the legislature of a province; ( institution étrangère)   
  *former-Act company* means a body corporate referred to in paragraph 13(1)(b); (société antérieure)   
  *former-Act society* means a body corporate referred to in paragraph 13(2)(b); (société de secours antérieure)   
  *form of proxy* means a written or printed form that, when completed and executed by or on behalf of a shareholder or a policyholder, or, in the case of a fraternal benefit society, a member, constitutes a proxy; (formulaire de procuration)   
  *fraternal benefit society* means a body corporate  
  (a) that is without share capital, 
  (b) that has a representative form of government, and 
  (c) that was incorporated for fraternal, benevolent or religious purposes, including the provision of insurance benefits solely to its members or the spouses, common-law partners or children of its members; ( société de secours mutuel)   
  *going-private transaction* means a going-private transaction as defined in the regulations; (transaction de fermeture)   
  *guarantee* includes a letter of credit; (garantie)   
  *head office* means  
  (a) in relation to a company, the office required to be maintained by the company under section 260, 
  (b) in relation to a society, the office required to be maintained by the society under section 544, and 
  (c) in relation to an insurance holding company, the office required to be maintained by the insurance holding company under section 868; ( siège)   
  *holder* means  
  (a) in respect of a security certificate, the person in possession of the certificate issued or endorsed to that person or to bearer or in blank, and 
  (b) in respect of the ownership of a share, the shareholder of the share within the meaning of section 7; ( détenteur)   
  *holding body corporate* means a holding body corporate within the meaning of section 4; (société mère)   
  *incorporated*, when used with reference to a body corporate that is incorporated by or under an Act of Parliament or of the legislature of a province, also refers to a body corporate that is continued by or under any such Act; (constitué en personne morale)   
  *incorporating instrument* means the special Act, letters patent, instrument of continuance or other constating instrument by which a body corporate was incorporated or continued and includes any amendment to or restatement of the constating instrument; (acte constitutif)   
  *incorporator*, in relation to a company or an insurance holding company, means a person who applied for letters patent to incorporate the company or insurance holding company, as the case may be; (fondateur)   
  *infrastructure asset* means a physical asset, including a long-lived physical asset that supports the delivery of public services, prescribed by regulation; (infrastructure)   
  *insurance holding company* means a body corporate that is incorporated or formed under Part XVII; (société de portefeuille d’assurances)   
  *issuer*, in respect of a security, means the entity that issues or issued the security; (émetteur)   
  *letters patent*, in respect of an instrument authorized to be issued under this Act, means letters patent in a form approved by the Superintendent; (lettres patentes)   
  *life company* means a company or a provincial company that is permitted to insure risks falling within the class of life insurance, other than a company or a provincial company that is also permitted to insure risks falling within any other class of insurance other than accident and sickness insurance, credit protection insurance and other approved products insurance; (société d’assurance-vie)   
  *marine company* means a company that is incorporated for the sole purpose of insuring risks within the class of marine insurance; (société d’assurance maritime)   
  *Minister* means the Minister of Finance; (ministre)   
  *minor* has the same meaning as in the applicable provincial law and in the absence of any such law has the same meaning as the word “child” in the United Nations Convention on the Rights of the Child adopted in the United Nations General Assembly on November 20, 1989; (mineur)   
  *mutual company* means  
  (a) a company that is incorporated or continued as a mutual company under this Act, 
  (b) a former-Act company that, on the coming into force of this paragraph, has no issued and outstanding shares, or 
  (c) a company that is converted into a mutual company under sections 226 to 236, and that is not converted into a company with common shares under this Act; ( société mutuelle)   
  *non-WTO Member foreign institution* means a foreign institution that is not controlled by a WTO Member resident; (institution étrangère d’un non-membre de l’OMC)   
  *officer* means  
  (a) in relation to a body corporate, a chief executive officer, president, vice-president, secretary, controller, treasurer and any other natural person designated as an officer of the body corporate by by-law or by resolution of the directors of the body corporate, and 
  (b) in relation to any other entity, any natural person designated as an officer of the entity by by-law, by resolution of the members thereof or otherwise; ( dirigeant)   
  *order form*, in respect of a security, means a security in order form as determined in accordance with subsection 87(3); (titre à ordre)   
  *ordinary resolution* means a resolution passed by a majority of the votes cast by or on behalf of the shareholders or policyholders who voted in respect of that resolution; (résolution ordinaire)   
  *participating policy* means a policy issued by a company that entitles its holder to participate in the profits of the company; (police à participation)   
  *participating policyholder* means the holder of a participating policy; (souscripteur avec participation)   
  *permitted infrastructure entity* means an entity that, in accordance with prescribed conditions, only makes investments in infrastructure assets or engages in any other activity prescribed by regulation; (entité d’infrastructure admissible)   
  *person* means a natural person, an entity or a personal representative; (personne)   
  *personal representative* means a person who stands in place of and represents another person and, without limiting the generality of the foregoing, includes, as the circumstances require, a trustee, an executor, an administrator, a committee, a guardian, a tutor, a curator, an assignee, a receiver, an agent or an attorney of any person; (représentant personnel)   
  *policy* means any written contract of insurance or reinsurance whether contained in one or more documents and, in the case of insurance in a fraternal benefit society, any contract of insurance whether evidenced by a written document or not and any certificate of membership relating in any way to insurance, and includes any annuity contract and any endowment insurance contract; (police)   
  *policy in Canada* [Repealed, 2007, c. 6, s. 186]   
  *policyholder in Canada* [Repealed, 2007, c. 6, s. 186]   
  *prescribed* means prescribed by regulation; (Version anglaise seulement)   
  *property and casualty company* means a company or a provincial company that is not a life company or a marine company; (société d’assurances multirisques)   
  *provincial company* means, subject to subsection (1.1),  
  (a)  [Repealed, 2001, c. 9, s. 345]  
  (b) Antigonish Farmers’ Mutual Fire Insurance Company, 
  (c) Clare Mutual Insurance Company, 
  (d) The Halifax Insurance Company, or 
  (e) Pictou County Farmers’ Mutual Fire Insurance Company, or, if the name of such company is changed, includes the successor company by its new name; ( société provinciale)   
  *proxy* means a completed and executed form of proxy by means of which a shareholder or policyholder or, in the case of a society, a member, appoints a proxyholder to attend and act on behalf of the shareholder, policyholder or member at a meeting of shareholders, policyholders or members; (procuration)   
  *proxyholder* means the person appointed by proxy to attend and act on behalf of a shareholder or a policyholder or, in the case of a society, a member at a meeting of shareholders, policyholders or members; (fondé de pouvoir)   
  *real property* includes a leasehold interest in real property; (biens immeubles)   
  *recorded address* means  
  (a) in relation to a person who is a shareholder of a company or an insurance holding company, the latest postal address of the person according to the central securities register of the company or the insurance holding company, as the case may be, and 
  (b) in relation to a person in any other respect, the latest postal address of the person according to the records of the company or insurance holding company; ( adresse enregistrée)   
  *registered form*, in respect of a security, means a security in registered form as determined in accordance with subsection 87(4); (titre nominatif)   
  *regulated foreign entity* means an entity that is  
  (a) incorporated or formed otherwise in a country or territory, other than Canada, in which a trade agreement listed in Schedule IV of the Bank Act is applicable; and  
  (b) subject to financial services regulation in that country or territory; ( entité étrangère réglementée)   
  *regulatory capital*, in respect of a company, a society, a provincial company or an insurance holding company, has the meaning given that expression by the regulations; (capital réglementaire)   
  *resident Canadian* means a natural person who is  
  (a) a Canadian citizen ordinarily resident in Canada, 
  (b) a Canadian citizen not ordinarily resident in Canada who is a member of a prescribed class of persons, or 
  (c) a permanent resident within the meaning of subsection 2(1) of the Immigration and Refugee Protection Act and ordinarily resident in Canada, except a permanent resident who has been ordinarily resident in Canada for more than one year after the time at which the individual first became eligible to apply for Canadian citizenship; (résident canadien)   
  *residential property* means real property consisting of buildings that are used, or are to be used, to the extent of at least one half of the floor space thereof, as one or more private dwellings; (immeuble résidentiel)   
  *securities underwriter* means a person who, as principal, agrees to purchase securities with a view to the distribution of the securities or who, as agent for a body corporate or other person, offers for sale or sells securities in connection with a distribution of the securities, and includes a person who participates, directly or indirectly, in a distribution of securities, other than a person whose interest in the distribution of securities is limited to receiving a distributor’s or seller’s commission payable by a securities underwriter; (souscripteur à forfait)   
  *security* means  
  (a) in relation to a body corporate, a share of any class of shares of the body corporate or a debt obligation of the body corporate, and includes a warrant of the body corporate, but does not include a deposit with a financial institution or any instrument evidencing such a deposit, and 
  (b) in relation to any other entity, any ownership interest in or debt obligation of the entity, but does not include a policy; ( titre ou valeur mobilière)   
  *security interest* means an interest in or charge on property by way of mortgage, lien, pledge or otherwise taken by a creditor or guarantor to secure the payment or performance of an obligation; (sûreté)   
  *send* includes deliver; (envoyer)   
  *series*, in respect of shares, means a division of a class of shares; (série)   
  *significant interest* means a significant interest determined in accordance with section 8; (intérêt substantiel)   
  *society* means a body corporate referred to in subsection 13(2) that is a fraternal benefit society; (société de secours)   
  *special resolution* means a resolution passed by a majority of not less than two thirds of the votes cast by or on behalf of the shareholders and policyholders and, in the case of a fraternal benefit society, the members, who voted in respect of that resolution or signed by all the shareholders, policyholders and members entitled to vote on that resolution; (résolution extraordinaire)   
  *squeeze-out transaction* means a transaction by a company that is not a distributing company, or an insurance holding company that is not a distributing insurance holding company, that requires an amendment to a by-law referred to in subsection 238(1) or 851(1), as the case may be, and that would directly or indirectly result in the interest of a holder of shares of a class of shares being terminated without their consent and without substituting an interest of equivalent value in shares that are issued by the following persons and have rights and privileges equal to or greater than those of the shares of the affected class:  
  (a) in the case of a company, the company, and 
  (b) in the case of an insurance holding company, the insurance holding company; ( transaction d’éviction)   
  *subordinated indebtedness* means an instrument evidencing an indebtedness of a company that by its terms provides that the indebtedness will, in the event of the insolvency or winding-up of the company, be subordinate in right of payment to all policy liabilities of the company and all other liabilities of the company except those other liabilities that, by their terms, rank equally with or are subordinate to such indebtedness; (titre secondaire)   
  *subsidiary* means an entity that is a subsidiary of another entity within the meaning of section 5; (filiale)   
  *substantial investment* means a substantial investment determined in accordance with section 10; (intérêt de groupe financier)   
  *Superintendent* means the Superintendent of Financial Institutions appointed pursuant to the Office of the Superintendent of Financial Institutions Act ; (surintendant)   
  *total assets*, in respect of a company, society, provincial company or insurance holding company, has the meaning given that expression by the regulations; (actif total)   
  *trade*, in respect of securities, means any sale or disposition of securities for valuable consideration; (opération)   
  *transfer*, in respect of securities, includes a transmission by operation of law; (transfert)   
  *voting share* means a share of any class of shares of a body corporate carrying voting rights under all circumstances or by reason of an event that has occurred and is continuing or by reason of a condition that has been fulfilled; (action avec droit de vote)   
  *WTO Member resident* means a WTO Member resident within the meaning of section 11.1. (résident d’un membre de l’OMC)  
  
  ### Provincial company status
  
  (1.1) A company referred to in the definition 
  *provincial company* in subsection (1) ceases to be a provincial company for the purposes of this Act if the order made by the Superintendent under subsection 657(1) approving the commencement and carrying on of business by the company is revoked.  
  
  ### Policy loans
  
  (2) For greater certainty, any reference in this Act to a loan does not include, unless otherwise provided, a reference to an advance on the security or against the cash surrender value of a policy. 
  
  ### Major shareholder
  
  (3) For the purposes of this Act, a person is a major shareholder of a body corporate if 
  (a) the aggregate of the shares of any class of voting shares of the body corporate that are beneficially owned by the person and that are beneficially owned by any entities controlled by the person is more than 20 per cent of the outstanding shares of that class of voting shares of the body corporate; or 
  (b) the aggregate of the shares of any class of non-voting shares of the body corporate that are beneficially owned by the person and that are beneficially owned by any entities controlled by the person is more than 30 per cent of the outstanding shares of that class of non-voting shares of the body corporate. 
  
  ### Widely held
  
  (4) For the purposes of this Act, a body corporate is widely held if it has no major shareholder. 
  
  ## Interpretation 
  
  ### Regulations — distributing company or insurance holding company
  
  2.1 (1) The Governor in Council may make regulations respecting the determination of what constitutes a distributing company or distributing insurance holding company for the purposes of this Act. 
  
  ### Exemption — company or insurance holding company
  
  (2) On the application of a company or insurance holding company, the Superintendent may determine that it is not or was not a distributing company or distributing insurance holding company, as the case may be, if the Superintendent is satisfied that the determination would not prejudice any security holder of that company or insurance holding company. 
  
  ### Exemption — class of companies or insurance holding companies
  
  (3) The Superintendent may determine that members of a class of companies or insurance holding companies are not or were not distributing companies or distributing insurance holding companies, as the case may be, if the Superintendent is satisfied that the determination would not prejudice any security holder of a member of the class. 
  
  ### Regulations — permitted infrastructure entities
  
  2.2 The Governor in Council may make regulations prescribing 
  (a) physical assets for the purposes of the definition infrastructure asset ;  
  (b) activities in which a permitted infrastructure entity is permitted to engage; and 
  (c) conditions applicable to investments made and other activities carried out by permitted infrastructure entities. 
  
  ### Control
  
  3 (1) For the purposes of this Act, 
  (a) a person controls a body corporate if securities of the body corporate to which are attached more than 50 per cent of the votes that may be cast to elect directors of the body corporate are beneficially owned by the person and the votes attached to those securities are sufficient, if exercised, to elect a majority of the directors of the body corporate; 
  (b) a person controls an unincorporated entity, other than a limited partnership, if more than 50 per cent of the ownership interests, however designated, into which the entity is divided are beneficially owned by that person and the person is able to direct the business and affairs of the entity; 
  (c) the general partner of a limited partnership controls the limited partnership; and 
  (d) a person controls an entity if the person has any direct or indirect influence that, if exercised, would result in control in fact of the entity. 
  
  ### Deemed control
  
  (2) A person who controls an entity is deemed to control any entity that is controlled, or deemed to be controlled, by the entity. 
  
  ### Deemed control
  
  (3) A person is deemed to control, within the meaning of paragraph (1)(a) or (b), an entity if the aggregate of 
  (a) any securities of the entity that are beneficially owned by that person, and 
  (b) any securities of the entity that are beneficially owned by any entity controlled by that person is such that, if that person and all of the entities referred to in paragraph (b) that beneficially own securities of the entity were one person, that person would control the entity. 
  
  ### Guidelines
  
  (4) The Minister may, for any purpose of any provision of this Act that refers to control within the meaning of paragraph (1)(d), make guidelines respecting what constitutes such control, including guidelines describing the policy objectives that the guidelines and the relevant provisions of the Act are intended to achieve and, if any such guidelines are made, the reference to paragraph (1)(d) in that provision shall be interpreted in accordance with the guidelines. 
  
  ### Holding body corporate
  
  4 A body corporate is the holding body corporate of any entity that is its subsidiary. 
  
  ### Subsidiary
  
  5 An entity is a subsidiary of another entity if it is controlled by the other entity. 
  
  ### Affiliated entities
  
  6 (1) One entity is affiliated with another entity if one of them is controlled by the other or both are controlled by the same person. 
  
  ### Affiliated entities
  
  (2) Despite subsection (1), for the purposes of Divisions VIII and X of Part VI and Subdivisions 8 and 10 of Division 6 of Part XVII, one entity is affiliated with another entity if one of them is controlled, determined without regard to paragraph 3(1)(d), by the other or both are controlled, determined without regard to paragraph 3(1)(d), by the same person. 
  
  ### Shareholder
  
  7 (1) For the purposes of this Act, a person is a shareholder of a body corporate when, according to the securities register of the body corporate, the person is the owner of one or more shares of the body corporate or is entitled to be entered in the securities register or like record of the body corporate as the owner of the share or shares. 
  
  ### Holder of a share
  
  (2) A reference in this Act to the holding of a share by or in the name of any person is a reference to the fact that the person is registered or is entitled to be registered in the securities register or like record of the body corporate as the holder of that share. 
  
  ### Significant interest
  
  8 (1) A person has a significant interest in a class of shares of a company or an insurance holding company if the aggregate of 
  (a) any shares of that class beneficially owned by the person, and 
  (b) any shares of that class beneficially owned by entities controlled by the person exceeds 10 per cent of all of the outstanding shares of that class of shares of the company or insurance holding company, as the case may be. 
  
  ### Increasing significant interest
  
  (2) A person who has a significant interest in a class of shares of a company or insurance holding company increases that significant interest in the class of shares if the person or any entity controlled by the person 
  (a) acquires beneficial ownership of additional shares of that class, or 
  (b) acquires control of any entity that beneficially owns shares of that class, in such number as to increase the percentage of shares of that class that are beneficially owned by the person and by any entities controlled by the person. 
  
  ### Acting in concert
  
  9 (1) For the purposes of Part VII and Division 7 of Part XVII, if two or more persons have agreed, under any agreement, commitment or understanding, whether formal or informal, verbal or written, to act jointly or in concert in respect of 
  (a) shares of a company or of an insurance holding company that they beneficially own, 
  (b) shares or ownership interests that they beneficially own of any entity that beneficially owns shares of a company or of an insurance holding company, or 
  (c) shares or ownership interests that they beneficially own of any entity that controls any entity that beneficially owns shares of a company or insurance holding company, those persons are deemed to be a single person who is acquiring beneficial ownership of the aggregate number of shares of the company or insurance holding company or shares or ownership interests of the entity that are beneficially owned by them. 
  
  ### Acting in concert
  
  (2) Without limiting the generality of subsection (1), any agreement, commitment or understanding by or between two or more persons who beneficially own shares of a company or insurance holding company or shares or ownership interests of any entity referred to in paragraph (1)(b) or (c), 
  (a) whereby any of them or their nominees may veto any proposal put before the board of directors of the company or insurance holding company, as the case may be, or 
  (b) under which no proposal put before the board of directors of the company or insurance holding company, as the case may be, may be approved except with the consent of any of them or their nominees, is deemed to be an agreement, commitment or understanding referred to in subsection (1). 
  
  ### Exceptions
  
  (3) For the purposes of this section, persons shall be presumed not to have agreed to act jointly or in concert solely by reason of the fact that 
  (a) one is the proxyholder of one or more of the others in respect of shares or ownership interests referred to in subsection (1); or 
  (b) they vote the voting rights attached to shares or ownership interests referred to in subsection (1) in the same manner. 
  
  ### Designation
  
  (4) Where in the opinion of the Superintendent it is reasonable to conclude that an agreement, commitment or understanding referred to in subsections (1) and (2) exists by or among two or more persons, the Superintendent may designate those persons as persons who have agreed to act jointly or in concert. 
  
  ### Contravention
  
  (5) A person contravenes a provision of Part VII or Division 7 of Part XVII if the person agrees to act jointly or in concert with one or more other persons in such a manner that a deemed single person contravenes the provision. 
  
  ### Substantial investment in body corporate
  
  10 (1) A person has a substantial investment in a body corporate where 
  (a) the voting rights attached to the aggregate of any voting shares of the body corporate beneficially owned by the person and by any entities controlled by the person exceed 10 per cent of the voting rights attached to all of the outstanding voting shares of the body corporate; or 
  (b) the aggregate of any shares of the body corporate beneficially owned by the person and by any entities controlled by the person represents ownership of greater than 25 per cent of the shareholders’ equity of the body corporate. 
  
  ### Increasing substantial investment in body corporate
  
  (2) A person who has a substantial investment in a body corporate pursuant to paragraph (1)(a) increases that substantial investment when the person or any entity controlled by the person 
  (a) acquires beneficial ownership of additional voting shares of the body corporate in such number as to increase the percentage of voting rights attached to the aggregate of the voting shares of the body corporate beneficially owned by the person and by any entities controlled by the person; or 
  (b) acquires control of any entity that beneficially owns any voting shares of the body corporate in such number as to increase the percentage of voting rights attached to the aggregate of the voting shares of the body corporate beneficially owned by the person and by any entities controlled by the person. 
  
  ### Idem
  
  (3) A person who has a substantial investment in a body corporate pursuant to paragraph (1)(b) increases that substantial investment when the person or any entity controlled by the person 
  (a) acquires beneficial ownership of additional shares of the body corporate in such number as to increase the percentage of the shareholders’ equity of the body corporate represented by the aggregate of the shares of the body corporate beneficially owned by the person and by any entities controlled by the person; or 
  (b) acquires control of any entity that beneficially owns any shares of the body corporate in such number as to increase the percentage of the shareholders’ equity of the body corporate represented by the aggregate of the shares of the body corporate beneficially owned by the person and by any entities controlled by the person. 
  
  ### New substantial investment
  
  (4) For greater certainty, 
  (a) where a person has a substantial investment in a body corporate pursuant to paragraph (1)(a) and the person, or any entity controlled by the person, 
  (i) purchases or otherwise acquires beneficial ownership of shares of the body corporate, or 
  (ii) acquires control of any entity that beneficially owns shares of the body corporate, in such number as to cause the shareholders’ equity of the body corporate represented by the aggregate of the shares of the body corporate beneficially owned by the person and by any entities controlled by the person to exceed 25 per cent of the shareholders’ equity of the body corporate, or 
  (b) where a person has a substantial investment in a body corporate pursuant to paragraph (1)(b) and the person or any entity controlled by the person 
  (i) purchases or otherwise acquires beneficial ownership of voting shares of the body corporate, or 
  (ii) acquires control of any entity that beneficially owns voting shares of the body corporate, in such number as to cause the voting rights attached to the aggregate of the voting shares beneficially owned by the person and by any entities controlled by the person to exceed 10 per cent of the voting rights attached to all of the outstanding voting shares of the company, the acquisition is deemed to cause the person to increase a substantial investment in the body corporate. 
  
  ### Substantial investment in unincorporated entity
  
  (5) A person has a substantial investment in an unincorporated entity where the aggregate of any ownership interests, however designated, into which the entity is divided, beneficially owned by the person and by any entities controlled by the person exceeds 25 per cent of all of the ownership interests into which the entity is divided. 
  
  ### Increasing substantial investment in unincorporated entities
  
  (6) A person who has a substantial investment in an unincorporated entity increases that substantial investment when the person or any entity controlled by the person 
  (a) acquires beneficial ownership of additional ownership interests in the unincorporated entity in such number as to increase the percentage of ownership interests in the unincorporated entity beneficially owned by the person and by any entities controlled by the person; or 
  (b) acquires control of any entity that beneficially owns ownership interests in the unincorporated entity in such number as to increase the percentage of ownership interests beneficially owned by the person and by any entities controlled by the person. 
  11  [Repealed, 2005, c. 54, s. 216]  
  
  ### WTO Member resident
  
  11.1 (1) For the purposes of this Act, a WTO Member resident is 
  (a) a natural person who is ordinarily resident in a country or territory that is a WTO Member as defined in subsection 2(1) of the World Trade Organization Agreement Implementation Act, other than Canada;  
  (b) a body corporate, association, partnership or other organization that is incorporated, formed or otherwise organized in a country or territory that is a WTO Member, as defined in subsection 2(1) of the World Trade Organization Agreement Implementation Act, other than Canada, and that is controlled,  
  (i) directly or indirectly, by one or more persons referred to in paragraph (a), or 
  (ii) by a government of a WTO Member, whether federal, state or local, or an agency of one of those governments; 
  (c) a trust established by one or more persons referred to in paragraph (a) or (b) or a trust in which one or more of those persons have more than 50 per cent of the beneficial interest; or 
  (d) a body corporate, association, partnership or other organization that is controlled, directly or indirectly, by a trust referred to in paragraph (c). 
  
  ### Interpretation
  
  (2) For the purposes of subsection (1), 
  (a) a body corporate is controlled by one or more persons if 
  (i) securities of the body corporate to which are attached more than 50 per cent of the votes that may be cast to elect directors of the body corporate are beneficially owned by the person or persons, and 
  (ii) the votes attached to those securities are sufficient to elect a majority of the directors of the body corporate; 
  (b) an association, partnership or other organization is controlled by one or more persons if 
  (i) more than 50 per cent of the ownership interests, however designated, into which the association, partnership or other organization is divided are beneficially owned by the person or persons, and 
  (ii) the person or persons are able to direct the business and affairs of the association, partnership or other organization; 
  (c) a body corporate, association, partnership or other organization is controlled by one or more persons if the person or persons have, directly or indirectly, control in fact of the body corporate, association, partnership or other organization; and 
  (d) a body corporate, association, partnership or other organization that controls another body corporate, association, partnership or other organization is deemed to control any body corporate, association, partnership or other organization that is controlled or deemed to be controlled by the other body corporate, association, partnership or other organization. 
  
  ### Class of insurance
  
  12 (1) A class of insurance is a class set out in the schedule. 
  
  ### Reference to particular class
  
  (2) A reference in this Act to a particular class of insurance is a reference to the insurance of risks falling within that particular class determined in accordance with subsections (3) to (6) and the schedule. 
  
  ### Property
  
  (3) A class of insurance that includes insurance against the loss of, or damage to, property includes insurance against loss of use, occupancy, rents and profits resulting from that loss or damage. 
  
  ### Personal injuries and death
  
  (4) Unless specifically mentioned in the schedule, no class of insurance includes insurance against liability arising out of bodily injury to, or the death of, a natural person or the loss of, or damage to, property. 
  
  ### Idem
  
  (5) A class of insurance that includes insurance against liability arising out of bodily injury to, or the death of, a natural person or the loss of, or damage to, property includes insurance against loss, damage or expenses incident to a claim giving rise to that liability. 
  
  ### Endowments
  
  (6) The class of life insurance includes the issuance of endowment insurance the funds of which are to be paid at a fixed or determinable future time if the person whose life is insured is then alive or at the person’s death if the person dies before that time. 
  
  ### Amendment
  
  (7) The Governor in Council may, by order, amend subsections (3) to (5) and the schedule. 
  
  ## Application 
  
  ### Application of Act
  
  13 (1) This Act applies to every body corporate 
  (a) that is incorporated or continued as a company under this Act, or 
  (b) to which any of the provisions of Parts I, II, III and VII and either or both of Parts IV and VI of the Canadian and British Insurance Companies Act applied immediately before the coming into force of this section  and that is not discontinued under this Act. 
  
  ### Application of certain provisions
  
  (2) This Part, Parts II to IV, sections 224, 225, 245 to 258 and 489 and Parts X, XII, XV, XVI and XVIII to XX apply to every body corporate that is not discontinued under this Act and 
  (a) that is incorporated or continued as a society under this Act; or 
  (b) to which any of the provisions of Parts I and II, Part III, except section 77, Part IV, except sections 123 to 130 and 153 to 158, and Parts V and VII of the Canadian and British Insurance Companies Act applied before June 1, 1992.  
  
  ### Conflicting provisions
  
  14 Where there is a conflict or inconsistency between a provision of this Act and a provision of the incorporating instrument of a former-Act company or former-Act society, the provision of this Act prevails. 
  
  # PART II 
  
  ## Status and Powers 
  
  ### Corporate powers
  
  15 (1) A company or society has the capacity of a natural person and, subject to this Act, the rights, powers and privileges of a natural person. 
  
  ### Powers restricted
  
  (2) Neither a company nor a society shall carry on any business or exercise any power that it is restricted by this Act from carrying on or exercising, or exercise any of its powers in a manner contrary to this Act. 
  
  ### Business in Canada
  
  (3) A company or society may carry on business throughout Canada. 
  
  ### Powers outside Canada
  
  (4) Subject to this Act, a company or society has the capacity to carry on its business, conduct its affairs and exercise its powers in any jurisdiction outside Canada to the extent and in the manner that the laws of that jurisdiction permit. 
  
  ### Policies and procedures — integrity or security
  
  15.1 A company or society shall establish and adhere to policies and procedures to protect itself against threats to its integrity or security, including foreign interference. 
  
  ### No invalidity
  
  16 No act of a company or society, including any transfer of property to or by a company or society, is invalid by reason only that the act or transfer is contrary to the company’s or society’s incorporating instrument or this Act. 
  
  ### By-law not necessary
  
  17 It is not necessary for a company to pass a by-law in order to confer any particular power on the company or its directors. 
  
  ### No personal liability
  
  18 (1) The shareholders and participating policyholders of a company are not, as shareholders or policyholders, liable for any liability, act or default of the company except as otherwise provided by this Act. 
  
  ### Idem
  
  (2) The members of a society are not, as members, liable for any liability, act or default of the society except as otherwise provided by this Act. 
  
  ### No constructive notice
  
  19 No person is affected by or is deemed to have notice or knowledge of the contents of a document concerning a company or society by reason only that the document has been filed with the Superintendent or the Minister or is available for inspection at an office of the company or society. 
  
  ### Authority of directors and officers
  
  20 (1) No company or society and no guarantor of an obligation of a company or society may assert against a person dealing with the company or society or against a person who has acquired rights from the company or society that 
  (a) the company’s or society’s incorporating instrument or any by-laws of the company or society have not been complied with; 
  (b) the persons named as directors of the company or society in the most recent return sent to the Superintendent under section 549 or 668 are not the directors of the company or society; 
  (c) the place named in the incorporating instrument or by-laws of the company or society is not the place where the head office of the company or society is situated; 
  (d) a person held out by the company or society as a director, officer or representative of the company or society has not been duly appointed or has no authority to exercise the powers and perform the duties that are customary in the business of the company or society or usual for a director, officer or representative; or 
  (e) a document issued by any director, officer or representative of the company or society with actual or usual authority to issue the document is not valid or not genuine. 
  
  ### Exception — knowledge
  
  (2) Subsection (1) does not apply in respect of a person who has or ought to have knowledge of a situation described in that subsection by virtue of their relationship to the company or society. 
  
  ### Sunset provision
  
  21 (1) Subject to subsections (2) and (4), companies and societies shall not carry on business, and foreign companies shall not carry on business in Canada, after June 30, 2025. 
  
  ### Extension
  
  (2) The Governor in Council may, by order, extend by up to six months the time during which companies and societies may continue to carry on business and foreign companies may continue to carry on business in Canada. No more than one order may be made under this subsection. 
  
  ### Order not a regulation
  
  (3) The order is not a regulation for the purposes of the Statutory Instruments Act. However, it shall be published in Part II of the Canada Gazette.  
  
  ### Exception — dissolution
  
  (4) If Parliament dissolves on the day set out in subsection (1) or on any day within the six-month period before that day or on any day within an extension ordered under subsection (2), companies and societies may continue to carry on business, and foreign companies may continue to carry on business in Canada, until the end of the 180th day after the first day of the first session of the next Parliament. 
  
  # PART III 
  
  ## Incorporation, Continuance and Discontinuance 
  
  ## Formalities of Incorporation 
  
  ### Incorporation of company or society
  
  22 On the application of one or more persons made in accordance with this Act, the Minister may, subject to this Part, issue letters patent incorporating a company or society. 
  
  ### Restrictions on incorporation
  
  23 (1) Letters patent incorporating a company or society may not be issued if the application therefor is made by or on behalf of 
  (a) Her Majesty in right of Canada or in right of a province, an agency of Her Majesty in either of those rights, or an entity controlled by Her Majesty in either of those rights; 
  (b) the government of a foreign country or any political subdivision thereof; 
  (c) an agency of the government of a foreign country or any political subdivision thereof; or 
  (d) an entity, other than a foreign institution or any subsidiary of a foreign institution, that is controlled by the government of a foreign country or any political subdivision thereof. 
  
  ### Societies
  
  (2) Letters patent incorporating a society may not be issued if the society is to operate for profit or as a commercial enterprise or its property is not to be under the control of persons periodically elected by members of the society. 
  
  ### National treatment
  
  24 (1) If a proposed company would be a subsidiary of a foreign institution that is engaged in the insurance business, letters patent to incorporate the company may not be issued unless the Minister is satisfied that, if the application is made by a non-WTO Member foreign institution, treatment as favourable for companies to which this Act applies exists or will be provided in the jurisdiction in which the foreign institution principally carries on business, either directly or through a subsidiary. 
  
  ### Part XII of the Bank Act 
  
  (2) Nothing in subsection (1) affects the operation of Part XII of the Bank Act.  
  
  ### Application for incorporation
  
  25 (1) An application for letters patent to incorporate a company or society setting out the names of the first directors of the company or society shall be filed with the Superintendent, together with such other information, material and evidence as the Superintendent may require. 
  
  ### Publishing notice of intent
  
  (2) Before filing an application referred to in subsection (1), the applicant or one of the applicants, as the case may be, shall, at least once a week for a period of four consecutive weeks, publish, in a form satisfactory to the Superintendent, a notice of intention to make the application in the Canada Gazette and in a newspaper in general circulation at or near the place where the head office of the company or society is to be situated.  
  
  ### Objections to incorporation
  
  26 (1) Any person who objects to the proposed incorporation of a company or society may, within thirty days after the date of the last publication under subsection 25(2) in respect of the proposed company or society, submit the objection in writing to the Superintendent. 
  
  ### Minister to be informed
  
  (2) On receipt of an objection under subsection (1), the Superintendent shall inform the Minister of the objection. 
  
  ### Inquiry into objection and report
  
  (3) On receipt of an objection under subsection (1), and if the application for the issuance of the letters patent to which the objection relates has been received, the Superintendent shall, if satisfied that it is necessary and in the public interest to do so, hold or cause to be held a public inquiry into the objection as it relates to the application and, on completion of the inquiry, the Superintendent shall report the findings of the inquiry to the Minister. 
  
  ### Report to be made available
  
  (4) Within thirty days after receiving a report under subsection (3), the Minister shall make the report available to the public. 
  
  ### Rules governing proceedings
  
  (5) Subject to the approval of the Governor in Council, the Superintendent may make rules governing the proceedings at public inquiries held under this section. 
  
  ### Matters for consideration
  
  27 Before issuing letters patent to incorporate a company or society, the Minister shall take into account all matters that the Minister considers relevant to the application, including 
  (a) the nature and sufficiency of the financial resources of the applicant or applicants as a source of continuing financial support for the company or society; 
  (b) the soundness and feasibility of the plans of the applicant or applicants for the future conduct and development of the business of the company or society; 
  (c) the business record and experience of the applicant or applicants; 
  (d) the character and integrity of the applicant or applicants or, if the applicant or any of the applicants is a body corporate, its reputation for being operated in a manner that is consistent with the standards of good character and integrity; 
  (e) whether the company or society will be operated responsibly by persons with the competence and experience suitable for involvement in the operation of a financial institution; 
  (f) the impact of any integration of the operations and businesses of the applicant or applicants with those of the company or society on the conduct of those operations and businesses; and 
  (g) the best interests of the financial system in Canada. 
  
  ### Contents of letters patent
  
  28 (1) There shall be set out in the letters patent incorporating a company or society 
  (a) the name of the company or society; 
  (b) the province in which the head office of the company or society is to be situated; 
  (c) the date that the company or society came, or is to come, into existence; and 
  (d) in the case of letters patent incorporating a company, whether the company is to be a mutual company. 
  
  ### Fraternal benefit societies
  
  (2) In addition to the information required to be included under subsection (1), there shall be set out in the letters patent of a society 
  (a) the criteria for membership in the society; 
  (b) the manner in which the capital of the society is to be acquired; and 
  (c) the disposition to be made of the property of the society on liquidation. 
  
  ### Provisions in letters patent
  
  (3) The Minister may set out in the letters patent incorporating a company or society any provision not contrary to this Act that the Minister considers advisable in order to take into account the particular circumstances of the proposed company or society. 
  
  ### Terms and conditions
  
  (4) The Minister may impose such terms and conditions in respect of the issuance of letters patent incorporating a company or society as the Minister considers necessary or appropriate. 
  
  ### Letters patent of incorporation on application of converted companies
  
  28.1 (1) If the Minister, under section 22, issues letters patent incorporating a company on the application of a converted company in respect of which subsection 407(4) or (11) applies or applied at any time, the Minister may include in the letters patent of incorporation of the company a provision deeming shares of the company to be issued, on a share for share basis, to all shareholders of the converted company in exchange for all the issued and outstanding shares of the converted company. 
  
  ### Effect of provision
  
  (2) Shares of a company deemed to be issued under subsection (1) are subject to the same designation, rights, privileges and restrictions or conditions and, subject to any agreement to the contrary, to the same charges, encumbrances and other restrictions as the shares of the converted company for which they are exchanged and the shares of the converted company, on the issuance of the letters patent, become the property of the company free and clear of any charge, encumbrance or other restriction. 
  
  ### Effect of provision
  
  (3) An exchange of shares of a converted company referred to in subsection (1) under a provision included in the letters patent incorporating a company does not deprive a person who was a holder of shares of the converted company immediately before the exchange of any right or privilege with respect to the shares or relieve the person of any liability in respect of the shares, but that right or privilege must be exercised in accordance with this Act. 
  
  ### Transfer and voting of company shares
  
  (4) Despite subsection (3), no share of a company that is deemed to be issued under a provision included in the letters patent incorporating a company may subsequently be transferred or voted contrary to this Act. 
  
  ### Shareholder and policyholder approval
  
  (5) No provision described in subsection (1) may be included in letters patent issued under section 22 unless the application for the letters patent is accompanied by evidence that the request for the provision was approved by a special resolution of the shareholders and policyholders of the converted company who are entitled to vote at a meeting of shareholders and policyholders called to consider the application. 
  
  ### Exchange of share certificates
  
  (6) If, under a provision included in the letters patent incorporating a company, a share exchange is deemed to have taken place, the company shall, within ninety days after the issuance of the letters patent, make provision for the issue of share certificates representing shares of the company and for the exchange of those certificates for share certificates representing the shares of the converted company that were outstanding on the day the letters patent were issued. 
  
  ### Proposal involving fundamental change
  
  28.2 (1) On application, made in accordance with the regulations, by a converted company in respect of which subsection 407(4) or (11) applies or applied at any time to give effect to a proposal to incorporate a company as the holding body corporate of the converted company, to continue a body corporate as a company that is the holding body corporate of the converted company or to amalgamate two or more bodies corporate and continue those bodies corporate as a company that is the holding body corporate of the converted company — and to make any other fundamental change to the converted company, including an exchange of any or all of the shares of the converted company for shares of the company —, the Minister may, to give effect to the proposal, 
  (a) include in the letters patent of the company issued under section 22, 34 or 251 any provision the Minister considers necessary; or 
  (b) despite any provision of the Act specified in regulations made under paragraph (2)(e), give any approval that the Minister considers necessary. 
  
  ### Regulations
  
  (2) The Governor in Council may make regulations 
  (a) respecting applications referred to in subsection (1), including their form and the information to be contained in them, and authorizing the Superintendent to require additional information in respect of such applications; 
  (b) respecting proposals to which subsection (1) applies, including the information to be contained in the proposals and the times within which the transactions involved in them must occur; 
  (c) respecting the procedures to be followed by a converted company that makes an application under subsection (1); 
  (d) respecting the approval, confirmation or authorization, if any, of all or any portion of proposals to which subsection (1) applies, including the approval of shareholders and policyholders and including the terms and conditions of those approvals, confirmations or authorizations and their effect; and 
  (e) specifying provisions of the Act for the purpose of paragraph (1)(b). 
  
  ### Notice of issue of letters patent
  
  29 The Superintendent shall cause to be published in the Canada Gazette a notice of the issuance of letters patent incorporating a company or society.  
  
  ### First directors
  
  30 The first directors of a company or society are the directors named in the application for letters patent to incorporate the company or society. 
  
  ### Effect of letters patent
  
  31 A company or society comes into existence on the date provided therefor in its letters patent. 
  
  ## Continuance 
  
  ### Federal corporations
  
  32 (1) A body corporate incorporated under the Canada Business Corporations Act or any other Act of Parliament, including an insurance holding company but not including a federal credit union, may apply to the Minister for letters patent continuing the body corporate as a company under this Act.  
  
  ### Other corporations
  
  (2) A body corporate incorporated otherwise than by or under an Act of Parliament may, if so authorized by the laws of the jurisdiction where it is incorporated, apply to the Minister for letters patent continuing the body corporate as a company under this Act. 
  
  ### Fraternal benefit societies
  
  (3) A fraternal benefit society incorporated otherwise than by or under an Act of Parliament may, if so authorized by the laws of the jurisdiction where it is incorporated, apply to the Minister for letters patent continuing the fraternal benefit society as a society. 
  
  ### Application for continuance
  
  33 (1) Where a body corporate applies for letters patent under subsection 32(1), (2) or (3), sections 23 to 27 apply in respect of the application, with such modifications as the circumstances require. 
  
  ### Special resolution approval
  
  (2) Where a body corporate applies for letters patent under subsection 32(1), (2) or (3), the application must be duly authorized by a special resolution. 
  
  ### Copy of special resolution
  
  (3) A copy of the special resolution referred to in subsection (2) shall be filed with the application. 
  
  ### Power to issue letters patent
  
  34 (1) On the application of a body corporate under subsection 32(1) or (2), the Minister may, subject to this Part, issue letters patent continuing the body corporate as a company under this Act. 
  
  ### Power to issue letters patent to fraternal benefit society
  
  (2) On the application of a fraternal benefit society under subsection 32(3), the Minister may, subject to this Part, issue letters patent continuing the fraternal benefit society as a society. 
  
  ### Issue of letters patent
  
  (3) Section 28 applies in respect of the issue of letters patent under subsection (1) or (2), with such modifications as the circumstances require. 
  
  ### Effect of letters patent
  
  35 (1) On the day set out in the letters patent continuing a body corporate as a company under subsection 34(1), 
  (a) the body corporate becomes a company as if it had been incorporated under this Act; and 
  (b) the letters patent are deemed to be the incorporating instrument of the continued company. 
  
  ### Effect of letters patent — society
  
  (2) On the day set out in the letters patent continuing a fraternal benefit society as a society under subsection 34(2), 
  (a) the fraternal benefit society becomes a society as if it had been incorporated under this Act; and 
  (b) the letters patent are deemed to be the incorporating instrument of the continued society. 
  
  ### Copy of letters patent
  
  36 (1) Where a body corporate is continued as a company or society under this Part, the Superintendent shall without delay send a copy of the letters patent to the appropriate official or public body in the jurisdiction in which the body corporate was authorized to apply to be continued under this Act. 
  
  ### Notice of issuance of letters patent
  
  (2) The Superintendent shall publish in the Canada Gazette a notice of the issuance of letters patent continuing a body corporate as a company or society under this Act.  
  
  ### Effects of continuance
  
  37 Where a body corporate is continued as a company or society under this Part, 
  (a) the property of the body corporate continues to be the property of the company or society; 
  (b) the company or society continues to be liable for the obligations of the body corporate; 
  (c) an existing cause of action or claim by or against the body corporate or any liability of the body corporate to prosecution is unaffected; 
  (d) a civil, criminal or administrative action or proceeding pending by or against the body corporate may continue to be prosecuted by or against the company or society; 
  (e) a conviction against, or any ruling, order or judgment in favour of or against the body corporate may be enforced by or against the company or society; 
  (f) a person who, on the day the body corporate becomes a company or society, is the holder of a security issued by the body corporate is not deprived of any right or privilege available to the person at that time in respect of the security or relieved of any liability in respect of it, but any such right or privilege may be exercised only in accordance with this Act; and 
  (g) the by-laws of the body corporate, except those that are in conflict with this Act, continue as the by-laws of the company or society. 
  
  ### Transitional
  
  38 (1) Notwithstanding any other provision of this Act or the regulations, the Minister may, on the recommendation of the Superintendent, by order, grant to a company or society in respect of which letters patent were issued under subsection 34(1) or (2) permission to 
  (a) engage in a business activity specified in the order that the company or society would not otherwise be permitted by this Act to engage in and that the body corporate continued as the company or society was engaging in at the time the application for the letters patent was made; 
  (b) continue to have issued and outstanding debt obligations the issue of which is not authorized by this Act if the debt obligations were outstanding at the time the application for the letters patent was made; 
  (c)  [Repealed, 1994, c. 47, s. 119]  
  (d) hold assets that the company or society would not otherwise be permitted by this Act to hold, if the assets were held by the body corporate continued as the company or society at the time the application for the letters patent was made; 
  (e) acquire and hold assets that the company or society would not otherwise be permitted by this Act to acquire or hold, if the body corporate continued as the company or society was obliged, at the time the application for the letters patent was made, to acquire those assets; and 
  (f) maintain outside Canada any records or registers required by this Act to be maintained in Canada. 
  
  ### Duration
  
  (2) The permission granted under subsection (1) shall be expressed to be granted for a period specified in the order not exceeding 
  (a) with respect to any activity described in paragraph (1)(a), thirty days after the date of issue of the letters patent or, where the activity is conducted pursuant to an agreement existing on the date of issue of the letters patent, the expiration of the agreement; 
  (b) with respect to any matter described in paragraph (1)(b), ten years; and 
  (c) with respect to any matter described in any of paragraphs (1)(d) to (f), two years. 
  
  ### Renewal
  
  (3) Subject to subsection (4), the Minister may, on the recommendation of the Superintendent, by order, renew a permission granted by order under subsection (1) with respect to any matter described in paragraphs (1)(b) to (e) for such further period or periods as the Minister considers necessary. 
  
  ### Limitation
  
  (4) The Minister shall not grant to a company or society any permission 
  (a) with respect to matters described in paragraph (1)(b), that purports to be effective more than ten years after the date of the approval for the company or society to commence and carry on business, unless the Minister is satisfied on the basis of evidence on oath provided by an officer of the company or society that the company or society will not be able at law to redeem at the end of the ten years the outstanding debt obligations to which the permission relates; and 
  (b) with respect to matters described in paragraphs (1)(d) and (e), that purports to be effective more than ten years after the date of the approval for the company or society to commence and carry on business. 
  
  ## Discontinuance 
  
  ### Transferring to other federal Acts
  
  39 (1) A company or society may 
  (a) apply, under the Bank Act, for letters patent continuing the company or society as a bank or a bank holding company under that Act, or amalgamating and continuing the company or society as a bank or a bank holding company under that Act;  
  (b) apply, with the approval in writing of the Minister, under the Canada Business Corporations Act for a certificate of continuance as a corporation under that Act;  
  (c) apply, with the approval in writing of the Minister, under the Canada Cooperatives Act for a certificate of continuance, or a certificate of continuance and a certificate of amalgamation, as a cooperative under that Act;  
  (d) apply, under the Cooperative Credit Associations Act, for letters patent continuing the company or society as an association under that Act, or amalgamating and continuing the company or society as an association under that Act; or  
  (e) apply, under the Trust and Loan Companies Act, for letters patent continuing the company or society as a company under that Act, or amalgamating and continuing the company or society as a company under of that Act.  
  
  ### Continuance under the Canada Not-for-profit Corporations Act 
  
  (2) A society may also, with the approval in writing of the Minister, apply under the Canada Not-for-profit Corporations Act, for a certificate of continuance under that Act.  
  
  ### Conditions for approval
  
  (3) The approval referred to in paragraph (1)(b) or (c) or subsection (2) may be given only if the Minister is satisfied that 
  (a) the company or society has published, once a week for four consecutive weeks in the Canada Gazette and in a newspaper in general circulation at or near the place where the head office of the company or society is situated, a notice of its intention to apply for the approval;  
  (b) the company or society has discharged, or provided for the discharge of, all its policy liabilities; 
  (c) the company or society will not, unless it is an entity referred to in paragraph 47(2)(b) or (c), use the word “ assurance ”, “ assurances ” or “insurance” in its name after the certificate or letters patent are issued in respect of the company or society; and  
  (d) the application has been authorized by a special resolution. 
  
  ### Withdrawing application
  
  (4) If a special resolution authorizing the application for the certificate or letters patent so states, the directors of a company or society may, without further approval of the shareholders, policyholders entitled to vote or members, withdraw the application before it is acted on. 
  
  ### Restriction on other transfers
  
  (5) A company or society may not apply to be continued, or to be amalgamated and continued, as the case may be, as a body corporate other than one referred to in subsection (1) or (2). 
  
  ### Act ceases to apply
  
  40 If a company or society applies for a certificate or letters patent referred to in section 39 in accordance with that section and the certificate is given or the letters patent are issued, this Act ceases to apply to the company or society as of the day the certificate or the letters patent take effect. 
  41  [Repealed, 2001, c. 9, s. 358]  
  
  ## Corporate Name 
  
  ### Prohibited names
  
  42 (1) A company or society may not be incorporated under this Act with a name 
  (a) that is prohibited by an Act of Parliament; 
  (b) that is, in the opinion of the Superintendent, deceptively misdescriptive; 
  (c) that is the same as or, in the opinion of the Superintendent, substantially the same as or confusingly similar to, any existing 
  (i) trademark or trade name, or 
  (ii) corporate name of a body corporate, except where the trademark or trade name is being changed or the body corporate is being dissolved or is changing its corporate name and consent to the use of the trademark, trade name or corporate name is signified to the Superintendent in such manner as the Superintendent may require; 
  (d) that is the same as or, in the opinion of the Superintendent, substantially the same as or confusingly similar to, the known name under or by which any entity carries on business or is identified; or 
  (e) that is reserved under section 45 for another company or society or a proposed company or society or under section 734 for an insurance holding company or a proposed insurance holding company. 
  
  ### Exception
  
  (2) Paragraph (1)(a) does not apply with respect to any former-Act company or former-Act society incorporated by or under an Act of Parliament that expressly authorizes the use of any name that would otherwise be prohibited. 
  
  ### Affiliated company or society
  
  43 Despite section 42, a company or society that is affiliated with another entity may, with the consent of that entity, be incorporated with, or change its name to, substantially the same name as that of the affiliated entity. 
  
  ### French or English form of name
  
  44 (1) The name of a company or society may be set out in its letters patent in an English form, a French form, an English form and a French form or in a combined English and French form, and the company or society may use and be legally designated by any such form. 
  
  ### Alternate name
  
  (2) A company or society may identify itself outside Canada by its name in any language and the company or society may use and be legally designated by any such form of its name outside Canada. 
  
  ### Other name
  
  (3) Subject to subsection (4) and section 278, a company or society may carry on business under or identify itself by a name other than its corporate name. 
  
  ### Directions
  
  (4) Where a company or society is carrying on business under or identifying itself by a name other than its corporate name, the Superintendent may, by order, direct the company or society not to use that other name if the Superintendent is of the opinion that that other name is a name referred to in any of paragraphs 42(1)(a) to (e). 
  
  ### Reserved name
  
  45 The Superintendent may, on request, reserve for ninety days a name for a proposed company or society or for a company or society that intends to change its name. 
  
  ### Directing change of name
  
  46 (1) If through inadvertence or otherwise a company or society 
  (a) comes into existence or is continued with a name, or 
  (b) on an application to change its name, is granted a name that is prohibited by section 42, the Superintendent may, by order, direct the company or society to change its name and the company or society shall comply with that direction. 
  
  ### Revoking name
  
  (2) If a company or society has been directed under subsection (1) to change its name and has not, within sixty days after the service of the direction, changed its name to a name that is not prohibited by this Act, the Superintendent may revoke the name of the company or society and assign to it a name and, until changed in accordance with section 224, 238 or 544.1, the name of the company or society is thereafter the name so assigned. 
  
  ### Restriction on use of name
  
  47 (1) No entity incorporated or formed by or under an Act of Parliament shall use the word “ assurance ”, “ assurances ”, “insurance” or “lifeco” or any word or words of import equivalent to any of those words in its name.  
  
  ### Exceptions
  
  (2) Subsection (1) does not apply to 
  (a) a company or society; 
  (a.1) an insurance holding company; 
  (b) an entity the business of which is not financial activities; 
  (c) an entity that is primarily engaged in insurance brokerage or insurance agency services; or 
  (d) an entity that was, on the day immediately preceding the day on which that subsection comes into force, using the word “ assurance ”, “ assurances ”, “insurance” or “lifeco” or any word or words of import equivalent to any of those words in its name.  
  
  ### Subsidiaries
  
  48 Despite subsection 47(1), a subsidiary of a company or society may use the company’s or society’s name in its name. 
  
  ### Definition of 
  *reserved name* 
  
  48.1 (1) In this section, 
  *reserved name* means a name that includes as part thereof the word “ assurance ”, “ assurances ”, “insurance”, “lifeco”, “ fiduciaire ”, “fiduciary”, “ fiducie ”, “trust”, “trustco”, “loan”, “loanco” or “ prêt ” or any word or words of import equivalent to any of those words.  
  
  ### Termination of control required in certain cases
  
  (2) No person, other than a financial institution, who 
  (a) is carrying on business in Canada under a reserved name, and 
  (b) has control or acquires control of a company, shall control the company on the later of 
  (c) one year after this section comes into force, and 
  (d) one year after the date of acquisition of the control. 
  
  ### Prohibition
  
  (3) No person, other than a financial institution, who 
  (a) controls an entity that is not a financial institution that carries on business in Canada under a reserved name, and 
  (b) has control or acquires control of a company, shall control the company on the later of 
  (c) one year after this section comes into force, and 
  (d) one year after the date of the acquisition of the control. 
  
  ### Continuing control prohibited
  
  (4) Notwithstanding subsection (3), where a financial institution controls an entity that 
  (a) is not a financial institution, 
  (b) carries on business in Canada under a reserved name, and 
  (c) has control or acquires control of a company, the entity shall not control the company on the later of 
  (d) one year after this section comes into force, and 
  (e) one year after the date on which the entity acquires control of the company. 
  
  ### Exceptions
  
  (5) Subsections (2) to (4) do not apply with respect to a person or entity that was carrying on business in Canada under a reserved name on the day immediately preceding the day on which those subsections come into force. 
  
  # PART IV 
  
  ## Organization and Commencement 
  
  ## Organization Meetings 
  
  ### First directors’ meeting
  
  49 (1) After letters patent incorporating a company or society are issued, a meeting of the directors of the company or society shall be held at which the directors shall appoint an actuary to be the actuary of the company or society and may, subject to this Part, 
  (a) make by-laws; 
  (b) adopt forms of share certificates and corporate records; 
  (c) authorize the issue of shares of the company; 
  (d) appoint officers; 
  (e) appoint an auditor to hold office until the meeting called pursuant to subsection 50(1), (2) or (3); 
  (f) make banking arrangements; and 
  (g) deal with any other matters necessary to organize the company or society. 
  
  ### Calling directors’ meeting
  
  (2) An incorporator or a director named in the application for letters patent may call the meeting referred to in subsection (1) by giving, subject to subsection 190(2), no fewer than five days notice of the purpose, time and place of the meeting to each director of the company or society. 
  
  ### Calling shareholders’ meeting
  
  50 (1) If at least five million dollars, or any greater amount that the Minister may specify, has been received by a company, other than a mutual company, in respect of which letters patent were issued under section 22 from the issue of its shares, the directors of the company shall without delay call a meeting of the shareholders of the company. 
  
  ### Calling incorporators’ meeting
  
  (2) Where such amount as the Minister may specify has been received by a mutual company in respect of which letters patent were issued pursuant to section 22 from its incorporators, the directors of the mutual company shall forthwith call a meeting of the incorporators of the mutual company. 
  
  ### Calling meeting of supreme governing body
  
  (3) Where such amount as the Minister may specify has been received by a society in respect of which letters patent were issued pursuant to section 22 from its incorporators, the directors of the society shall forthwith call a meeting of the supreme governing body of the society. 
  
  ### Meeting of shareholders or incorporators
  
  (4) The shareholders or incorporators of a company or the supreme governing body of a society shall, by resolution at the meeting of shareholders or incorporators called pursuant to subsection (1), (2) or (3), 
  (a) approve, amend or reject any by-law made by the directors of the company or society; 
  (b) subject to section 176, elect directors to hold office for a term expiring not later than the close of the third annual meeting of shareholders and policyholders or members following the election; and 
  (c) appoint an auditor to hold office until the close of the first annual meeting of shareholders and policyholders or, in the case of a society, until the close of the first general meeting of members. 
  
  ### Term of first directors
  
  51 A director named in the application for letters patent to incorporate a company or society holds office until the election of directors at the meeting of shareholders or incorporators or of the supreme governing body called pursuant to subsection 50(1), (2) or (3). 
  
  ## Commencement and Carrying on of Business 
  
  ### Order to commence and carry on business
  
  52 (1) Subject to subsection (6), a company or society shall not carry on any business until the Superintendent has, by order, approved the commencement and carrying on of business by the company or society. 
  
  ### Former-Act companies and societies
  
  (2) A certificate of registry issued to a company or society under Part III of the Canadian and British Insurance Companies Act, or any other authorization, that is in effect immediately before the coming into force of this Part is deemed to be an order of the Superintendent of indeterminate duration under subsection 53(1) and the company or society remains subject to any and all other restrictions and conditions in the certificate.  
  
  ### Continued company or society
  
  (3) Except in respect of a body corporate that is continued as a company or society under this Act for the purposes of amalgamating without delay with one or more bodies corporate and continuing as a company or society under this Act, where letters patent continuing a body corporate as a company or society under this Act are issued, the Superintendent shall make an order approving the commencement and carrying on of business by the company or society. 
  
  ### Amalgamated company or society
  
  (4) Where letters patent amalgamating and continuing two or more bodies corporate as a company or society under this Act are issued, the Superintendent shall make an order approving the commencement and carrying on of business by the company or society. 
  
  ### Subsection 53(2) and section 57 do not apply
  
  (5) For greater certainty, subsection 53(2) and section 57 do not apply in respect of a company or society referred to in subsections (3) and (4). 
  
  ### Marine insurance
  
  (6) A company that is not a marine company may insure risks in the class of marine insurance without an order under subsection (1). 
  
  ### Transitional
  
  (7) Every former-Act company and former-Act society that deposited securities with the Receiver General pursuant to section 76 or 82 of the Canadian and British Insurance Companies Act shall apply for the return of those securities within such period following the coming into force of this section as may be fixed by order of the Governor in Council.  
  
  ### Authority to make order
  
  53 (1) On application by a company or society, the Superintendent may make an order approving the commencement and carrying on of business by the company or society. 
  
  ### Statement of payments
  
  (2) An application by a company or society for an order under subsection (1) must contain a statement setting out the amounts paid or to be paid by the company or society in connection with its incorporation and organization. 
  
  ### No payments before order
  
  54 Until an order approving the commencement and carrying on of business is made in respect of a company or society, the company or society shall not make any payment on account of incorporation or organization expenses out of moneys received from the paid-in capital of the company or society and interest on those moneys, except reasonable sums 
  (a) for the remuneration of not more than two officers; 
  (b) for the payment of costs related to the issue of shares; and 
  (c) for the payment of clerical assistance, legal services, accounting services, office accommodation at one location, office expenses, advertising, stationery, postage and travel expenses. 
  
  ### Expenses charged to paid-in capital
  
  55 All incorporation and organization expenses of a company or society shall be charged to the paid-in capital of the company or society and shall not in any way be charged directly or indirectly to policyholders. 
  
  ### Deposits and investments before order
  
  56 (1) Subject to subsection (2), where a company or society comes into existence but no order approving the commencement and carrying on of business is made for the company or society, the company or society may only 
  (a) deposit, in Canada, paid-in capital of the company or society in a deposit-taking Canadian financial institution; or 
  (b) invest paid-in capital of the company or society in unencumbered securities of the Government of Canada or the government of any province. 
  
  ### Exception
  
  (2) Subsection (1) does not apply in respect of any company incorporated for the sole purpose of insuring risks in the class of marine insurance. 
  
  ### Conditions for order
  
  57 (1) The Superintendent shall not make an order approving the commencement and carrying on of business by a company or society until 
  (a) it has been shown to the satisfaction of the Superintendent that 
  (i) the meeting of shareholders, incorporators or supreme governing body of the company or society referred to in subsection 50(1), (2) or (3) has been duly held, 
  (ii) the company or society has paid-in capital of 
  (A) such amount as is specified by the Minister under subsection 50(2) or (3), in the case of a mutual company or a society, or 
  (B) at least five million dollars or any greater amount that is specified by the Minister under subsection 50(1), in the case of a company other than a mutual company, 
  (iii) the expenses of incorporation and organization to be borne by the company or society are reasonable, and 
  (iv) all other relevant requirements of this Act have been complied with; and 
  (b) in the case of a society, the society has filed with the Superintendent 
  (i) a report of an actuary appointed by the society, in such form as the Superintendent may require, on the results of an actuarial valuation of each of the benefit funds maintained by the society, having regard to the prospective liabilities of and contributions to each fund, 
  (ii) the opinion of the actuary that the assets of the society applicable to each fund, together with the contributions to be received thereafter from the members, are sufficient to provide for the payment at maturity of all of the obligations of the fund without deduction or abatement, and 
  (iii) a statement of its condition and affairs in such detail as the Superintendent may require, as at the date of the valuation referred to in subparagraph (i). 
  
  ### Restrictions re societies
  
  (2) No order approving the commencement and carrying on of business of a society shall be made if the society operates for profit or as a commercial or business enterprise or the property or funds of the society are under the control of persons not periodically elected by members of the society. 
  
  ### Time limit
  
  (3) The Superintendent shall not make an order approving the commencement and carrying on of business by a company or society more than one year after the day on which the company or society comes into existence. 
  
  ### Order to specify classes of insurance
  
  58 (1) An order approving the commencement and carrying on of business by a company shall specify the classes of insurance risks that the company is permitted to insure pursuant to section 443. 
  
  ### Conditions of order
  
  (2) An order approving the commencement and carrying on of business by a company or society may contain such conditions or limitations that are consistent with this Act and relate to the business of the company or society as the Superintendent deems expedient and necessary. 
  
  ### Variations
  
  59 (1) In respect of the order approving the commencement and carrying on of business by a company or society, the Superintendent may at any time, by further order, 
  (a) specify additional classes of insurance risks that the company is permitted to insure pursuant to section 443, 
  (b) make the order subject to such conditions or limitations that are consistent with this Act and that relate to the business of the company or society as the Superintendent deems expedient and necessary, or 
  (c) amend or revoke any authorization contained in the order or any condition or limitation to which the order is subject, but before making any such further order the Superintendent shall provide the company or society with an opportunity to make representations regarding that further order. 
  (2) to (6)  [Repealed, 1996, c. 6, s. 71]  
  
  ### Limit on assets
  
  59.1 (1) The Minister may, by order, require a company that is a converted company in respect of which the Minister has issued an order under subsection 407(8) or a converted company in respect of which subsection 407(11) applied at any time not to have average total assets in any three month period ending on the last day of a month subsequent to the month specified in the order exceeding the company’s average total assets in the three month period ending on the last day of the month immediately before the month specified in the order if the Minister is of the opinion that it is in the best interests of the financial system in Canada to do so, after having considered the Superintendent’s opinion on 
  (a) the nature and extent of the financial services activities carried out by entities affiliated with the company; and 
  (b) the impact that the nature and degree of supervision and regulation of those financial services activities have on the supervision and regulation of the company. 
  
  ### Revocation of order
  
  (2) If the Minister is of the opinion that the circumstances giving rise to the order have ceased to exist or have changed substantially, the Minister may, by further order, revoke the order. 
  
  ### Average total assets
  
  (3) For the purposes of subsection (1), the average total assets of a company in a three month period shall be computed by adding the total assets of the company as calculated for the month end of each of the three months in the period and by dividing the sum by three. 
  
  ### Public notice
  
  60 (1) On the making of an order approving the commencement and carrying on of business by a company or society, the company or society shall publish a notice of the making of the order in a newspaper in general circulation at or near the place where the head office of the company or society is located. 
  
  ### Notice in Canada Gazette 
  
  (2) The Superintendent shall cause to be published in the Canada Gazette a notice of the making of an order approving the commencement and carrying on of business by a company or society.  
  
  ### Non-application to former-Act company or society
  
  (3) For greater certainty, this section does not apply to a company or society referred to in subsection 52(2). 
  
  ### Cessation of existence
  
  61 (1) Subject to subsection (2), except for the sole purpose of winding up the company’s or society’s affairs, a company or society ceases to exist one year after the day on which its incorporating instrument became effective if it does not obtain an order approving the commencement and carrying on of business within that year. 
  
  ### Marine insurance
  
  (2) A company that was incorporated for the sole purpose of insuring risks in the class of marine insurance ceases to exist one year after the day on which its incorporating instrument became effective if, in the opinion of the Superintendent, the company is not, by that date, actively engaged in insuring those risks. 
  
  ### Allowed disbursements
  
  62 (1) Where 
  (a) an order approving the commencement and carrying on of business is not made for a company or society, or 
  (b) the Superintendent is of the opinion that a company referred to in subsection 61(2) is not actively engaged in insuring risks in the class of marine insurance, no part of the moneys of the company or society shall be used for the payment of incorporation and organization expenses, other than remuneration and costs referred to in section 54, unless the payment has been approved by a special resolution. 
  
  ### Application to court to settle disbursements
  
  (2) If the amount allowed by a special resolution for the payment of any incorporation and organization expenses referred to in subsection (1) is considered insufficient by the directors or if no special resolution for the payment of such expenses is passed, the directors may apply to any court having jurisdiction in the place where the head office of the company or society is situated to settle and determine the amounts to be paid out of any moneys of the company or society before distribution of the balance to the shareholders or, where there are no shareholders, to the incorporators. 
  
  ### Notice of application to court
  
  (3) The directors shall, at least twenty-one days prior to the date fixed for the hearing of the application referred to in subsection (2), send to the shareholders or incorporators, as the case may be, a notice of the application, which notice shall contain a statement of the amounts that are proposed to be settled and determined by the court. 
  
  ### Ratio payable
  
  (4) In order that the amounts paid and payable under this section may be equitably borne by the shareholders or incorporators, as the case may be, the directors shall, after the amounts of the payments have been approved by special resolution or settled and determined by a court, fix the proportionate part thereof chargeable to each shareholder or incorporator as the ratio of the amount paid in by the shareholder or incorporator to the aggregate of all the amounts paid in by the shareholders or incorporators. 
  
  ### Return of excess
  
  (5) After the amounts referred to in this section have been paid, the directors shall pay, with any interest earned thereon, to the shareholders or incorporators, the respective balances of the moneys paid in by them, less the amount chargeable to each shareholder or incorporator under subsection (4). 
  
  # PART V 
  
  ## Capital Structure 
  
  ## Share Capital 
  
  ### Power to issue shares
  
  63 (1) Subject to this Act and the by-laws of the company, shares of a company may be issued at such times and to such persons and for such consideration as the directors of the company may determine. 
  (2) and (3)  [Repealed, 1997, c. 15, s. 180]  
  
  ### Shares
  
  (4) Shares of a company shall be in registered form and shall be without nominal or par value. 
  
  ### Shares of former-Act company
  
  (5) Shares with nominal or par value of a former-Act company are deemed to be shares without nominal or par value. 
  
  ### Shares of continued company
  
  (6) Where a body corporate is continued as a company under this Act, shares with nominal or par value issued by the body corporate before it was so continued are deemed to be shares without nominal or par value. 
  
  ### Deemed share conditions
  
  (7) Where any right of a holder of a share with nominal or par value of a former-Act company or a body corporate continued as a company under this Act, other than a voting right, was stated or expressed in terms of the nominal or par value of the share immediately before the coming into force of this Part or the continuance under this Act, as the case may be, that right is thereafter deemed to be the same right stated or expressed without reference to the nominal or par value of the share. 
  
  ### Common shares
  
  64 (1) A company, other than a mutual company, shall have one class of shares, to be designated as “common shares”, which are non-redeemable and in which the rights of the holders thereof are equal in all respects, and those rights include 
  (a) the right to vote at all meetings of shareholders except where only holders of a specified class of shares, or policyholders, are entitled to vote; 
  (b) the right to receive dividends declared on those shares; and 
  (c) the right to receive the remaining property of the company on dissolution that pertains to shareholders. 
  
  ### Designations of shares
  
  (2) No company shall designate more than one class of its shares as “common shares” or any variation of that term. 
  (3)  [Repealed, 2012, c. 5, s. 124]  
  
  ### Continued company
  
  (4) A body corporate continued as a company under this Act that is not in compliance with subsection (2) on the date letters patent continuing it as a company are issued shall, within twelve months after that date, redesignate its shares to comply with that subsection. 
  
  ### Classes of shares
  
  65 (1) The by-laws of a company may provide for one or more classes of shares and, if they so provide, shall set out 
  (a) the rights, privileges, restrictions and conditions attaching to the shares of each class; and 
  (b) the maximum number, if any, of shares of any class that the company is authorized to issue. 
  
  ### Shareholder approval
  
  (2) Where a by-law referred to in subsection (1) is made, the directors of the company shall submit the by-law to the shareholders and policyholders at the next meeting of shareholders and policyholders. 
  
  ### Effective date
  
  (3) A by-law referred to in subsection (1) is not effective until it is confirmed or confirmed with amendments by special resolution of the shareholders and policyholders at the meeting referred to in subsection (2). 
  
  ### Shares issued in series
  
  66 (1) The by-laws of a company may, subject to any limitations set out in them, authorize the issue of any class of shares in one or more series and may 
  (a) fix the maximum number of shares in each series and determine the designation, rights, privileges, restrictions and conditions attaching to them; and 
  (b) authorize the directors to do anything referred to in paragraph (a). 
  
  ### Series participation
  
  (2) If any cumulative dividend or amounts payable on return of capital in respect of a series of shares are not paid in full, the shares of all series of the same class participate rateably in respect of accumulated dividends and return of capital. 
  
  ### Voting rights
  
  (3) Where voting rights are attached to any series of a class of shares, the shares of every other series of that class shall have the same voting rights. 
  
  ### Restriction on series
  
  (4) No rights, privileges, restrictions or conditions attached to a series of shares authorized under this section confer on the series a priority in respect of dividends or return of capital over any other series of shares of the same class that are then outstanding. 
  
  ### Material to Superintendent
  
  (5) If the directors exercise their authority under paragraph (1)(b), the directors shall, before the issue of shares of the series, send to the Superintendent particulars of the series of shares and a copy of the by-law that granted the authority to the directors. 
  
  ### One share, one vote
  
  67 Where voting rights are attached to a share of a company, the voting rights may confer only one vote in respect of that share. 
  
  ### Shares non-assessable
  
  68 Shares issued by a company after the coming into force of this section are non-assessable and the shareholders are not liable to the company or to its creditors in respect thereof. 
  
  ### Consideration for share
  
  69 (1) No share of any class of shares of a company shall be issued until it is fully paid for in money or, with the approval of the Superintendent, in property. 
  
  ### Transitional
  
  (2) Where any share of a company is not fully paid for on the day this Part comes into force, the provisions of the Canadian and British Insurance Companies Act that applied to the company immediately prior to that day and that relate to  
  (a) the liability of holders of shares of a company that are not fully paid for and the enforcement of that liability, 
  (b) the forfeiture of the share, and 
  (c) the forfeiture of the right to vote the share continue to apply in respect of that share. 
  
  ### Other currencies
  
  (3) When issuing shares, a company may provide that any aspect of the shares relating to money or involving the payment of or the liability to pay money be in a currency other than the currency of Canada. 
  
  ### Stated capital account
  
  70 (1) A company shall maintain a separate stated capital account for each class and series of shares it issues. 
  
  ### Addition to stated capital account
  
  (2) A company shall record in the appropriate stated capital account the full amount of any consideration it receives for any shares it issues. 
  
  ### Exception
  
  (2.1) Despite subsection (2), a company may, subject to subsection (2.2), record in the stated capital account maintained for the shares of a class or series any part of the consideration it receives in an exchange if it issues shares 
  (a) in exchange for 
  (i) property of a person who immediately before the exchange did not deal with the company at arm’s length within the meaning of that expression in the Income Tax Act,  
  (ii) shares of or another interest in a body corporate that immediately before the exchange or because of it did not deal with the company at arm’s length within the meaning of that expression in the Income Tax Act, or  
  (iii) property of a person who immediately before the exchange dealt with the company at arm’s length within the meaning of that expression in the Income Tax Act if the person, the company and all of the holders of shares in the class or series of shares so issued consent to the exchange;  
  (b) under an agreement referred to in subsection 246(1); or 
  (c) to shareholders of an amalgamating body corporate who receive the shares in addition to or instead of securities of the amalgamated company. 
  
  ### Limit on addition to a stated capital account
  
  (2.2) On the issuance of a share, a company shall not add to the stated capital account in respect of the share an amount greater than the amount of the consideration it receives for the share. 
  
  ### Constraint on addition to a stated capital account
  
  (2.3) Where a company that has issued any outstanding shares of more than one class or series proposes to add to a stated capital account that it maintains in respect of a class or series of shares an amount that was not received by the company as consideration for the issue of shares, the addition must be approved by special resolution unless all the issued and outstanding shares are of not more than two classes of convertible shares referred to in subsection 81(4). 
  
  ### Stated capital of former-Act company
  
  (3) On the coming into force of this Part, a former-Act company shall record in the stated capital account maintained for each class and series of shares then outstanding an amount that is equal to the aggregate of 
  (a) the aggregate amount paid up on the shares of each class and series of shares immediately before the coming into force of this Part, and 
  (b) the amount of the contributed surplus of the company that is attributable to those shares. 
  
  ### Contributed surplus entry
  
  (4) The amount of any contributed surplus recorded in the stated capital account pursuant to paragraph (3)(b) shall be deducted from the contributed surplus account of the company. 
  
  ### Share issued before coming into force
  
  (5) Any amount unpaid in respect of a share issued by a former-Act company before the coming into force of this Part and paid after the coming into force of this Part shall be recorded in the stated capital account maintained by the company for the shares of that class or series. 
  
  ### Stated capital of continued company
  
  71 (1) Where a body corporate is continued as a company under this Act, the company shall record in the stated capital account maintained for each class and series of shares then outstanding an amount that is equal to the aggregate of 
  (a) the aggregate amount paid up on the shares of each class and series of shares immediately before the body corporate was so continued, and 
  (b) the amount of the contributed surplus of the company that is attributable to those shares. 
  
  ### Contributed surplus entry
  
  (2) The amount of any contributed surplus recorded in the stated capital account pursuant to paragraph (1)(b) shall be deducted from the contributed surplus account of the company. 
  
  ### Shares issued before continuance
  
  (3) Any amount unpaid in respect of a share issued by a body corporate before it was continued as a company under this Act and paid after it was so continued shall be recorded in the stated capital account maintained by the company for the shares of that class or series. 
  
  ### Pre-emptive right
  
  72 (1) Where the by-laws of a company so provide, no shares of any class shall be issued unless the shares have first been offered to the shareholders holding shares of that class, and those shareholders have a pre-emptive right to acquire the offered shares in proportion to their holdings of the shares of that class, at such price and on such terms as those shares are to be offered to others. 
  
  ### Exception
  
  (2) Notwithstanding the existence of a pre-emptive right, a shareholder of a company has no pre-emptive right in respect of shares of a class to be issued 
  (a) for a consideration other than money; 
  (b) as a share dividend; or 
  (c) pursuant to the exercise of conversion privileges, options or rights previously granted by the company. 
  
  ### Idem
  
  (3) Notwithstanding the existence of a pre-emptive right, a shareholder of a company has no pre-emptive right in respect of shares to be issued 
  (a) where the issue of shares to the shareholder is prohibited by this Act; or 
  (b) where, to the knowledge of the directors of the company, the offer of shares to a shareholder whose recorded address is in a country other than Canada ought not to be made unless the appropriate authority in that country is provided with information in addition to that submitted to the shareholders at the last annual meeting. 
  
  ### Conversion privileges
  
  73 (1) A company may issue conversion privileges, options or rights to acquire securities of the company, and shall set out the conditions thereof 
  (a) in the documents that evidence the conversion privileges, options or rights; or 
  (b) in the securities to which the conversion privileges, options or rights are attached. 
  
  ### Transferable rights
  
  (2) Conversion privileges, options and rights to acquire securities of a company may be made transferable or non-transferable, and options and rights to acquire such securities may be made separable or inseparable from any securities to which they are attached. 
  
  ### Reserved shares
  
  (3) Where a company has granted privileges to convert any securities issued by the company into shares, or into shares of another class or series, or has issued or granted options or rights to acquire shares, if the by-laws limit the number of authorized shares, the company shall reserve and continue to reserve sufficient authorized shares to meet the exercise of such conversion privileges, options and rights. 
  
  ### Holding of own shares
  
  74 Except as provided in sections 75 to 78, or unless permitted by the regulations, a company shall not 
  (a) hold shares of the company or of any body corporate that controls the company; 
  (b) hold any ownership interests of any unincorporated entity that controls the company; 
  (c) permit any of its subsidiaries to hold any shares of the company or of any body corporate that controls the company; or 
  (d) permit any of its subsidiaries to hold any ownership interests of any unincorporated entity that controls the company. 
  
  ### Purchase and redemption of shares
  
  75 (1) Subject to subsection (2) and to its by-laws, a company may, with the consent of the Superintendent, purchase, for the purpose of cancellation, any shares issued by it, or redeem any redeemable shares issued by it at prices not exceeding the redemption price thereof calculated according to a formula stated in its by-laws or the conditions attaching to the shares. 
  
  ### Restrictions on purchase and redemption
  
  (2) A company shall not make any payment to purchase or redeem any shares issued by it if there are reasonable grounds for believing that the company is, or the payment would cause the company to be, in contravention of subsection 515(1), any regulation made under subsection 515(2) or any order made under subsection 515(3). 
  
  ### Donated shares
  
  (3) A company may accept from any shareholder a share of the company surrendered to it as a gift, but may not extinguish or reduce a liability in respect of an amount unpaid on any such share except in accordance with section 79. 
  
  ### Holding as personal representative
  
  76 (1) A company may, and may permit its subsidiaries to, hold, in the capacity of a personal representative, shares of the company or of any body corporate that controls the company or ownership interests in any unincorporated entity that controls the company, but only where the company or the subsidiary does not have a beneficial interest in the shares or ownership interests. 
  
  ### Security interest
  
  (2) A company may, and may permit its subsidiaries to, by way of a security interest 
  (a) hold shares of the company or of any body corporate that controls the company, or 
  (b) hold any ownership interests of any entity that controls the company, where the security interest is nominal or immaterial when measured by criteria established by the company that have been approved in writing by the Superintendent. 
  
  ### Saving
  
  (3) Nothing in subsection (2) precludes a former-Act company or any of its subsidiaries from holding any security interest held immediately prior to the coming into force of this Part. 
  
  ### Exception — conditions before acquisition
  
  76.01 (1) A company may permit any of its subsidiaries to acquire shares of the company through the issuance of those shares by the company to the subsidiary if the conditions prescribed for the purposes of this subsection are met before the subsidiary acquires the shares. 
  
  ### Conditions after acquisition
  
  (2) After a subsidiary has acquired shares under the purported authority of subsection (1), the conditions prescribed for the purposes of this subsection must be met. 
  
  ### Non-compliance with conditions
  
  (3) If a company permits any of its subsidiaries to acquire shares of the company under the purported authority of subsection (1) and one or more of the conditions prescribed for the purposes of subsections (1) and (2) were not met, are not met or cease to be met, as the case may be, then, despite section 16 and subsection 70(2), the company must comply with the prescribed requirements. 
  
  ### Holding in market-indexed segregated fund
  
  76.1 A company may hold shares of the company or shares or ownership interests of an entity that controls the company, if 
  (a) the shares or ownership interests are assets of a fund maintained by the company as required by paragraph 451(b); and 
  (b) the assets of the fund reflect the securities upon which a generally recognized market index is based and the weighting of those securities in that index. 
  
  ### Mutual fund entity’s or closed-end fund’s holding in company
  
  76.2 If a mutual fund entity, as defined in subsection 490(1), or a closed-end fund, as defined in that subsection, becomes a subsidiary of a company by reason of the company investing, in the entity or fund, assets of a fund maintained by the company as required by paragraph 451(b), the company may permit the entity or fund to hold shares of the company, or shares or ownership interests of an entity that controls the company, as long as the assets of the mutual fund entity or closed-end fund reflect the securities upon which a generally recognized market index is based and the weighting of those securities in that index. 
  
  ### Cancellation of shares
  
  77 (1) Subject to subsection (2), where a company purchases shares of the company or fractions thereof or redeems or otherwise acquires shares of the company, the company shall cancel those shares. 
  
  ### Requirement to sell
  
  (2) Where a company or any of its subsidiaries, through the realization of security, acquires any shares of the company or of any body corporate that controls the company or any ownership interests in an unincorporated entity that controls the company, the company shall, or shall cause its subsidiaries to, as the case may be, within six months after the day of the realization, sell or otherwise dispose of the shares or ownership interests. 
  
  ### Subsidiary holding shares
  
  78 Subject to the regulations, a former-Act company shall cause any subsidiary of the company that holds shares of the company, or of any body corporate that controls the company, or any ownership interests of any unincorporated entity that controls the company to sell or otherwise dispose of those shares or ownership interests within six months after the day this section comes into force. 
  
  ### Reduction of capital
  
  79 (1) The stated capital of a company may be reduced by special resolution. 
  
  ### Limitation
  
  (2) A company shall not reduce its stated capital by special resolution if there are reasonable grounds for believing that the company is, or the reduction would cause the company to be, in contravention of subsection 515(1), any regulation made under subsection 515(2) or any order made under subsection 515(3). 
  
  ### Contents of special resolution
  
  (3) A special resolution to reduce the stated capital of a company shall specify the stated capital account or accounts from which the reduction of stated capital effected by the special resolution will be deducted. 
  
  ### Approval by Superintendent
  
  (4) A special resolution to reduce the stated capital of a company has no effect until it is approved in writing by the Superintendent. 
  
  ### Exception
  
  (4.1) Subsection (4) does not apply if 
  (a) the reduction in the stated capital is made solely as a result of changes made to the accounting principles referred to in subsection 331(4); and 
  (b) there is to be no return of capital to shareholders or policyholders as a result of the reduction. 
  
  ### Conditions for approval
  
  (5) No approval to reduce the stated capital of a company may be given by the Superintendent unless application therefor is made within three months after the time of the passing of the special resolution and a copy of the special resolution, together with a notice of intention to apply for approval, has been published in the Canada Gazette.  
  
  ### Statements to be submitted
  
  (6) In addition to evidence of the passing of a special resolution to reduce the stated capital of a company and of the publication thereof, statements showing 
  (a) the number of the company’s shares issued and outstanding, 
  (b) the results of the voting by policyholders and by class of shares of the company, 
  (c) the company’s assets and liabilities, and 
  (d) the reason why the company seeks the reduction of capital shall be submitted to the Superintendent at the time of the application for approval of the special resolution. 
  
  ### Recovery by action
  
  80 (1) Where any money or property was paid or distributed to a shareholder or other person as a consequence of a reduction of capital made contrary to section 79, a creditor of the company may apply to a court for an order compelling the shareholder or other person to pay the money or deliver the property to the company. 
  
  ### Shares held by personal representative
  
  (2) No person holding shares in the capacity of a personal representative and registered on the records of the company as a shareholder and therein described as the personal representative of a named person is personally liable under subsection (1), but the named person is subject to all the liabilities imposed by that subsection. 
  
  ### Limitation
  
  (3) An action to enforce a liability imposed by subsection (1) may not be commenced more than two years after the date of the act complained of. 
  
  ### Remedy preserved
  
  (4) This section does not affect any liability that arises under section 216. 
  
  ### Adjustment of stated capital account
  
  81 (1) On a purchase, redemption or other acquisition by a company of shares or fractions thereof issued by it, other than shares acquired pursuant to section 76 or acquired through the realization of security and sold pursuant to subsection 77(2), the company shall deduct from the stated capital account maintained for the class or series of shares so purchased, redeemed or otherwise acquired an amount equal to the result obtained by multiplying the stated capital in respect of the shares of that class or series by the number of shares of that class or series so purchased, redeemed or otherwise acquired and dividing by the number of shares of that class or series outstanding immediately before the purchase, redemption or other acquisition. 
  
  ### Idem
  
  (2) A company shall adjust its stated capital account or accounts in accordance with any special resolution referred to in section 79. 
  
  ### Shares converted to another class
  
  (3) On a conversion of outstanding shares of a company into shares of another class or series, or on a change of outstanding shares of the company into shares of another class or series, the company shall 
  (a) deduct from the stated capital account maintained for the class or series of shares converted or changed an amount equal to the result obtained by multiplying the stated capital of the shares of that class or series by the number of shares of that class or series converted or changed, and dividing by the number of outstanding shares of that class or series immediately before the conversion or change; and 
  (b) record the result obtained under paragraph (a) and any additional consideration received pursuant to the conversion or change in the stated capital account maintained or to be maintained for the class or series of shares into which the shares have been converted or changed. 
  
  ### Stated capital of convertible shares
  
  (4) For the purposes of subsection (3) and subject to the company’s by-laws, where a company issues two classes of shares and there is attached to each class a right to convert a share of one class into a share of the other class and a share is so converted, the amount of stated capital attributable to a share in either class is the aggregate of the stated capital of both classes divided by the number of outstanding shares of both classes immediately before the conversion. 
  
  ### Conversion or change of shares
  
  (5) Shares issued by a company and converted into shares of another class or series, or changed under subsection 238(1) into shares of another class or series, become issued shares of the class or series of shares into which the shares have been converted or changed. 
  
  ### Addition to stated capital account
  
  82 On a conversion of any debt obligation of a company into shares of a class or series of shares, the company shall 
  (a) deduct from the liabilities of the company the nominal value of the debt obligation being converted; and 
  (b) record the result obtained under paragraph (a) and any additional consideration received for the conversion in the stated capital account maintained or to be maintained for the class or series of shares into which the debt obligation has been converted. 
  
  ### Declaration of dividend
  
  83 (1) The directors of a company may declare and a company may pay a dividend by issuing fully paid shares of the company or options or rights to acquire fully paid shares of the company and, subject to subsection (4), the directors of a company may declare and a company may pay a dividend in money or property, and, if a dividend is to be paid in money, the dividend may be paid in a currency other than the currency of Canada. 
  
  ### Notice to Superintendent
  
  (2) The directors of a company shall notify the Superintendent of the declaration of a dividend at least 15 days before the day fixed for its payment. 
  
  ### Share dividend
  
  (3) If shares of a company are issued in payment of a dividend, the company shall record in the stated capital account maintained or to be maintained for the shares of the class or series issued in payment of the dividend the declared amount of the dividend stated as an amount of money. 
  
  ### When dividend not to be declared
  
  (4) The directors of a company shall not declare and a company shall not pay a dividend if there are reasonable grounds for believing that the company is, or the payment would cause the company to be, in contravention of subsection 515(1), any regulation made under subsection 515(2) or any order made under subsection 515(3). 
  (5)  [Repealed, 2007, c. 6, s. 199]  
  (6) to (8)  [Repealed, 1997, c. 15, s. 184]  
  
  ## Restrictions Specific to Shares of Mutual Companies 
  
  ### Definitions
  
  83.01 The definitions in this section apply in this section and in sections 83.02 to 83.11.  
  *participating share* means a share issued by a mutual company that confers on the holder of the share the right to receive remaining property of the company on the dissolution of the company. (action participante)   
  *participating shareholder* means the holder of a participating share. (actionnaire participant)   
  *participating shareholder account* means an account that a mutual company is required by section 83.04 to maintain. (compte des actionnaires participants)  
  
  ### Voting rights
  
  83.02 (1) Except as provided in subsections (2) and (3), a mutual company shall not issue any share that confers on its holder the right to vote at meetings of the shareholders and policyholders of the company. 
  
  ### Exception — specified events or conditions
  
  (2) A share may confer on its holder the right to vote where an event has occurred and is continuing or a condition is fulfilled. 
  
  ### Exception — election of directors
  
  (3) Subject to subsection 173(4.1), participating shares may confer on their holders the right to elect the number of directors indicated in the company’s by-laws. 
  
  ### Participating shares
  
  83.03 A mutual company shall not issue participating shares unless the by-laws of the company authorize it to issue participating shares. 
  
  ### Participating shareholder accounts
  
  83.04 A mutual company that issues participating shares shall maintain separate accounts, in the form and manner determined by the Superintendent, in respect of those shares. 
  
  ### Allocation of income
  
  83.05 There shall be credited to, or debited from, a participating shareholder account that portion of the income or losses of the company for a financial year, including accrued capital gains or losses, whether or not realized, that is determined in accordance with a method that is 
  (a) in the written opinion of the actuary of the company, fair and equitable to the participating policyholders of the company; 
  (b) approved by resolution of the directors, after considering the written opinion of the actuary; and 
  (c) not disallowed by the Superintendent, on the ground that it is not fair and equitable to the participating policyholders, within sixty days after receiving the resolution. 
  
  ### Allocation of expenses
  
  83.06 There shall be debited from a participating shareholder account that portion of the expenses, including taxes, of the company for a financial year that is determined in accordance with a method that is 
  (a) in the written opinion of the actuary of the company, fair and equitable to the participating policyholders of the company; 
  (b) approved by resolution of the directors, after considering the written opinion of the actuary; and 
  (c) not disallowed by the Superintendent, on the ground that it is not fair and equitable to the participating policyholders, within sixty days after receiving the resolution. 
  
  ### Filing of allocation method
  
  83.07 A mutual company the directors of which by resolution approve a method of allocating its income and losses and expenses to a participating shareholder account shall, within thirty days after the making of the resolution, file a copy of it with the Superintendent, together with a copy of the written opinion of the actuary of the company and any other information relevant to the allocation method that the Superintendent requests. 
  
  ### Review of allocation method
  
  83.08 The actuary of a company shall annually report in writing to the directors on the fairness and equitableness of the method used by the company for allocating its income and losses and expenses to a participating shareholder account. 
  
  ### Payment of dividends
  
  83.09 A mutual company that pays a dividend under section 83 on participating shares shall debit from the participating shareholder account in respect of those shares 
  (a) in the case of a dividend paid by issuing fully paid shares, the amount recorded as stated capital in respect of the dividend as required by subsection 83(3); and 
  (b) in any other case, the amount or value of the dividend. 
  
  ### Participating share redemptions, etc.
  
  83.1 (1) On a purchase, redemption or other acquisition by a company of participating shares issued by it or fractions of participating shares issued by it, other than participating shares held under section 76 or acquired through the realization of security and sold as required by subsection 77(2), there shall be debited from the participating shareholder account for the class or series of shares so purchased, redeemed or otherwise acquired the amount determined by the formula is the balance of the participating shareholder account for the shares of that class or series immediately before the purchase, redemption or other acquisition; is the number of shares of that class or series so purchased, redeemed or otherwise acquired; and is the number of shares of that class or series outstanding immediately before the purchase, redemption or other acquisition. 
  
  ### Shares converted to another class
  
  (2) On a conversion of outstanding participating shares of a company into shares of another class or series, or on a change of outstanding participating shares of the company into shares of another class or series 
  (a) there shall be deducted from the participating shareholder account maintained for the class or series of participating shares converted or changed the amount determined by the formula is the balance of the participating shareholder account for the shares of that class or series immediately before the conversion or change, is the number of shares of that class or series converted or changed, and is the number of shares of that class or series outstanding immediately before the conversion or change; and 
  (b) if the shares of that other class or series are participating shares, the amount determined under the formula in paragraph (a) shall be credited to the participating shareholder account for those participating shares. 
  
  ### Participating shareholder account for convertible participating shares
  
  (3) For the purposes of subsection (2) and subject to the company’s by-laws, where a company issues two classes of participating shares and there is attached to each class a right to convert a share of one class into a share of the other class and a share is so converted, the amount in a participating shareholder account attributable to a share in either class is the amount determined by the formula is the total of the balances of the participating shareholder accounts of both classes; and is the number of outstanding shares of both classes immediately before the conversion. 
  
  ### Remaining property on dissolution
  
  83.11 The remaining property of a company that a participating shareholder of the company is entitled to receive on the dissolution of the company shall not exceed the sum of all amounts each of which is the amount in respect of a class or series of participating shares of the company determined by the formula is the balance in the participating shareholder account for the shares of that class or series immediately before the dissolution; is the number of shares of that class or series held by the participating shareholder immediately before the dissolution; and is the number of shares of that class or series immediately before the dissolution. 
  
  ## Subordinated Indebtedness 
  
  ### Restriction on subordinated indebtedness
  
  84 (1) A company shall not issue subordinated indebtedness unless the subordinated indebtedness is fully paid for in money or, with the approval of the Superintendent, in property. 
  
  ### References to subordinated indebtedness
  
  (2) A person shall not in any prospectus, advertisement, correspondence or literature relating to any subordinated indebtedness issued or to be issued by a company refer to the subordinated indebtedness otherwise than as subordinated indebtedness. 
  
  ### Other currencies
  
  (3) When issuing subordinated indebtedness, a company may provide that any aspect of the subordinated indebtedness relating to money or involving the payment of or the liability to pay money in relation thereto be in a currency other than that of Canada including, without restricting the generality of the foregoing, the payment of any interest thereon. 
  
  ## Security Certificates and Transfers 
  
  ### Definitions
  
  85 In this section and sections 86 to 139,  
  *adverse claim* includes a claim that a transfer was or would be wrongful or that a particular adverse person is the owner of or has an interest in a security; (opposition)   bona fide purchaser means a purchaser for value in good faith and without notice of any adverse claim who takes delivery of a security in bearer form or order form or of a security in registered form issued to the purchaser or endorsed to the purchaser or endorsed in blank; (acheteur de bonne foi)   
  *clearing agency* means a person designated as a recognized clearing agency by the Superintendent; (agence de compensation et de dépôt)   
  *delivery* means voluntary transfer of possession; (livraison ou remise)   
  *fungible*, in respect of securities, means securities of which any unit is, by nature or usage of trade, the equivalent of any other like unit; (fongibles)   
  *genuine* means free of forgery or counterfeit; (authentique)   
  *good faith* means honesty in fact in the conduct of the transaction concerned; (bonne foi)   
  *over-issue* means the issue of securities in excess of any maximum number of securities that the issuer is authorized to issue; (émission excédentaire)   
  *purchaser* means a person who takes an interest in a security by sale, mortgage, pledge, issue, reissue, gift or any other voluntary transaction; (acquéreur)   
  *securities broker* means a person who is engaged for all or part of the person’s time in the business of buying and selling securities and who, in the transaction concerned, acts for, or buys a security from, or sells a security to, a customer; (courtier)   
  *security* or 
  *security certificate* means an instrument issued by a company that is  
  (a) in bearer, order or registered form, 
  (b) of a type commonly dealt in on securities exchanges or markets or commonly recognized in any area in which it is issued or dealt in as a medium for investment, 
  (c) one of a class or series or by its terms divisible into a class or series of instruments, and 
  (d) evidence of a share, participation or other interest in or obligation of a company, but does not include a policy; ( valeur mobilière ou certificat de valeur mobilière)   
  *trust indenture* has the meaning given that expression by section 317; (acte de fiducie)   
  *unauthorized*, in relation to a signature or an endorsement, means a signature or an endorsement made without actual, implied or apparent authority, and includes a forgery; (non autorisé)   
  *uncertificated security* means a security, not evidenced by a security certificate, the issue and any transfer of which is registered and recorded in records maintained for that purpose by or on behalf of a company; (valeur mobilière sans certificat)   
  *valid* means issued in accordance with the applicable law or validated under section 101. (valide)  
  
  ### Provisions governing transfers of securities
  
  86 The transfer of a security is governed by sections 87 to 139. 
  
  ### Security a negotiable instrument
  
  87 (1) A security is a negotiable instrument but, in the case of any inconsistency between the provisions of the Bills of Exchange Act and this Act, this Act prevails to the extent of the inconsistency.  
  
  ### Bearer form
  
  (2) A security is in bearer form if it is payable to bearer according to its terms and not by reason of any endorsement. 
  
  ### Order form
  
  (3) A security is in order form where the security is not a share and, by its terms, it is payable to the order or assigns of any person therein specified with reasonable certainty or to the person or the person’s order. 
  
  ### Registered form
  
  (4) A security is in registered form if 
  (a) it specifies a person entitled to the security or to the rights it evidences, and its transfer is capable of being recorded in a securities register; or 
  (b) it bears a statement that it is in registered form. 
  
  ### Status of guarantor
  
  88 A guarantor for an issuer of a security is deemed to be an issuer to the extent of the guarantee, whether or not the guarantor’s obligation is noted on the security. 
  
  ### Rights of holder
  
  89 (1) Subject to Part VII, every security holder is entitled at the holder’s option to a security certificate that complies with this Act or to a non-transferable written acknowledgement of the holder’s right to obtain a security certificate that complies with this Act from a company in respect of the securities of that company held by the security holder. 
  
  ### Fee for security certificate
  
  (2) A company may charge a fee, not exceeding a prescribed amount, for a security certificate issued in respect of a transfer. 
  
  ### Joint holders
  
  (3) A company is not required to issue more than one security certificate in respect of securities held jointly by several persons, and delivery of a security certificate to one of several joint holders is sufficient delivery to all joint holders of the security. 
  
  ### Signatures
  
  90 (1) A security certificate shall be signed by or bear the printed or otherwise mechanically reproduced signature of at least one of the following: 
  (a) a director or officer of the company; 
  (b) a registrar or transfer agent of the company or a branch transfer agent or a natural person on their behalf; or 
  (c) a trustee who certifies it in accordance with a trust indenture. 
  
  ### Continuation of validity of signature
  
  (2) If a security certificate contains a person’s printed or mechanically reproduced signature, the company may issue the security certificate even if the person has ceased to be a director or officer of the company. The security certificate is as valid as if the person were a director or officer at the date of its issue. 
  
  ### Contents of share certificate
  
  91 There shall be stated on the face of each share certificate issued by a company after the coming into force of this section 
  (a) the name of the company; 
  (b) a statement that the company is subject to the Insurance Companies Act ;  
  (c) the name of the person to whom the share certificate is issued; and 
  (d) the number and class of shares and the designation of any series that the certificate represents. 
  
  ### Restrictions and charges
  
  92 (1) No charge in favour of a company and no restriction on transfer, other than a constraint under Part VII other than section 427, is effective against a transferee of a security issued by the company if the transferee has no actual knowledge of the charge or restriction unless it or a reference to it is noted conspicuously on the security certificate. 
  
  ### No restriction
  
  (2) If any of the issued shares of a distributing company remain outstanding and are held by more than one person, the company may not restrict the transfer or ownership of its shares except by way of a constraint under Part VII. 
  
  ### Continuance
  
  (3) If a body corporate that is continued as a company under this Act has outstanding security certificates and the words “private company” or “private corporation” appear on the certificates, those words are deemed to be a notice of a charge or restriction for the purposes of subsection (1). 
  
  ### Particulars of class
  
  93 (1) There shall be stated legibly on a share certificate issued after the coming into force of this section by a company that is authorized to issue shares of more than one class or series 
  (a) the rights, privileges, restrictions and conditions attached to the shares of each class and series existing when the share certificate is issued; or 
  (b) that the class or series of shares that the certificate represents has rights, privileges, restrictions or conditions attached thereto and that the company will furnish a shareholder, on demand and without charge, with a full copy of 
  (i) the text of the rights, privileges, restrictions and conditions attached to each class authorized to be issued and to each series in so far as those rights, privileges, restrictions and conditions have been fixed by the directors, and 
  (ii) the text of the authority of the directors, if the directors are so authorized, to fix the rights, privileges, restrictions and conditions of subsequent series of shares. 
  
  ### Duty
  
  (2) Where a share certificate issued by a company contains the statement mentioned in paragraph (1)(b), the company shall provide a shareholder, on demand and without charge, with a full copy of the texts referred to in subparagraphs (1)(b)(i) and (ii). 
  
  ### Fractional share
  
  94 A company may issue a certificate for a fractional share or may issue in place thereof a scrip certificate in bearer form that entitles the holder to receive a certificate for a full share by exchanging scrip certificates aggregating a full share. 
  
  ### Scrip certificates
  
  95 The directors of a company may attach conditions to any scrip certificate issued by the company, including conditions that 
  (a) the scrip certificate becomes void if not exchanged for a share certificate representing a full share before a specified date; and 
  (b) any shares for which the scrip certificate is exchangeable may, notwithstanding any pre-emptive right, be issued by the company to any person and the proceeds thereof may be distributed rateably to the holders of all the scrip certificates. 
  
  ### Holders of fractional shares
  
  96 (1) A holder of a fractional share issued by a company is not entitled to exercise voting rights or to receive a dividend in respect of the fractional share. 
  
  ### Holders of scrip certificates
  
  (2) A holder of a scrip certificate is not entitled to exercise voting rights or to receive a dividend in respect of the scrip certificate. 
  
  ### Dealings with registered holder
  
  97 (1) A company or a trustee within the meaning of section 317 may, subject to sections 142 to 145 and 149, treat the registered owner of a security as the person exclusively entitled to vote, to receive notices, to receive any interest, dividend or other payment in respect of the security and to exercise all of the rights and powers of an owner of the security. 
  
  ### Constructive registered holder
  
  (2) Notwithstanding subsection (1), a company may treat a person as a registered security holder entitled to exercise all of the rights of the security holder that the person represents, if that person provides the company with evidence as described in subsection 131(4) that the person is 
  (a) the heir or personal representative of a deceased security holder or the personal representative of the heirs of the deceased security holder; 
  (b) the personal representative of a registered security holder who is a minor, an incompetent person or a missing person; or 
  (c) a liquidator of, or a trustee in bankruptcy for, a registered security holder. 
  
  ### Permissible registered holder
  
  (3) If a person on whom the ownership of a security of a company devolves by operation of law, other than a person described in subsection (2), provides proof of that person’s authority to exercise rights or privileges in respect of a security of the company that is not registered in the person’s name, the company shall, subject to this Act, treat that person as entitled to exercise those rights or privileges. 
  
  ### Immunity of company
  
  (4) A company is not required to inquire into the existence of, or see to the performance or observance of, any duty owed to a third person by a registered holder of any of its securities or by anyone whom it treats, as permitted or required by this Part, as the owner or registered holder thereof. 
  
  ### Minors
  
  98 If a minor exercises any rights of ownership in the securities of a company, no subsequent repudiation or avoidance is effective against the company. 
  
  ### Joint shareholders
  
  99 A company may treat as owners of a security the survivors of persons to whom the security was issued as joint holders, if the company receives proof satisfactory to it of the death of any of the joint holders. 
  
  ### Transmission of securities
  
  100 (1) Subject to the provisions of Part VII and any applicable law relating to the collection of taxes, a person referred to in paragraph 97(2)(a) is entitled to become registered as the owner of a security, or to designate another person to be registered as the owner of a security, if the person referred to in paragraph 97(2)(a) delivers to the company or its transfer agent 
  (a) the original grant of probate or of letters of administration, or a copy thereof certified to be a true copy by 
  (i) the court that granted the probate or letters of administration, 
  (ii) a trust company incorporated under the Trust and Loan Companies Act or under the laws of a province, or  
  (iii) a lawyer or notary acting on behalf of the person referred to in paragraph 97(2)(a), or 
  (b) in the case of transmission by notarial will in the Province of Quebec, a copy thereof authenticated pursuant to the laws of that Province, together with 
  (c) an affidavit or declaration of transmission made by the person referred to in paragraph 97(2)(a) that states the particulars of the transmission, and 
  (d) the security certificate that was owned by the deceased holder 
  (i) in the case of a transfer to the person referred to in paragraph 97(2)(a), with or without the endorsement of that person, and 
  (ii) in the case of a transfer to any other person, endorsed in accordance with section 115, and accompanied by any assurance the company may require under section 131. 
  
  ### Excepted transmissions
  
  (2) Notwithstanding subsection (1), if the laws of the jurisdiction governing the transmission of a security of a deceased holder do not require a grant of probate or of letters of administration in respect of the transmission, a personal representative of the deceased holder is entitled, subject to Part VII and any applicable law relating to the collection of taxes, to become registered as the owner or to designate a person to be registered as the owner, if the personal representative delivers to the company or its transfer agent the following documents, namely, 
  (a) the security certificate that was owned by the deceased holder; and 
  (b) reasonable proof of the governing laws, of the deceased holder’s interest in the security and of the right of the personal representative or the designated person to become the registered shareholder. 
  
  ### Right of company to treat as owner
  
  (3) Subject to Part VII, delivery of the documents referred to in this section empowers a company or its transfer agent to record in a securities register the transmission of a security from the deceased holder to a person referred to in paragraph 97(2)(a) or to such person as the person referred to in that paragraph may designate and, thereafter, to treat the person who becomes so registered as the owner of that security. 
  
  ### Over-issue
  
  101 (1) The provisions of this Part that validate a security or compel its issue or reissue do not apply to the extent that a validation, issue or reissue would result in over-issue, but 
  (a) if a valid security similar in all respects to the security involved in the over-issue is reasonably available for purchase, the person entitled to the validation or issue may compel the issuer to purchase and deliver such a security to that person against surrender of the security that the person holds; or 
  (b) if a valid security similar in all respects to the security involved in the over-issue is not reasonably available for purchase, the person entitled to the validation or issue may recover from the issuer an amount equal to the price the last purchaser for value paid for the invalid security. 
  
  ### Retroactive validation
  
  (2) Where an issuer is subsequently authorized to issue securities of a number equal to or exceeding the number of securities previously authorized plus the amount of the securities over-issued, the securities so over-issued are valid from the date of their issue. 
  
  ### Payment not a purchase or redemption
  
  (3) A purchase or payment by an issuer under subsection (1) is not a purchase or payment in respect of which section 75 or 81 applies. 
  
  ### Burden of proof
  
  102 In any action on a security, 
  (a) unless specifically denied in the pleadings, each signature on the security or in a necessary endorsement is admitted; 
  (b) a signature on the security is presumed to be genuine and authorized but, if the effectiveness of the signature is put in issue, the burden of establishing that it is genuine and authorized is on the party claiming under the signature; 
  (c) if a signature is admitted or established, production of the instrument entitles a holder to recover on it unless the defendant establishes a defence or a defect going to the validity of the security; and 
  (d) if the defendant establishes that a defence or defect exists, the plaintiff has the burden of establishing that the defence or defect is ineffective against the plaintiff or any person under whom the plaintiff claims. 
  
  ### Securities fungible
  
  103 Unless otherwise agreed, and subject to any applicable law, regulation or stock exchange rule, a person required to deliver securities may deliver any security of the specified issue in bearer form or registered in the name of the transferee or endorsed to the transferee or in blank. 
  
  ### Notice of defect
  
  104 (1) Even against a purchaser for value and without notice of a defect going to the validity of a security, the terms of the security include those stated on the security and those incorporated therein by reference to another instrument, statute, rule, regulation or order to the extent that the terms so referred to do not conflict with the stated terms, but such a reference is not of itself notice to a purchaser for value of a defect going to the validity of the security, notwithstanding that the security expressly states that a person accepting it admits the notice. 
  
  ### Purchaser for value
  
  (2) A security is valid in the hands of a purchaser for value without notice of any defect going to its validity. 
  
  ### Lack of genuineness
  
  (3) Except as provided in section 105, the fact that a security is not genuine is a complete defence even against a purchaser for value and without notice. 
  
  ### Ineffective defences
  
  (4) All defences of an issuer, including non-delivery and conditional delivery of a security but not including lack of genuineness, are ineffective against a purchaser for value without notice of the particular defence. 
  
  ### Staleness as defect notice
  
  (5) After an event that creates a right to immediate performance of the principal obligation evidenced by a security, or that sets a date on or after which a security is to be presented or surrendered for redemption or exchange, a purchaser is deemed to have notice of any defect in its issue or of any defence of the issuer 
  (a) if the event requires the payment of money or the delivery of securities, or both, on presentation or surrender of the security, and the funds or securities are available on the date set for payment or exchange, and the purchaser takes the security more than one year after that date; or 
  (b) if the purchaser takes the security more than two years after the date set for presentation or surrender or the date on which the performance became due. 
  
  ### Unauthorized signature
  
  105 An unauthorized signature on a security before or in the course of issue is ineffective, except that the signature is effective in favour of a purchaser for value and without notice of the lack of authority, if the signing has been done by 
  (a) an authenticating trustee, registrar, transfer agent or other person entrusted by the issuer with the signing of the security, or of similar securities, or their immediate preparation for signing; or 
  (b) an employee of the issuer or of a person referred to in paragraph (a) who, in the ordinary course of the employee’s duties, handles the security. 
  
  ### Completion or alteration
  
  106 (1) Where a security contains the signatures necessary to its issue or transfer but is incomplete in any other respect, 
  (a) any person may complete it by filling in the blanks in accordance with the person’s authority; and 
  (b) notwithstanding that the blanks are incorrectly filled in, the security as completed is enforceable by a purchaser who took it for value and without notice of the incorrectness. 
  
  ### Enforceability
  
  (2) A completed security that has been improperly altered, even if fraudulently altered, remains enforceable, but only according to its original terms. 
  
  ### Warranties of agents
  
  107 (1) A person signing a security, as authenticating trustee, registrar, transfer agent or other person entrusted by the issuer with the signing of the security, warrants to a purchaser for value without notice that 
  (a) the security is genuine; 
  (b) the person’s acts in connection with the issue of the security are within the person’s authority; and 
  (c) the person has reasonable grounds for believing that the security is in the form and within the amount the issuer is authorized to issue. 
  
  ### Limitation of liability
  
  (2) Unless otherwise agreed, a person referred to in subsection (1) does not assume any further liability for the validity of a security. 
  
  ### Title of purchaser
  
  108 (1) Subject to Part VII, on delivery of a security the purchaser acquires the rights in the security that the purchaser’s transferor had or had authority to convey, except that the position of a purchaser who has been a party to any fraud or illegality affecting the security or who as a prior holder had notice of an adverse claim is not improved by taking from a later bona fide purchaser.  
  
  ### Title of bona fide purchaser 
  
  (2) A bona fide purchaser, in addition to acquiring the rights of a purchaser, also acquires the security free from any adverse claim.  
  
  ### Limited interest purchaser
  
  (3) A purchaser of a limited interest acquires rights only to the extent of the interest purchased. 
  
  ### Deemed notice of adverse claim
  
  109 A purchaser of a security, or any securities broker for a seller or purchaser, is deemed to have notice of an adverse claim if 
  (a) the security, whether in bearer form or registered form, has been endorsed “for collection” or “for surrender” or for some other purpose not involving transfer; or 
  (b) the security is in bearer form and has on it a statement that it is the property of a person other than the transferor, except that the mere writing of a name on a security is not such a statement. 
  
  ### Notice of fiduciary duty
  
  110 Notwithstanding that a purchaser, or any securities broker for a seller or purchaser, has notice that a security is held for a third person by, or is registered in the name of or endorsed by, a fiduciary, neither the purchaser nor the securities broker has any duty to inquire into the rightfulness of the transfer or any notice of an adverse claim, except that if the purchaser or securities broker for the seller or purchaser knows that the consideration is to be used for, or that the transaction is for, the personal benefit of the fiduciary or is otherwise in breach of the fiduciary’s duty, the purchaser or securities broker is deemed to have notice of an adverse claim. 
  
  ### Staleness as notice
  
  111 An event that creates a right to immediate performance of the principal obligation evidenced by a security or that sets a date on or after which the security is to be presented or surrendered for redemption or exchange is not of itself notice of an adverse claim, except in the case of a purchase 
  (a) made more than one year after any date set for such a presentation or surrender; or 
  (b) made more than six months after any date set for payment of money against such a presentation or surrender if funds are available for payment on that date. 
  
  ### Warranties to issuer
  
  112 (1) A person who presents a security for registration of transfer or for payment or exchange warrants to the issuer that the person is entitled to the registration, payment or exchange, except that a purchaser for value without notice of an adverse claim who receives a new, reissued or re-registered security on registration of transfer warrants only that the purchaser has no knowledge of any unauthorized signature in a necessary endorsement. 
  
  ### Warranties to purchaser
  
  (2) A person by transferring a security to a purchaser for value warrants only that 
  (a) the transfer is effective and rightful; 
  (b) the security is genuine and has not been materially altered; and 
  (c) the person knows of nothing that might impair the validity of the security. 
  
  ### Warranties of intermediary
  
  (3) Where a security is delivered by an intermediary known by the purchaser to be entrusted with delivery of the security on behalf of another or with collection of a draft or other claim to be collected against that delivery, the intermediary by that delivery warrants only the intermediary’s own good faith and authority even if the intermediary has purchased or made advances against the draft or other claim to be collected against the delivery. 
  
  ### Warranties of pledgee
  
  (4) A pledgee or other holder for purposes of security who redelivers a security received, or after payment and on order of the debtor delivers that security to a third person, gives only the warranties of an intermediary under subsection (3). 
  
  ### Warranties of securities broker
  
  (5) A securities broker gives to the broker’s customer, to the issuer and to a purchaser, as the case may be, the warranties provided in subsections (1) to (4) and has the rights and privileges of a purchaser under those subsections, and those warranties of and in favour of the broker acting as an agent are in addition to warranties given by the broker’s customer and warranties given in favour of the broker’s customer. 
  
  ### Right to compel endorsement
  
  113 Where a security in registered form is delivered to a purchaser without a necessary endorsement, the purchaser may become a bona fide purchaser only as of the time the endorsement is supplied, but against the transferor the transfer is complete on delivery and the purchaser has a specifically enforceable right to have any necessary endorsement supplied.  
  
  ### Definition of 
  *appropriate person* 
  
  114 (1) In this section, section 115, subsections 122(1), 125(4) and 130(1) and section 134, 
  *appropriate person* means  
  (a) the person specified by the security or by special endorsement to be entitled to the security; 
  (b) if a person described in paragraph (a) is described as a fiduciary but is no longer serving in the described capacity, either that person or that person’s successor; 
  (c) if the security or endorsement mentioned in paragraph (a) specifies more than one person as fiduciaries and one or more of those persons are no longer serving in the described capacity, the remaining fiduciary or fiduciaries, whether or not a successor has been appointed; 
  (d) if a person described in paragraph (a) is a natural person and is without capacity to act by reason of death, incompetence, minority or other reason, the person’s fiduciary; 
  (e) if the security or endorsement mentioned in paragraph (a) specifies more than one person with right of survivorship and by reason of death not all of the persons can sign, the survivor or survivors; 
  (f) a person having power to sign under any applicable law or a power of attorney; or 
  (g) to the extent that a person described in any of paragraphs (a) to (f) may act through an agent, the person’s authorized agent. 
  
  ### Determining an 
  *appropriate person* 
  
  (2) Whether the person signing is an appropriate person is determined as of the time of signing, and an endorsement by such a person does not become unauthorized for the purposes of this Part by reason of any subsequent change of circumstances. 
  
  ### Endorsement
  
  115 (1) An endorsement of a security in registered form is made when an appropriate person signs, either on the security or on a separate document, an assignment or transfer of the security or a power to assign or transfer it, or when the signature of an appropriate person is written without more on the back of the security. 
  
  ### Special or blank
  
  (2) An endorsement may be special or in blank. 
  
  ### Blank endorsement
  
  (3) An endorsement in blank includes an endorsement to bearer. 
  
  ### Special endorsement
  
  (4) A special endorsement specifies the person to whom the security is to be transferred, or who has power to transfer it. 
  
  ### Right of holder
  
  (5) A holder may convert an endorsement in blank into a special endorsement. 
  
  ### Immunity of endorser
  
  116 Unless otherwise agreed, the endorser by the endorsement assumes no obligation that the security will be honoured by the issuer. 
  
  ### Partial endorsement
  
  117 An endorsement purporting to be an endorsement of only part of a security representing units intended by the issuer to be separately transferable is effective to the extent of the endorsement. 
  
  ### Effect of failure by fiduciary to comply
  
  118 Failure of a fiduciary to comply with a controlling instrument or with the law of the jurisdiction governing the fiduciary relationship, including any law requiring the fiduciary to obtain court approval of a transfer, does not render the fiduciary’s endorsement unauthorized for the purposes of this Part. 
  
  ### Effect of endorsement without delivery
  
  119 An endorsement of a security, whether special or in blank, does not constitute a transfer until delivery of the security on which it appears or, if the endorsement is on a separate document, until delivery of both the security and that document. 
  
  ### Endorsement in bearer form
  
  120 An endorsement of a security in bearer form may give notice of an adverse claim under section 109 but does not otherwise affect any of the holder’s rights. 
  
  ### Effect of unauthorized endorsement
  
  121 (1) The owner of a security may assert the ineffectiveness of an endorsement against the issuer or any purchaser, other than a purchaser for value and without notice of an adverse claim, who has in good faith received a new, reissued or re-registered security on registration of transfer, unless the owner 
  (a) has ratified an unauthorized endorsement of the security; or 
  (b) is otherwise precluded from impugning the effectiveness of an unauthorized endorsement. 
  
  ### Liability of issuer
  
  (2) An issuer who registers the transfer of a security on an unauthorized endorsement is liable for improper registration. 
  
  ### Warranties of guarantor of signature
  
  122 (1) A person who guarantees the signature of an endorser of a security warrants that, at the time of signing, 
  (a) the signature was genuine; 
  (b) the signer was an appropriate person to endorse; and 
  (c) the signer had legal capacity to sign. 
  
  ### Limitation of liability
  
  (2) A person who guarantees the signature of an endorser does not otherwise warrant the rightfulness of the transfer to which the signature relates. 
  
  ### Warranties of guarantor of endorsement
  
  (3) A person who guarantees the endorsement of a security warrants both the signature and the rightfulness, in all respects, of the transfer to which the signature relates, but an issuer may not require a guarantee of endorsement as a condition to registration of transfer. 
  
  ### Extent of warrantor’s liability
  
  (4) The warranties referred to in subsections (1) to (3) are made to any person who, relying on the guarantee, takes or deals with the security, and the guarantor is liable to such a person for any loss resulting from breach of warranty. 
  
  ### Constructive delivery of a security
  
  123 Delivery to a purchaser occurs when 
  (a) the purchaser or a person designated by the purchaser acquires possession of a security; 
  (b) the purchaser’s securities broker acquires possession of a security specially endorsed to or issued in the name of the purchaser; 
  (c) the purchaser’s securities broker sends the purchaser confirmation of the purchase and the broker in the broker’s records identifies a specific security as belonging to the purchaser; or 
  (d) in respect of an identified security to be delivered while still in the possession of a third person, that person acknowledges that it is held for the purchaser. 
  
  ### Constructive ownership of security
  
  124 (1) A purchaser is the owner of a security held for the purchaser by a securities broker, but a purchaser is not a holder except in the cases referred to in paragraphs 123(b) and (c). 
  
  ### Ownership of part of fungible bulk
  
  (2) If a security is part of a fungible bulk, a purchaser of the security is the owner of the proportionate interest in the fungible bulk. 
  
  ### Notice to securities broker of adverse claim
  
  (3) Notice of an adverse claim received by a securities broker or by a purchaser after the broker takes delivery as a holder for value is not effective against the broker or the purchaser, except that, as between the broker and the purchaser, the purchaser may demand delivery of an equivalent security in respect of which no notice of an adverse claim has been received. 
  
  ### Delivery of security
  
  125 (1) Unless otherwise agreed, if a sale of a security is made on a stock exchange or otherwise through securities brokers, 
  (a) the selling customer fulfils the customer’s duty to deliver when the customer delivers the security to the selling securities broker or to a person designated by the selling securities broker or causes an acknowledgement to be made to the selling securities broker that it is held for the selling securities broker; and 
  (b) the selling securities broker, including a correspondent broker, acting for a selling customer fulfils the securities broker’s duty to deliver by delivering the security or a like security to the buying securities broker or to a person designated by the buying securities broker or by effecting clearance of the sale in accordance with the rules of the exchange on which the transaction took place. 
  
  ### Duty to deliver
  
  (2) Except as otherwise provided in this section and unless otherwise agreed, a transferor’s duty to deliver a security under a contract of purchase is not fulfilled until the transferor delivers the security in negotiable form to the purchaser or to a person designated by the purchaser, or causes an acknowledgement to be made to the purchaser that the security is held for the purchaser. 
  
  ### Delivery to securities broker
  
  (3) A sale to a securities broker purchasing for the securities broker’s own account is subject to subsection (2) and not subsection (1), unless the sale is made on a stock exchange. 
  
  ### Transfer through clearing agency
  
  (4) If a security shown in the records of a clearing agency is evidenced by 
  (a) a security certificate in the custody of the clearing agency or a custodian, or a nominee of either, subject to the instructions of the clearing agency, and is in bearer form or endorsed in blank by an appropriate person or registered in the name of the clearing agency or a custodian, or of a nominee of either, or 
  (b) an uncertificated security registered or recorded in records maintained by or on behalf of the company in the name of the clearing agency or a custodian, or of a nominee of either, subject to the instructions of the clearing agency, then, in addition to other methods, a transfer or pledge of the security or any interest therein may be effected by the making of an appropriate entry in the records of the clearing agency. 
  
  ### Interest in fungible bulk
  
  (5) Under subsections (4) to (10), entries may be in respect of like securities or interests therein as part of a fungible bulk and may refer merely to a quantity of a particular security without reference to the name of the registered owner, certificate or bond number or the like and, in appropriate cases, may be on a net basis taking into account other transfers or pledges of the same security. 
  
  ### Constructive endorsement and delivery
  
  (6) A transfer or pledge under subsections (4) to (10) has the effect of a delivery of a security in bearer form or duly endorsed in blank representing the amount of the obligation or the number of shares or rights transferred or pledged. 
  
  ### Idem
  
  (7) If a pledge or the creation of a security interest is intended, the making of entries has the effect of a taking of delivery by the pledgee or a secured party and the pledgee or secured party shall be deemed to have taken possession for all purposes. 
  
  ### Holder
  
  (8) A person depositing a security certificate or an uncertificated security with a clearing agency, or a transferee or pledgee of a security under subsections (4) to (10), is a holder of the security and shall be deemed to have possession of the security so deposited, transferred or pledged, as the case may be, for all purposes. 
  
  ### Not registration
  
  (9) A transfer or pledge under subsections (4) to (10) does not constitute a registration of transfer under sections 130 to 137. 
  
  ### Error in records
  
  (10) That entries made in the records of the clearing agency as provided in subsection (4) are not appropriate does not affect the validity or effect of the entries nor the liabilities or obligations of the clearing agency to any person adversely affected thereby. 
  
  ### Right to reclaim possession
  
  126 (1) A person against whom the transfer of a security is wrongful for any reason, including the person’s incapacity, may, against anyone except a bona fide purchaser,  
  (a) reclaim possession of the security or obtain possession of any new security evidencing all or part of the same rights; or 
  (b) claim damages. 
  
  ### Recovery where unauthorized endorsement
  
  (2) If the transfer of a security is wrongful by reason of an unauthorized endorsement, the owner may reclaim possession of the security or a new security even from a bona fide purchaser if the ineffectiveness of the purported endorsement is asserted against the purchaser under section 121.  
  
  ### Remedies
  
  (3) The right to reclaim possession of a security may be specially enforced, its transfer may be restrained and the security may be impounded pending litigation. 
  
  ### Right to requisites for registration
  
  127 (1) Unless otherwise agreed, a transferor shall, on demand, supply a purchaser with proof of the transferor’s authority to transfer a security or with any other requisite that is necessary to obtain registration of the transfer of a security, but if the transfer is not for value, it is not necessary for a transferor to prove authority to transfer unless the purchaser pays the reasonable and necessary costs of the proof and transfer. 
  
  ### Rescission of transfer
  
  (2) If a transferor fails to comply with a demand under subsection (1) within a reasonable time, the purchaser may reject or rescind the transfer. 
  
  ### Seizure of security
  
  128 No seizure of a security or other interest evidenced thereby is effective until the person making the seizure obtains possession of the security. 
  
  ### No conversion if good faith delivery
  
  129 An agent or bailee who in good faith, including observance of reasonable commercial standards if the agent or bailee is in the business of buying, selling or otherwise dealing with securities of a company, has received securities and sold, pledged or delivered them according to the instructions of the agent’s or bailee’s principal is not liable for conversion or for participation in breach of fiduciary duty even though the principal has no right to dispose of the securities. 
  
  ### Duty to register transfer
  
  130 (1) Subject to Part VII, where a security in registered form is presented for transfer, the issuer shall register the transfer if 
  (a) the security is endorsed by an appropriate person; 
  (b) reasonable assurance is given that the endorsement is genuine and effective; 
  (c) the issuer has no duty to inquire into adverse claims or has discharged any such duty; 
  (d) all applicable laws relating to the collection of taxes have been complied with; 
  (e) the transfer is rightful or is to a bona fide purchaser; and  
  (f) the fee, if any, referred to in subsection 89(2) has been paid. 
  
  ### Liability for delay
  
  (2) Where an issuer has a duty to register a transfer of a security, the issuer is liable to the person presenting it for registration for any loss resulting from any unreasonable delay in registration or from the failure or refusal to register the transfer. 
  
  ### Assurance of endorsements
  
  131 (1) An issuer may require an assurance that each necessary endorsement on a security is genuine and effective by requiring a guarantee of the signature of the person endorsing the security and by requiring 
  (a) if the endorsement is by an agent, reasonable assurance of authority to sign; 
  (b) if the endorsement is by a fiduciary, evidence of appointment or incumbency; 
  (c) if there is more than one fiduciary, reasonable assurance that all who are required to sign have done so; and 
  (d) in any other case, assurance that corresponds as closely as practicable to the foregoing. 
  
  ### Definition of 
  *guarantee of the signature* 
  
  (2) For the purposes of subsection (1), 
  *guarantee of the signature* means a guarantee signed by or on behalf of a person whom the issuer believes, on reasonable grounds, to be a responsible person.  
  
  ### Standards
  
  (3) An issuer may adopt reasonable standards to determine responsible persons for the purposes of subsection (2). 
  
  ### Definition of 
  *evidence of appointment or incumbency* 
  
  (4) For the purposes of paragraph (1)(b), 
  *evidence of appointment or incumbency* means  
  (a) in the case of a fiduciary appointed by a court and referred to in subsection 100(1), a copy of the certified court order referred to in subsection 100(1) and dated not earlier than sixty days before the day a security is presented for transfer; or 
  (b) in the case of any other fiduciary, a copy of a document showing the appointment or other evidence believed by the issuer to be appropriate. 
  
  ### Standards
  
  (5) An issuer may adopt reasonable standards with respect to evidence referred to in paragraph (4)(b). 
  
  ### No notice to issuer
  
  (6) An issuer is deemed not to have notice of the contents of any document referred to in subsection (4) that is obtained by the issuer except to the extent that the contents relate directly to appointment or incumbency. 
  
  ### Notice from additional documentation
  
  132 If an issuer, in relation to a transfer, demands assurance other than an assurance specified in subsection 131(1) and obtains a copy of a will, trust or partnership agreement or a by-law or similar document, the issuer is deemed to have notice of all matters contained therein affecting the transfer. 
  
  ### Limited duty of inquiry
  
  133 (1) An issuer to whom a security is presented for registration has a duty to inquire into adverse claims if 
  (a) the issuer receives written notice of an adverse claim at a time and in a manner that provides the issuer with a reasonable opportunity to act on it before the issue of a new, reissued or re-registered security and the notice discloses the name and address of the claimant, the registered owner and the issue of which the security is a part; or 
  (b) the issuer is deemed to have notice of an adverse claim from a document that it obtained under section 132. 
  
  ### Discharge of duty
  
  (2) An issuer may discharge a duty of inquiry by any reasonable means, including notifying an adverse claimant by registered mail sent to the address provided by the adverse claimant or, if no such address has been provided, to the adverse claimant’s residence or regular place of business, that a security has been presented for registration of transfer by a named person and that the transfer will be registered unless, within thirty days after the date of mailing of the notice, either 
  (a) the issuer is served with a restraining order or other order of a court, or 
  (b) the issuer is provided with an indemnity bond sufficient in the issuer’s judgment to protect the issuer and any registrar, transfer agent or other agent of the issuer from any loss that may be incurred by any of them as a result of complying with the adverse claim. 
  
  ### Inquiry into adverse claims
  
  134 Unless an issuer is deemed to have notice of an adverse claim from a document that it obtained under section 132 or has received notice of an adverse claim under subsection 133(1), if a security presented for registration is endorsed by the appropriate person, the issuer has no duty to inquire into adverse claims and, in particular, 
  (a) an issuer registering a security in the name of a person who is a fiduciary or who is described as a fiduciary is not bound to inquire into the existence, extent or correct description of the fiduciary relationship and thereafter the issuer may assume without inquiry that the newly registered owner continues to be the fiduciary until the issuer receives written notice that the fiduciary is no longer acting as such with respect to the particular security; 
  (b) an issuer registering a transfer on an endorsement by a fiduciary has no duty to inquire into whether the transfer is made in compliance with the document or with the law of the jurisdiction governing the fiduciary relationship; and 
  (c) an issuer is deemed not to have notice of the contents of any court record or any registered document even if the record or document is in the issuer’s possession and even if the transfer is made on the endorsement of a fiduciary to the fiduciary specifically or to the fiduciary’s nominee. 
  
  ### Duration of notice of adverse claim
  
  135 A written notice of adverse claim received by an issuer is effective for twelve months after the day it was received unless the notice is renewed in writing. 
  
  ### Limitation on issuer’s liability
  
  136 (1) Except as otherwise provided in any applicable law relating to the collection of taxes, an issuer is not liable to the owner or any other person who incurs a loss as a result of the registration of a transfer of a security if 
  (a) the necessary endorsements were on or with the security; and 
  (b) the issuer had no duty to inquire into adverse claims or had discharged any such duty. 
  
  ### Duty of issuer on default
  
  (2) If an issuer has registered a transfer of a security to a person not entitled to it, the issuer shall on demand deliver a like security to the owner unless 
  (a) the issuer is not liable by virtue of subsection (1); 
  (b) the owner is precluded by subsection 137(1) from asserting any claim; or 
  (c) the delivery would result in over-issue in respect of which section 101 applies. 
  
  ### Lost or stolen security
  
  137 (1) Where a security has been lost, apparently destroyed or wrongfully taken, and the owner fails to notify the issuer of that fact by giving the issuer written notice of the owner’s adverse claim within a reasonable time after the owner knows of the loss, destruction or taking, then, if the issuer has registered a transfer of the security before receiving the notice, the owner is precluded from asserting against the issuer any claim to a new security. 
  
  ### Duty to issue new security
  
  (2) Where the owner of a security claims that the security has been lost, destroyed or wrongfully taken, the issuer shall issue a new security in place of the original security if the owner 
  (a) so requests before the issuer has notice that the security has been acquired by a bona fide purchaser;  
  (b) provides the issuer with a sufficient indemnity bond; and 
  (c) satisfies any other reasonable requirements imposed by the issuer. 
  
  ### Duty to register transfer
  
  (3) If, after the issue of a new security under subsection (2), a bona fide purchaser of the original security presents the original security for registration of transfer, the issuer shall register the transfer unless registration would result in over-issue in respect of which section 101 applies.  
  
  ### Right of issuer to recover
  
  (4) In addition to the rights that an issuer has by reason of an indemnity bond, the issuer may recover the new security issued under subsection (2) from the person to whom it was issued or any person taking under that person other than a bona fide purchaser.  
  
  ### Authenticating agent’s duty
  
  138 An authenticating trustee, registrar, transfer agent or other agent of an issuer has, in respect of the issue, registration of transfer and cancellation of a security of the issuer, 
  (a) a duty to the issuer to exercise good faith and reasonable diligence; and 
  (b) the same obligations to the holder or owner of a security and the same rights, privileges and immunities as the issuer. 
  
  ### Notice to agent
  
  139 Notice to an authenticating trustee, registrar, transfer agent or other agent of an issuer is notice to the issuer in respect of the functions performed by the agent. 
  
  # PART VI 
  
  ## Corporate Governance 
  
  # DIVISION I 
  
  ## Shareholders and Policyholders 
  
  ## Place of Meetings 
  
  ### Place of meetings
  
  140 (1) Meetings of shareholders or policyholders of a company shall be held at the place within Canada provided for in the by-laws of the company or, in the absence of any such provision, at the place within Canada that the directors determine. 
  
  ### Participation by electronic means
  
  (2) Unless the by-laws provide otherwise, any person who is entitled to attend a meeting of shareholders or policyholders may participate in the meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting if the company makes one available. A person who is participating in a meeting by one of those means is deemed for the purposes of this Act to be present at the meeting. 
  
  ### Regulations
  
  (3) The Governor in Council may make regulations respecting the manner of and conditions for participating in a meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting. 
  
  ## Calling Meetings 
  
  ### Calling meetings
  
  141 (1) The directors of a company 
  (a) shall, after the meeting called pursuant to subsection 50(1) or (2), call the first annual meeting of shareholders and policyholders of the company, which meeting must be held not later than six months after the end of the first financial year of the company; 
  (b) shall subsequently call an annual meeting of shareholders and policyholders, which meeting must be held not later than six months after the end of each financial year; and 
  (c) may at any time call a special meeting of shareholders or policyholders. 
  
  ### Order to delay calling annual meeting
  
  (2) Despite subsection (1), the company may apply to the court for an order extending the time for calling an annual meeting. 
  
  ### Obligation to notify Superintendent
  
  (3) The company shall give notice of the application to the Superintendent before any hearing concerning the application and shall provide the Superintendent with a copy of any order that is issued. 
  
  ### Superintendent’s right to appear
  
  (4) The Superintendent is entitled to appear and be heard in person or by counsel at any hearing concerning the application. 
  
  ## Record Dates 
  
  ### Authority to fix record date
  
  142 (1) The directors may in advance fix a record date, that is within the prescribed period, for the determination of 
  (a) shareholders who are entitled to receive payment of a dividend; 
  (b) shareholders or policyholders who are entitled to participate in a liquidation distribution; 
  (c) shareholders 
  (i) who are entitled to receive notice of a meeting of shareholders or a meeting of shareholders and policyholders, 
  (ii) who are entitled to vote at a meeting of shareholders or at a meeting of shareholders and policyholders, or 
  (iii) for any other purpose; 
  (d) policyholders who are entitled to 
  (i) receive notice of a meeting of policyholders or a meeting of shareholders and policyholders, or 
  (ii) vote at a meeting of policyholders or at a meeting of shareholders and policyholders; or 
  (e) policyholders for any other purpose except 
  (i) the right to receive payment of a policy dividend or bonus, 
  (ii) any purpose where the determination of policyholders is governed by contract, and 
  (iii) the right to receive benefits in respect of the conversion of a mutual company into a company with common shares. 
  
  ### Determination of record date — shareholders
  
  (2) If no record date is fixed, 
  (a) the record date for the determination of shareholders who are entitled to receive notice of a meeting of shareholders or a meeting of shareholders and policyholders is 
  (i) at the close of business on the day immediately preceding the day on which the notice is given, or 
  (ii) if no notice is given, the day on which the meeting is held; and 
  (b) the record date for the determination of shareholders for any other purpose, other than to establish a shareholder’s right to vote, is at the close of business on the day on which the directors pass a resolution in respect of that purpose. 
  
  ### Determination of record date — policyholders
  
  (3) If no record date is fixed, 
  (a) the record date for the determination of policyholders who are entitled to receive notice of a meeting of policyholders or a meeting of shareholders and policyholders is 
  (i) at the close of business on the day immediately preceding the day on which the notice is given, or 
  (ii) if no notice is given, the day on which the meeting is held; 
  (b) the record date for the determination of policyholders entitled to vote at a meeting is the day on which the meeting is held; and 
  (c) the record date for the determination of policyholders for any other purpose is at the close of business on the day on which the directors pass a resolution in respect of that purpose. 
  
  ### Notice of record date — shareholders
  
  (4) If a record date is fixed and unless notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the securities register at the close of business on the day on which the directors fix the record date, notice of the record date shall be given within the prescribed period by 
  (a) advertisement in a newspaper in general circulation in the place where the company’s head office is situated and in each place in Canada where the company has a transfer agent or where a transfer of its shares may be recorded; and 
  (b) written notice to each stock exchange in Canada on which the company’s shares are listed for trading. 
  
  ## Notices of Meetings 
  
  ### Notice of meeting
  
  143 (1) Notice of the time and place of a meeting of a company’s shareholders or policyholders shall be sent within the prescribed period to 
  (a) each shareholder entitled to vote at the meeting; 
  (b) each policyholder who is determined under subsection (1.4) or (1.6) to be entitled to notice if no business referred to in subparagraphs (c)(i) to (iii) is to be dealt with; 
  (c) each policyholder entitled to vote at the meeting if any of the following business is to be dealt with: 
  (i) authorizing the company to apply to the Minister for approval of a mutualization proposal or amalgamation agreement, 
  (ii) confirming a by-law changing the rights of policyholders to vote at meetings or the province in which the head office of the company is situated, or 
  (iii) approving an agreement setting out the terms and means of effecting the transfer of all or substantially all of the company’s policies or the reinsurance of all or substantially all of the company’s policies; 
  (d) each director; 
  (e) the auditor of the company; 
  (f) the actuary of the company; and 
  (g) the Superintendent. 
  
  ### Exception
  
  (1.001) In the case of a company that is not a distributing company and does not have any policyholders entitled to vote, notice may be sent within any shorter period specified in its by-laws. 
  
  ### Number of eligible votes
  
  (1.01) A converted company in respect of which subsection 407(4) applies or a company to which subsection 407(5) applies shall set out in the notice of a meeting the number of eligible votes, as defined under subsection 164.08(1), that may be cast at the meeting as of the record date for determining the shareholders or policyholders entitled to receive the notice of meeting or, if there are to be separate votes of shareholders or policyholders at the meeting, the number of eligible votes, as defined in that subsection, in respect of each separate vote to be held at the meeting. 
  
  ### Waiver of notice
  
  (1.1) A company is not required under subsection (1) to send to a person notice of a meeting if the person waives notice of the meeting. That waiver may be in any manner. 
  
  ### Attendance constitutes waiver
  
  (1.2) A person who attends a meeting of shareholders or policyholders is deemed to have waived notice of the meeting, except where the person attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called. 
  
  ### Practices of policyholder notification
  
  (1.3) A company shall adopt and follow either of the two practices set out in subsections (1.4) and (1.5) for the notification of policyholders under paragraph (1)(b). 
  
  ### First practice
  
  (1.4) One practice requires the company to send the notice to each policyholder entitled to vote at the meeting. If that practice is adopted, each of those policyholders is entitled to notice under paragraph (1)(b). 
  
  ### Second practice
  
  (1.5) The other practice requires the company, at the time of the application for or issuance of a policy that gives the policyholder the right to vote at meetings of the shareholders and policyholders of the company, and after that time at least once every three years, 
  (a) to advise the policyholder of the policyholder’s right to attend and to vote in person or by proxy at those meetings; and 
  (b) to provide the policyholder with a form on which the policyholder may indicate whether the policyholder wants to receive notices of those meetings. 
  
  ### Notice under second practice
  
  (1.6) If a company chooses the practice under subsection (1.5), each policyholder entitled to vote at a meeting is entitled to notice under paragraph (1)(b) if, within three years before the record date fixed under subparagraph 142(1)(d)(i) or determined under paragraph 142(3)(a), they complete and return to the company the form referred to in paragraph (1.5)(b) indicating that they want to receive notice or they indicate to the satisfaction of the company that they want to receive notice. 
  
  ### Exemption
  
  (2) The Minister may exempt a company from the application of paragraph (1)(c) with respect to business consisting of the approval of an amalgamation agreement, having regard to the size of the company and of the companies or bodies corporate with which it proposes to amalgamate. 
  
  ### Publication in newspaper
  
  (3) In addition to the notice required under subsection (1), 
  (a) where any class of shares of a company is publicly traded on a recognized stock exchange in Canada, notice of the time and place of the meeting of shareholders shall be published once a week for at least four consecutive weeks before the date of the meeting in a newspaper in the place where the head office of the company is situated and in each place in Canada where the company has a transfer agent or where a transfer of the company’s shares may be recorded; or 
  (b) notice of the time and place of the meeting of policyholders of the company and, where a company follows the practice under subsection (1.5), information on the means by which any policyholder can receive the notice required under subsection (1), shall be published once a week for at least four consecutive weeks before the date of the meeting in a newspaper in the place where the head office of the company is situated and in each region of Canada in which more than one per cent of the total number of policyholders entitled to vote at the meeting reside. 
  
  ### Notice not required — shareholders
  
  (4) Notice of a meeting is not required to be sent to shareholders who are not registered on the records of the company or the company’s transfer agent on the record date fixed under subparagraph 142(1)(c)(i) or determined under paragraph 142(2)(a). 
  
  ### Notice not required — policyholders
  
  (5) Notice of a meeting at which business referred to in paragraph (1)(c) is to be dealt with is not required to be sent to policyholders who become policyholders after the record date fixed under subparagraph 142(1)(d)(i) or determined under paragraph 142(3)(a). 
  
  ### Effect of default
  
  (6) Failure to receive a notice of a meeting of shareholders or policyholders does not deprive a shareholder or policyholder of the right to vote at the meeting. 
  
  ### Notice of adjourned meeting
  
  144 (1) If a meeting of shareholders or policyholders is adjourned for less than thirty days, it is not necessary, unless the by-laws otherwise provide, to give notice of the adjourned meeting, other than by announcement at the earliest meeting that is adjourned. 
  
  ### Notice after longer adjournment
  
  (2) If a meeting of shareholders or policyholders is adjourned by one or more adjournments for a total of thirty days or more, notice of the continuation of the meeting shall be given as for an original meeting but, unless the meeting is adjourned by one or more adjournments for a total of more than ninety days, subsection 164.03(1) does not apply. 
  
  ### Special business
  
  145 (1) All matters dealt with at a special meeting of shareholders or policyholders or at an annual meeting of shareholders and policyholders are deemed to be special business, except that special business does not include consideration of 
  (a) the financial statements; 
  (b) the auditor’s report; 
  (c) the actuary’s report; 
  (d) the election of directors; 
  (e) the remuneration of directors and reappointment of the incumbent auditor; or 
  (f) the description of the roles of the actuary and the auditor in the preparation and audit of the financial statements. 
  
  ### Notice of special business
  
  (2) Notice of a meeting of shareholders or policyholders at which special business is to be transacted must 
  (a) state the nature of the special business in sufficient detail to permit a shareholder or policyholder to form a reasoned judgment thereon; 
  (b) contain the text of any special resolution to be submitted to the meeting; and 
  (c) state, where a management proxy circular is sent to shareholders concurrently with the notice, that a policyholder is entitled on request to receive a copy of the management proxy circular. 
  
  ### Exemption
  
  (3) The Superintendent may exempt a company from the application of paragraph (2)(b) in relation to policyholders, on condition that, instead of sending the policyholders the text of a special resolution to be submitted to a meeting, the company send the policyholders a summary of the text. 
  146  [Repealed, 1997, c. 15, s. 190]  
  
  ## Shareholder and Policyholder Proposals 
  
  ### Proposal
  
  147 (1) Subject to subsections (1.1) and (1.2), a registered holder or beneficial owner of shares that may be voted — or a policyholder entitled to vote — at an annual meeting of shareholders and policyholders may 
  (a) submit to the company notice of any matter that they propose to raise at the meeting (in this section and section 148 referred to as a “proposal”); and 
  (b) discuss at the meeting any matter in respect of which they would have been entitled to submit a proposal. 
  
  ### Eligibility to submit proposal
  
  (1.1) To be eligible to submit a proposal a person shall 
  (a) for at least the prescribed period be the registered holder or beneficial owner of at least the prescribed number of the company’s outstanding shares; 
  (b) have the support of persons who, in the aggregate and including or not including the person who submits the proposal, have for at least the prescribed period been the registered holders or beneficial owners of at least the prescribed number of the company’s outstanding shares; or 
  (c) be a policyholder entitled to vote at an annual meeting of the company’s shareholders and policyholders. 
  
  ### Information to be provided
  
  (1.2) A proposal submitted by a registered holder or beneficial owner is to be accompanied by the following information: 
  (a) the name and address of the person submitting the proposal and the names and addresses of their supporters, if any; and 
  (b) the number of shares held or owned by the person and their supporters, if any, and the date that the shares were acquired. 
  
  ### Information not part of proposal
  
  (1.3) The information provided under subsection (1.2) does not form part of a proposal or of the supporting statement referred to in subsection (3) and is not to be included for the purpose of the prescribed maximum number of words referred to in subsection (3). 
  
  ### Proof may be required
  
  (1.4) If the company requests within the prescribed period that a person provide proof that they are eligible to submit a proposal, the person shall within the prescribed period provide proof that they meet the requirements of subsection (1.1). 
  
  ### Circulation of proposal
  
  (2) A company shall attach any proposal of a shareholder or policyholder submitted for consideration at a meeting of shareholders and policyholders to the notice of the meeting. 
  
  ### Supporting statement
  
  (3) At the request of the person who submits a proposal, the company shall attach to the notice of the meeting the person’s statement in support of the proposal and their name and address. The statement and proposal together are not to exceed the prescribed maximum number of words. 
  
  ### Nomination of directors
  
  (4) A proposal may include nominations for the election of directors if it is signed by 
  (a) in the case of nominations for the directors to be elected by shareholders, one or more registered holders or beneficial owners of shares representing in the aggregate not less than 5% of the shares of the company or 5% of the shares of a class of its shares entitled to vote at the meeting at which the proposal is to be presented; and 
  (b) in the case of nominations for the directors to be elected by policyholders, the lesser of 250 policyholders and 1% of the policyholders who are entitled to vote at the meeting. 
  
  ### Conditions precedent for proposals
  
  (5) A company is not required to comply with subsections (2) and (3) if 
  (a) the proposal is not submitted to the company at least the prescribed number of days before the anniversary date of the notice of meeting that was sent to shareholders and policyholders in respect of the previous annual meeting of shareholders and policyholders; 
  (b) it clearly appears that the primary purpose of the proposal is to enforce a personal claim or redress a personal griev­ance against the company or its directors, officers or security holders; 
  (b.1) it clearly appears that the proposal does not relate in a significant way to the business or affairs of the company; 
  (c) the person submitting the proposal failed within the prescribed period before the company receives their proposal to present, in person or by proxy, at a meeting of shareholders or policyholders a proposal that at their request had been attached to a notice of meeting; 
  (d) substantially the same proposal was set out in or attached to a dissident’s proxy circular or attached to a notice of meeting relating to, and was presented to shareholders or policyholders at, a meeting of shareholders or policyholders held within the prescribed period before the receipt of the proposal and did not receive the prescribed minimum amount of support at the meeting; 
  (e) the rights conferred by subsections (1) to (4) are being abused to secure publicity; 
  (f) in the case of a proposal submitted by a policyholder that relates to business that is referred to in paragraph 143(1)(c), the proposal is not signed by at least five hundred policyholders entitled to vote at the meeting to which the proposal is to be presented, or one per cent of the total number of those policyholders, whichever is lesser; 
  (g) in the case of any other proposal submitted by a policyholder, the proposal is not signed by at least one hundred policyholders entitled to vote at the meeting to which the proposal is to be presented; 
  (h) in the case of a proposal submitted by a policyholder, the proposal 
  (i) relates to the management of the ordinary business and affairs of the company, or 
  (ii) would, if implemented, result in a change in the character or direction of the company that would have a material adverse effect on the ability of the company to meet the reasonable expectations of the company’s participating policyholders as to the net cost of their insurance; or 
  (iii)  [Repealed, 1996, c. 6, s. 72]  
  (i) in the case of a proposal submitted by a policyholder or a shareholder of a mutual company, the proposal would result in the mutual company being converted into a company with common shares. 
  
  ### Company may refuse to include proposal
  
  (5.1) If a person who submits a proposal fails to continue to hold or own shares in accordance with paragraph (1.1)(a) or, as the case may be, does not continue to have the support of persons who are in the aggregate the registered holders or beneficial owners of the prescribed number of shares in accordance with paragraph (1.1)(b) until the end of the meeting, the company is not required to attach any proposal submitted by that person to a notice of meeting for any meeting held within the prescribed period after the day of the meeting. 
  
  ### Immunity for proposal and statement
  
  (6) No company or person acting on behalf of a company incurs any liability by reason only of circulating a proposal or statement in compliance with subsections (2) and (3). 
  
  ### Notice of refusal
  
  148 (1) If a company refuses to attach a proposal to a notice of a meeting, it shall in writing notify the person submitting the proposal of its intention not to attach the proposal to the notice of the meeting and of the reasons for the refusal. It shall notify the person within the prescribed period after either the day on which it receives the proposal or, if it has requested proof under subsection 147(1.4), the day on which it receives the proof. 
  
  ### Application to court
  
  (2) On the application of a person submitting a proposal who claims to be aggrieved by a company’s refusal under subsection (1), a court may restrain the holding of the meeting at which the proposal is sought to be presented and make any further order that it thinks fit. 
  
  ### Idem
  
  (3) A company or any person claiming to be aggrieved by a proposal may apply to a court for an order permitting the company not to attach the proposal to the notice of the meeting, and the court, if it is satisfied that subsection 147(5) applies, may make such order as it thinks fit. 
  
  ### Notice to Superintendent
  
  (4) An applicant under subsection (2) or (3) shall give the Superintendent written notice of the application and the Superintendent may appear and be heard at the hearing of the application in person or by counsel. 
  
  ## Shareholder and Policyholder Lists 
  
  ### Lists of shareholders and policyholders
  
  149 (1) A company shall prepare an alphabetical list 
  (a) of shareholders entitled to receive notice of a meeting showing the number of shares held by each shareholder 
  (i) if a record date is fixed under subparagraph 142(1)(c)(i), no later than 10 days after that date, and 
  (ii) if no record date is fixed, on the record date determined under paragraph 142(2)(a); and 
  (b) of policyholders entitled to vote at a meeting 
  (i) if a record date is fixed under subparagraph 142(1)(d)(ii), no later than the day on which the meeting is held, and 
  (ii) if no record date is fixed, on the record date determined under paragraph 142(3)(b). 
  
  ### Shareholder voting list
  
  (1.1) The company shall prepare an alphabetical list of shareholders entitled to vote as of the record date showing the number of shares held by each shareholder 
  (a) if a record date is fixed under subparagraph 142(1)(c)(ii), no later than 10 days after that date; and 
  (b) if no record date is fixed under subparagraph 142(1)(c)(ii), no later than 10 days after a record date is fixed under subparagraph 142(1)(c)(i) or no later than the record date determined under paragraph 142(2)(a), as the case may be. 
  (1.2)  [Repealed, 2005, c. 54, s. 234]  
  
  ### Entitlement to vote — shareholders
  
  (2) Subject to section 164.08, a shareholder whose name appears on a list prepared under subsection (1.1) is entitled to vote the shares shown opposite their name. 
  
  ### Entitlement to vote — policyholders
  
  (3) A policyholder whose name appears on a list prepared under paragraph (1)(b) is entitled to vote at the meeting to which the list relates. 
  
  ### Examination of shareholder list
  
  (4) A shareholder or policyholder may examine the list of shareholders 
  (a) during usual business hours at the head office of the company or at the place where its central securities register is maintained; and 
  (b) at the meeting of shareholders for which the list was prepared. 
  
  ### Verification of right of policyholder to vote
  
  (5) A shareholder or policyholder of a company may, at the meeting of policyholders for which the list referred to in subsection (1) was prepared, require the company to verify from that list whether a person identified both by name and by some other distinguishing feature is entitled to vote at that meeting. 
  
  ## Quorum 
  
  ### Shareholders
  
  150 (1) Unless the by-laws otherwise provide, a quorum of shareholders is present at a meeting of shareholders if the holders of a majority of the shares who are entitled to vote at the meeting are present in person or represented by proxyholders. 
  
  ### Policyholders
  
  (2) Unless the by-laws otherwise provide, a quorum of policyholders is present at a meeting of policyholders if at least five hundred policyholders who are entitled to vote at the meeting, or one per cent of the total number of those policyholders, whichever is lesser, are present in person or represented by proxyholders. 
  
  ### Shareholders and policyholders
  
  (3) Unless the by-laws otherwise provide, a quorum of shareholders and policyholders is present at a meeting of shareholders and policyholders if the holders of a majority of the shares and at least five hundred policyholders, or one per cent of the total number of policyholders, whichever is lesser, who are entitled to vote at the meeting are present in person or represented by proxyholders. 
  
  ### Quorum at opening
  
  (4) If a quorum is present at the opening of a meeting of shareholders or policyholders, the shareholders or policyholders present may, unless the by-laws otherwise provide, proceed with the business of the meeting, notwithstanding that a quorum is not present throughout the meeting. 
  
  ### No quorum at opening
  
  (5) If a quorum is not present at the opening of a meeting of shareholders or policyholders, the shareholders or policyholders present may adjourn the meeting to a fixed time and place but may not transact any other business. 
  
  ### One shareholder meeting
  
  151 If a company has only one shareholder, or only one holder of any class or series of shares, the shareholder present in person or represented by a proxyholder constitutes a meeting of shareholders or a meeting of shareholders of that class or series. 
  
  ## Voting 
  
  ### One share — one vote
  
  152 Subject to section 164.08, if a share of a company entitles the holder of the share to vote at a meeting of shareholders or shareholders and policyholders, that share entitles the shareholder to one vote at the meeting. 
  
  ### One vote for each participating policyholder
  
  153 (1) Subject to subsection 149(3), the holder of one or more participating policies issued by a company is entitled to attend a meeting of policyholders or shareholders and policyholders of the company and is entitled to one vote at that meeting. 
  
  ### Exception
  
  (2) Notwithstanding subsection (1) but subject to subsection 149(3), the holder of a participating policy that was issued by a former-Act company before June 1, 1992 is entitled to more than one vote, or to a fraction of a vote, at a meeting of policyholders or shareholders and policyholders of the company in accordance with the terms of the policy or the provisions of the incorporating instrument or the by-laws of the company that had not been repealed and had not otherwise ceased to have effect before that date. 
  
  ### Other policyholders entitled to vote
  
  154 (1) Subject to subsection 149(3), the holder of one or more policies, other than participating policies, issued by a company is entitled to attend a meeting of policyholders or shareholders and policyholders of the company, and is entitled to one vote at that meeting, where 
  (a) the terms of one or more of those policies entitle the policyholder to vote at the meeting; or 
  (b) the by-laws of the company entitle the policyholder to vote at the meeting. 
  
  ### Exception
  
  (2) Notwithstanding subsection (1) but subject to subsection 149(3), the holder of a policy, other than a participating policy, that was issued by a former-Act company before June 1, 1992 is entitled to more than one vote, or to a fraction of a vote, at a meeting of policyholders or shareholders and policyholders of the company in accordance with the terms of the policy or the provisions of the incorporating instrument or the by-laws of the company that had not been repealed and had not otherwise ceased to have effect before that date. 
  
  ### One policyholder — one vote
  
  (3) Subject to subsection 149(3), the holder of one or more participating policies issued by a company and one or more policies, other than participating policies, referred to in subsection (1) 
  (a) is entitled to one vote as the holder of one or more participating policies and to another vote as the holder of one or more policies, other than participating policies, referred to in that subsection where this Act provides for participating policyholders to vote separately from other policyholders who are entitled to vote, or for those other policyholders to vote separately from participating policyholders; 
  (b) is not otherwise entitled to more than one vote at a meeting of policyholders; and 
  (c) is not otherwise entitled to more than one vote at a meeting of shareholders and policyholders, unless the holder is also a shareholder, in which case the holder is entitled to one vote as a policyholder and is also entitled to vote his or her shares. 
  
  ### Representative shareholder or policyholder
  
  155 (1) If an entity is a shareholder or policyholder of a company, the company shall recognize any natural person authorized by a resolution of the directors or governing body or similar authority of the entity to represent it at meetings of shareholders or policyholders of the company. 
  
  ### Idem
  
  (2) A natural person authorized under subsection (1) to represent an entity may exercise on behalf of the entity all the powers the entity could exercise if the entity were a natural person who was a shareholder or policyholder. 
  
  ### Joint shareholders or policyholders
  
  156 Unless the by-laws otherwise provide, if two or more persons hold shares or policies jointly, one of those holders present at a meeting of shareholders or policyholders may in the absence of the others vote the shares or policies, but if two or more of those persons who are present in person or represented by proxyholder vote, they shall vote as one on the shares or policies jointly held by them. 
  
  ### Voting by hands or ballot
  
  157 (1) Unless the by-laws otherwise provide, voting at a meeting of shareholders or policyholders shall take place by show of hands except when a ballot is demanded by a shareholder, policyholder or proxyholder entitled to vote at the meeting. 
  
  ### Ballot
  
  (2) A shareholder, policyholder or proxyholder may demand a ballot either before or after any vote by show of hands. 
  
  ### Electronic voting
  
  (3) Despite subsection (1) and unless the by-laws provide otherwise, any vote referred to in that subsection may be held entirely by means of a telephonic, electronic or other communication facility if the company makes one available. 
  
  ### Voting while participating electronically
  
  (4) Unless the by-laws provide otherwise, any person who is participating in a meeting of shareholders or policyholders under subsection 140(2) and entitled to vote at that meeting may vote by means of the telephonic, electronic or other communication facility that the company has made available for that purpose. 
  
  ### Regulations
  
  (5) The Governor in Council may make regulations respecting the manner of and conditions for voting at a meeting of shareholders or policyholders by means of a telephonic, electronic or other communication facility. 
  
  ## Resolution in lieu of Meeting 
  
  ### Resolution in lieu of meeting
  
  158 (1) Except where a written statement is submitted by a director under section 182 or by an auditor under subsection 344(1), 
  (a) a resolution in writing signed by all the shareholders and policyholders entitled to vote on that resolution at a meeting of shareholders or policyholders is as valid as if it had been passed at a meeting of the shareholders or policyholders; and 
  (b) a resolution in writing dealing with all matters required by this Act to be dealt with at a meeting of shareholders or policyholders, and signed by all the shareholders and policyholders entitled to vote at that meeting, satisfies all the requirements of this Act relating to meetings of shareholders or policyholders. 
  
  ### Filing resolution
  
  (2) A copy of every resolution referred to in subsection (1) shall be kept with the minutes of the meetings of shareholders or policyholders. 
  
  ### Evidence
  
  (3) Unless a ballot is demanded, an entry in the minutes of a meeting that the chairperson declared a resolution to be carried or defeated is in the absence of evidence to the contrary proof of that fact without proof of the number or proportion of votes recorded in favour of or against the resolution. 
  
  ## Requisitioned Meetings 
  
  ### Requisitioned meeting
  
  159 (1) Shareholders who together hold not less than 5 per cent of the issued and outstanding shares of a company that carry the right to vote at a meeting sought to be held may requisition the directors to call a meeting of shareholders or shareholders and policyholders for the purposes stated in the requisition. 
  
  ### Idem
  
  (2) At least five hundred policyholders entitled to vote at a meeting sought to be held, or one per cent of the total number of those policyholders, whichever is greater, may requisition the directors to call a meeting of policyholders or shareholders and policyholders for the purposes stated in the requisition. 
  
  ### Form
  
  (3) A requisition referred to in subsection (1) or (2) 
  (a) must state the business to be transacted at the meeting and must be sent to each director and to the head office of the company; and 
  (b) may consist of several documents of like form, each signed by one or more shareholders or policyholders. 
  
  ### Directors calling meeting
  
  (4) On receipt of a requisition referred to in subsection (1) or (2), the directors shall call a meeting of shareholders or policyholders to transact the business stated in the requisition, unless 
  (a) a record date has been fixed under subparagraph 142(1)(c)(i) or (d)(i) and notice of it has been given under subsection 142(4); 
  (b) the directors have called a meeting of shareholders or policyholders and have given notice thereof under section 143; or 
  (c) the business of the meeting as stated in the requisition includes matters described in paragraphs 147(5)(b) to (e), (h) and (i). 
  
  ### Shareholders’ and policyholders’ power
  
  (5) If the directors do not call a meeting within twenty-one days after receiving a requisition referred to in subsection (1) or (2), any shareholder or policyholder who signed the requisition may call the meeting. 
  
  ### Procedure
  
  (6) A meeting called under this section shall be called as nearly as possible in the manner in which meetings are to be called pursuant to the by-laws and this Act. 
  
  ### Reimbursement
  
  (7) Unless the shareholders or policyholders otherwise resolve at a meeting called under subsection (5), the company shall reimburse the shareholders or policyholders for any expenses reasonably incurred by them in requisitioning, calling and holding the meeting. 
  
  ## Powers of the Court 
  
  ### Court may order meeting to be called
  
  160 (1) A court may, on the application of a director, a shareholder or policyholder who is entitled to vote or the Superintendent, order a meeting to be called, held or conducted in the manner that the court directs if 
  (a) it is impracticable to call the meeting within the time or in the manner in which it is to be called; 
  (b) it is impracticable to conduct the meeting in the manner required by this Act or the by-laws; or 
  (c) the court thinks that the meeting ought to be called, held or conducted within the time or in the manner that it directs for any other reason. 
  (1.1)  [Repealed, 2005, c. 54, s. 238]  
  
  ### Varying quorum
  
  (2) Without restricting the generality of subsection (1), a court may order that the quorum required by the by-laws or this Act be varied or dispensed with at a meeting called, held and conducted pursuant to this section. 
  
  ### Valid meeting
  
  (3) A meeting called, held and conducted pursuant to this section is for all purposes a meeting of shareholders or policyholders of the company duly called, held and conducted. 
  
  ### Court review of election
  
  161 (1) A company or a shareholder, policyholder or director of a company may apply to a court to resolve any dispute in respect of the election or appointment of a director or an auditor of the company. 
  
  ### Powers of court
  
  (2) On an application under subsection (1), a court may make any order it thinks fit including, without limiting the generality of the foregoing, 
  (a) an order restraining a director or auditor whose election or appointment is challenged from acting pending determination of the dispute; 
  (b) an order declaring the result of the disputed election or appointment; 
  (c) an order requiring a new election or appointment, and including in the order directions for the management of the business and affairs of the company until a new election is held or the new appointment is made; and 
  (d) an order determining the voting rights of shareholders, persons claiming to own shares, policyholders and persons claiming to be policyholders. 
  
  ### Notice to Superintendent
  
  162 (1) A person who makes an application under subsection 160(1) or 161(1) shall give notice of the application to the Superintendent before the hearing and shall deliver a copy of the order of the court, if any, to the Superintendent. 
  
  ### Superintendent representation
  
  (2) The Superintendent may appear and be heard in person or by counsel at the hearing of an application referred to in subsection (1). 
  
  ## Pooling Agreements 
  
  ### Pooling agreement
  
  163 A written agreement between two or more shareholders or policyholders may provide that in exercising voting rights the shares or policies held by them will be voted as provided in the agreement. 
  
  # DIVISION I.1 
  
  ## Proxies 
  
  ### Definitions
  
  164 The definitions in this section apply in this Division.  
  *intermediary* means a person who holds a security on behalf of another person who is not the registered holder of the security, and includes  
  (a) a securities broker or dealer required to be registered to trade or deal in securities under the laws of any jurisdiction; 
  (b) a securities depositary; 
  (c) a financial institution; 
  (d) in relation to a clearing agency, a securities dealer, trust company, association within the meaning of section 2 of the Cooperative Credit Associations Act, bank or other person, including another clearing agency, on whose behalf the clearing agency or its nominee holds securities of an issuer;  
  (e) a trustee or administrator of a self-administered retirement savings plan, retirement income fund or education savings plan or another similar self-administered savings or investment plan registered under the Income Tax Act ;  
  (f) a nominee of a person referred to in any of paragraphs (a) to (e); and 
  (g) a person who performs functions similar to those performed by a person referred to in any of paragraphs (a) to (e) and holds a security registered in their name, or in the name of their nominee, on behalf of another person who is not the registered holder of the security. ( intermédiaire)   
  *registrant* [Repealed, 2005, c. 54, s. 239]   
  *solicit* or 
  *solicitation* includes  
  (a) a request for a proxy, whether or not accompanied by or included in a form of proxy, 
  (b) a request to execute or not to execute a form of proxy or to revoke a proxy, 
  (c) the sending of a form of proxy or other communication to a shareholder or policyholder under circumstances reasonably calculated to result in the procurement, withholding or revocation of a proxy, and 
  (d) the sending of a form of proxy to a shareholder or a policyholder under section 164.03, but does not include 
  (e) the sending of a form of proxy in response to an unsolicited request made by or on behalf of a shareholder or policyholder, 
  (f) the performance of administrative acts or professional services on behalf of a person soliciting a proxy, 
  (g) the sending by a registrant of the documents referred to in section 164.06, or 
  (h) a solicitation by a person in respect of shares of which that person is the beneficial owner. ( sollicitation)   
  *solicitation by or on behalf of the management of a company* means a solicitation by any person pursuant to a resolution or instruction of, or with the acquiescence of, the directors or a committee of the directors of the company. (sollicitation effectuée par la direction d’une société ou pour son compte)  
  
  ### Appointing proxyholder
  
  164.01 (1) A shareholder or policyholder who is entitled to vote at a meeting of shareholders or policyholders may, by executing a form of proxy, appoint a proxyholder or one or more alternate proxyholders, who are not required to be shareholders or policyholders, to attend and act at the meeting in the manner and to the extent authorized by the proxy and with the authority conferred by the proxy. 
  
  ### Execution of proxy
  
  (2) A form of proxy shall be executed by a shareholder or policyholder or by a shareholder’s or policyholder’s attorney authorized in writing to do so. 
  
  ### Limit on authority
  
  (3) No appointment of a proxyholder provides authority for the proxyholder to act in respect of the appointment of an auditor or the election of a director unless a nominee proposed in good faith for the appointment or election is named in the form of proxy, a management proxy circular, a dissident’s proxy circular or a proposal under subsection 147(1). 
  
  ### Required information
  
  (4) A form of proxy must indicate, in bold-face type, that the shareholder or policyholder by whom or on whose behalf it is executed may appoint a proxyholder, other than a person designated in the form of proxy, to attend and act on the shareholder’s or policyholder’s behalf at a meeting to which the proxy relates, and must contain instructions as to the manner in which the shareholder or policyholder may do so. 
  
  ### Validity of proxy
  
  (5) A proxy is valid only at the meeting in respect of which it is given or at a continuation of the meeting after an adjournment. 
  
  ### Revocation of proxy
  
  (6) A shareholder or policyholder may revoke a proxy 
  (a) by depositing an instrument in writing executed by the shareholder or policyholder or by the shareholder’s or policyholder’s attorney authorized in writing to do so 
  (i) at the head office of the company at any time up to and including the last business day before the day of a meeting, or a continuation of a meeting after an adjournment, at which the proxy is to be used, or 
  (ii) with the chairperson of the meeting on the day of the meeting or a continuation of the meeting after an adjournment; or 
  (b) in any other manner permitted by law. 
  
  ### Deposit of proxies
  
  164.02 (1) The directors may specify, in a notice calling a meeting of shareholders or policyholders or a continuation of a meeting of shareholders or policyholders after an adjournment, a time before which executed forms of proxy to be used at the meeting or the continued meeting must be deposited with the company or its transfer agent. 
  
  ### Time for deposit of proxies
  
  (2) The time specified for the deposit of forms of proxy may not precede the meeting or the continued meeting by more than 
  (a) forty-eight hours, excluding Saturdays and holidays, in the case of forms of proxy executed by shareholders; and 
  (b) ten days, in the case of forms of proxy executed by policyholders. 
  
  ### Mandatory solicitation
  
  164.03 (1) Subject to subsections (2) and 144(2), the management of a company shall, concurrently with sending notice of a meeting of shareholders and policyholders, send a form of proxy that is in accordance with the regulations to each shareholder entitled to receive notice of the meeting and to each policyholder entitled to receive notice of the meeting under section 143. 
  
  ### Exception
  
  (2) The management of a company is not required to send a form of proxy to shareholders under subsection (1) if the company 
  (a) is not a distributing company; and 
  (b) has 50 or fewer shareholders who are entitled to vote at a meeting, two or more joint holders of a share being counted as one shareholder. 
  
  ### Optional solicitation
  
  (3) The management of a company may send forms of proxy referred to in subsection (1) to policyholders who are entitled to vote at the meeting but not entitled to receive notice of the meeting under section 143, if the management 
  (a) sends forms of proxy referred to in that subsection to all policyholders who are entitled to vote at the meeting but not entitled to receive notice of the meeting under that section; and 
  (b) at the same time sends to each of the policyholders referred to in paragraph (a) a notice of the meeting as if those policyholders were persons entitled under that subsection to notice of the meeting. 
  
  ### Deeming rule for other provisions
  
  (4) For the purposes of this Act other than this section, if notices of a meeting are sent to policyholders under paragraph (3)(b), those policyholders are deemed to have been entitled under paragraph 143(1)(b) to receive notice of the meeting. 
  
  ### Soliciting proxies
  
  164.04 (1) A person shall not solicit proxies unless a proxy circular that is in accordance with the regulations is sent to the auditor of the company, to each shareholder or policyholder whose proxy is solicited and, in the case set out in paragraph (b), to the company as follows: 
  (a) in the case of solicitation by or on behalf of the management of a company, a management proxy circular, either as an appendix to or as a separate document accompanying the notice of the meeting; and 
  (b) in the case of any other solicitation, a dissident’s proxy circular stating the purposes of the solicitation. 
  
  ### Exception — limited solicitation
  
  (1.1) Despite subsection (1), a person may solicit proxies, other than by or on behalf of the management of the company, without sending a dissident’s proxy circular, if the total number of shareholders and policyholders whose proxies are solicited is 15 or fewer, with two or more joint holders being counted as one shareholder. 
  
  ### Exception — solicitation by public broadcast
  
  (1.2) Despite subsection (1), a person may solicit proxies, other than by or on behalf of the management of the company, without sending a dissident’s proxy circular if the solicitation is, in the prescribed circumstances, conveyed by public broadcast, speech or publication. 
  
  ### Copy to Superintendent
  
  (2) A person who sends a management proxy circular or dissident’s proxy circular shall concurrently send to the Superintendent a copy of it together with the form of proxy, any other documents for use in connection with the meeting and, in the case of a management proxy circular, a copy of the notice of meeting. 
  
  ### Exemption by Superintendent
  
  (3) On the application of an interested person, the Superintendent may, on any terms that the Superintendent thinks fit, exempt the person from any of the requirements of subsection (1) and section 164.03, and the exemption may be given retroactive effect. 
  
  ### Reporting exemptions
  
  (4) The Superintendent shall publish in a publication generally available to the public, a notice of a decision made by the Superintendent granting an exemption under subsection (3). 
  
  ### Attendance at meeting
  
  164.05 (1) A person who solicits a proxy and is appointed proxyholder shall attend in person or cause an alternate proxyholder to attend every meeting in respect of which the proxy is valid, and the proxyholder or alternate proxyholder shall comply with the directions of the shareholder or policyholder who executed the form of proxy. 
  
  ### Rights of proxyholder
  
  (2) A proxyholder or an alternate proxyholder has the same rights as the appointing shareholder or policyholder to speak at a meeting of shareholders or policyholders in respect of any matter, to vote by way of ballot at the meeting and, except where a proxyholder or an alternate proxyholder has conflicting instructions from more than one shareholder or policyholder, to vote at the meeting in respect of any matter by way of a show of hands. 
  
  ### Vote by show of hands
  
  (3) Despite subsections (1) and (2) and unless a shareholder, policyholder or proxyholder demands a ballot, if the chairperson of a meeting of shareholders or policyholders declares to the meeting that, if a ballot were conducted, the total number of votes represented at the meeting by proxy required to be voted against what, to the knowledge of the chairperson, would be the decision of the meeting on a matter or group of matters is less than 5% of all the votes that might be cast by shareholders or policyholders, in person or by proxy, 
  (a) the chairperson may conduct the vote in respect of that matter or group of matters by way of a show of hands; and 
  (b) a proxyholder or alternate proxyholder may vote in respect of that matter or group of matters by way of a show of hands. 
  
  ### Duty of intermediary
  
  164.06 (1) Shares of a company that are registered in the name of an intermediary or an intermediary’s nominee and not beneficially owned by the intermediary may not be voted unless the intermediary sends to the beneficial owner 
  (a) a copy of the notice of the meeting, annual statement, management proxy circular and dissident’s proxy circular and any other documents, other than the form of proxy, that were sent to shareholders by or on behalf of any person for use in connection with the meeting; and 
  (b) a written request for voting instructions except if the intermediary has already received written voting instructions from the beneficial owner. 
  
  ### When documents to be sent
  
  (2) The intermediary shall send the documents referred to in subsection (1) without delay after they receive the documents referred to in paragraph (1)(a). 
  
  ### Restriction on voting
  
  (3) An intermediary or a proxyholder appointed by them may not vote shares that the intermediary does not beneficially own and that are registered in the name of the intermediary or their nominee unless the intermediary or proxyholder, as the case may be, receives written voting instructions from the beneficial owner. 
  
  ### Copies
  
  (4) A person by or on behalf of whom a solicitation is made shall on request and without delay provide the intermediary, at the person’s expense, with the necessary number of copies of the documents referred to in paragraph (1)(a). 
  
  ### Instructions to intermediary
  
  (5) The intermediary shall vote or appoint a proxyholder to vote in accordance with any written voting instructions received from the beneficial owner. 
  
  ### Beneficial owner as proxyholder
  
  (6) If a beneficial owner so requests and provides an intermediary with appropriate documentation, the intermediary shall appoint the beneficial owner or a nominee of the beneficial owner as proxyholder. 
  
  ### Effect of intermediary’s failure to comply
  
  (7) The failure of an intermediary to comply with any of subsections (1) to (6) does not render void any meeting of shareholders or policyholders or any action taken at the meeting. 
  
  ### Intermediary may not vote
  
  (8) Nothing in this Division gives an intermediary the right to vote shares that they are otherwise prohibited from voting. 
  
  ### Regulations
  
  164.061 The Governor in Council may make regulations 
  (a) respecting the powers that may be granted by a shareholder or a policyholder in a form of proxy; 
  (b) respecting proxy circulars and forms of proxy, including the form and content of those documents; and 
  (c) respecting the conditions under which a company is exempt from any of the requirements of sections 164.01 to 164.06. 
  
  ### Restraining order
  
  164.07 (1) If a form of proxy, management proxy circular or dissident’s proxy circular contains an untrue statement of a material fact or omits to state a material fact that is required to be contained in it or that is necessary to make a statement contained in it not misleading in light of the circumstances in which the statement is made, an interested person or the Superintendent may apply to a court and the court may make any order it thinks fit including 
  (a) an order restraining the solicitation or the holding of the meeting, or restraining any person from implementing or acting on a resolution passed at the meeting, to which the form of proxy, management proxy circular or dissident’s proxy circular relates; 
  (b) an order requiring correction of any form of proxy or proxy circular and a further solicitation; and 
  (c) an order adjourning the meeting. 
  
  ### Notice of application
  
  (2) Where a person other than the Superintendent is an applicant under subsection (1), the applicant shall give to the Superintendent notice of the application and the Superintendent is entitled to appear and to be heard in person or by counsel. 
  
  # DIVISION I.2 
  
  ## Restrictions on Voting 
  
  ### Meaning of 
  *eligible votes* 
  
  164.08 (1) In this section, 
  *eligible votes* means the total number of votes that may be cast by or on behalf of shareholders and policyholders on a vote of shareholders or shareholders and policyholders or a vote of holders of a class or series of shares, as the case may be, in respect of any particular matter, calculated without regard to subsection (2).  
  
  ### Restriction
  
  (2) At a meeting of shareholders and policyholders of a company in respect of which subsection 407(4) applies or of a company to which subsection 407(5) applies, no person and no entity controlled by any person may, in respect of any vote of shareholders or shareholders and policyholders or holders of any class or series of shares of the company, cast votes in respect of any shares beneficially owned by the person or the entity that are, in aggregate, more than 20 per cent of the eligible votes that may be cast in respect of that vote. 
  
  ### Proxyholders
  
  (3) No person who is a proxyholder for a person or for an entity controlled by a person may cast votes to which the proxy relates that the person or entity may not cast by reason of subsection (2). 
  
  ### Exception
  
  (4) Subsections (2) and (3) do not apply in respect of votes cast by or on behalf of 
  (a) a company to which subsection 407(5) applies, or an insurance holding company to which subsection 407(6) applies, that controls the company; or 
  (b) any entity that is controlled by a company or an insurance holding company referred to in paragraph (a). 
  
  ### Exception
  
  (5) Subsections (2) and (3) do not apply in respect of a vote held under section 239. 
  
  ### Validity of vote
  
  (6) A vote in respect of a particular matter is not invalid merely because a person voted contrary to subsection (2) or (3). 
  
  ### Disposition of shareholdings
  
  (7) If, with respect to any company, a person contravenes subsection (2) or (3), the Minister may, by order, direct the shareholder of the shares to which the contravention relates or any person controlled by that shareholder to dispose of any number of shares of the company beneficially owned by any of those persons that the Minister specifies in the order, within the time specified in the order and in the proportion, if any, as between the shareholder and the persons controlled by that shareholder that is specified in the order. 
  
  ### Restriction on voting rights
  
  (8) If the Minister makes an order under subsection (7), the person to whom the order relates may not, in person or by proxy, exercise any voting rights that are attached to shares of the company beneficially owned by the person. 
  
  ### Subsection (8) ceases to apply
  
  (9) Subsection (8) ceases to apply in respect of a person when the shares to which the order relates have been disposed of. 
  
  ### Reliance on number in notice
  
  (10) For the purpose of this section, a person is entitled to rely on the number of eligible votes set out in a notice of a meeting under subsection 143(1.01). 
  
  ### Designation of persons
  
  (11) For the purpose of this section, the Minister may, with respect to a particular company, designate two or more persons who are parties to an agreement, commitment or understanding referred to in section 9 to be a single person. 
  
  # DIVISION II 
  
  ## Directors and Officers 
  
  ## Duties 
  
  ### Duty to manage
  
  165 (1) Subject to this Act, the directors of a company shall manage or supervise the management of the business and affairs of the company. 
  
  ### Specific duties
  
  (2) Without limiting the generality of subsection (1), the directors of a company shall 
  (a) establish an audit committee to perform the duties referred to in subsections 203(3) and (4); 
  (b) establish a conduct review committee to perform the duties referred to in subsection 204(3); 
  (c) establish procedures to resolve conflicts of interest, including techniques for the identification of potential conflict situations and for restricting the use of confidential information; 
  (d) designate a committee of the board of directors to monitor the procedures referred to in paragraph (c); 
  (e) in the case of a company that issues participating policies, establish, before issuing any participating policies or, in the case of a former-Act company, within six months after the coming into force of this Part, a policy for determining the dividends and bonuses to be paid to the participating policyholders; 
  (e.1) establish a policy respecting the management of each of the participating accounts maintained under section 456, 
  (i) if the company has participating policyholders on the day on which this paragraph comes into force, within six months after that day, and 
  (ii) in any other case, before issuing a participating policy; 
  (e.2) establish criteria for changes made by the company to the premium or charge for insurance, amount of insurance or surrender value in respect of its adjustable policies, 
  (i) if the company has adjustable policyholders on the day on which this paragraph comes into force, within six months after that day, and 
  (ii) in any other case, before issuing an adjustable policy; 
  (f) establish procedures to provide disclosure of information to customers of the company that is required to be disclosed by this Act and for dealing with complaints as required by section 486; 
  (g) designate a committee of the board of directors to monitor the procedures referred to in paragraph (f) and satisfy itself that they are being adhered to by the company; 
  (h) establish investment and lending policies, standards and procedures in accordance with section 492; and 
  (i) in the case of a former-Act company, appoint the actuary of the company forthwith after the coming into force of this Part. 
  
  ### Exception
  
  (3) Paragraphs (2)(a) and (b) do not apply to the directors of a company where 
  (a) all the voting shares of the company, other than directors’ qualifying shares, if any, are beneficially owned by a Canadian financial institution described by any of paragraphs (a) to (d) of the definition 
  *financial institution* in subsection 2(1);  
  (b) there are no policyholders who are entitled to vote; and 
  (c) the audit committee or the conduct review committee of the Canadian financial institution referred to in paragraph (a) performs for and on behalf of the company all the functions that would otherwise be required to be performed by the audit committee or conduct review committee of the company under this Act. 
  
  ### Report of actuary — par. (2)(e)
  
  (3.1) The company’s actuary shall report to the directors in writing on the fairness to participating policyholders of any policy to be established or amended under paragraph (2)(e) and report at least once during each financial year on its continuing fairness. In the case of a policy established before the day on which this subsection comes into force, the actuary shall within six months after that day report on its fairness to participating policyholders and report at least once during each financial year on its continuing fairness. 
  
  ### Report of actuary — par. (2)(e.1)
  
  (3.2) The company’s actuary shall report to the directors in writing on the fairness to participating policyholders of any policy to be established or amended under paragraph (2)(e.1) and report at least once during each financial year on its continuing fairness. 
  
  ### Report of actuary — par. (2)(e.2)
  
  (3.3) The company’s actuary shall report to the directors in writing on the fairness to adjustable policyholders of the criteria to be established or amended under paragraph (2)(e.2) and report at least once during each financial year on their continuing fairness. 
  
  ### Consideration of reports
  
  (3.4) The directors shall consider the report prepared under subsection (3.1), (3.2) or (3.3) before establishing or amending a policy under paragraph (2)(e) or (e.1) or the criteria under paragraph (2)(e.2), as the case may be. 
  
  ### Generally accepted actuarial practice
  
  (3.5) The report of the actuary referred to in subsections (3.1) to (3.3) shall be prepared in accordance with generally accepted actuarial practice with such changes as may be determined by the Superintendent and any additional directions that may be made by the Superintendent. 
  
  ### Copy to Superintendent
  
  (4) The company shall, within 30 days after a policy is established or amended under paragraph (2)(e) or (e.1) or criteria are established or amended under paragraph (2)(e.2), send a copy to the Superintendent. 
  
  ### Access to policies
  
  (4.1) The company shall on request and free of charge send a copy of a policy established or amended under paragraph (2)(e) or (e.1) to a shareholder or participating policyholder and on payment of a reasonable fee to any other person. 
  
  ### Access to criteria
  
  (4.2) The company shall on request and free of charge send a copy of the criteria referred to in paragraph (2)(e.2) to an adjustable policyholder and on payment of a reasonable fee to any other person. 
  
  ### Regulations
  
  (5) The Governor in Council may make regulations respecting the content of the policies established under paragraphs (2)(e) and (e.1) and of the criteria established under paragraph (2)(e.2). 
  
  ### Duty of care
  
  166 (1) Every director and officer of a company in exercising any of the powers of a director or an officer and discharging any of the duties of a director or an officer shall 
  (a) act honestly and in good faith with a view to the best interests of the company; and 
  (b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. 
  
  ### Duty to comply
  
  (2) Every director, officer and employee of a company shall comply with this Act, the regulations, the company’s incorporating instrument and the by-laws of the company. 
  
  ### No exculpation
  
  (3) No provision in any contract, in any resolution or in the by-laws of a company relieves any director, officer or employee of the company from the duty to act in accordance with this Act and the regulations or relieves a director, officer or employee from liability for a breach thereof. 
  
  ## Qualification and Number — Directors 
  
  ### Minimum number of directors
  
  167 (1) A company shall have at least seven directors. 
  
  ### Residency requirement
  
  (2) At least one half of the directors of a company that is a subsidiary of a foreign institution or of a prescribed holding body corporate of a foreign institution and a majority of the directors of any other company must be, at the time of each director’s election or appointment, resident Canadians. 
  
  ### Disqualified persons
  
  168 (1) The following persons are disqualified from being directors of a company: 
  (a) a person who is less than eighteen years of age; 
  (b) a person who is of unsound mind and has been so found by a court in Canada or elsewhere; 
  (c) a person who has the status of a bankrupt; 
  (d) a person who is not a natural person; 
  (e) a person who is prohibited by subsection 164.08(8) or section 418 or 430 from exercising voting rights attached to shares of the company or whose voting rights attached to the shares are suspended under section 432.1 or subsection 1016.3(4); 
  (f) a person who is an officer, director or full time employee of an entity that is prohibited by subsection 164.08(8) or section 418 or 430 from exercising voting rights attached to shares of the company or whose voting rights attached to the shares are suspended under section 432.1 or subsection 1016.3(4); 
  (f.1) a person who is an officer, director, employee or agent of — or any other person acting on behalf of — an eligible agent within the meaning of section 406.1; 
  (g)  [Repealed, 2013, c. 40, s. 164]  
  (h) a minister of Her Majesty in right of Canada or in right of a province; 
  (i) a person who is an agent or employee of the government of a foreign country or any political subdivision thereof; and 
  (j) a person who is an insurance agent or broker of the company. 
  
  ### Shareholders disqualified
  
  (2) A shareholder of a company is disqualified from being a policyholders’ director of the company. 
  (3)  [Repealed, 2013, c. 40, s. 164]  
  
  ### No requirement to hold shares or policies
  
  169 A director of a company is not required to hold shares of or a policy issued by the company. 
  
  ### Affiliated person
  
  170 The Governor in Council may make regulations specifying the circumstances under which a natural person is affiliated with a company for the purposes of this Act. 
  
  ### Affiliated director determination
  
  170.1 (1) Notwithstanding section 170, the Superintendent may determine that a particular director is affiliated with a company for the purposes of this Act if, in the opinion of the Superintendent, the director has a significant or sufficient commercial, business or financial relationship with the company or with an affiliate of the company to the extent that the relationship can be construed as being material to the director and can reasonably be expected to affect the exercise of the director’s best judgment. 
  
  ### Notification by Superintendent
  
  (2) A determination by the Superintendent under subsection (1) 
  (a) becomes effective on the day of the next annual meeting of the shareholders and policyholders unless a notice in writing by the Superintendent revoking the determination is received by the company prior to that day; and 
  (b) ceases to be in effect on the day of the next annual meeting of the shareholders and policyholders after a notice in writing by the Superintendent revoking the determination is received by the company. 
  
  ### Unaffiliated directors
  
  171 (1) At the election of directors at each annual meeting of the shareholders and policyholders of a company and at all times until the day of the next annual meeting no more than two thirds of the directors may be persons affiliated with the company. 
  
  ### Exception
  
  (2) Subsection (1) does not apply where 
  (a) all the voting shares of a company, other than directors’ qualifying shares, if any, are beneficially owned by a Canadian financial institution incorporated by or under an Act of Parliament; and 
  (b) there are no policyholders who are entitled to vote. 
  
  ### Determination of affiliation
  
  (3) For the purposes of subsection (1), whether or not a person is affiliated with a company shall be determined as of the day the notice of the annual meeting is sent to shareholders and policyholders pursuant to section 143 and that determination becomes effective on the day of that meeting, and a person shall be deemed to continue to be affiliated or unaffiliated, as the case may be, until the next annual meeting of shareholders and policyholders. 
  
  ### Limit on directors
  
  172 No more than 15 per cent of the directors of a company may, at each director’s election or appointment, be employees of the company or a subsidiary of the company, except that up to four persons who are employees of the company or a subsidiary of the company may be directors of the company if those directors constitute not more than one half of the directors of the company. 
  
  ## Election and Tenure — Directors 
  
  ### Number of directors
  
  173 (1) Subject to subsection 167(1) and sections 176 and 238, the directors of a company shall, by by-law, determine the number of directors or the minimum and maximum number of directors, but no by-law that decreases the number of directors shortens the term of an incumbent director. 
  
  ### Shareholders’ and policyholders’ directors
  
  (2) Subject to subsection 167(1) and sections 176 and 238, the directors of a company that has common shares and policyholders who are entitled to vote at an annual meeting of shareholders and policyholders shall by by-law determine the number of directors, or the minimum and maximum number of directors, who are to be elected by the shareholders and the number, or the minimum and maximum number, who are to be elected by the policyholders. 
  
  ### Election at annual meeting
  
  (3) A by-law made pursuant to subsection (1) that provides for a minimum and maximum number of directors may provide that the number of directors, shareholders’ directors or policyholders’ directors to be elected at any annual meeting of the shareholders and policyholders be such number as is fixed by the directors prior to the annual meeting. 
  
  ### Minimum
  
  (4) If a company has common shares and policyholders who are entitled to vote at an annual meeting of shareholders and policyholders, the number of shareholders’ directors and the number of policyholders’ directors, whether determined by by-law or fixed by the directors, must each be at least one third of the total number of directors. 
  
  ### Mutual company
  
  (4.1) Where the shareholders of a mutual company are entitled to elect one or more directors of the company, not more than one third of the directors may be elected by the shareholders. 
  
  ### Shareholders’ and policyholders’ directors
  
  (5) In making by-laws for the purposes of subsection (2), the directors shall designate every member of the board as being either a shareholders’ director or a policyholders’ director. 
  
  ### Election or appointment as director
  
  173.1 The election or appointment of a person as a director is subject to the following conditions: 
  (a) the person was present at the meeting when the election or appointment took place and did not refuse to hold office as a director; or 
  (b) the person was not present at the meeting when the election or appointment took place but 
  (i) consented in writing to hold office as a director before the election or appointment or within 10 days after it, or 
  (ii) acted as a director after the election or appointment. 
  
  ### Term of directors
  
  174 (1) Except where this Act or the by-laws of a company provide for cumulative voting, the company may, by by-law, provide that the directors be elected for terms of one, two or three years. 
  
  ### Idem
  
  (2) Where this Act or the by-laws of a company provide for cumulative voting to elect the shareholders’ directors, the company may, by by-law, provide that the policyholders’ directors be elected for terms of one, two or three years. 
  
  ### Term of one, two or three years
  
  (3) A director elected for a term of one, two or three years holds office until the close of the first, second or third annual meeting of shareholders and policyholders, as the case may be, following the election of the director. 
  
  ### No stated term
  
  (4) A director who is not elected for an expressly stated term of office ceases to hold office at the close of the next annual meeting of shareholders and policyholders following the election of the director. 
  
  ### Tenure of office
  
  (5) It is not necessary that all directors elected at a meeting of shareholders or policyholders hold office for the same term. 
  
  ### Idem
  
  (6) If a by-law of a company provides that the directors be elected for a term of two or three years, it may also provide that the term of office of each director be for the whole of that term, or that, as nearly as may be, one half of the directors retire each year if the term is two years, and that one third of the directors retire each year if the term is three years. 
  
  ### Composition requirements
  
  (7) Where a director of a company is elected or appointed for a term of more than one year, the company shall comply with subsections 167(2) and 171(1), section 172 and subsection 173(4) at each annual meeting of shareholders and policyholders during the director’s term of office as if that director were elected or appointed on that date. 
  
  ### Transitional
  
  (8) Subsection (7) does not apply in respect of a former-Act company until the day of the third annual meeting of shareholders and policyholders after the coming into force of this section. 
  
  ### Determining election of directors
  
  175 (1) Except where this Act or the by-laws of a company provide for cumulative voting, the persons, to the number authorized to be elected, who receive the greatest number of votes at an election of directors of a company shall be the directors thereof. 
  
  ### No right to vote
  
  (2) A shareholder of a company that has common shares and policyholders who are entitled to vote at an annual meeting of shareholders and policyholders 
  (a) is not entitled to vote for the policyholders’ directors if the shareholder is not a policyholder; and 
  (b) is not entitled to vote any shares for the policyholders’ directors. 
  
  ### Idem
  
  (3) The holder of a policy issued by a company that has common shares and policyholders who are entitled to vote at an annual meeting of shareholders and policyholders 
  (a) is not entitled to vote for the shareholders’ directors if the policyholder is not a shareholder; and 
  (b) is not entitled to vote as a policyholder for the shareholders’ directors. 
  
  ### Equal number of votes
  
  (4) If, at any election of directors referred to in subsection (1), two or more persons receive an equal number of votes and there are not sufficient vacancies remaining to enable all the persons receiving an equal number of votes to be elected, the directors who receive a greater number of votes or the majority of them shall, in order to complete the full number of directors, determine which of the persons so receiving an equal number of votes are to be elected. 
  
  ### Cumulative voting
  
  176 (1) Where this Act or the by-laws provide for cumulative voting, 
  (a) there shall be a stated number determined by by-law, and not a minimum and maximum number, of directors, in the case of a company that has no policyholders who are entitled to vote at an annual meeting of shareholders and policyholders, or of shareholders’ directors, in the case of a company that has such policyholders; 
  (b) each shareholder entitled to vote at an election of directors to be elected by cumulative voting has the right to cast a number of votes equal to the number of votes attached to the shares held by the shareholder multiplied by the number of directors to be elected by cumulative voting, and the shareholder may cast all such votes in favour of one candidate or distribute them among the candidates in any manner; 
  (c) a separate vote shall be taken with respect to each candidate nominated for a position that is to be filled by cumulative voting unless a resolution is passed unanimously permitting two or more persons to be elected by a single vote; 
  (d) if a shareholder has voted for more than one candidate without specifying the distribution of the votes among the candidates, the shareholder is deemed to have distributed the votes equally among the candidates for whom the shareholder voted; 
  (e) if the number of candidates nominated exceeds the number of positions to be filled, the candidates who receive the least number of votes shall be eliminated until the number of candidates remaining equals the number of positions to be filled; 
  (f) each director elected by cumulative voting ceases to hold office at the close of the next annual meeting of shareholders and policyholders following the director’s election; 
  (g) a director elected by cumulative voting may be removed from office only if the number of votes cast in favour of a motion to remove the director is greater than the product of the number of directors required by the by-laws to be elected by cumulative voting and the number of votes cast against the motion; and 
  (h) the number of directors required by the by-laws to be elected by cumulative voting may be decreased only if the number of votes cast in favour of a motion to decrease the number of directors is greater than the product of the number of directors required by the by-laws to be elected by cumulative voting and the number of votes cast against the motion. 
  
  ### Mandatory cumulative voting
  
  (2) Where the aggregate of the voting shares beneficially owned by a person and any entities controlled by the person carries more than 10 per cent of the voting rights attached to all the outstanding voting shares of a company, the directors to be elected by shareholders shall be elected by cumulative voting. 
  
  ### Exception
  
  (3) Subsection (2) does not apply where all the voting shares of the company that are outstanding, other than directors’ qualifying shares, if any, are beneficially owned by 
  (a) one person; 
  (b) one person and one or more entities controlled by that person; or 
  (c) one or more entities controlled by the same person. 
  
  ### Exception
  
  (3.1) Subsection (2) does not apply to a converted company in respect of which subsection 407(4) applies or a company to which subsection 407(5) applies. 
  
  ### Transitional election
  
  (4) Where this Act or the by-laws of a company provide for cumulative voting, the shareholders of the company shall, 
  (a) at the first annual meeting of shareholders and policyholders held not earlier than ninety days following the date that cumulative voting is required under subsection (2) or provided for in the by-laws, and 
  (b) at each succeeding annual meeting, elect the stated number of directors to hold office until the close of the next annual meeting of shareholders and policyholders following their election. 
  
  ### Class or series of shares
  
  (5) Nothing in this Act precludes the holders of any class or series of shares of a company from having an exclusive right to elect one or more directors. 
  
  ### Re-election of directors
  
  177 A director who has completed a term of office is, if otherwise qualified, eligible for re-election. 
  
  ## Incomplete Elections and Director Vacancies 
  
  ### Void election or appointment
  
  178 (1) If, immediately after the time of any purported election or appointment of directors, the board of directors would fail to comply with subsection 167(2) or 171(1), section 172 or subsection 173(4) or (4.1), the purported election or appointment of all persons purported to be elected or appointed at that time is void unless the directors, within forty-five days after the discovery of the non-compliance, develop a plan, approved by the Superintendent, to rectify the non-compliance. 
  
  ### Failure to elect minimum
  
  (2) Where, at the close of a meeting of shareholders or policyholders of a company, the shareholders or policyholders have failed to elect the number or minimum number of directors required by this Act or the by-laws of a company, the purported election of directors at the meeting 
  (a) is valid if the directors purported to be elected and those incumbent directors, if any, whose terms did not expire at the close of the meeting, together constitute a quorum; or 
  (b) is void if the directors purported to be elected and those incumbent directors, if any, whose terms did not expire at the close of the meeting, together do not constitute a quorum. 
  (3) and (4)  [Repealed, 1997, c. 15, s. 204]  
  
  ### Directors where elections incomplete or void
  
  179 (1) Notwithstanding subsections 174(3) and (4) and paragraphs 176(1)(f) and 180(1)(a), where subsection 178(1) or (2) applies at the close of any meeting of shareholders or policyholders of a company, the board of directors shall, until their successors are elected or appointed, consist solely of 
  (a) where paragraph 178(2)(a) applies, the directors referred to in that paragraph; or 
  (b) where subsection 178(1) or paragraph 178(2)(b) applies, those persons who were the incumbent directors immediately before the meeting. 
  
  ### Where there is no approved rectification plan
  
  (2) Notwithstanding subsections 174(3) and (4) and paragraphs 176(1)(f) and 180(1)(a), where a plan to rectify the non-compliance referred to in subsection 178(1) has not been approved by the Superintendent by the end of the forty-five day period referred to in that subsection, the board of directors shall, until their successors are elected or appointed, consist solely of the persons who were the incumbent directors immediately before the meeting at which the purported election or appointment referred to in that subsection occurred. 
  
  ### Directors to call meeting
  
  (3) Where subsection (1) or (2) applies, the board of directors referred to in that subsection shall without delay call a special meeting of shareholders or policyholders to fill the vacancies, where paragraph 178(2)(a) applies, or elect a new board of directors, where subsection 178(1) or paragraph 178(2)(b) applies. 
  
  ### Shareholder or policyholder may call meeting
  
  (4) Where the directors fail to call a special meeting required by subsection (3), the meeting may be called by any shareholder or policyholder entitled to vote. 
  
  ### Ceasing to hold office
  
  180 (1) A director ceases to hold office 
  (a) at the close of the annual meeting at which the director’s term of office expires; 
  (b) when the director dies or resigns; 
  (c) when the director becomes disqualified under section 168 or ineligible to hold office pursuant to subsection 212(2); 
  (d) when the director is removed under section 181; or 
  (e) when the director is removed from office under section 678.1 or 678.2. 
  
  ### Date of resignation
  
  (2) The resignation of a director of a company becomes effective at the time a written resignation is sent to the company by the director or at the time specified in the resignation, whichever is later. 
  
  ### Removal of director
  
  181 (1) Subject to paragraph 176(1)(g) and this section, the shareholders or policyholders of a company may by resolution at a special meeting remove any director or all the directors from office. 
  
  ### Exception
  
  (2) A shareholders’ director may be removed only by a resolution of the shareholders at a meeting of shareholders or shareholders and policyholders. 
  
  ### Idem
  
  (3) A policyholders’ director may be removed only by a resolution of the policyholders at a meeting of policyholders or shareholders and policyholders. 
  
  ### Idem
  
  (4) Where the holders of any class or series of shares of a company have the exclusive right to elect one or more directors, a director so elected may be removed only by a resolution at a meeting of the shareholders of that class or series. 
  
  ### Vacancy by removal
  
  (5) Subject to paragraphs 176(1)(b) to (e), a vacancy created by the removal of a director may be filled at the meeting of the shareholders or policyholders at which the director is removed or, if not so filled, may be filled under section 185 or 187. 
  
  ### Statement of director
  
  182 (1) A director who 
  (a) resigns, 
  (b) receives a notice or otherwise learns of a meeting of shareholders or policyholders called for the purpose of removing the director from office, or 
  (c) receives a notice or otherwise learns of a meeting of directors or shareholders or policyholders at which another person is to be appointed or elected to fill the office of director, whether because of the director’s resignation or removal or because the director’s term of office has expired or is about to expire, is entitled to submit to the company a written statement giving the reasons for the resignation or the reasons why the director opposes any proposed action or resolution. 
  
  ### Statement to Superintendent
  
  (2) Where a director resigns as a result of a disagreement with the other directors or the officers of a company, the director shall submit to the company and the Superintendent a written statement setting out the nature of the disagreement. 
  
  ### Circulation of statement
  
  183 (1) A company shall forthwith on receipt of a director’s statement referred to in subsection 182(1) relating to a matter referred to in paragraph 182(1)(b) or (c), or a director’s statement referred to in subsection 182(2), send a copy thereof to each shareholder and policyholder entitled to receive a notice of meetings under paragraph 143(1)(a) or (b) and to the Superintendent, unless the statement is attached to a notice of a meeting. 
  
  ### Immunity for statement
  
  (2) No company or person acting on its behalf incurs any liability by reason only of circulating a director’s statement in compliance with subsection (1). 
  
  ### Shareholders or policyholders filling vacancy
  
  184 The by-laws of a company may provide that a vacancy among the directors is to be filled only by vote of 
  (a) the shareholders or policyholders; 
  (b) the shareholders, if the vacancy occurs among the shareholders’ directors; 
  (c) the policyholders, if the vacancy occurs among the policyholders’ directors; or 
  (d) the holders of any class or series of shares having an exclusive right to elect one or more directors if the vacancy occurs among the directors elected by the holders of that class or series. 
  
  ### Directors filling vacancy
  
  185 (1) Despite section 192 but subject to subsection (2) and sections 184, 186 and 187, a quorum of directors may fill a vacancy among the directors except a vacancy resulting from a change in the by-laws by which the number or the minimum or maximum number of directors is increased or from a failure to elect the number or minimum number of directors provided for in the by-laws. 
  
  ### Where composition fails
  
  (2) Notwithstanding sections 184 and 192, where by reason of a vacancy the number of directors or the composition of the board of directors fails to meet any of the requirements of section 167, subsection 171(1), section 172 and subsection 173(4), the directors who, in the absence of any by-law, would be empowered to fill that vacancy shall do so forthwith. 
  
  ### Vacancy among shareholders’ or policyholders’ directors
  
  186 Notwithstanding section 192 but subject to sections 184 and 187, where a company has shareholders’ directors and policyholders’ directors and a vacancy occurs among those directors, 
  (a) the remaining shareholders’ directors or policyholders’ directors, as the case may be, may fill the vacancy except one resulting from an increase in the number or the minimum or maximum number — or from a failure to elect the number or minimum number — of shareholders’ directors or policyholders’ directors provided for in the by-laws; 
  (b) if there are no such remaining directors and, by reason of the vacancy, the number of directors or the composition of the board of directors fails to meet any of the requirements of section 167, subsection 171(1), section 172 and subsection 173(4), the other directors may fill that vacancy; and 
  (c) if there are no such remaining directors and paragraph (b) does not apply, any shareholder or policyholder entitled to vote may call a meeting of shareholders or policyholders for the purpose of filling the vacancy. 
  
  ### Class vacancy
  
  187 Notwithstanding section 192 but subject to section 184, where the holders of any class or series of shares of a company have an exclusive right to elect one or more directors and a vacancy occurs among those directors, 
  (a) the remaining directors elected by the holders of that class or series of shares may fill the vacancy except one resulting from an increase in the number or the minimum or maximum number of directors for that class or series or from a failure to elect the number or minimum number of directors provided for in the by-laws for that class or series; 
  (b) if there are no such remaining directors and, by reason of the vacancy, the number of directors or the composition of the board of directors fails to meet any of the requirements of section 167, subsection 171(1), section 172 and subsection 173(4), the other directors may fill that vacancy; and 
  (c) if there are no such remaining directors and paragraph (b) does not apply, any holder of shares of that class or series may call a meeting of the holders thereof for the purpose of filling the vacancy. 
  
  ### Unexpired term
  
  188 (1) Unless the by-laws otherwise provide, a director elected or appointed to fill a vacancy holds office for the unexpired term of the director’s predecessor in office. 
  
  ### Affiliation
  
  (2) Notwithstanding subsection 171(3), the affiliation of a person to be elected or appointed to fill a vacancy shall be determined as at the date of the person’s election or appointment and that person shall be deemed to continue to be affiliated or unaffiliated, as the case may be, until the next annual meeting of the shareholders and policyholders. 
  
  ### Additional directors
  
  188.1 (1) Shareholders’ directors may appoint one or more additional directors as shareholders’ directors, and policyholders’ directors may appoint one or more additional directors as policyholders’ directors, where the by-laws of the company allow them to do so and the by-laws determine the minimum and maximum numbers of shareholders’ directors and policyholders’ directors. 
  
  ### Term of office
  
  (2) A director appointed under subsection (1) holds office for a term expiring not later than the close of the next annual meeting of shareholders or policyholders of the company. 
  
  ### Limit on number appointed
  
  (3) The total number of directors appointed under subsection (1) may not exceed one third of the number of directors elected at the previous annual meeting of shareholders or policyholders of the company. 
  
  ## Meetings of the Board 
  
  ### Meetings required
  
  189 (1) The directors shall meet at least four times during each financial year. 
  
  ### Place for meetings
  
  (2) The directors may meet at any place unless the by-laws provide otherwise. 
  
  ### Notice for meetings
  
  (3) The notice for the meetings must be given as required by the by-laws. 
  
  ### Notice of meeting
  
  190 (1) A notice of a meeting of directors shall specify each matter referred to in section 207 that is to be dealt with at the meeting but, unless the by-laws otherwise provide, need not otherwise specify the purpose of or the business to be transacted at the meeting. 
  
  ### Waiver of notice
  
  (2) A director may in any manner waive notice of a meeting of directors and the attendance of a director at a meeting of directors is a waiver of notice of that meeting except where the director attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called. 
  
  ### Adjourned meeting
  
  (3) Notice of an adjourned meeting of directors is not required to be given if the time and place of the adjourned meeting was announced at the original meeting. 
  
  ### Quorum
  
  191 (1) Subject to section 192, the number of directors referred to in subsection (2) constitutes a quorum at any meeting of directors or a committee of directors and, notwithstanding any vacancy among the directors, a quorum of directors may exercise all the powers of the directors. 
  
  ### Idem
  
  (2) The number of directors constituting a quorum at any meeting of directors or a committee of directors shall be 
  (a) a majority of the minimum number of directors required by this Act for the board of directors or a committee of directors; or 
  (b) such greater number of directors than the number calculated pursuant to paragraph (a) as may be established by the by-laws of the company. 
  
  ### Director continues to be present
  
  (3) A director who is present at a meeting of directors or of a committee of directors but is not, in accordance with subsection 212(1), present at any particular time during the meeting is considered to be present for the purposes of this section. 
  
  ### Resident Canadian majority
  
  192 (1) The directors of a company shall not transact business at a meeting of directors unless 
  (a) in the case of a company that is the subsidiary of a foreign institution, at least one half of the directors present are resident Canadians; and 
  (b) in the case of any other company, a majority of the directors present are resident Canadians. 
  
  ### Exception
  
  (2) Despite subsection (1), the directors of a company may transact business at a meeting of directors without the required proportion of directors who are resident Canadians if 
  (a) a director who is a resident Canadian unable to be present approves, in writing or by telephonic, electronic or other communications facilities, the business transacted at the meeting; and 
  (b) there would have been present the required proportion of directors who are resident Canadians had that director been present at the meeting. 
  
  ### Presence of unaffiliated director
  
  192.1 (1) The directors of a company shall not transact business at a meeting of directors unless at least one of the directors who is not affiliated with the company is present. 
  
  ### Exception
  
  (2) Despite subsection (1), the directors of a company may transact business at a meeting of directors if a director who is not affiliated with the company and who is not able to be present approves, in writing or by telephonic, electronic or other communications facilities, the business transacted at the meeting. 
  
  ### Exception
  
  (3) Subsection (1) does not apply if all the voting shares of the company, other than directors’ qualifying shares, if any, are beneficially owned by a Canadian financial institution incorporated by or under an Act of Parliament. 
  
  ### Electronic meeting
  
  193 (1) Subject to the by-laws of a company, a meeting of directors or of a committee of directors may be held by means of such telephonic, electronic or other communications facilities as permit all persons participating in the meeting to communicate adequately with each other during the meeting. 
  
  ### Deemed present
  
  (2) A director participating in a meeting by any means referred to in subsection (1) is deemed for the purposes of this Act to be present at that meeting. 
  
  ### Resolution outside board meeting
  
  193.1 (1) A resolution in writing signed by all the directors entitled to vote on that resolution at a meeting of directors is as valid as if it had been passed at a meeting of directors. 
  
  ### Filing directors’ resolution
  
  (2) A copy of the resolution referred to in subsection (1) shall be kept with the minutes of the proceedings of the directors. 
  
  ### Resolution outside committee meeting
  
  (3) A resolution in writing signed by all the directors entitled to vote on that resolution at a meeting of a committee of directors, other than a resolution of the audit committee in carrying out its duties under subsection 203(3) or a resolution of the conduct review committee in carrying out its duties under subsection 204(3), is as valid as if it had been passed at a meeting of that committee. 
  
  ### Filing committee resolution
  
  (4) A copy of the resolution referred to in subsection (3) shall be kept with the minutes of the proceedings of that committee. 
  
  ### Evidence
  
  (5) Unless a ballot is demanded, an entry in the minutes of a meeting that the chairperson declared a resolution to be carried or defeated is in the absence of evidence to the contrary proof of that fact without proof of the number or proportion of votes recorded in favour of or against the resolution. 
  
  ### Dissent of director
  
  194 (1) A director of a company who is present at a meeting of directors or a committee of directors is deemed to have consented to any resolution passed or action taken at that meeting unless 
  (a) the director requests that the director’s dissent be entered or the director’s dissent is entered in the minutes of the meeting; 
  (b) the director sends a written dissent to the secretary of the meeting before the meeting is adjourned; or 
  (c) the director sends the director’s dissent by registered mail or delivers it to the head office of the company immediately after the meeting is adjourned. 
  
  ### Loss of right to dissent
  
  (2) A director of a company who votes for or consents to a resolution is not entitled to dissent under subsection (1). 
  
  ### Dissent of absent director
  
  (3) A director of a company who is not present at a meeting at which a resolution is passed or action taken is deemed to have consented thereto unless, within seven days after the director becomes aware of the resolution, the director 
  (a) causes the director’s dissent to be placed with the minutes of the meeting; or 
  (b) sends the director’s dissent by registered mail or delivers it to the head office of the company. 
  
  ### Record of attendance
  
  195 (1) A company shall keep a record of the attendance at each meeting of directors and each committee meeting of directors. 
  
  ### Statement to shareholders and policyholders
  
  (2) A company shall attach to the notice of each annual meeting it sends to its shareholders and policyholders a statement showing, in respect of the financial year immediately preceding the meeting, the total number of directors’ meetings and directors’ committee meetings held during the financial year and the number of those meetings attended by each director. 
  
  ### Meeting required by Superintendent
  
  196 (1) Where in the opinion of the Superintendent it is necessary, the Superintendent may, by notice in writing, require a company to hold a meeting of directors of the company to consider the matters set out in the notice. 
  
  ### Attendance of Superintendent
  
  (2) The Superintendent may attend and be heard at a meeting referred to in subsection (1). 
  
  ## By-laws 
  
  ### By-laws
  
  197 (1) Unless this Act otherwise provides, the directors of a company may by resolution make, amend or repeal any by-law that regulates the business or affairs of the company. 
  
  ### Shareholder and policyholder approval
  
  (2) The directors shall submit a by-law, or an amendment to or a repeal of a by-law, that is made under subsection (1) to the shareholders and policyholders at the next meeting of shareholders and policyholders, and the shareholders and policyholders may, by resolution, confirm or amend the by-law, amendment or repeal. 
  
  ### Separate vote
  
  (2.1) If a by-law made, amended or repealed under subsection (1) deals with the quorum of policyholders at a meeting of shareholders and policyholders, the policyholders who are entitled to vote on a resolution to confirm or amend the by-law, amendment or repeal are entitled to vote on it separately from the shareholders. 
  
  ### Effective date of by-law
  
  (3) Unless this Act otherwise provides, a by-law, or an amendment to or a repeal of a by-law, is effective from the date of the resolution of the directors under subsection (1) until it is confirmed, confirmed as amended or rejected by the shareholders and policyholders under subsection (2) or (2.1) or until it ceases to be effective under subsection (4) and, where the by-law is confirmed, or confirmed as amended, it continues in effect in the form in which it was so confirmed. 
  
  ### Effect where no shareholder or policyholder approval
  
  (4) If a by-law, or an amendment to or a repeal of a by-law, is rejected by the shareholders and policyholders, or is not submitted to the shareholders and policyholders by the directors as required under subsection (2), the by-law, amendment or repeal ceases to be effective from the date of its rejection or the date of the next meeting of shareholders and policyholders, as the case may be, and no subsequent resolution of the directors to make, amend or repeal a by-law having substantially the same purpose or effect is effective until it is confirmed, or confirmed as amended, by the shareholders and policyholders. 
  
  ### Shareholder or policyholder proposal of by-law
  
  198 A shareholder or policyholder entitled to vote at an annual meeting of shareholders and policyholders may, in accordance with sections 147 and 148, make a proposal to make, amend or repeal a by-law. 
  
  ### By-laws of former-Act company
  
  199 (1) Subject to section 200, where a by-law of a former-Act company is in effect on the coming into force of this section, the by-law continues in effect until amended or repealed, unless it is contrary to a provision of this Act. 
  
  ### Unconfirmed by-laws
  
  (2) A by-law made by the directors of a company under section 23 of the Canadian and British Insurance Companies Act, as that section read immediately before the coming into force of this section, and not confirmed at a general or annual meeting of the company in accordance with section 24 of that Act on or before the coming into force of this section, continues to have effect, unless it is contrary to the provisions of this Act, until the first meeting of the shareholders and policyholders following the coming into force of this section.  
  
  ### Shareholder and policyholder approval
  
  (3) A by-law referred to in subsection (2) shall be submitted to the shareholders and policyholders at the first meeting of the shareholders and policyholders following the coming into force of this section. 
  
  ### Application of ss. 197(3) and (4) and 198
  
  (4) Subsections 197(3) and (4) and section 198 apply in respect of a by-law referred to in this section as if it were a by-law made under section 197. 
  
  ### Resolutions re remuneration
  
  200 (1) Where the remuneration of directors of a former-Act company was, immediately prior to the coming into force of this section, fixed by a resolution of the shareholders or policyholders of the company that was passed pursuant to subsection 135(1) of the Canadian and British Insurance Companies Act, that resolution continues to have effect, unless it is contrary to the provisions of this Act, until the first meeting of the shareholders and policyholders following the coming into force of this section.  
  
  ### Existing resolutions
  
  (2) Where the remuneration of directors of a former-Act company was, immediately prior to the coming into force of this section, fixed by a resolution of the directors, that resolution continues to have effect, unless it is contrary to the provisions of this Act, until the first meeting of the shareholders and policyholders following the coming into force of this section. 
  
  ### Deemed by-laws
  
  201 (1) Any matter provided for in the incorporating instrument of a former-Act company on the coming into force of this section, or of a body corporate continued as a company under this Act at the time of continuance that, under this Act, would be provided for in the by-laws of a company is deemed to be provided for in the by-laws of the company. 
  
  ### By-law prevails
  
  (2) Where a by-law of the company made in accordance with sections 197 and 198 amends or repeals any matter referred to in subsection (1), the by-law prevails. 
  
  ## Committees of the Board 
  
  ### Committees
  
  202 The directors of a company may appoint from their number, in addition to the committees referred to in subsection 165(2), such other committees as they deem necessary and, subject to section 207, delegate to those committees such powers of the directors, and assign to those committees such duties, as the directors consider appropriate. 
  
  ### Audit committee
  
  203 (1) The audit committee of a company shall consist of at least three directors. 
  
  ### Membership
  
  (2) A majority of the members of the audit committee must consist of directors who are not persons affiliated with the company and none of the members of the audit committee may be officers or employees of the company or a subsidiary of the company. 
  
  ### Duties of audit committee
  
  (3) The audit committee of a company shall 
  (a) review the annual statement of the company before the annual statement is approved by the directors; 
  (b) review such returns of the company as the Superintendent may specify; 
  (c) require the management of the company to implement and maintain appropriate internal control procedures; 
  (c.1) review, evaluate and approve those procedures; 
  (d) review such investments and transactions that could adversely affect the well-being of the company as the auditor or any officer of the company may bring to the attention of the committee; 
  (e) meet with the auditor to discuss the annual statement and the returns and transactions referred to in this subsection; 
  (f) meet with the actuary of the company to discuss the parts of the annual statement and the annual return filed under section 665 prepared by the actuary; and 
  (g) meet with the chief internal auditor of the company, or the officer or employee of the company acting in a similar capacity, and with management of the company, to discuss the effectiveness of the internal control procedures established for the company. 
  
  ### Report
  
  (4) In the case of the annual statement and returns of a company that under this Act must be approved by the directors of the company, the audit committee of the company shall report thereon to the directors before the approval is given. 
  
  ### Required meeting of directors
  
  (5) The audit committee of a company may call a meeting of the directors of the company to consider any matter of concern to the committee. 
  
  ### Conduct review committee
  
  204 (1) The conduct review committee of a company shall consist of at least three directors. 
  
  ### Membership
  
  (2) A majority of the members of the conduct review committee of a company must consist of directors who are not persons affiliated with the company and none of the members of the conduct review committee may be officers or employees of the company or a subsidiary of the company. 
  
  ### Duties of conduct review committee
  
  (3) The conduct review committee of a company shall 
  (a) require the management of the company to establish procedures for complying with Part XI; 
  (b) review those procedures and their effectiveness in ensuring that the company is complying with Part XI; 
  (b.1) if an insurance holding company or a bank holding company that is widely held has a significant interest in any class of shares of the company, 
  (i) establish policies for entering into transactions referred to in subsection 528.1(1), and 
  (ii) review transactions referred to in subsection 528.3(1); and 
  (c) review the practices of the company to ensure that any transactions with related parties of the company that may have a material effect on the stability or solvency of the company are identified. 
  
  ### Company report to Superintendent
  
  (4) A company shall report to the Superintendent on the mandate and responsibilities of the conduct review committee and the procedures referred to in paragraph (3)(a). 
  
  ### Committee report to directors
  
  (5) After each meeting of the conduct review committee of a company, the committee shall report to the directors of the company on matters reviewed by the committee. 
  
  ### Directors’ report to Superintendent
  
  (6) Within ninety days after the end of each financial year, the directors of a company shall report to the Superintendent on what the conduct review committee did during the year in carrying out its responsibilities under subsection (3). 
  
  ## Directors and Officers — Authority 
  
  ### Chief executive officer
  
  205 The directors of a company shall appoint from their number a chief executive officer who must be ordinarily resident in Canada and, subject to section 207, may delegate to that officer any of the powers of the directors. 
  
  ### Appointment of officers
  
  206 (1) The directors of a company may, subject to the by-laws, designate the offices of the company, appoint officers thereto, specify the duties of those officers and delegate to them powers, subject to section 207, to manage the business and affairs of the company. 
  
  ### Directors as officers
  
  (2) Subject to section 172, a director of a company may be appointed to any office of the company. 
  
  ### Two or more offices
  
  (3) Two or more offices of a company may be held by the same person. 
  
  ### Limits on power to delegate
  
  207 The directors of a company may not delegate any of the following powers, namely, the power to 
  (a) submit to the shareholders or policyholders a question or matter requiring the approval of the shareholders or policyholders; 
  (b) fill a vacancy among the directors, on a committee of directors or in the office of auditor or actuary, or appoint additional directors; 
  (c) issue or cause to be issued securities, including an issue of shares of a series that is authorized in accordance with section 66, except in accordance with any authorization made by the directors; 
  (d) declare a dividend on shares or a policy dividend, bonus or other benefit payable to policyholders, other than a dividend on a group policy that is a participating policy; 
  (e) authorize the redemption or other acquisition by the company pursuant to section 75 of shares issued by the company; 
  (f) authorize the payment of a commission on a share issue; 
  (g) approve a management proxy circular; 
  (h) except as provided in this Act, approve the annual statement of the company and any other financial statements issued by the company; or 
  (i) adopt, amend or repeal by-laws. 
  
  ### Remuneration of directors, officers and employees
  
  208 (1) Subject to this section and the by-laws, the directors of a company may fix the remuneration of the directors, officers and employees of the company. 
  
  ### By-law required
  
  (2) No remuneration shall be paid to a director as director until a by-law fixing the aggregate of all amounts that may be paid to all directors in respect of directors’ remuneration during a fixed period of time has been confirmed by special resolution. 
  
  ### Validity of acts
  
  209 (1) An act of a director or an officer of a company is valid notwithstanding a defect in the director’s qualification or an irregularity in the director’s election or in the appointment of the director or officer. 
  
  ### Idem
  
  (2) An act of the board of directors of a company is valid notwithstanding a defect in the composition of the board or an irregularity in the election of the board or in the appointment of a member of the board. 
  
  ### Right to attend meetings
  
  210 A director of a company is entitled to attend and to be heard at every meeting of shareholders or policyholders. 
  
  ## Conflicts of Interest 
  
  ### Disclosure of interest
  
  211 (1) A director or officer of a company shall disclose to the company, in writing or by requesting to have it entered in the minutes of a meeting of directors or a meeting of a committee of directors, the nature and extent of any interest they have in a material contract or material transaction with the company, whether entered into or proposed, if they 
  (a) are a party to the contract or transaction; 
  (b) are a director or officer of a party to the contract or transaction or a person acting in a similar capacity; or 
  (c) have a material interest in a party to the contract or transaction. 
  
  ### Time of disclosure — director
  
  (2) The disclosure shall be made in the case of a director 
  (a) at the meeting of directors, or of a committee of directors, at which the proposed contract or transaction is first considered; 
  (b) if at the time of the meeting referred to in paragraph (a) the director was not interested in the proposed contract or transaction, at the first one after they become interested in it; 
  (c) if the director becomes interested after a contract or transaction is entered into, at the first one after they become interested; or 
  (d) if a person who is interested in a contract or transaction becomes a director, at the first one after they become a director. 
  
  ### Time of disclosure — officer
  
  (3) The disclosure shall be made in the case of an officer who is not a director 
  (a) immediately after they become aware that the contract, transaction, proposed contract or proposed transaction is to be considered or has been considered at a meeting of directors or of a committee of directors; 
  (b) if they become interested after the contract or transaction is entered into, immediately after they become interested; or 
  (c) if a person who is interested in a contract or transaction becomes an officer, immediately after they become an officer. 
  
  ### Time of disclosure — contract not requiring approval
  
  (4) If the material contract or material transaction, whether entered into or proposed, is one that in the ordinary course of the company’s business would not require approval by the directors, shareholders or policyholders, the director or officer shall disclose to the company, in writing or by requesting to have it entered in the minutes of a meeting of directors or of a committee of directors, the nature and extent of their interest immediately after they become aware of the contract or transaction. 
  
  ### Director to abstain
  
  212 (1) A director who is required to make a disclosure under subsection 211(1) shall not be present at any meeting of directors, or of a committee of directors, while the contract or transaction is being considered or vote on any resolution to approve it unless the contract or transaction 
  (a) relates primarily to their remuneration as a director, officer, employee or agent of the company, an entity controlled by the company or an entity in which the company has a substantial investment; 
  (b) is for indemnity under section 221 or insurance under section 222; or 
  (c) is with an affiliate of the company. 
  
  ### Ineligibility
  
  (2) Any director who knowingly contravenes subsection (1) ceases to hold office as director and is not eligible, for a period of five years after the date on which the contravention occurred, for election or appointment as a director of any financial institution that is incorporated or formed by or under an Act of Parliament. 
  
  ### Validity of acts
  
  (3) An act of the board of directors of a company or of a committee of the board of directors is not invalid because a person acting as a director had ceased under subsection (2) to hold office as a director. 
  
  ### General notice
  
  213 (1) For the purposes of subsection 211(1), a general notice to the directors declaring that a director or officer is to be regarded as interested for any of the following reasons in a contract or transaction entered into with a party is a sufficient declaration of interest in relation to any contract or transaction with that party: 
  (a) the director or officer is a director or officer of a party referred to in paragraph 211(1)(b) or (c) or a person acting in a similar capacity; 
  (b) the director or officer has a material interest in the party; or 
  (c) there has been a material change in the nature of the director’s or officer’s interest in the party. 
  
  ### Access to disclosures
  
  (2) A policyholder who is entitled to vote or a shareholder may examine the portions of any minutes of meetings of directors or committees of directors that contain disclosures under subsection 211(1), or the portions of any other documents that contain those disclosures, during the usual business hours of the company. 
  
  ### Avoidance standards
  
  214 (1) A contract or transaction for which disclosure is required under subsection 211(1) is not invalid and a director or officer is not accountable to the company or its shareholders or policyholders for any profit realized from it by reason only of the director’s or officer’s interest in the contract or transaction or the fact that the director was present or was counted to determine whether a quorum existed at the meeting of directors, or of a committee of directors, that considered it if 
  (a) the director or officer disclosed their interest in accordance with section 211 and subsection 213(1); 
  (b) the directors approved the contract or transaction; and 
  (c) the contract or transaction was reasonable and fair to the company at the time that it was approved. 
  
  ### Confirmation by shareholders and policyholders
  
  (2) Even if the conditions set out in subsection (1) are not met, a director or officer acting honestly and in good faith is not accountable to the company or its shareholders or policyholders for any profit realized from a contract or transaction for which disclosure was required and the contract or transaction is not invalid by reason only of the director’s or officer’s interest in it if 
  (a) the contract or transaction is approved or confirmed by special resolution at a meeting of shareholders and policyholders; 
  (b) disclosure of the interest was made to the shareholders and to the policyholders entitled to vote in a manner sufficient to indicate its nature before the contract or transaction was approved or confirmed; and 
  (c) the contract or transaction was reasonable and fair to the company at the time that it was approved or confirmed. 
  
  ### Court may set aside or require accounting
  
  215 If a director or officer of a company fails to comply with any of sections 211 to 214, a court, on application of the company or any of its policyholders entitled to vote or its shareholders, may set aside the contract or transaction on any terms that the court thinks fit and may require the director or officer to account to the company for any profit or gain realized on it. 
  
  ## Liability, Exculpation and Indemnification 
  
  ### Director liability
  
  216 (1) Directors of a company who vote for or consent to a resolution of the directors authorizing the issue of a share contrary to subsection 69(1) or the issue of subordinated indebtedness contrary to section 84 for a consideration other than money are jointly and severally, or solidarily, liable to the company to make good any amount by which the consideration received is less than the fair equivalent of the money that the company would have received if the share or subordinated indebtedness had been issued for money on the date of the resolution. 
  
  ### Further liability
  
  (2) Directors of a company who vote for or consent to a resolution of the directors authorizing any of the following are jointly and severally, or solidarily, liable to restore to the company any amounts so distributed or paid and not otherwise recovered by the company and any amounts in relation to any loss suffered by the company: 
  (a) a redemption or purchase of shares contrary to section 75; 
  (b) a reduction of capital contrary to section 79; 
  (c) a payment of a dividend contrary to section 83; 
  (d) a payment of an indemnity contrary to section 221; or 
  (e) any transaction contrary to Part XI. 
  
  ### Contribution
  
  217 (1) A director who has satisfied a judgment in relation to the director’s liability under section 216 is entitled to contribution from the other directors who voted for or consented to the unlawful act on which the judgment was founded. 
  
  ### Recovery
  
  (2) A director who is liable under section 216 is entitled to apply to a court for an order compelling a shareholder or other person to pay or deliver to the director 
  (a) any money or property that was paid or distributed to the shareholder or other person contrary to section 75, 79, 83 or 221; or 
  (b) an amount equal to the value of the loss suffered by the company as a result of any transaction contrary to Part XI. 
  
  ### Court order
  
  (3) Where an application is made to a court under subsection (2), the court may, where it is satisfied that it is equitable to do so, 
  (a) order a shareholder or other person to pay or deliver to a director any money or property that was paid or distributed to the shareholder or other person contrary to section 75, 79, 83 or 221 or any amount referred to in paragraph (2)(b); 
  (b) order a company to return or issue shares to a person from whom the company has purchased, redeemed or otherwise acquired shares; or 
  (c) make any further order it thinks fit. 
  
  ### Limitation
  
  218 An action to enforce a liability imposed by section 216 may not be commenced after two years from the date of the resolution authorizing the action complained of. 
  
  ### Directors liable for wages
  
  219 (1) Subject to subsections (2) and (3), the directors of a company are jointly and severally, or solidarily, liable to each employee of the company for all debts not exceeding six months wages payable to the employee for services performed for the company while they are directors. 
  
  ### Conditions precedent
  
  (2) A director is not liable under subsection (1) unless 
  (a) the company has been sued for the debt within six months after it has become due and execution has been returned unsatisfied in whole or in part; 
  (b) the company has commenced liquidation and dissolution proceedings or has been dissolved and a claim for the debt has been proven within six months after the earlier of the date of commencement of the liquidation and dissolution proceedings and the date of dissolution; or 
  (c) a winding-up order has been issued in respect of the company under the Winding-up and Restructuring Act and a claim for the debt has been allowed or proven within six months after the issue of the winding-up order.  
  
  ### Limitations
  
  (3) A director is not liable under subsection (1) unless the director is sued for a debt referred to in that subsection while a director or within two years after the director has ceased to be a director. 
  
  ### Amount due after execution
  
  (4) Where execution referred to in paragraph (2)(a) has issued, the amount recoverable from a director is the amount remaining unsatisfied after execution. 
  
  ### Subrogation of director
  
  (5) Where a director of a company pays a debt referred to in subsection (1) that is proven in liquidation and dissolution or winding-up proceedings, the director is entitled to any preference that the employee would have been entitled to and, where a judgment has been obtained, the director is entitled to an assignment of the judgment. 
  
  ### Contribution entitlement
  
  (6) A director of a company who has satisfied a claim under this section is entitled to a contribution from the other directors of the company who are liable for the claim. 
  
  ### Defence — due diligence
  
  220 (1) A director, officer or employee of a company is not liable under section 216 or 219 or subsection 539(1) and has fulfilled their duty under subsection 166(2) if they exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on 
  (a) financial statements of the company that were represented to them by an officer of the company or in a written report of the auditor of the company fairly to reflect the financial condition of the company; or 
  (b) a report of a person whose profession lends credibility to a statement made by them. 
  
  ### Defence — good faith
  
  (2) A director or officer of a company has fulfilled their duty under subsection 166(1) if they relied in good faith on 
  (a) financial statements of the company that were represented to them by an officer of the company or in a written report of the auditor of the company fairly to reflect the financial condition of the company; or 
  (b) a report of a person whose profession lends credibility to a statement made by them. 
  
  ### Indemnification
  
  221 (1) A company may indemnify a director or officer of the company, a former director or officer of the company or another person who acts or acted, at the company’s request, as a director or officer of or in a similar capacity for another entity against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by them in respect of any civil, criminal, administrative, investigative or other proceeding in which they are involved because of that association with the company or other entity. 
  
  ### Advances
  
  (2) A company may advance amounts to the director, officer or other person for the costs, charges and expenses of a proceeding referred to in subsection (1). They shall repay the amounts if they do not fulfil the conditions set out in subsection (3). 
  
  ### No indemnification
  
  (3) A company may not indemnify a person under subsection (1) unless 
  (a) the person acted honestly and in good faith with a view to the best interests of, as the case may be, the company or the other entity for which they acted at the company’s request as a director or officer or in a similar capacity; and 
  (b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the person had reasonable grounds for believing that their conduct was lawful. 
  
  ### Indemnification — derivative actions
  
  (4) A company may with the approval of a court indemnify a person referred to in subsection (1) or advance amounts to them under subsection (2) — in respect of an action by or on behalf of the company or other entity to procure a judgment in its favour to which the person is made a party because of the association referred to in subsection (1) with the company or other entity — against all costs, charges and expenses reasonably incurred by them in connection with that action if they fulfil the conditions set out in subsection (3). 
  
  ### Right to indemnity
  
  (5) Despite subsection (1), a person referred to in that subsection is entitled to be indemnified by the company in respect of all costs, charges and expenses reasonably incurred by them in connection with the defence of any civil, criminal, administrative, investigative or other proceeding to which the person is subject because of the association referred to in subsection (1) with the company or other entity described in that subsection if the person 
  (a) was not judged by the court or other competent authority to have committed any fault or omitted to do anything that they ought to have done; and 
  (b) fulfils the conditions set out in subsection (3). 
  
  ### Heirs and personal representatives
  
  (6) A company may, to the extent referred to in subsections (1) to (5) in respect of the person, indemnify the heirs or personal representatives of any person whom the company may indemnify under those subsections. 
  
  ### Directors’ and officers’ insurance
  
  222 A company may purchase and maintain insurance for the benefit of any person referred to in section 221 against any liability incurred by the person 
  (a) in the capacity of a director or an officer of the company, except where the liability relates to a failure to act honestly and in good faith with a view to the best interests of the company; or 
  (b) in the capacity of a director or officer of another entity or while acting in a similar capacity for another entity, if they act or acted in that capacity at the company’s request, except if the liability relates to a failure to act honestly and in good faith with a view to the best interests of the entity. 
  
  ### Application to court for indemnification
  
  223 (1) A company or a person referred to in section 221 may apply to a court for an order approving an indemnity under that section and the court may so order and make any further order it thinks fit. 
  
  ### Notice to Superintendent
  
  (2) An applicant under subsection (1) shall give the Superintendent written notice of the application and the Superintendent is entitled to appear and to be heard at the hearing of the application in person or by counsel. 
  
  ### Other notice
  
  (3) On an application under subsection (1), the court may order notice to be given to any interested person and that person is entitled to appear and to be heard in person or by counsel at the hearing of the application. 
  
  # DIVISION III 
  
  ## Fundamental Changes 
  
  ## Amendments — Letters Patent 
  
  ### Incorporating instrument
  
  224 On the application of a company or society duly authorized by special resolution, the Minister may approve a proposal to add, change or remove any provision that is permitted by this Act to be set out in the incorporating instrument of the company or society. 
  
  ### Letters patent to amend
  
  225 (1) On receipt of an application referred to in section 224, the Minister may issue letters patent to effect the proposal. 
  
  ### Effect of letters patent
  
  (2) Letters patent issued pursuant to subsection (1) become effective on the day stated in the letters patent. 
  
  ## Mutualization 
  
  ### Mutualization
  
  226 (1) On the application of a company that has common shares but does not have securities that are not convertible into common shares until after, or options or rights to acquire those shares that are not exercisable until after, the time of the application, the Minister may approve a proposal to convert the company into a mutual company by the purchase, or other acquisition, for the purpose of cancellation of those shares, securities, options and rights. 
  
  ### Definitions
  
  (2) In sections 227 to 236,  
  *common share* includes  
  (a) a security currently convertible into a common share, and 
  (b) a currently exercisable option or a right to acquire a common share or a security referred to in paragraph (a); ( action ordinaire)   
  *mutualization proposal* means a proposal referred to in subsection (1). (proposition de mutualisation)  
  
  ### Saving
  
  (3) Nothing in this section or sections 227 to 236 limits the powers of companies under subsection 75(1). 
  
  ### Contents of mutualization proposal
  
  227 (1) Every mutualization proposal shall set out the terms and means of effecting the conversion, and, in particular, 
  (a) the manner in which all issued and outstanding shares of the company, other than shares that may be issued by a mutual company, are to be purchased or otherwise acquired for the purpose of cancellation; 
  (b) the price to be paid for those shares; 
  (c) the nature of the consideration to be paid for those shares; 
  (d) the amount of any dividends to be paid to the holders of those shares after their purchase or other acquisition; 
  (e) the period within which the company intends to purchase or otherwise acquire those shares; 
  (f) the anticipated date when the company will become a mutual company; and 
  (g) the proposed by-laws of the converted company. 
  
  ### Idem
  
  (2) The mutualization proposal shall also contain such other information and evidence as the Minister may require. 
  
  ### Shareholder and policyholder approval
  
  228 (1) The directors of a company that makes a mutualization proposal shall, before applying to the Minister for approval of the proposal, submit it for approval to a meeting of the shareholders and policyholders entitled to vote and, subject to subsection (3), to the holders of each class or series of shares. 
  
  ### Right to vote
  
  (2) Each share of a company that makes a mutualization proposal carries the right to vote in respect of the proposal whether or not it otherwise carries the right to vote. 
  
  ### Class vote
  
  (3) The holders of shares of a class or series of shares of a company that makes a mutualization proposal are entitled to vote separately as a class or series in respect of the proposal. 
  
  ### Policyholder vote
  
  (4) Policyholders who are entitled to vote are entitled to vote separately from shareholders in respect of a mutualization proposal. 
  
  ### Special resolution
  
  (5) Subject to subsections (3) and (4), a mutualization proposal is approved when the shareholders and the policyholders who are entitled to vote have approved the proposal by special resolution. 
  
  ### Application to Minister
  
  229 (1) A company shall, within three months after the approval of a mutualization proposal in accordance with section 228, apply to the Minister for approval of the proposal. 
  
  ### Criteria for approval
  
  (2) In determining whether to approve a mutualization proposal, the Minister shall consider all matters that the Minister considers relevant and may not approve the proposal unless satisfied that 
  (a) the proposal was approved by the shareholders and policyholders pursuant to section 228; 
  (b) the conversion of the company into a mutual company may reasonably be expected to be achieved under the terms of the proposal and in accordance with this section and sections 230 to 236; 
  (c) there are no reasonable grounds for believing that the conversion would cause the company to be in contravention of subsection 515(1), any regulation made under subsection 515(2) or any order made under subsection 515(3); 
  (d) the stated capital of the company has ceased to be an important factor in safeguarding the interests of the policyholders of the company, having regard to the quality and amount of the assets of the company, the surplus of the company relative to its liabilities, the nature of the business carried on by the company and any other considerations deemed by the Minister to be relevant; 
  (e) the price fixed by the directors for the purchase or other acquisition of the common shares of the company under the proposal is fair and reasonable in the circumstances; and 
  (f) the proposal is in the best interests of the financial system in Canada. 
  
  ### Effect of Minister’s approval
  
  230 (1) Where the Minister approves a mutualization proposal made by a company, 
  (a) the company may not issue any shares other than a share that may be issued by a mutual company; 
  (b) the company may solicit offers from the holders of the shares of the company that are to be purchased or otherwise acquired to effect the conversion of the company but shall not purchase or otherwise acquire those shares until the approval of the Superintendent under section 234 is obtained; and 
  (c) any change in the proposal must be approved by the shareholders and policyholders and by the Minister. 
  
  ### Application of ss. 228 to 230
  
  (2) Sections 228 to 230 apply with such modifications as the circumstances require in respect of changes in mutualization proposals. 
  
  ### Register to be kept
  
  231 A company shall prepare and maintain a register recording the offers for sale of shares under the terms of a mutualization proposal in the order in which those offers are received by the company, showing, in respect of each offer, 
  (a) the date of receipt by the company of the offer; 
  (b) the name and address of the shareholder making the offer; 
  (c) the number of shares so offered by the shareholder making the offer; 
  (d) the price at which each of the shares so offered may be purchased or otherwise acquired; 
  (e) the date of purchase, if any, of each of the shares so offered and the number of shares purchased; and 
  (f) the date of withdrawal, if any, of the offer and the number of shares affected by the withdrawal. 
  
  ### Application to Superintendent
  
  232 A company that holds binding offers from the holders of at least ninety per cent of each class of shares for the purchase or other acquisition of those shares pursuant to a mutualization proposal shall apply to the Superintendent for approval of the purchase or other acquisition of the shares. 
  
  ### Criteria for approval
  
  233 The Superintendent shall approve the purchase or other acquisition of shares pursuant to a mutualization proposal if the Superintendent is satisfied that 
  (a) the purchase or other acquisition of shares would not cause the company to be in contravention of subsection 515(1), any regulation made under subsection 515(2) or any order made under subsection 515(3); and 
  (b) the stated capital of the shares has, in the opinion of the Superintendent, ceased to be an important factor in safeguarding the interests of the policyholders of the company, having regard to the quality and amount of the assets of the company, the surplus of the company relative to its liabilities, the nature of the business carried on by the company and any other considerations deemed by the Superintendent to be relevant. 
  
  ### Effect of Superintendent’s approval
  
  234 Where the Superintendent approves the purchase or other acquisition of shares of a company pursuant to a mutualization proposal, the company 
  (a) shall, within the period set out in the mutualization proposal, purchase or otherwise acquire the shares for the purchase or other acquisition of which pursuant to the proposal the company holds binding offers; and 
  (b) may acquire the remaining shares in accordance with Division X, which applies in respect of that acquisition with such modifications as the circumstances require, as if each reference in that Division to 
  (i) the “offeree company” or the “offeror” were a reference to the “company”, 
  (ii) a “dissenting offeree” were a reference to a holder of a share of the company who has not offered to sell his or her share under the terms of the mutualization proposal, 
  (iii) an “offeree who accepted the take-over bid” were a reference to a holder of a share of the company who has offered to sell his or her share under the terms of the mutualization proposal, and 
  (iv) the “date of the take-over bid” or the “date of termination of the take-over bid” were a reference to the date on which the Superintendent approves the purchase or other acquisition of the shares of the company pursuant to a mutualization proposal. 
  
  ### Payment
  
  235 Notwithstanding anything in this Act, a company may, with the approval of the Superintendent, pay for shares purchased or otherwise acquired pursuant to a mutualization proposal by 
  (a) making a promissory note that is, or issuing debt securities that are, payable at a fixed or determinable future time not later than ten years after the date of its making or their issue; or 
  (b) issuing shares that a mutual company may issue. 
  
  ### Conversion into mutual company
  
  236 (1) Where a company purchases or otherwise acquires all of its common shares pursuant to a mutualization proposal, 
  (a) the company shall cancel those shares; and 
  (b) the directors of the company shall apply to the Minister for the issue of letters patent to effect the conversion of the company into a mutual company. 
  
  ### Issue of letters patent
  
  (2) On receipt of an application referred to in subsection (1), the Minister shall issue letters patent to effect the conversion of the company into a mutual company. 
  
  ### Effect of letters patent
  
  (3) Letters patent issued pursuant to subsection (2) become effective on the day stated in the letters patent. 
  
  ## Conversion into Company with Common Shares 
  
  ### Definitions
  
  236.1 The following definitions apply in sections 237 to 237.2.  
  *conversion proposal* means a proposal to convert a mutual company into a company with common shares. (proposition de transformation)   
  *converting company* has the meaning given to that expression by the regulations. (société en transformation)   
  *eligible policyholder* has the meaning given to that expression by the regulations. (souscripteur admissible)   
  *letters patent of conversion* means letters patent issued under paragraph 237(1)(b). (lettres patentes de transformation)  
  
  ### Conversion into company with common shares
  
  237 (1) On the application of a mutual company made in accordance with the regulations, the Minister may, on the recommendation of the Superintendent, 
  (a) approve a conversion proposal; and 
  (b) issue letters patent of conversion to effect the conversion proposal. 
  
  ### Special meeting of eligible policyholders
  
  (1.1) Before an application is made under subsection (1), the directors of the company must call a special meeting of eligible policyholders to obtain 
  (a) approval of the conversion proposal; 
  (b) confirmation of any by-law or of any amendment to or repeal of a by-law that is necessary to implement the conversion proposal; and 
  (c) authorization to make the application. 
  
  ### Notice of meeting and policyholder list
  
  (1.2) A company shall, in respect of a special meeting, 
  (a) send, not less than 45 days and not more than 75 days before the meeting, to each eligible policyholder a notice of the time and place of the meeting, describing the conversion proposal in sufficient detail to permit a policyholder to form a reasoned judgment about the terms of the proposal and its impact on both policyholders and the company, together with the prescribed information in respect of the conversion proposal; and 
  (b) prepare, not less than 45 days before the meeting, a list, which may be in electronic form, of all eligible policyholders. 
  
  ### Application of subsection 149(5)
  
  (1.3) Subsection 149(5) applies, with any modifications that the circumstances require, in respect of the list of eligible policyholders. 
  
  ### Entitlement to notice and right to vote
  
  (1.4) Only eligible policyholders are entitled to notice of and to vote at a special meeting. 
  
  ### Special resolution
  
  (1.5) Any approval, confirmation or authorization referred to in subsection (1.1) must be given by special resolution of the eligible policyholders. 
  
  ### Regulations
  
  (2) The Governor in Council may make regulations 
  (a) respecting the application referred to in subsection (1), including the form of the application and the information to be contained in the application, and authorizing the Superintendent to require additional information in order to make a recommendation; 
  (a.01) respecting the process that precedes the calling of a special meeting under subsection (1.1), including the development of a conversion proposal, and respecting the calling of that meeting; 
  (a.1) respecting the conversion proposal, including the information to be contained in the conversion proposal, and authorizing the Superintendent to approve the measures to be taken by the converting company in respect of any proposed amendment to the conversion proposal; 
  (a.2) respecting the value of a converting company for the purposes of the regulations and authorizing the Superintendent to specify a day at which the value shall be estimated by the converting company; 
  (b) concerning the fair and equitable treatment of policyholders under a conversion proposal; 
  (c) governing the ownership of shares issued by a mutual company that has been converted into a company with common shares, including limiting the circumstances in which the Minister may give approval under subsection 407(1); 
  (c.1) respecting the authorization by the Superintendent of the sending of a notice of a special meeting referred to in subsection (1.1), including 
  (i) prescribing the information to be submitted by the converting company in support of an authorization, 
  (ii) authorizing the Superintendent to consider information in addition to that referred to in subparagraph (i), and 
  (iii) authorizing the Superintendent to require that information, in addition to the prescribed information referred to in paragraph (1.2)(a), be sent with a notice; 
  (c.2) authorizing the Superintendent to 
  (i) require the converting company to hold one or more information sessions for eligible policyholders and to take other measures to assist eligible policyholders in forming a reasoned judgment on the conversion proposal, and 
  (ii) set the rules under which the information sessions must be held; 
  (c.3) respecting restrictions on any fee, compensation or other consideration that may be paid, in respect of the conversion of a mutual company into a company with common shares, to any director, officer or employee of the company or to any entity with which a director, officer or employee of the company is associated; 
  (c.4) prohibiting, during the period set out in the regulations, the issuance or provision of shares, share options or rights to acquire shares, of a company that has been converted from a mutual company into a company with common shares to 
  (i) any director, officer or employee of the company, or 
  (ii) any person who was a director, officer or employee of the company during the year preceding the effective date of conversion of the company; and 
  (d) generally, respecting the conversion of a mutual company into a company with common shares. 
  
  ### Regulations made under paragraph (2)(a.01)
  
  (2.1) Regulations made under paragraph (2)(a.01) may provide for court intervention in the process referred to in that paragraph, including the circumstances in which the court is to be seized of any matter in relation to that process, and may govern the court’s powers and procedures in that regard. They may also govern authorizations by the Superintendent in respect of notices to be sent in the context of that process. 
  
  ### Exemption by Superintendent
  
  (3) A regulation made under subsection (2) may provide that the Superintendent may, on such terms and conditions as the Superintendent considers appropriate, exempt a company from prescribed requirements of that regulation. 
  
  ### Exemption by Minister
  
  (4) The Minister may, on such terms and conditions as the Minister considers appropriate, exempt a company from any requirement of this Act or the regulations if 
  (a) the company is a mutual company applying for the approval of a proposal to convert the company into a company with common shares; and 
  (b) the Minister is of the opinion that the company is, or is about to be, in financial difficulty and that the exemption would help to facilitate an improvement in the financial condition of the company. 
  
  ### Effect of letters patent of conversion
  
  237.1 (1) Letters patent of conversion become effective on the day stated in the letters patent of conversion, and on that day 
  (a) the company ceases to be a mutual company; and 
  (b) the policyholders of the company cease to have any rights with respect to or any interest in the company as a mutual company. 
  
  ### Consideration for shares
  
  (2) For the purposes of subsection 69(1) and section 70, shares issued by a company under a conversion proposal are deemed to be fully paid for in money and the amount of consideration received by the company for those shares is deemed to be equal to the book value of the company immediately after the effective date of its conversion, determined in accordance with the accounting principles referred to in subsection 331(4) and calculated without taking into account any amounts remaining at that time in the participating accounts that the company maintains under section 456. 
  
  ### Distribution prohibited
  
  237.2 (1) A mutual company shall not take any action or series of actions directed toward the distribution of all or part of its property to its policyholders or shareholders or the provision of any other benefit to its policyholders or shareholders, other than as provided in subsections 237(1) to (1.2), until a conversion proposal has been approved by the Minister under subsection 237(1). 
  
  ### Exception
  
  (2) Nothing in subsection (1) prevents 
  (a) the directors of the company from declaring a dividend on shares or a policy dividend, bonus or other benefit payable to policyholders in the ordinary course of business; or 
  (b) the company from paying or otherwise satisfying a dividend, bonus or other benefit referred to in paragraph (a). 
  
  ### Non-application
  
  (3) This section does not apply to a company that is insolvent within the meaning of the Winding-up and Restructuring Act.  
  
  ## Amendments — By-laws 
  
  ### By-laws
  
  238 (1) The directors of a company may make, amend or repeal any by-laws, in the manner set out in subsections (2) and (3) and sections 239 to 244, to 
  (a) change the maximum number, if any, of shares of any class that the company is authorized to issue; 
  (b) create new classes of shares; 
  (c) change the designation of any or all of the company’s shares, and add, change or remove any rights, privileges, restrictions and conditions, including rights to accrued dividends, in respect of any or all of the company’s shares, whether issued or unissued; 
  (d) change the shares of any class or series, whether issued or unissued, into a different number of shares of the same class or series or into the same or a different number of shares of other classes or series; 
  (e) divide a class of shares, whether issued or unissued, into series and fix the maximum number of shares, if any, in each series and the rights, privileges, restrictions and conditions attached thereto; 
  (f) authorize the directors to divide any class of unissued shares into series and fix the maximum number of shares, if any, in each series and the rights, privileges, restrictions and conditions attached thereto; 
  (g) authorize the directors to change the rights, privileges, restrictions and conditions attached to unissued shares of any series; 
  (h) revoke, diminish or enlarge any authority conferred under paragraphs (f) and (g); 
  (i) change the rights of policyholders to vote at meetings of shareholders or policyholders, subject to subsection 153(1); 
  (i.1) change the name of the company; 
  (j) increase or decrease the number of directors, the minimum or maximum number of directors, the number of directors who are to be elected by the shareholders or the number of directors who are to be elected by the policyholders, subject to subsections 167(1) and 173(4) and (4.1) and section 176; or 
  (k) change the province in which the head office of the company is situated. 
  
  ### Shareholder or policyholder approval
  
  (2) The directors shall submit a by-law, or an amendment to or a repeal of a by-law, that is made under subsection (1) to the shareholders and policyholders entitled to vote, and the shareholders and policyholders may, by special resolution, confirm, amend or reject the by-law, amendment or repeal. 
  
  ### Right to vote
  
  (2.1) The by-laws of a company may provide that each participating share, as defined in section 83.01, of a mutual company carries the right to vote on a proposed addition or amendment to the by-laws to do anything referred to in any of paragraphs (1)(a) to (h), (j) and (k). Where that right is provided for in the by-laws, each of those shares carries that right even if they do not otherwise carry the right to vote. 
  
  ### Separate vote
  
  (2.2) The holders of shares who are entitled under subsection (2.1) to vote on a proposed addition or amendment referred to in that subsection are entitled to vote on it separately from policyholders. 
  
  ### Effective date of by-law
  
  (3) A by-law, or an amendment to or a repeal of a by-law, made under subsection (1) is not effective until it is confirmed or confirmed as amended by the shareholders and policyholders under subsection (2) and, in the case of a by-law respecting a change to the name of the company, approved by the Superintendent. 
  
  ### Letters patent
  
  (4) If the name of a company or the province in Canada in which the head office of the company is situated is changed under this section, the Superintendent may issue letters patent to amend the company’s incorporating instrument accordingly. 
  
  ### Effect of letters patent
  
  (5) Letters patent issued under subsection (4) become effective on the day stated in the letters patent. 
  
  ### Class vote
  
  239 (1) The holders of shares of a class or, subject to subsection (2), of a series are, unless the by-laws otherwise provide in the case of an amendment to the by-laws referred to in paragraph (a), (b) or (e), entitled to vote separately as a class or series on a proposal to amend the by-laws to 
  (a) increase or decrease any maximum number of authorized shares of that class, or increase any maximum number of authorized shares of a class having rights or privileges equal or superior to the shares of that class; 
  (b) effect an exchange, reclassification or cancellation of all or part of the shares of that class; 
  (c) add, change or remove the rights, privileges, restrictions or conditions attached to the shares of that class and, without limiting the generality of the foregoing, 
  (i) remove or change prejudicially rights to accrued dividends or rights to cumulative dividends, 
  (ii) add, remove or change prejudicially redemption rights, 
  (iii) reduce or remove a dividend preference or a liquidation preference, or 
  (iv) add, remove or change prejudicially conversion privileges, options, voting, transfer or pre-emptive rights, or rights to acquire securities of the company, or sinking fund provisions; 
  (d) increase the rights or privileges of any class of shares having rights or privileges equal or superior to the shares of that class; 
  (e) create a new class of shares equal or superior to the shares of that class; 
  (f) make any class of shares having rights or privileges inferior to the shares of that class equal or superior to the shares of that class; or 
  (g) effect an exchange or create a right of exchange of all or part of the shares of another class into the shares of that class. 
  
  ### Right limited
  
  (2) The holders of a series of shares of a class are entitled to vote separately as a series under subsection (1) if that series is affected by an addition or amendment to the by-laws in a manner different from other shares of the same class. 
  
  ### Right to vote
  
  (3) Subsections (1) and (2) apply whether or not the shares of a class otherwise carry the right to vote. 
  
  ### Participating policyholder vote
  
  240 (1) Participating policyholders are entitled to vote separately on a proposal to amend the by-laws to add to, change or remove the rights of policyholders, other than participating policyholders, to vote at meetings of shareholders or policyholders. 
  
  ### Policyholder vote
  
  (2) Policyholders who are entitled to vote, other than participating policyholders, are entitled to vote separately on a proposal to amend the by-laws to add to, change or remove the rights of policyholders, other than participating policyholders, to vote at meetings of shareholders or policyholders. 
  
  ### Right limited
  
  (3) The holders of a class of non-participating policies who are entitled to vote are entitled to vote separately as a class if the right to vote attached to policies of that class is added to, changed or removed by an addition or amendment to the by-laws in a manner different from the right to vote attached to other non-participating policies. 
  
  ### Separate resolutions
  
  241 (1) A proposed addition or amendment to the by-laws referred to in subsection 239(1) is adopted when the holders of the shares of each class or series entitled to vote separately thereon as a class or series and the policyholders have approved the addition or amendment by a special resolution. 
  
  ### Idem
  
  (2) A proposed addition or amendment to the by-laws referred to in section 240 is adopted when the participating policyholders, the non-participating policyholders who are entitled to vote and the holders of each class of non-participating policies entitled to vote separately thereon as a class and the shareholders have approved the addition or amendment by a special resolution. 
  
  ### Revoking resolution
  
  242 Where a special resolution referred to in subsection 238(2) so states, the directors may, without further approval of the shareholders or policyholders, revoke the special resolution. 
  
  ### Proposal to amend
  
  243 (1) Subject to subsection (2), a director or a shareholder or policyholder who is entitled to vote at an annual meeting of shareholders and policyholders of a company may, in accordance with sections 147 and 148, make a proposal to make an application referred to in section 224 or to make, amend or repeal the by-laws referred to in subsection 238(1) of the company. 
  
  ### Notice of amendment
  
  (2) Notice of a meeting of shareholders or policyholders at which a proposal to amend the incorporating instrument or to make, amend or repeal the by-laws of a company to effect any of the changes referred to in subsection 238(1) is to be considered must set out the proposal. 
  
  ### Rights preserved
  
  244 No amendment to the incorporating instrument or by-laws of a company affects an existing cause of action or claim or liability to prosecution in favour of or against the company or its directors or officers, or any civil, criminal or administrative action or proceeding to which the company or any of its directors or officers are a party. 
  
  ## Amalgamation 
  
  ### Application to amalgamate
  
  245 (1) On the joint application of two or more bodies corporate, incorporated by or under an Act of Parliament, including companies and insurance holding companies but not including federal credit unions, the Minister may issue letters patent amalgamating and continuing the applicants as one mutual company. 
  
  ### Application to amalgamate
  
  (2) On the joint application of two or more bodies corporate incorporated by or under an Act of Parliament, including companies — other than mutual companies — and insurance holding companies but not including federal credit unions, the Minister may issue letters patent amalgamating and continuing the applicants as one company. 
  
  ### Application to amalgamate societies
  
  (3) On the joint application of two or more societies, the Minister may issue letters patent amalgamating and continuing the applicants as one society. 
  
  ### Amalgamation agreement
  
  246 (1) Each applicant proposing to amalgamate shall enter into an amalgamation agreement. 
  
  ### Contents of agreement — company
  
  (2) Every amalgamation agreement for an amalgamation to which subsection 245(1) or (2) applies shall set out the terms and means of effecting the amalgamation and, in particular, 
  (a) the name of the amalgamated company and the province in which its head office is to be situated; 
  (b) whether the amalgamated company is to be a mutual company or a company with common shares; 
  (c) the name and place of ordinary residence of each proposed director of the amalgamated company; 
  (d) the manner in which any shares of each applicant are to be converted into shares or other securities of the amalgamated company; 
  (e) if any shares of an applicant are not to be converted into shares or other securities of the amalgamated company, the amount of money or securities that the holders of those shares are to receive in addition to or in lieu of shares or other securities of the amalgamated company; 
  (f) the manner of payment of money in lieu of the issue of fractional shares of the amalgamated company or of any other body corporate that are to be issued in the amalgamation; 
  (g) the proposed by-laws of the amalgamated company; 
  (h) details of any other matter necessary to perfect the amalgamation and to provide for the subsequent management and operation of the amalgamated company; and 
  (i) the proposed effective date of the amalgamation. 
  
  ### Contents of agreement — society
  
  (2.1) Every amalgamation agreement for an amalgamation to which subsection 245(3) applies shall set out the terms and means of effecting the amalgamation and, in particular, 
  (a) the name of the amalgamated society and the province in which its head office is to be situated; 
  (b) the name and place of ordinary residence of each proposed director of the amalgamated society; 
  (c) the proposed by-laws of the amalgamated society; 
  (d) details of any other matter necessary to perfect the amalgamation and to provide for the subsequent management and operation of the amalgamated society; and 
  (e) the proposed effective date of the amalgamation. 
  
  ### Cross ownership of shares
  
  (3) If shares of one of the applicants are held by or on behalf of another of the applicants, other than shares held in the capacity of a personal representative or by way of security, the amalgamation agreement must provide for the cancellation of those shares when the amalgamation becomes effective without any repayment of capital in respect thereof, and no provision shall be made in the agreement for the conversion of those shares into shares of the amalgamated company. 
  
  ### Approval of agreement by Superintendent
  
  247 (1) An amalgamation agreement must be submitted to the Superintendent for approval and any approval of the agreement under subsection 248(5) by the shareholders, policyholders or members of an applicant is invalid unless, before the date of the approval, the Superintendent has approved the agreement in writing. 
  
  ### Report of independent actuary
  
  (2) An amalgamation agreement submitted to the Superintendent for approval must be accompanied by the report of an independent actuary on the agreement. 
  
  ### Approval by shareholders, policyholders and members
  
  248 (1) The directors of each applicant shall submit an amalgamation agreement for approval 
  (a) to a meeting of the shareholders and policyholders entitled to vote of the applicant company of which they are directors and to the holders of each class or series of shares; 
  (b) to a meeting of the shareholders of the body corporate of which they are directors and to the holders of each class or series of shares; or 
  (c) to a meeting of the members of the applicant society of which they are directors. 
  
  ### Right to vote
  
  (2) Each share of an applicant carries the right to vote in respect of an amalgamation agreement whether or not it otherwise carries the right to vote. 
  
  ### Separate vote for class or series
  
  (3) The holders of shares of a class or series of shares of each applicant are entitled to vote separately as a class or series in respect of an amalgamation agreement if the agreement contains a provision that, if it were contained in a proposed amendment to the by-laws or incorporating instrument of the applicant, would entitle those holders to vote separately as a class or series. 
  
  ### Policyholder vote
  
  (4) Policyholders who are entitled to vote are entitled to vote separately from shareholders in respect of an amalgamation agreement. 
  
  ### Special resolution
  
  (5) Subject to subsections (3) and (4), an amalgamation agreement is approved when it has been approved by special resolution by 
  (a) the shareholders and the policyholders who are entitled to vote of each applicant company; 
  (b) the shareholders of each applicant body corporate; and 
  (c) the members of each applicant society. 
  
  ### Termination
  
  (6) An amalgamation agreement may provide that, at any time before the issue of letters patent of amalgamation, the agreement may be terminated by the directors of an applicant even though the agreement has been approved by the shareholders, policyholders or members of all or any of the applicant companies, bodies corporate or societies. 
  
  ### Vertical short-form amalgamation
  
  249 (1) A company that does not have any participating policyholders may, without complying with sections 246 to 248, amalgamate with one or more bodies corporate that 
  (a) are incorporated by or under an Act of Parliament, 
  (b) are wholly-owned subsidiaries of the company, and 
  (c) do not have any participating policyholders if 
  (d) the amalgamation is approved by a resolution of the directors of the company and of each amalgamating subsidiary, and 
  (e) the resolutions provide that 
  (i) the shares of each amalgamating subsidiary will be cancelled without any repayment of capital in respect thereof, 
  (ii) the letters patent of amalgamation and the by-laws of the amalgamated company will be the same as the incorporating instrument and the by-laws of the amalgamating company that is the holding body corporate, and 
  (iii) no securities will be issued by the amalgamated company in connection with the amalgamation. 
  
  ### Horizontal short-form amalgamation
  
  (2) Two or more bodies corporate that 
  (a) are incorporated by or under an Act of Parliament, 
  (b) are wholly-owned subsidiaries of the same holding body corporate, and 
  (c) do not have any participating policyholders may amalgamate and continue as one company without complying with sections 246 to 248 if 
  (d) at least one of the applicants is a company, 
  (e) the amalgamation is approved by a resolution of the directors of each of the applicants, and 
  (f) the resolutions provide that 
  (i) the shares of all applicants, except those of one of the applicants that is a company, will be cancelled without any repayment of capital in respect thereof, 
  (ii) the letters patent of amalgamation and the by-laws of the amalgamated company will be the same as the incorporating instrument and the by-laws of the amalgamating company whose shares are not cancelled, and 
  (iii) the stated capital of the amalgamating companies and bodies corporate whose shares are cancelled will be added to the stated capital of the amalgamating company whose shares are not cancelled. 
  
  ### Joint application to Minister
  
  250 (1) Subject to subsection (2), unless an amalgamation agreement is terminated in accordance with subsection 248(6), the applicants shall, within three months after the approval of the agreement in accordance with subsection 248(5) or the approval of the directors in accordance with subsection 249(1) or (2), jointly apply to the Minister for letters patent of amalgamation continuing the applicants as one company or society. 
  
  ### Conditions precedent to application
  
  (2) No application for the issue of letters patent under subsection (1) may be made unless 
  (a) notice of intention to make such an application has been published at least once a week for a period of four consecutive weeks in the Canada Gazette and in a newspaper in general circulation at or near the place where the head office of each applicant is situated; and  
  (b) the application is supported by satisfactory evidence that the applicants have complied with the requirements of this Part relating to amalgamations. 
  
  ### Application of sections 23 to 26
  
  (3) If two or more bodies corporate, none of which is a company or society, apply for letters patent under subsection (1), sections 23 to 26 apply in respect of the application with any modifications that the circumstances require. 
  
  ### Matters for consideration
  
  (4) Before issuing letters patent of amalgamation continuing the applicants as one company or society, the Minister shall take into account all matters that the Minister considers relevant to the application, including 
  (a) the sources of continuing financial support for the amalgamated company or society; 
  (b) the soundness and feasibility of the plans of the applicants for the future conduct and development of the business of the amalgamated company or society; 
  (c) the business record and experience of the applicants; 
  (d) the reputation of the applicants for being operated in a manner that is consistent with the standards of good character and integrity; 
  (e) whether the amalgamated company or society will be operated responsibly by persons with the competence and experience suitable for involvement in the operation of a financial institution; 
  (f) the impact of any integration of the operations and businesses of the applicants on the conduct of those operations and businesses; 
  (g) if one of the applicants is a converted company in respect of which the Minister has issued an order under subsection 407(8) or a converted company in respect of which subsection 407(11) applied at any time, or a body corporate that controls, within the meaning of paragraph 3(1)(d), such a company, the opinion of the Superintendent regarding the extent to which the proposed corporate structure of the amalgamated company and its affiliates may affect the supervision and regulation of the amalgamated company, having regard to 
  (i) the nature and extent of the proposed financial services activities to be carried out by the amalgamated company and its affiliates, and 
  (ii) the nature and degree of supervision and regulation applying to the proposed financial services activities to be carried out by the affiliates of the amalgamated company; and 
  (h) the best interests of the financial system in Canada. 
  
  ### Restriction
  
  (5) The Minister may not, before January 1, 2002, issue letters patent under section 251 amalgamating a converted company in respect of which subsection 407(4) or (11) applies, a company to which subsection 407(5) or (12) applies or an insurance holding company to which subsection 407(6) or (13) applies with any other body corporate. 
  
  ### Restriction
  
  (6) If one of the applicants for letters patent of amalgamation is a converted company in respect of which subsection 407(4) applies, or a company to which subsection 407(5) applies or an insurance holding company to which subsection 407(6) applies, the Minister may not issue the letters patent of amalgamation unless the amalgamated company is 
  (a) widely held; or 
  (b) controlled, within the meaning of paragraph 3(1)(d), by a company to which subsection 407(5) applies, or by an insurance holding company to which subsection 407(6) applies, that controlled one of the applicants at the time the application was made. 
  
  ### Deeming
  
  (7) If one of the applicants for letters patent of amalgamation is a converted company in respect of which subsection 407(4) applies, a company to which subsection 407(5) applies or an insurance holding company to which subsection 407(6) applies and the letters patent of amalgamation are issued, the amalgamated company is deemed to be a converted company in respect of which subsection 407(4) applies or a company to which subsection 407(5) applies, as the case may be. 
  
  ### Issue of letters patent
  
  251 (1) Where an application has been made to the Minister in accordance with section 250, the Minister may issue letters patent of amalgamation continuing the applicants as one company or society. 
  
  ### Letters patent
  
  (2) Where letters patent are issued pursuant to this section, section 28 applies with such modifications as the circumstances require in respect of the issue of the letters patent. 
  
  ### Publication of notice
  
  (3) The Superintendent shall cause to be published in the Canada Gazette notice of the issuance of letters patent pursuant to subsection (1).  
  
  ### Court enforcement
  
  251.1 (1) If a company or society, or any director, officer, employee or agent of a company or society, is contravening or has failed to comply with any term or condition made in respect of the issuance of letters patent of amalgamation, the Minister may, in addition to any other action that may be taken under this Act, apply to a court for an order directing the company or society, or the director, officer, employee or agent, to comply with the term or condition, cease the contravention or do any thing that is required to be done, and on the application the court may so order and make any other order it thinks fit. 
  
  ### Appeal
  
  (2) An appeal from an order of a court under this section lies in the same manner as, and to the same court to which, an appeal may be taken from any other order of the court. 
  
  ### Effect of letters patent
  
  252 (1) On the day provided for in the letters patent issued under section 251 
  (a) the amalgamation of the applicants and their continuance as one company or society becomes effective; 
  (b) the property of each applicant continues to be the property of the amalgamated company or society; 
  (c) the amalgamated company or society continues to be liable for the obligations of each applicant; 
  (d) any existing cause of action, claim or liability to prosecution is unaffected; 
  (e) any civil, criminal or administrative action or proceeding pending by or against an applicant may be continued to be prosecuted by or against the amalgamated company or society; 
  (f) any conviction against, or ruling, order or judgment in favour of or against, an applicant may be enforced by or against the amalgamated company or society; 
  (g) if any director or officer of an applicant continues as a director or officer of the amalgamated company, any disclosure by that director or officer of a material interest in any contract made to the applicant shall be deemed to be disclosure to the amalgamated company; and 
  (h) the letters patent of amalgamation are the incorporating instrument of the amalgamated company or society. 
  
  ### Minutes
  
  (2) Any deemed disclosure under paragraph (1)(g) shall be recorded in the minutes of the first meeting of directors of the amalgamated company. 
  
  ### Transitional
  
  253 (1) Notwithstanding any other provision of this Act or the regulations, the Minister may, by order, on the recommendation of the Superintendent, grant to a company or society in respect of which letters patent were issued under subsection 251(1) permission to 
  (a) engage in a business activity specified in the order that the company or society would not otherwise be permitted by this Act to engage in and that one or more of the amalgamating bodies corporate was engaging in at the time application for the letters patent was made; 
  (b) continue to have issued and outstanding debt obligations the issue of which is not authorized by this Act if the debt obligations were outstanding at the time the application for the letters patent was made; 
  (c)  [Repealed, 1994, c. 47, s. 121]  
  (d) hold assets that the company or society would not otherwise be permitted by this Act to hold, if the assets were held by one or more of the amalgamating bodies corporate at the time the application for the letters patent was made; 
  (e) acquire and hold assets that the company or society would not otherwise be permitted by this Act to acquire or hold, if one or more of the amalgamating bodies corporate were obliged, at the time the application for the letters patent was made, to acquire those assets; and 
  (f) maintain outside Canada any records or registers required by this Act to be maintained in Canada. 
  
  ### Duration of exceptions
  
  (2) The permission granted under subsection (1) shall be expressed to be granted for a period specified in the order not exceeding 
  (a) with respect to any matter described in paragraph (1)(a), thirty days after the date of issue of the letters patent or, where the activity is conducted pursuant to an agreement existing on the date of issue of the letters patent, the expiration of the agreement; 
  (b) with respect to any matter described in paragraph (1)(b), ten years; and 
  (c) with respect to any matter described in any of paragraphs (1)(d) to (f), two years. 
  
  ### Renewal
  
  (3) Subject to subsection (4), the Minister, on the recommendation of the Superintendent, may by order renew a permission granted by order under subsection (1) with respect to any matter described in any of paragraphs (1)(b) to (e) for any further period or periods that the Minister considers necessary. 
  
  ### Limitation
  
  (4) The Minister shall not grant to a company or society any permission 
  (a) with respect to matters described in paragraph (1)(b), that purports to be effective more than ten years after the date of the approval for the company or society to commence and carry on business, unless the Minister is satisfied on the basis of evidence on oath provided by an officer of the company or society that the company or society will not be able at law to redeem at the end of the ten years the outstanding debt obligations to which the permission relates; and 
  (b) with respect to matters described in paragraphs (1)(d) and (e), that purports to be effective more than ten years after the date of issue of the letters patent. 
  
  ## Transfer of Business and Reinsurance 
  
  ### Restricted transactions
  
  254 (1) Except in accordance with this section or an order made under subsection 678.5(1), a company or society shall not 
  (a) cause itself to be reinsured, on an assumption basis, against all or any portion of the risks undertaken under its policies; or 
  (b) sell all or substantially all of its assets. 
  (c)  [Repealed, 2007, c. 6, s. 207]  
  
  ### Approval of the Minister
  
  (2) A company or society may, with the approval of the Minister, 
  (a) cause itself to be reinsured, on an assumption basis, against all or substantially all of the risks undertaken under its policies, by one or more of the following entities: 
  (i) a company or society, 
  (ii) a foreign company that, in Canada, reinsures those risks, 
  (iii) a body corporate incorporated or formed by or under the laws of a province, if the Superintendent has entered into satisfactory arrangements concerning the reinsurance with either or both of the body corporate and the appropriate official or public body responsible for the supervision of the body corporate, or 
  (iv) an entity that is authorized to reinsure those risks, if the risks were undertaken outside Canada by the company or society; or 
  (b) sell all or substantially all of its assets. 
  
  ### Approval of the Superintendent
  
  (2.01) A company or society may, with the approval of the Superintendent, cause itself to be reinsured, on an assumption basis, against less than substantially all of the risks undertaken under its policies, by one or more of the following entities: 
  (a) a company or society; 
  (b) a foreign company that, in Canada, reinsures those risks; 
  (c) a body corporate incorporated or formed by or under the laws of a province, if the Superintendent has entered into satisfactory arrangements concerning the reinsurance with either or both of the body corporate and the appropriate official or public body responsible for the supervision of the body corporate; or 
  (d) an entity that is authorized to reinsure those risks, if the risks were undertaken outside Canada by the company or society. 
  
  ### Prescribed transactions
  
  (2.1) The approval of the Minister or Superintendent is not required for a prescribed transaction or a transaction in a prescribed class of transactions. 
  
  ### Procedure
  
  (3) The company or society must, at least 30 days before it applies for the Minister’s or Superintendent’s approval, publish a notice in the Canada Gazette and in a newspaper in general circulation at or near the place where the head office of the company or society is situated stating the day on or after which it will apply.  
  
  ### Information
  
  (4) Where a company or society publishes a notice referred to in subsection (3), the Superintendent may direct the company or society to provide its shareholders, policyholders and members with such information as the Superintendent may require. 
  
  ### Report of independent actuary
  
  (4.1) An application for approval under paragraph (2)(a) must, if the Superintendent so requires, be accompanied by the report of an independent actuary on the proposed reinsurance agreement. 
  
  ### Inspection
  
  (5) If a company or society publishes a notice referred to in subsection (3), it must make the agreement for the transaction that the Minister or Superintendent is asked to approve available at its head office for the inspection of its shareholders, policyholders and members for at least 30 days after the publication of the notice and must provide a copy of the agreement to any shareholder, policyholder or member who requests one by writing to the head office of the company or society. 
  
  ### Superintendent may shorten periods
  
  (6) If the Superintendent is of the opinion that it is in the best interests of a group of policyholders affected by the transaction that the Minister or the Superintendent is asked to approve, the Superintendent may shorten the periods of 30 days referred to in subsections (3) and (5). 
  
  ### Taking of effect of approval
  
  255 A transaction referred to in subsection 254(2) or (2.01) has no effect until it has been approved by the Minister or the Superintendent, as the case may be. 
  256  [Repealed, 2007, c. 6, s. 208]  
  
  ### Shareholder and policyholder approval
  
  257 (1) A company or society proposing to transfer all or substantially all of its policies, to cause itself to be reinsured, on an assumption basis, against all or substantially all of the risks undertaken under its policies, or to sell all or substantially all of its assets shall submit the proposal for approval to a meeting of the shareholders and policyholders who are entitled to vote, or to a meeting of members, and, subject to subsection (3), to the holders of each class or series of shares. 
  
  ### Notice to Superintendent
  
  (1.1) A company or society proposing to transfer all or substantially all of its policies must give notice of the proposal to the Superintendent. 
  
  ### Information
  
  (1.2) After receiving the notice, the Superintendent may direct the company or society to provide its shareholders, policyholders and members with any information that the Superintendent may require. 
  
  ### Right to vote
  
  (2) Each share of the company carries the right to vote in respect of the proposal whether or not the share otherwise carries the right to vote. 
  
  ### Class vote
  
  (3) The holders of shares of a class or series of shares of the company are entitled to vote separately as a class or series in respect of the proposal if the shares of the class or series are affected by the proposed transaction in a manner different from the shares of another class or series. 
  
  ### Policyholder vote
  
  (4) Policyholders who are entitled to vote are entitled to vote separately from shareholders in respect of the proposal. 
  
  ### Special resolution
  
  (5) For the purpose of subsection (1), and subject to subsections (3) and (4), the proposal is not approved by the shareholders and the policyholders who are entitled to vote or the members unless they approve it by special resolution. 
  
  ### Abandoning transfer or reinsurance
  
  (6) Where a special resolution under subsection (5) approving a proposed transaction so states, the directors of a company or society may, subject to the rights of third parties, abandon the transaction without further approval of the shareholders, policyholders or members. 
  
  ### Application to Minister
  
  (7) Except in the case of a transaction to transfer all or substantially all of a company’s or society’s policies, the company or society shall, within three months after the approval of the transaction in accordance with subsection (5), apply to the Minister for approval of the transaction, unless the transaction is abandoned in accordance with subsection (6). 
  
  ### When section does not apply
  
  (8) This section does not apply if the transfer or reinsurance is made under an order made under subsection 678.5(1). 
  
  ### Regulations
  
  258 The Governor in Council may, for the purposes of section 254 or 257, make regulations respecting the circumstances in which companies or societies are deemed to be causing themselves to be reinsured, on an assumption basis, against risks undertaken under their policies. 
  259  [Repealed, 1997, c. 15, s. 227]  
  
  # DIVISION IV 
  
  ## Head Office and Corporate Records 
  
  ### Head office
  
  260 (1) A company shall at all times have a head office in the province specified in its incorporating instrument or by-laws. 
  
  ### Change of head office
  
  (2) The directors of a company may change the address of the head office within the province specified in the incorporating instrument or by-laws. 
  
  ### Notice of change of address
  
  (3) A company shall send to the Superintendent, within fifteen days after any change of address of its head office, a notice of the change of address. 
  
  ### Company records
  
  261 (1) A company shall prepare and maintain records containing 
  (a) its incorporating instrument and the by-laws of the company and all amendments thereto; 
  (b) minutes of meetings and resolutions of shareholders or policyholders; 
  (c) the information referred to in paragraphs 668(1)(a), (c) and (e) to (h) contained in all returns provided to the Superintendent pursuant to section 668; 
  (d) particulars of any authorizations, conditions and limitations established by the Superintendent under subsection 58(1) or (2) or 59(1) that are from time to time applicable to the company; and 
  (e) particulars of exceptions granted under section 38 or 253 that are from time to time applicable to the company. 
  
  ### Additional records
  
  (2) In addition to the records described in subsection (1), a company shall prepare and maintain adequate 
  (a) corporate accounting records; 
  (b) records containing minutes of meetings and resolutions of the directors and any committee thereof; and 
  (c) records showing, for each customer of, or claimant under a policy issued by, the company, the amount owing to the company and the nature of the liabilities of the company to the customer or claimant. 
  
  ### Former-Act and continued companies
  
  (3) For the purposes of paragraph (1)(b) and subsection (2), 
  (a) in the case of a body corporate continued as a company under this Act, 
  *records* includes similar records required by law to be maintained by the body corporate before it was so continued;  
  (b) in the case of a body corporate amalgamated and continued as a company under this Act, 
  *records* includes similar records required by law to be maintained by the body corporate before it was so amalgamated; and  
  (c) in the case of a former-Act company, 
  *records* includes similar records required by law to be maintained by the company before the coming into force of this section.  
  
  ### Place of records
  
  262 (1) The records described in section 261 shall be kept at the head office of the company or at such other place in Canada as the directors think fit. 
  
  ### Notice of place of records
  
  (2) Where any of the records described in section 261 are not kept at the head office of a company, the company shall notify the Superintendent of the place where the records are kept. 
  
  ### Exception
  
  (3) Subsection (1) does not apply in respect of records of an office of the company outside Canada or in respect of customers of such an office. 
  
  ### Exception
  
  (3.1) Subject to subsection 268(1.1), subsection (1) does not apply to a company that is a subsidiary of a regulated foreign entity. 
  
  ### Inspection
  
  (4) The records described in section 261, other than those described in paragraph 261(2)(c), shall at all reasonable times be open to inspection by the directors. 
  
  ### Access to company records
  
  (5) A company’s shareholders, policyholders entitled to vote and creditors and their personal representatives may examine the records referred to in subsection 261(1) during the usual business hours of the company and may take extracts from them free of charge or have copies of them made on payment of a reasonable fee. If the company is a distributing company, any other person may on payment of a reasonable fee examine those records during the usual business hours of the company and take extracts from them or have copies of them made. 
  
  ### Electronic access
  
  (5.1) A company may make the information contained in records referred to in subsection 261(1) available to persons by any system of mechanical or electronic data processing or any other information storage device that is capable of reproducing the records in intelligible written form within a reasonable time. 
  
  ### Copies of by-laws for shareholders
  
  (6) Every shareholder of a company is entitled, on request made not more often than once in each calendar year, to receive free of charge one copy of the by-laws of the company. 
  
  ### Copies of by-laws for policyholders
  
  (7) Every policyholder of a company who is entitled to vote at a meeting of policyholders or shareholders and policyholders of the company is entitled, on request made not more often than once in each calendar year, to receive free of charge one copy of the by-laws of the company. 
  
  ### Shareholder lists
  
  263 (1) A person who is entitled to a basic list of shareholders of a company (in this section referred to as the “applicant”) may request the company to furnish the applicant with a basic list within ten days after receipt by the company of the affidavit referred to in subsection (2) and, on payment of a reasonable fee by the applicant, the company shall comply with the request. 
  
  ### Affidavit and contents
  
  (2) A request under subsection (1) must be accompanied by an affidavit containing 
  (a) the name and address of the applicant, 
  (b) the name and address for service of the entity, if the applicant is an entity, and 
  (c) an undertaking that the basic list and any supplemental lists obtained pursuant to subsections (5) and (6) will not be used except as permitted under section 265, and, if the applicant is an entity, the affidavit shall be made by a director or an officer of the entity, or any person acting in a similar capacity. 
  
  ### Entitlement to list
  
  (3) A company’s shareholders, policyholders entitled to vote and creditors and their personal representatives are — or if the company is a distributing company, any person is — entitled to a basic list of shareholders of the company. 
  
  ### Basic list of shareholders
  
  (4) A basic list of shareholders of a company consists of a list of shareholders that is made up to a date not more than ten days before the receipt of the affidavit referred to in subsection (2) and that sets out 
  (a) the names of the shareholders of the company; 
  (b) the number of shares owned by each shareholder; and 
  (c) the address of each shareholder as shown in the records of the company. 
  
  ### Supplemental lists
  
  (5) A person requiring a company to supply a basic list of shareholders may, if the person states in the accompanying affidavit that supplemental lists are required, request the company or its agent, on payment of a reasonable fee, to provide supplemental lists of shareholders setting out any changes from the basic list in the names and addresses of the shareholders and the number of shares owned by each shareholder for each business day following the date to which the basic list is made up. 
  
  ### When supplemental lists to be furnished
  
  (6) A company or its agent shall provide a supplemental list of shareholders required under subsection (5) 
  (a) within ten days following the date the basic list is provided, where the information relates to changes that took place prior to that date; and 
  (b) within ten days following the day to which the supplemental list relates, where the information relates to changes that took place on or after the date the basic list was provided. 
  
  ### Option holders
  
  264 A person requiring a company to supply a basic list or a supplemental list of shareholders may also require the company to include in that list the name and address of any known holder of an option or right to acquire shares of the company. 
  
  ### Use of shareholder list
  
  265 A list of shareholders obtained under section 263 shall not be used by any person except in connection with 
  (a) an effort to influence the voting of shareholders of the company; 
  (b) an offer to acquire shares of the company; or 
  (c) any other matter relating to the affairs of the company. 
  
  ### Form of records
  
  266 (1) A register or other record required or authorized by this Act to be prepared and maintained by a company 
  (a) may be in a bound or loose-leaf form or in a photographic film form; or 
  (b) may be entered or recorded by any system of mechanical or electronic data processing or any other information storage device that is capable of reproducing any required information in intelligible written form within a reasonable time. 
  
  ### Conversion of records
  
  (2) Registers and records maintained in one form may be converted to any other form. 
  
  ### Destruction of converted records
  
  (3) Notwithstanding section 269, a company may destroy any register or other record referred to in subsection (1) at any time after the register or other record has been converted to another form. 
  
  ### Protection of records
  
  267 A company and its agents shall take reasonable precautions to 
  (a) prevent loss or destruction of, 
  (b) prevent falsification of entries in, 
  (c) facilitate detection and correction of inaccuracies in, and 
  (d) ensure that unauthorized persons do not have access to or use of information in, the registers and records required or authorized by this Act to be prepared and maintained. 
  
  ### Requirement to maintain copies and process information in Canada
  
  268 (1) If the Superintendent is of the opinion that it is incompatible with the fulfilment of the Superintendent’s responsibilities under this Act for a company to maintain, in another country, copies of records referred to in section 261 or of its central securities register or for a company to process, in another country, information or data relating to the preparation and maintenance of those records or of its central securities register — or if the Superintendent is advised by the Minister that, in the opinion of the Minister, it is not in the national interest for a company to do any of those activities in another country — the Superintendent shall direct the company to not maintain those copies, or to not process the information or data, as the case may be, in that other country or to maintain those copies or to process the information or data only in Canada. 
  
  ### Direction — immediate, direct, complete and ongoing access
  
  (1.1) Where a company referred to in subsection 262(3.1) or 274(3) maintains records referred to in section 261 or the central securities register at a place outside Canada, the Superintendent may, in the case referred to in paragraph (a), and shall, in the case referred to in paragraph (b), by order, direct the company to maintain a copy of those records or register at any place in Canada as the directors think fit 
  (a) if the Superintendent is of the opinion that he or she does not have immediate, direct, complete and ongoing access to those records or register; or 
  (b) if the Superintendent is advised by the Minister that the Minister is of the opinion that it is not in the national interest for the company not to maintain a copy of those records or register in Canada. 
  
  ### Company to comply
  
  (2) A company shall without delay comply with any order issued under subsection (1) or (1.1). 
  
  ### Retention of records
  
  269 A company shall retain 
  (a) the records of the company referred to in subsection 261(1); 
  (b) any record of the company referred to in paragraph 261(2)(a) or (b); and 
  (c) the central securities register referred to in subsection 271(1). 
  
  ### Regulations
  
  270 The Governor in Council may make regulations respecting the records, papers and documents to be retained by a company, including the length of time those records, papers and documents are to be retained, and what constitutes immediate, direct, complete and ongoing access, for the purpose of paragraph 268(1.1)(a). 
  
  # DIVISION V 
  
  ## Securities Registers 
  
  ### Central securities register
  
  271 (1) A company shall maintain a central securities register in which it shall record the securities, within the meaning of section 85, issued by it in registered form, showing in respect of each class or series of securities 
  (a) the names, alphabetically arranged, and latest known addresses of the persons who are security holders, and the names and latest known addresses of the persons who have been security holders; 
  (b) the number of securities held by each security holder; and 
  (c) the date and particulars of the issue and transfer of each security. 
  
  ### Former-Act and continued companies
  
  (2) For the purposes of subsection (1), 
  *central securities register* includes similar registers required by law to be maintained by a former-Act company or by a body corporate continued, or amalgamated and continued, as a company under this Act before the continuance, amalgamation or coming into force of this section, as the case may be.  
  
  ### Access to central securities register
  
  (3) A company’s shareholders, policyholders entitled to vote and creditors and their personal representatives may examine the central securities register during the usual business hours of the company and may take extracts from it free of charge or have copies of it made on payment of a reasonable fee. If the company is a distributing company, any other person may on payment of a reasonable fee examine the central securities register during the usual business hours of the company and take extracts from it or have copies of it made. 
  
  ### Electronic access
  
  (4) The company may make the information contained in the central securities register available by any mechanical or electronic data processing system or other information storage device that is capable of reproducing it in intelligible written form within a reasonable time. 
  
  ### Affidavit and undertaking
  
  (5) A person who wishes to examine the central securities register, take extracts from it or have copies of it made shall provide the company with an affidavit containing their name and address — or if they are an entity, the name and address for service of the entity — and with an undertaking that the information contained in the register will not be used except in the same way as a list of shareholders may be used under section 265. In the case of an entity, the affidavit is to be sworn by a director or officer of the entity or a person acting in a similar capacity. 
  
  ### Supplementary information
  
  (6) A person who wishes to examine a central securities register, take extracts from it or have copies of it made may on payment of a reasonable fee, if they state in the accompanying affidavit that supplementary information is required, request the company or its agent to provide supplementary information setting out any changes made to the register. 
  
  ### When supplementary information to be provided
  
  (7) A company or its agent shall provide the supplementary information within 
  (a) 10 days after the day on which the central securities register is examined if the changes take place before that day; and 
  (b) 10 days after the day to which the supplementary information relates if the changes take place on or after the day on which the central securities register is examined. 
  
  ### Branch registers
  
  272 A company may establish as many branch securities registers as it considers necessary. 
  
  ### Agents
  
  273 A company may appoint an agent to maintain its central securities register and each of its branch securities registers. 
  
  ### Location of central securities register
  
  274 (1) The central securities register of a company shall be maintained by the company at its head office or at any other place in Canada designated by the directors of the company. 
  
  ### Location of branch securities register
  
  (2) A branch securities register of a company may be kept at any place in or outside Canada designated by the directors of the company. 
  
  ### Exception
  
  (3) Subject to subsection 268(1.1), subsection (1) does not apply to a company that is a subsidiary of a regulated foreign entity. 
  
  ### Effect of registration
  
  275 Registration of the issue or transfer of a security in the central securities register or in a branch securities register is complete and valid registration for all purposes. 
  
  ### Particulars in branch register
  
  276 (1) A branch securities register shall only contain particulars of the securities issued or transferred at the branch for which that register is established. 
  
  ### Particulars in central securities register
  
  (2) Particulars of each issue or transfer of a security registered in a branch securities register of a company shall also be kept in the central securities register of the company. 
  
  ### Destruction of certificates
  
  277 A company, its agent or a trustee within the meaning of section 317 is not required to produce 
  (a) a cancelled security certificate in registered form or an instrument referred to in subsection 73(1) that is cancelled or a like cancelled instrument in registered form after six years from the date of its cancellation; 
  (b) a cancelled security certificate in bearer form or an instrument referred to in subsection 73(1) that is cancelled or a like cancelled instrument in bearer form after the date of its cancellation; or 
  (c) an instrument referred to in subsection 73(1) or a like instrument, irrespective of its form, after the date of its expiration. 
  
  # DIVISION VI 
  
  ## Corporate Name and Seal 
  
  ### Publication of name
  
  278 A company shall set out its name in legible characters in all contracts, premium notices, applications for policies, policies, negotiable instruments and other documents evidencing rights or obligations with respect to other parties that are issued or made by or on behalf of the company. 
  
  ### Corporate seal
  
  279 (1) A company may adopt a corporate seal and change one that it adopted. 
  
  ### Validity of unsealed documents
  
  (2) A document executed on behalf of a company is not invalid merely because a corporate seal is not affixed to it. 
  
  # DIVISION VII 
  
  ## [Repealed, 1997, c. 15, s. 230] 
  
  # DIVISION VIII 
  
  ## Insiders 
  
  ## Interpretation 
  
  ### Definitions
  
  288 (1) In this Division,  
  *affiliate* means a body corporate that is affiliated with another body corporate within the meaning of subsection 6(2); (groupe)   
  *business combination* means an acquisition of all or substantially all of the assets of one body corporate by another, an amalgamation of two or more bodies corporate or any similar reorganization between two or more bodies corporate; (regroupement d’entreprises)   
  *call* means an option, transferable by delivery, to demand delivery of a specified number or amount of shares at a fixed price within a specified time but does not include an option or right to acquire shares of the body corporate that granted the option or right to acquire; (option d’achat)   
  *distributing company* [Repealed, 2005, c. 54, s. 270]   
  *insider* [Repealed, 2005, c. 54, s. 270]   
  *officer*, in relation to a company, means  
  (a) an officer as defined in paragraph (a) of the definition 
  *officer* in section 2, or  
  (b) any natural person who performs functions for the company similar to those performed by a person referred to in paragraph (a) of the definition 
  *officer* in section 2; (dirigeant d’une société)   
  *put* means an option, transferable by delivery, to deliver a specified number or amount of shares at a fixed price within a specified time; (option de vente)   
  *share* means a voting share and includes  
  (a) a security currently convertible into a voting share, and 
  (b) a currently exercisable option or a right to acquire a voting share or a security referred to in paragraph (a). ( action)  
  
  ### Control
  
  (2) For the purposes of this Division, a person controls a body corporate where the person controls the body corporate within the meaning of section 3, determined without regard to paragraph 3(1)(d). 
  (3) and (4)  [Repealed, 2005, c. 54, s. 270]  
  
  ## Insider Reporting 
  
  ### Insider report
  
  289 An insider shall submit an insider report in accordance with the regulations. 
  
  ### Exemption by Superintendent
  
  290 On application by an insider, the Superintendent may in writing and on any terms that the Superintendent thinks fit exempt the insider from any of the requirements of section 289. The exemption may be given retroactive effect and the Superintendent shall publish the particulars of the exemption and the reasons for it in a periodical available to the public. 
  290.1  [Repealed, 2005, c. 54, s. 271]  
  
  ### Regulations
  
  291 The Governor in Council may make regulations for carrying out the purposes of sections 289 and 290, including 
  (a) defining “insider” for the purposes of sections 289 and 290; 
  (b) respecting the form and content of an insider report; and 
  (c) respecting the submission or publication of an insider report. 
  292  [Repealed, 2005, c. 54, s. 271]  
  
  ## Insider Trading 
  
  ### Meaning of 
  *insider* 
  
  293 (1) In this section, 
  *insider* means with respect to a distributing company  
  (a) a director or officer of the company; 
  (b) a director or officer of a subsidiary of the company; 
  (c) a director or officer of a body corporate that enters into a business combination with the company; or 
  (d) a person employed or retained by the company. 
  
  ### Prohibition — short sale
  
  (2) No insider may knowingly sell, directly or indirectly, a security of a distributing company or of any of the distributing company’s affiliates if the insider does not own or has not fully paid for the security. 
  
  ### Exception
  
  (3) Despite subsection (2), an insider may sell a security that they do not own if they own another security that is convertible into the security that was sold or they own an option or right to acquire the security that was sold, and if within 10 days after the sale they 
  (a) exercise the conversion privilege, option or right and deliver the security so acquired to the purchaser; or 
  (b) transfer the convertible security, option or right to the purchaser. 
  
  ### Prohibition — calls and puts
  
  (4) No insider may knowingly, directly or indirectly, buy or sell a call or put in respect of a security of a company or of any of the company’s affiliates. 
  
  ## Civil remedies 
  
  ### Extended meaning of 
  *insider* 
  
  294 (1) In this section and sections 294.1 and 295, 
  *insider* with respect to a company means  
  (a) the company; 
  (b) an affiliate of the company; 
  (c) a director or officer of the company or of any person described in paragraph (b), (d) or (f); 
  (d) a person who beneficially owns directly or indirectly, or who exercises control or direction over or has a combination of ownership, control and direction in respect of, shares of the company carrying more than the prescribed percentage of the voting rights attached to all of the company’s outstanding shares not including shares held by the person as underwriter while those shares are in the course of a distribution to the public; 
  (e) a person, other than a person described in paragraph (f), who is employed or retained by the company or by a person described in paragraph (f); 
  (f) a person who engages in or proposes to engage in any business or professional activity with or on behalf of the company; 
  (g) a person who received material confidential information concerning the company while they were a person described in any of paragraphs (a) to (f); 
  (h) a person who receives material confidential information from a person who is and who they know or ought reasonably to have known is a person described in this subsection, including in this paragraph, or subsection (3) or (4); or 
  (i) a prescribed person. 
  
  ### Extended meaning of 
  *security* 
  
  (2) For the purposes of this section, each of the following is deemed to be a security of a company: 
  (a) a put, call, option or other right or obligation to purchase or sell a security of the company; and 
  (b) a security of another entity, the market price of which varies materially with the market price of the securities of the company. 
  
  ### Deemed insider — take-over bid or business combination
  
  (3) For the purposes of this section and subsection 294.1(1), a person who proposes to make a take-over bid as defined in the regulations for securities of a company or to enter into a business combination with a company is an insider of the company with respect to material confidential information obtained from the company. 
  
  ### Deemed insider — affiliate or associate
  
  (4) An insider of a person referred to in subsection (3), or the person’s affiliate or associate, is an insider of the company referred to in that subsection. Paragraphs (1)(b) to (i) apply in making this determination except that references to “company” are to be read as references to “person described in subsection (3)”. 
  
  ### Meaning of 
  *associate* 
  
  (5) In subsection (4), 
  *associate* means with respect to a person  
  (a) a body corporate that the person directly or indirectly controls, determined without regard to paragraph 3(1)(d), or of which they beneficially own shares or securities currently convertible into shares carrying more than 10% of the voting rights under all circumstances or by reason of the occurrence of an event that has occurred and is continuing or a currently exercisable option or right to purchase the shares or convertible securities; 
  (b) a partner of the person acting on behalf of the partnership of which they are partners; 
  (c) a trust or estate in which the person has a substantial beneficial interest or in respect of which they serve as a trustee or a liquidator of the succession or in a similar capacity; 
  (d) a spouse or common-law partner of the person; 
  (e) a child of the person or of their spouse or common-law partner; or 
  (f) if that relative has the same residence as the person, a relative of the person or of their spouse or common-law partner. 
  
  ### Insider trading — compensation to sellers and purchasers
  
  (6) An insider of a company who purchases or sells a security of the company with knowledge of confidential information that if it were generally known might reasonably be expected to materially affect the value of any of the securities of the company is liable to compensate the seller or purchaser of the security, as the case may be, for any loss suffered by them as a result of the purchase or sale unless the insider establishes that 
  (a) the insider reasonably believed that the information had been generally disclosed; 
  (b) the information was known or ought reasonably to have been known by the seller or purchaser; or 
  (c) the purchase or sale of the security took place in the prescribed circumstances. 
  
  ### Insider trading — compensation to company
  
  (7) The insider is accountable to the company for any benefit or advantage received or receivable by the insider as a result of a purchase or sale described in subsection (5), unless they establish the circumstances described in paragraph (6)(a). 
  
  ### Tipping — compensation to sellers and purchasers
  
  294.1 (1) An insider of a company who discloses confidential information with respect to the company that has not been generally disclosed and that if it were generally known might reasonably be expected to materially affect the value of any of the securities of the company is liable to compensate any person who subsequently sells securities of the company to or purchases them from any person who received the information unless the insider establishes that 
  (a) the insider reasonably believed that the information had been generally disclosed; 
  (b) the information was known or ought reasonably to have been known by the person who alleges that they suffered the loss; 
  (c) if the insider is not a person described in subsection 294(3) or (4), the disclosure of the information was necessary in the course of their business; or 
  (d) if the insider is a person described in subsection 294(3) or (4), the disclosure of the information was necessary to effect the take-over bid or business combination. 
  
  ### Tipping — compensation to company
  
  (2) The insider is accountable to the company for any benefit or advantage received or receivable by them as a result of a disclosure of information as described in subsection (1) unless they establish the circumstances described in paragraph (1)(a), (c) or (d). 
  
  ### Measure of damages
  
  295 (1) The court may assess damages under subsection 294(6) or 294.1(1) in accord­ance with any measure of damages that it considers relevant in the circumstances. However, in assessing damages in respect of a security of a distributing company, the court shall consider the following: 
  (a) if the plaintiff is a purchaser, the price that they paid for the security less the average market price of the security over the 20 trading days immediately following general disclosure of the information; and 
  (b) if the plaintiff is a seller, the average market price of the security over the 20 trading days immediately following general disclosure of the information, less the price that they received for the security. 
  
  ### Liability — more than one insider
  
  (2) If more than one insider is liable under subsection 294(6) or 294.1(1) with respect to the same transaction or series of transactions, their liability is joint and several, or solidary. 
  
  ### Limitation
  
  (3) An action to enforce a right created by subsection 294(6) or (7) or section 294.1 may be commenced only within two years after discovery of the facts that gave rise to the cause of action. 
  
  # DIVISION IX 
  
  ## Prospectus 
  
  ### Distribution
  
  296 (1) No person including a company shall distribute securities of a company except in accordance with the regulations made under subsection (2). 
  
  ### Regulations
  
  (2) The Governor in Council may make regulations respecting the distribution of securities of a company, including 
  (a) respecting the information that is to be disclosed by a company before the distribution of any of its securities, including the information that is to be included in a prospectus; 
  (b) respecting the manner of disclosure and the form of the information that is to be disclosed; and 
  (c) exempting any class of distribution of securities from the application of subsection (1). 
  
  ### Order of exemption
  
  297 (1) On application by a company or any person proposing to make a distribution, the Superintendent may, by order, exempt that distribution from the application of any regulations made under subsection 296(2) if the Superintendent is satisfied that the company has disclosed or is about to disclose, in compliance with the laws of the relevant jurisdiction, information relating to the distribution that in form and content substantially complies with the requirements of those regulations. 
  
  ### Conditions
  
  (2) An order under subsection (1) may contain any conditions or limitations that the Superintendent deems appropriate. 
  
  # DIVISION IX.1 
  
  ## Going-private Transactions and Squeeze-out Transactions 
  
  ### Going-private transactions
  
  298 A company may carry out a going-private transaction if it complies with any applicable provincial securities laws. 
  
  ### Squeeze-out transactions
  
  299 No company may carry out a squeeze-out transaction unless, in addition to any approval by holders of shares required by or under this Act or the company’s by-laws, the transaction is approved by ordinary resolution of the holders of each class of shares affected by the transaction, voting separately, whether or not the shares otherwise carry the right to vote. However, the following do not have the right to vote on the resolution: 
  (a) affiliates of the company; and 
  (b) holders of shares that following the squeeze-out transaction would be entitled to consideration of greater value or to superior rights or privileges than those available to other holders of shares of the same class. 
  
  ### Right to dissent
  
  300 (1) A holder of shares of a company may dissent if the company resolves to carry out a going-private transaction or squeeze-out transaction that affects those shares. 
  
  ### Payment for shares
  
  (2) In addition to any other right that the shareholder may have, but subject to subsection (25), a shareholder who complies with this section is, when the action approved by the resolution from which the shareholder dissents becomes effective, entitled to be paid by the company the fair value of the shares in respect of which the shareholder dissents, determined as of the close of business on the day before the resolution was adopted by the policyholders entitled to vote and the shareholders. 
  
  ### No partial dissent
  
  (3) A dissenting shareholder may claim under this section only with respect to all of the shares of a class held on behalf of any one beneficial owner and registered in the name of the dissenting shareholder. 
  
  ### Objection
  
  (4) A dissenting shareholder shall send to the company, at or before any meeting of shareholders and policyholders at which a resolution referred to in subsection (2) is to be voted on by the policyholders entitled to vote and the shareholders, a written objection to the resolution unless the company did not give notice to the shareholder of the purpose of the meeting and their right to dissent. 
  
  ### Notice that resolution was adopted
  
  (5) The company shall within 10 days after the day on which the policyholders entitled to vote and the shareholders adopt the resolution send to each shareholder who sent an objection under subsection (4) notice that the resolution was adopted. If it is necessary for the Minister or Superintendent to approve the transaction within the meaning of subsection 1016(1) before it becomes effective, the company shall send notice within 10 days after the approval. Notice is not required to be sent to a shareholder who voted for the resolution or one who has withdrawn their objection. 
  
  ### Demand for payment
  
  (6) A dissenting shareholder shall within 20 days after receiving the notice referred to in subsection (5) — or, if they do not receive it, within 20 days after learning that the resolution was adopted by the policyholders entitled to vote and the shareholders — send to the company a written notice containing 
  (a) their name and address; 
  (b) the number and class of shares in respect of which they dissent; and 
  (c) a demand for payment of the fair value of those shares. 
  
  ### Share certificates
  
  (7) A dissenting shareholder shall within 30 days after sending a notice under subsection (6) send the certificates representing the shares in respect of which they dissent to the company or its transfer agent. 
  
  ### Forfeiture
  
  (8) A dissenting shareholder who fails to comply with subsection (7) has no right to make a claim under this section. 
  
  ### Endorsing certificate
  
  (9) A company or its transfer agent shall endorse on any share certificate received in accordance with subsection (7) a notice that the holder is a dissenting shareholder under this section and shall without delay return the share certificates to the dissenting shareholder. 
  
  ### Suspension of rights
  
  (10) On sending a notice under subsection (6), a dissenting shareholder ceases to have any rights as a shareholder other than to be paid the fair value of their shares as determined under this section. However, the shareholder’s rights are reinstated as of the date the notice was sent if 
  (a) the shareholder withdraws the notice before the company makes an offer under subsection (11); 
  (b) the company fails to make an offer in accordance with subsection (11) and the shareholder withdraws the notice; or 
  (c) the directors revoke under section 242 the special resolution that was made in respect of the going-private transaction or squeeze-out transaction. 
  
  ### Offer to pay
  
  (11) A company shall, no later than seven days after the later of the day on which the action approved by the resolution from which the shareholder dissents becomes effective and the day on which the company received the notice referred to in subsection (6), send to each dissenting shareholder who sent a notice 
  (a) a written offer to pay for their shares in an amount considered by the directors of the company to be the fair value, accompanied by a statement showing how the fair value was determined; or 
  (b) if subsection (25) applies, a notice that it is unable to lawfully pay dissenting shareholders for their shares. 
  
  ### Same terms
  
  (12) Every offer made under subsection (11) for shares of the same class or series is to be on the same terms. 
  
  ### Payment
  
  (13) Subject to subsection (25), a company shall pay for the shares of a dissenting shareholder within 10 days after the day on which an offer made under subsection (11) is accepted, but the offer lapses if the company does not receive an acceptance within 30 days after the day on which the offer is made. 
  
  ### Court may fix fair value
  
  (14) If a company fails to make an offer under subsection (11) or if a dissenting shareholder fails to accept an offer, the company may, within 50 days after the day on which the action approved by the resolution from which the shareholder dissents becomes effective or within any further period that a court may allow, apply to the court to fix a fair value for the shares of any dissenting shareholder. 
  
  ### Shareholder application
  
  (15) If a company fails to apply to a court under subsection (14), a dissenting shareholder may apply to a court for the same purpose within a further period of 20 days or within any further period that the court may allow. 
  
  ### Venue
  
  (16) An application under subsection (14) or (15) is to be made to a court having jurisdiction where the company’s head office is situated or, if the company carries on business in the province in which the dissenting shareholder resides, in that province. 
  
  ### No security for costs
  
  (17) A dissenting shareholder is not required to give security for costs in an application made under subsection (14) or (15). 
  
  ### Parties
  
  (18) On an application to a court under subsection (14) or (15), 
  (a) all dissenting shareholders whose shares have not been purchased by the company are to be joined as parties and are bound by the decision of the court; 
  (b) the company shall notify each of them of the date, place and consequences of the application and their right to appear and be heard in person or by counsel; and 
  (c) the company shall notify the Superintendent of the date and place of the application and the Superintend­ent may appear and be heard in person or by counsel. 
  
  ### Powers of court
  
  (19) On an application to a court under subsection (14) or (15), the court may determine whether any other person is a dissenting shareholder and is to be joined as a party and the court shall then fix a fair value for the shares of all dissenting shareholders. 
  
  ### Appraisers
  
  (20) The court may appoint one or more appraisers to assist the court to fix a fair value for the shares of the dissenting shareholders. 
  
  ### Final order
  
  (21) The final order of the court is to be rendered against the company in favour of each dissenting shareholder for the value of the shares as fixed by the court. 
  
  ### Interest
  
  (22) The court may allow a reasonable rate of interest on the amount payable to each dissenting shareholder from the date the action approved by the resolution from which the shareholder dissents becomes effective until the date of payment. 
  
  ### Notice that s. (25) applies
  
  (23) If subsection (25) applies, the company shall within 10 days after an order is made under subsection (21) notify each dissenting shareholder that it is unable to lawfully pay dissenting shareholders for their shares. 
  
  ### Effect of s. (25)
  
  (24) If subsection (25) applies, a dissenting shareholder may by written notice delivered to the company within 30 days after receiving notice under subsection (23) 
  (a) withdraw their notice of dissent, in which case the company is deemed to consent to the withdrawal and the shareholder is reinstated to their full rights as a shareholder; or 
  (b) retain their status as a claimant against the company, to be paid as soon as the company is able to lawfully pay them or, in a liquidation, to be ranked subordinate to the rights of the company’s creditors but in priority to its shareholders. 
  
  ### Limitation
  
  (25) A company may not make a payment to a dissenting shareholder under this section if there are reasonable grounds for believing that the company is or the payment would cause the company to be in contravention of a regulation referred to in subsection 515(1) or (2) or 516(1) or (2) or of an order made under subsection 515(3) or 516(4). 
  301  [Repealed, 2005, c. 54, s. 272]  
  302  [Repealed, 2005, c. 54, s. 272]  
  303  [Repealed, 2005, c. 54, s. 272]  
  304  [Repealed, 2005, c. 54, s. 272]  
  305  [Repealed, 2005, c. 54, s. 272]  
  306  [Repealed, 2005, c. 54, s. 272]  
  
  # DIVISION X 
  
  ## Compulsory Acquisitions 
  
  ### Definitions
  
  307 (1) In this Division,  
  *affiliate* means a body corporate that is affiliated with another body corporate within the meaning of subsection 6(2); (groupe)   
  *associate of the offeror* means  
  (a) a body corporate that an offeror, directly or indirectly, controls, determined without regard to paragraph 3(1)(d), or of which an offeror beneficially owns shares or securities currently convertible into shares carrying more than 10 per cent of the voting rights under all circumstances or by reason of the occurrence of an event that has occurred and is continuing, or a currently exercisable option or right to purchase the shares or the convertible securities, 
  (b) a partner of the offeror acting on behalf of the partnership of which they are partners, 
  (c) a trust or estate in which the offeror has a substantial beneficial interest or in respect of which they serve as a trustee or a liquidator of the succession or in a similar capacity, 
  (d) a spouse or common-law partner of the offeror, 
  (e) a child of the offeror or of the offeror’s spouse or common-law partner, or 
  (f) a relative of the offeror or of the offeror’s spouse or common-law partner, if that relative has the same residence as the offeror; ( associé du pollicitant)   
  *dissenting offeree* means a holder of a share who does not accept a take-over bid or a subsequent holder of the share who acquires it from the first-mentioned holder; (pollicité opposant)   
  *exempt offer* [Repealed, 2005, c. 54, s. 273]   
  *offeree* means a person to whom a take-over bid is made; (pollicité)   
  *offeree company* means a company the shares of which are the object of a take-over bid; (société pollicitée)   
  *offeror* means a person, other than an agent, who makes a take-over bid, and includes two or more persons who, directly or indirectly,  
  (a) make take-over bids jointly or in concert, or 
  (b) intend to exercise jointly or in concert voting rights attached to shares for which a take-over bid is made; ( pollicitant)   
  *share* means a share with or without voting rights and includes  
  (a) a security that is currently convertible into a share, and 
  (b) a currently exercisable option or right to acquire a share or a security referred to in paragraph (a); ( action)   
  *take-over bid* means an offer made by an offeror at approximately the same time to all of the shareholders of a distributing company to acquire all of the shares of a class of issued shares, and includes an offer by a distributing company to repurchase all of the shares of a class. (offre d’achat visant à la mainmise)  
  
  ### Control
  
  (2) For the purposes of this Division, a person controls a body corporate when the person controls the body corporate within the meaning of section 3, determined without regard to paragraph 3(1)(d). 
  
  ### Date of bid
  
  (3) A take-over bid is deemed to be dated as of the date on which it is sent. 
  
  ### Right to acquire shares
  
  308 If, within one hundred and twenty days after the date of a take-over bid, the bid is accepted by the holders of not less than 90 per cent of the shares of any class of shares to which the take-over bid relates, other than shares held at the date of the take-over bid by or on behalf of the offeror or an affiliate or associate of the offeror, the offeror is entitled, on complying with this Division, to acquire the shares held by the dissenting offerees. 
  
  ### Offeror’s notice to dissenters
  
  309 (1) An offeror may acquire shares held by a dissenting offeree by sending by registered mail within sixty days after the date of termination of the take-over bid and in any event within one hundred and eighty days after the date of the take-over bid, an offeror’s notice to each dissenting offeree and to the Superintendent stating that 
  (a) offerees holding not less than 90 per cent of the shares of any class of shares to which the take-over bid relates, other than shares held at the date of the take-over bid by or on behalf of the offeror or an affiliate or associate of the offeror, have accepted the take-over bid; 
  (b) the offeror is bound to take up and pay for or has taken up and paid for the shares of the offerees who accepted the take-over bid; 
  (c) a dissenting offeree is required to elect 
  (i) to transfer the dissenting offeree’s shares to the offeror on the same terms on which the offeror acquired the shares from the offerees who accepted the take-over bid, or 
  (ii) to demand payment of the fair value of the dissenting offeree’s shares in accordance with sections 313 to 316 by notifying the offeror within twenty days after receipt of the offeror’s notice; 
  (d) a dissenting offeree who does not notify the offeror in accordance with paragraph 310(b) is deemed to have elected to transfer the shares to the offeror on the same terms on which the offeror acquired the shares from the offerees who accepted the take-over bid; and 
  (e) a dissenting offeree must send the dissenting offeree’s shares to which the take-over bid relates to the offeree company within twenty days after the dissenting offeree receives the offeror’s notice. 
  
  ### Notice of adverse claim
  
  (2) Concurrently with sending the offeror’s notice under subsection (1), the offeror shall send to the offeree company a notice of adverse claim in accordance with subsection 133(1) with respect to each share held by a dissenting offeree. 
  
  ### Share certificates and election
  
  310 A dissenting offeree to whom a notice is sent under subsection 309(1) shall within 20 days after receiving the notice 
  (a) send to the offeree company the share certificates representing the shares to which the take-over bid relates; and 
  (b) elect to transfer the shares to the offeror on the same terms as those on which the offeror acquired shares from the offerees who accepted the take-over bid or to demand payment of the fair value of the shares in accordance with sections 313 to 316 by notifying the offeror. 
  
  ### Deemed election
  
  310.1 A dissenting offeree who does not notify the offeror in accordance with paragraph 310(b) is deemed to have elected to transfer the shares to the offeror on the same terms as those on which the offeror acquired shares from the offerees who accepted the take-over bid. 
  
  ### Payment to offeree company
  
  311 (1) Within 20 days after the offeror sends a notice under subsection 309(1), the offeror shall pay the money, or transfer the other consideration, to the offeree company that the offeror would have had to pay or transfer to a dissenting offeree if the dissenting offeree had elected to transfer their shares in accordance with paragraph 310(b). 
  
  ### Consideration in trust
  
  (2) An offeree company is deemed to hold in a fiduciary capacity for the dissenting offerees the money or other consideration it receives under subsection (1). 
  
  ### Deposit or custody
  
  (3) An offeree company shall deposit the money received under subsection (1) in a separate account in a deposit-taking financial institution in Canada and the offeree company shall place any other consideration in the custody of a deposit-taking financial institution in Canada. 
  
  ### Fiduciary capacity of company
  
  311.1 A company that is making a take-over bid to repurchase all of the shares of a class is deemed to hold in a fiduciary capacity for the dissenting shareholders the money that it would have had to pay, and the other consideration that it would have had to transfer, to a dissenting offeree if the dissenting offeree had elected to transfer their shares in accordance with paragraph 310(b). The company shall within 20 days after a notice is sent under subsection 309(1) deposit the money in a separate account in a deposit-taking financial institution in Canada and place any other consideration in the custody of a deposit-taking financial institution in Canada. 
  
  ### Duty of offeree company
  
  312 Within thirty days after an offeror sends an offeror’s notice under subsection 309(1), the offeree company shall 
  (a) if the payment or transfer required by subsection 311(1) is made, issue to the offeror a share certificate in respect of the shares that were held by the dissenting offerees; 
  (b) give to each dissenting offeree who elects to transfer shares under paragraph 310(b) and who sends the share certificates as required under paragraph 310(a) the money or other consideration to which they are entitled, disregarding fractional shares, which may be paid for in money; and 
  (c) if the payment or transfer required by subsection 311(1) is made and the money or other consideration is deposited as required by subsections 311(2) and (3) or by section 311.1, send to each dissenting offeree who has not sent share certificates as required under paragraph 310(a) a notice stating that 
  (i) their shares have been cancelled, 
  (ii) the offeree company or its designated person holds in a fiduciary capacity for that offeree the money or other consideration to which they are entitled as payment for or in exchange for the shares, and 
  (iii) the offeree company will, subject to sections 313 to 316, send that money or other consideration to that offeree without delay after receiving the share certificates. 
  
  ### Court may fix fair value
  
  313 (1) If a dissenting offeree has elected to demand payment of the fair value of their shares under paragraph 310(b), the offeror may, within 20 days after it has paid the money or transferred the other consideration under subsection 311(1), apply to a court to fix the fair value of the shares of that dissenting offeree. 
  
  ### Idem
  
  (2) If an offeror fails to apply to a court under subsection (1), a dissenting offeree may apply to a court for the same purpose within a further period of twenty days. 
  
  ### Venue
  
  (3) An application under subsection (1) or (2) shall be made to a court having jurisdiction in the place at which the head office of the company is situated or in the province in which the dissenting offeree resides if the company carries on business in that province. 
  
  ### No security for costs
  
  (4) A dissenting offeree is not required to give security for costs in an application made under subsection (1) or (2). 
  
  ### Parties and notice
  
  314 On an application under subsection 313(1) or (2), 
  (a) all dissenting offerees who have made elections to demand payment under paragraph 310(b) and whose shares have not been acquired by the offeror shall be joined as parties and are bound by the decision of the court; and 
  (b) the offeror shall notify each affected dissenting offeree of the date, place and consequences of the application and of the dissenting offeree’s right to appear and be heard in person or by counsel at the hearing of the application. 
  
  ### Powers of court
  
  315 (1) On an application to a court under subsection 313(1) or (2), the court may determine whether any other person is a dissenting offeree who should be joined as a party, and the court shall then fix a fair value for the shares of all dissenting offerees. 
  
  ### Appraisers
  
  (2) A court may in its discretion appoint one or more appraisers to assist the court in fixing a fair value for the shares of a dissenting offeree. 
  
  ### Final order
  
  (3) The final order of a court shall be made against the offeror in favour of each dissenting offeree and for the amount for each dissenting offeree’s shares as fixed by the court. 
  
  ### Additional powers of court
  
  (4) In connection with proceedings under subsection 313(1) or (2), a court may make any order it thinks fit and, without limiting the generality of the foregoing, may 
  (a) fix the amount of money or other consideration that is deemed to be held in a fiduciary capacity under subsection 311(2) or section 311.1; 
  (b) order that the money or other consideration is to be held in trust by a person other than the offeree company; 
  (c) allow a reasonable rate of interest on the amount payable to each dissenting offeree from the date the dissenting offeree sends the share certificates required under section 310 until the date of payment; or 
  (d) order that any money payable to a shareholder who cannot be found be paid to the Receiver General. 
  
  ### Recovery
  
  (5) If at any time a person establishes an entitlement to any moneys paid to the Receiver General under this section, the Receiver General shall pay an equivalent amount to that person out of the Consolidated Revenue Fund. 
  
  ### Status of dissenter
  
  316 Where no application is made to a court under subsection 313(2) within the period set out in that subsection, a dissenting offeree is deemed to have elected to transfer the dissenting offeree’s shares to the offeror on the same terms on which the offeror acquired the shares from the offerees who accepted the take-over bid. 
  
  ### Obligation to acquire shares
  
  316.1 (1) If a shareholder who holds shares of an offeree company does not receive the notice referred to in subsection 309(1), the shareholder may require the offeror to acquire the shares 
  (a) within 90 days after the date of termination of the take-over bid; or 
  (b) if the shareholder did not receive an offer under the take-over bid, within 90 days after the later of 
  (i) the date of termination of the take-over bid, and 
  (ii) the day on which the shareholder learned of the take-over bid. 
  
  ### Acquisition on same terms
  
  (2) If the shareholder requires the offeror to acquire shares, the offeror shall acquire them on the same terms as those on which the offeror acquires shares from offerees who accept the take-over bid. 
  
  # DIVISION XI 
  
  ## Trust Indentures 
  
  ### Definitions
  
  317 In this Division,  
  *event of default* means, in relation to a trust indenture, an event specified in the trust indenture on the occurrence of which the principal, interest and other moneys payable thereunder become or may be declared to be payable before maturity, but the event is not an event of default until all the conditions set out in the trust indenture in connection with the giving of notice of the event have been satisfied or the period of time for giving the notice has elapsed; (cas de défaut)   
  *issuer* means a company that has issued, is about to issue or is in the process of issuing subordinated indebtedness; (émetteur)   
  *trustee* means any person appointed as trustee under the terms of a trust indenture to which a company is a party, and includes any successor trustee; (fiduciaire)   
  *trust indenture* means any deed, indenture or other instrument, including any supplement or amendment thereto, made by a company under which the company issues subordinated indebtedness and in which a person is appointed as trustee for the holders of the subordinated indebtedness issued thereunder. (acte de fiducie)  
  
  ### Application
  
  318 This Division applies in respect of a trust indenture if the subordinated indebtedness issued or to be issued under the trust indenture is part of a distribution to the public. 
  
  ### Exemption
  
  319 The Superintendent may, in writing, exempt a trust indenture from the application of this Division if, in the Superintendent’s opinion, the trust indenture and the subordinated indebtedness are subject to a law of a province or other jurisdiction, other than Canada, that is substantially equivalent to the provisions of this Act relating to trust indentures. 
  
  ### Conflict of interest
  
  320 (1) No person shall be appointed as trustee if at the time of the appointment there is a material conflict of interest between the person’s role as trustee and any other role of the person. 
  
  ### Eliminating conflict of interest
  
  (2) A trustee shall, within ninety days after the trustee becomes aware that a material conflict of interest exists, 
  (a) eliminate the conflict of interest; or 
  (b) resign from office. 
  
  ### Validity despite conflict
  
  321 A trust indenture and any subordinated indebtedness issued thereunder are valid notwithstanding a material conflict of interest of the trustee. 
  
  ### Removal of trustee
  
  322 If a trustee is appointed in contravention of subsection 320(1) or if a trustee contravenes subsection 320(2), any interested person may apply to a court for an order that the trustee be replaced, and the court may make an order on such terms as it thinks fit. 
  
  ### Trustee qualifications
  
  323 A trustee, or at least one of the trustees if more than one is appointed, must be 
  (a) a trust company pursuant to subsection 57(2) of the Trust and Loan Companies Act ; or  
  (b) a body corporate that is incorporated by or under an Act of the legislature of a province and authorized to carry on business as a trustee. 
  
  ### List of security holders
  
  324 (1) A holder of subordinated indebtedness issued under a trust indenture may, on payment to the trustee of a reasonable fee and on delivery of a statutory declaration to the trustee, require the trustee to provide, within fifteen days after the delivery to the trustee of the statutory declaration, a list setting out 
  (a) the names and addresses of the registered holders of the outstanding subordinated indebtedness, 
  (b) the principal amount of outstanding subordinated indebtedness owned by each such holder, and 
  (c) the aggregate principal amount of subordinated indebtedness outstanding as shown on the records maintained by the trustee on the day the statutory declaration is delivered to that trustee. 
  
  ### Duty of issuer
  
  (2) On the demand of a trustee, the issuer of subordinated indebtedness shall provide the trustee with the information required to enable the trustee to comply with subsection (1). 
  
  ### Where applicant is entity
  
  (3) Where the person requiring the trustee to provide a list under subsection (1) is an entity, the statutory declaration required under that subsection shall be made by a director or an officer of the entity or a person acting in a similar capacity. 
  
  ### Contents of statutory declaration
  
  (4) The statutory declaration required under subsection (1) must state 
  (a) the name and address of the person requiring the trustee to provide the list and, if the person is an entity, the address for service thereof; and 
  (b) that the list will not be used except as permitted by subsection (5). 
  
  ### Use of list
  
  (5) No person shall use a list obtained under this section except in connection with 
  (a) an effort to influence the voting of the holders of subordinated indebtedness; 
  (b) an offer to acquire subordinated indebtedness; or 
  (c) any other matter relating to the subordinated indebtedness or the affairs of the issuer or guarantor thereof. 
  
  ### Compliance with trust indentures
  
  325 (1) An issuer or a guarantor of subordinated indebtedness issued or to be issued under a trust indenture shall, before undertaking 
  (a) the issue, certification and delivery of subordinated indebtedness under the trust indenture, or 
  (b) the satisfaction and discharge of the trust indenture, provide the trustee with evidence of compliance with the conditions in the trust indenture in respect thereof. 
  
  ### Compliance by issuer or guarantor
  
  (2) On the demand of a trustee, the issuer or guarantor of subordinated indebtedness issued or to be issued under a trust indenture shall provide the trustee with evidence of compliance with the conditions in the trust indenture by the issuer or guarantor in respect of any act to be done by the trustee at the request of the issuer or guarantor. 
  
  ### Evidence of compliance
  
  (3) The following documents constitute evidence of compliance for the purposes of subsections (1) and (2): 
  (a) a statutory declaration or certificate made by a director or an officer of the issuer or guarantor stating that the conditions referred to in subsections (1) and (2) have been complied with; 
  (b) an opinion of legal counsel that the conditions of the trust indenture requiring review by legal counsel have been complied with, if the trust indenture requires compliance with conditions that are subject to review by legal counsel; and 
  (c) an opinion or report of the auditors of the issuer or guarantor, or such other accountant as the trustee selects, that the conditions of the trust indenture have been complied with, if the trust indenture requires compliance with conditions that are subject to review by auditors. 
  
  ### Further evidence of compliance
  
  (4) The evidence of compliance referred to in subsection (3) shall include a statement by the person giving the evidence 
  (a) declaring that the person has read and understands the conditions of the trust indenture referred to in subsections (1) and (2); 
  (b) describing the nature and scope of the examination or investigation on which the person based the certificate, statement or opinion; and 
  (c) declaring that the person has made such examination or investigation as the person believes necessary to enable the statements to be made or the opinions contained or expressed therein to be given. 
  
  ### Trustee may require evidence
  
  326 (1) On the request of a trustee, the issuer or guarantor of subordinated indebtedness issued under a trust indenture shall provide the trustee with evidence in such form as the trustee requires of compliance with any condition thereof relating to any action required or permitted to be taken by the issuer or guarantor under the trust indenture. 
  
  ### Certificate of compliance
  
  (2) At least once in each twelve month period beginning on the date of the trust indenture and at any other time on the demand of a trustee, the issuer or guarantor of subordinated indebtedness issued under a trust indenture shall provide the trustee with a certificate stating that the issuer or guarantor has complied with all requirements contained in the trust indenture that, if not complied with, would, with the giving of notice, lapse of time or otherwise, constitute an event of default, or, if there has been failure to so comply, giving particulars thereof. 
  
  ### Notice of default
  
  327 A trustee shall, within thirty days after the trustee becomes aware of the occurrence thereof, give to the holders of subordinated indebtedness issued under a trust indenture notice of every event of default arising under the trust indenture and continuing at the time the notice is given, unless the trustee believes on reasonable grounds that it is in the best interests of the holders of the subordinated indebtedness to withhold the notice and so informs the issuer and guarantor in writing. 
  
  ### Duty of care
  
  328 (1) In exercising a trustee’s powers and discharging a trustee’s duties, the trustee shall 
  (a) act honestly and in good faith with a view to the best interests of the holders of the subordinated indebtedness issued under the trust indenture; and 
  (b) exercise the care, diligence and skill of a reasonably prudent trustee. 
  
  ### Reliance on statements
  
  (2) Notwithstanding subsection (1), a trustee is not liable if the trustee relies in good faith on statements contained in a statutory declaration, certificate, opinion or report that complies with this Act or the trust indenture. 
  
  ### No exculpation
  
  329 No term of a trust indenture or of any agreement between a trustee and the holders of subordinated indebtedness issued thereunder or between the trustee and the issuer or guarantor operates to relieve a trustee from the duties imposed on the trustee by sections 320, 324 and 327 and subsection 328(1). 
  
  # DIVISION XII 
  
  ## Financial Statements 
  
  ### Financial year
  
  330 (1) The financial year of a company ends, at the election of the company in its by-laws, on the expiration of the thirty-first day of October or the thirty-first day of December in each year. 
  
  ### First financial year
  
  (2) Where a company has, after the first day of July in any year, obtained an order approving the commencement and carrying on of business, the first financial year of the company ends, at the election of the company in its by-laws, on the expiration of the thirty-first day of October or the thirty-first day of December in the next calendar year. 
  
  ### Annual financial statement
  
  331 (1) The directors of a company shall place before the shareholders and policyholders at every annual meeting 
  (a) a comparative annual financial statement relating separately to 
  (i) the financial year immediately preceding the meeting, and 
  (ii) the financial year, if any, immediately preceding the financial year referred to in subparagraph (i); 
  (a.1) in the case of a company that has participating policyholders, the information prescribed in respect of the policies established under paragraphs 165(2)(e) and (e.1) and the other prescribed information; 
  (b) the report of the auditor of the company; 
  (c) the report of the actuary of the company; 
  (d) a description of the roles of the actuary of the company and the auditor of the company in the preparation and audit of the annual statement; and 
  (e) any further information respecting the financial position of the company and the results of its operations required by the by-laws of the company to be placed before the shareholders and policyholders at the annual meeting. 
  
  ### Annual statement — contents
  
  (2) With respect to each of the financial years to which it relates, the annual statement of a company must contain the prescribed statements and any information that is in the opinion of the directors necessary to present fairly, in accordance with the accounting principles referred to in subsection (4), the financial position of the company as at the end of the financial year to which it relates and the results of the operations and changes in the financial position of the company for that financial year. 
  
  ### Additional information
  
  (3) A company shall include with its annual statement 
  (a) in the case of a company that has participating policyholders, a summary of the policies established under paragraphs 165(2)(e) and (e.1); 
  (b) a list of the subsidiaries of the company, other than subsidiaries that are not required to be listed by the regulations and subsidiaries acquired pursuant to section 499 or pursuant to a realization of security in accordance with section 500 and which the company would not otherwise be permitted to hold, showing, with respect to each subsidiary, 
  (i) its name and the address of its head or principal office, 
  (ii) the book value of the aggregate of any shares of the subsidiary beneficially owned by the company and by other subsidiaries of the company, and 
  (iii) the percentage of the voting rights attached to all the outstanding voting shares of the subsidiary that is carried by the aggregate of any voting shares of the subsidiary beneficially owned by the company and by other subsidiaries of the company; and 
  (c) such other information as may be prescribed in such form as may be prescribed. 
  
  ### Accounting principles
  
  (4) The financial statements referred to in subsection (1), paragraph (3)(b) and subsection 333(1) shall, except as otherwise specified by the Superintendent, be prepared in accordance with generally accepted accounting principles, the primary source of which is the Handbook of the Chartered Professional Accountants of Canada. A reference in any provision of this Act to the accounting principles referred to in this subsection shall be construed as a reference to those generally accepted accounting principles with any specifications so made. 
  (5)  [Repealed, 2005, c. 54, s. 284]  
  
  ### Regulations
  
  (6) The Governor in Council may make regulations respecting subsidiaries that are not required to be listed for the purposes of paragraph (3)(b). 
  
  ### Annual statement — approval
  
  332 (1) The directors of a company shall approve the annual statement and their approval shall be evidenced by the signature or a printed or otherwise mechanically reproduced facsimile of the signature of 
  (a) the chief executive officer or, in the event of that officer’s absence or inability to act, any other officer of the company authorized by the directors to sign in the stead of the chief executive officer; and 
  (b) one director, if the signature required by paragraph (a) is that of a director, or two directors if the signature required by that paragraph is that of an officer who is not a director. 
  
  ### Condition precedent to publication
  
  (2) A company shall not publish copies of an annual statement unless it is approved and signed in accordance with subsection (1). 
  
  ### Statements — subsidiaries
  
  333 (1) A company shall keep at its head office a copy of the current financial statements of each subsidiary of the company. 
  
  ### Examination
  
  (2) Subject to this section, the shareholders of a company, the policyholders of a company who are entitled to vote and their personal representatives may, on request therefor, examine the statements referred to in subsection (1) during the usual business hours of the company and may take extracts therefrom free of charge. 
  
  ### Barring examination
  
  (3) A company may refuse to permit an examination under subsection (2) by any person. 
  
  ### Application for order
  
  (4) Within fifteen days after a refusal under subsection (3), the company shall apply to a court for an order barring the right of the person concerned to make an examination under subsection (2) and the court shall either order the company to permit the examination or, if it is satisfied that the examination would be detrimental to the company or to any other body corporate the financial statements of which would be subject to examination, bar the right and make any further order it thinks fit. 
  
  ### Notice to Superintendent
  
  (5) A company shall give the Superintendent and the person seeking to examine the statements referred to in subsection (1) notice of an application to a court under subsection (4), and the Superintendent and the person may appear and be heard in person or by counsel at the hearing of the application. 
  
  ### Annual statement — distribution
  
  334 (1) A company shall, no later than 21 days before the date of each annual meeting or before the signing of a resolution under paragraph 158(1)(b) in lieu of the annual meeting and unless that time period is waived by the shareholder or policyholder, send 
  (a) to each shareholder a copy of the documents referred to in paragraphs 331(1)(a) and (b) to (e) and subsection 331(3) and, on request, the document referred to in paragraph 331(1)(a.1); and 
  (b) to each policyholder who is entitled under paragraph 143(1)(b) to receive notice of the meeting a copy of the documents referred to in subsections 331(1) and (3). 
  
  ### Exception
  
  (2) A company is not required to comply with subsection (1) with respect to shareholders or policyholders who have informed the company, in writing, that they do not wish to receive the annual statement. 
  
  ### Effect of default
  
  (3) Where a company is required to comply with subsection (1) and the company does not comply with that subsection, the annual meeting at which the annual statement is to be considered shall be adjourned until that subsection has been complied with. 
  
  ### Copy to Superintendent
  
  335 (1) Subject to subsection (2), a company shall send to the Superintendent a copy of the documents referred to in subsections 331(1) and (3) not later than twenty-one days before the date of each annual meeting of shareholders and policyholders of the company. 
  
  ### Later filing
  
  (2) If a company’s shareholders and policyholders sign a resolution under paragraph 158(1)(b) in lieu of an annual meeting, the company shall send a copy of the documents referred to in subsections 331(1) and (3) to the Superintendent not later than thirty days after the signing of the resolution. 
  
  # DIVISION XIII 
  
  ## Auditors 
  
  ## Interpretation 
  
  ### Definitions
  
  336 In this Division,  
  *firm of accountants* means a partnership, the members of which are accountants engaged in the practice of accounting, or a body corporate that is incorporated by or under an Act of the legislature of a province and engaged in the practice of accounting; (cabinet de comptables)   
  *member*, in relation to a firm of accountants, means  
  (a) an accountant who is a partner in a partnership, the members of which are accountants engaged in the practice of accounting, or 
  (b) an accountant who is an employee of a firm of accountants. ( membre)  
  
  ## Appointment 
  
  ### Appointment of auditor
  
  337 (1) The shareholders and policyholders of a company shall, by ordinary resolution at the first meeting of shareholders and policyholders and at each succeeding annual meeting, appoint an auditor to hold office until the close of the next annual meeting. 
  
  ### Remuneration of auditor
  
  (2) The remuneration of an auditor may be fixed by ordinary resolution of the shareholders and policyholders but, if not so fixed, shall be fixed by the directors. 
  
  ## Qualifications 
  
  ### Qualification of auditor
  
  338 (1) A natural person or firm of accountants is qualified to be an auditor of a company if 
  (a) in the case of a natural person, the person is an accountant who 
  (i) is a member in good standing of an institute or association of accountants incorporated by or under an Act of the legislature of a province, 
  (ii) has at least five years experience at a senior level in performing audits of a financial institution, 
  (iii) is ordinarily resident in Canada, and 
  (iv) is independent of the company; and 
  (b) in the case of a firm of accountants, the member of the firm jointly designated by the firm and the company to conduct the audit of the company on behalf of the firm is qualified in accordance with paragraph (a). 
  
  ### Independence
  
  (2) For the purposes of subsection (1), 
  (a) independence is a question of fact; and 
  (b) a person is deemed not to be independent of a company if that person, a business partner of that person or a firm of accountants of which that person is a member 
  (i) is a business partner, director, officer or employee of the company or of any affiliate of the company or is a business partner of any director, officer or employee of the company or of any affiliate of the company, 
  (ii) beneficially owns or controls, directly or indirectly, a material interest in the shares of the company or of any affiliate of the company, or 
  (iii) has been a liquidator, trustee in bankruptcy, receiver or receiver and manager of any affiliate of the company within the two years immediately preceding the person’s proposed appointment as auditor of the company, other than an affiliate that is a subsidiary of the company acquired pursuant to section 499 or through a realization of security pursuant to section 500. 
  
  ### Business partners
  
  (2.1) For the purposes of subsection (2), 
  (a) in the case of the appointment of a natural person as the auditor of a company, a business partner of the person includes a shareholder of the business partner; and 
  (b) in the case of the appointment of a firm of accountants as the auditor of a company, a business partner of a member of the firm includes another member of the firm and a shareholder of the firm or of a business partner of the member. 
  
  ### Notice of designation
  
  (3) Within fifteen days after the appointment of a firm of accountants as auditor of a company, the company and the firm of accountants shall jointly designate a member of the firm who meets the qualifications described in subsection (1) to conduct the audit of the company on behalf of the firm and the company shall forthwith notify the Superintendent in writing of the designation. 
  
  ### New designation
  
  (4) Where for any reason a member of a firm of accountants designated pursuant to subsection (3) ceases to conduct the audit of the company, the company and the firm of accountants may jointly designate another member of the same firm of accountants who meets the qualifications described in subsection (1) to conduct the audit of the company and the company shall forthwith notify the Superintendent in writing of the designation. 
  
  ### Deemed vacancy
  
  (5) In any case where subsection (4) applies and a designation is not made pursuant to that subsection within thirty days after the designated member ceases to conduct the audit of the company, there shall be deemed to be a vacancy in the office of auditor of the company. 
  
  ### Duty to resign
  
  339 (1) An auditor who ceases to be qualified under section 338 shall resign forthwith after the auditor, where the auditor is a natural person, or any member of the firm of accountants, where the auditor is a firm of accountants, becomes aware that the auditor or the firm has ceased to be so qualified. 
  
  ### Disqualification order
  
  (2) Any interested person may apply to a court for an order declaring that an auditor of a company has ceased to be qualified under section 338 and declaring the office of auditor to be vacant. 
  
  ## Vacancies 
  
  ### Revocation of appointment
  
  340 (1) The shareholders and policyholders of a company may, by ordinary resolution at a special meeting, revoke the appointment of an auditor. 
  
  ### Idem
  
  (2) The Superintendent may at any time revoke the appointment of an auditor made under subsection (3) or 337(1) or section 342 by notice in writing signed by the Superintendent and sent by registered mail to the auditor and to the company addressed to the usual place of business of the auditor and the company. 
  
  ### Filling vacancy
  
  (3) A vacancy created by the revocation of the appointment of an auditor under subsection (1) may be filled at the meeting at which the appointment was revoked and, if not so filled, shall be filled by the directors under section 342. 
  
  ### Ceasing to hold office
  
  341 (1) An auditor of a company ceases to hold office when 
  (a) the auditor resigns; 
  (b) the auditor, where the auditor is a natural person, dies; or 
  (c) the appointment of the auditor is revoked by the shareholders and policyholders or the Superintendent. 
  
  ### Effective date of resignation
  
  (2) The resignation of an auditor becomes effective at the time a written resignation is sent to the company or at the time specified in the resignation, whichever is later. 
  
  ### Filling vacancy
  
  342 (1) Subject to subsection 340(3), where a vacancy occurs in the office of auditor of a company, the directors shall forthwith fill the vacancy, and the auditor so appointed holds office for the unexpired term of office of the predecessor of that auditor. 
  
  ### Where Superintendent may fill vacancy
  
  (2) Where the directors fail to fill a vacancy in accordance with subsection (1), the Superintendent may fill the vacancy and the auditor so appointed holds office for the unexpired term of office of the predecessor of that auditor. 
  
  ### Designation of member of firm
  
  (3) Where the Superintendent has, pursuant to subsection (2), appointed a firm of accountants to fill a vacancy, the Superintendent shall designate the member of the firm who is to conduct the audit of the company on behalf of the firm. 
  
  ### Right to attend meetings
  
  343 (1) The auditor of a company is entitled to receive notice of every meeting of shareholders or policyholders and, at the expense of the company, to attend and be heard at those meetings on matters relating to the duties of the auditor. 
  
  ### Duty to attend meeting
  
  (2) If a director, a shareholder of a company, whether or not the shareholder is entitled to vote at the meeting, or a policyholder who is entitled to vote at the meeting gives written notice, not less than ten days before a meeting of shareholders or policyholders, to an auditor or former auditor of the company that the director, shareholder or policyholder wishes the auditor’s attendance at the meeting, the auditor or former auditor shall attend the meeting at the expense of the company and answer questions relating to the auditor’s or former auditor’s duties as auditor. 
  
  ### Notice to company
  
  (3) A director, shareholder or policyholder who gives notice under subsection (2) shall send concurrently a copy of the notice to the company and the company shall forthwith send a copy thereof to the Superintendent. 
  
  ### Superintendent may attend
  
  (4) The Superintendent may attend and be heard at any meeting referred to in subsection (2). 
  
  ### Statement of auditor
  
  344 (1) An auditor of a company who 
  (a) resigns, 
  (b) receives a notice or otherwise learns of a meeting of shareholders and policyholders called for the purpose of revoking the appointment of the auditor, or 
  (c) receives a notice or otherwise learns of a meeting of directors or shareholders and policyholders at which another person is to be appointed in the auditor’s stead, whether because of the auditor’s resignation or revocation of appointment or because the auditor’s term of office has expired or is about to expire, shall submit to the company and the Superintendent a written statement giving the reasons for the resignation or the reasons why the auditor opposes any proposed action. 
  
  ### Other statements
  
  (1.1) In the case of a proposed replacement of an auditor whether because of removal or the expiry of their term, the company shall make a statement of the reasons for the proposed replacement and the proposed replacement auditor may make a statement in which they comment on those reasons. 
  
  ### Statements to be sent
  
  (2) The company shall send a copy of the statements referred to in subsections (1) and (1.1) without delay to every shareholder entitled to vote at the annual meeting of shareholders and policyholders, to every policyholder entitled under paragraph 143(1)(b) to receive notice of an annual meeting of shareholders and policyholders and to the Superintendent. 
  
  ### Duty of replacement auditor
  
  345 (1) Where an auditor of a company has resigned or the appointment of an auditor has been revoked, no person or firm shall accept an appointment or consent to be appointed as auditor of the company until the person or firm has requested and received from the other auditor a written statement of the circumstances and reasons why the other auditor resigned or why, in the other auditor’s opinion, the other auditor’s appointment was revoked. 
  
  ### Exception
  
  (2) Notwithstanding subsection (1), a person or firm may accept an appointment or consent to be appointed as auditor of a company if, within fifteen days after a request under that subsection is made, no reply from the other auditor is received. 
  
  ### Effect of non-compliance
  
  (3) Unless subsection (2) applies, an appointment as auditor of a company is void if subsection (1) has not been complied with. 
  
  ## Examinations and Reports 
  
  ### Auditor’s examination
  
  346 (1) The auditor of a company shall make such examination as the auditor considers necessary to enable the auditor to report on the annual statement and on other financial statements required by this Act to be placed before the shareholders and policyholders, except such annual statements or parts thereof as relate to the period referred to in subparagraph 331(1)(a)(ii). 
  
  ### Auditing standards
  
  (2) The auditor’s examination referred to in subsection (1) shall, except as otherwise specified by the Superintendent, be conducted in accordance with generally accepted auditing standards, the primary source of which is the Handbook of the Chartered Professional Accountants of Canada. 
  
  ### Reliance on actuary
  
  (3) An auditor of a company may, in conducting the examination referred to in subsection (1), use the valuation by the actuary of the company, or by any other actuary, of 
  (a) the actuarial and other policy liabilities of the company as at the end of a financial year; and 
  (b) the increase in the actuarial liabilities of the company for a financial year. 
  
  ### Actuarial practices
  
  (4) A valuation by an actuary other than the actuary of the company may be used only if it was done in accordance with generally accepted actuarial practice and with any changes that may have been determined by the Superintendent and by following any additional directions that may have been made by the Superintendent. 
  
  ### Right to information
  
  347 (1) On the request of the auditor of a company, the present or former directors, officers, employees or representatives of the company shall, to the extent that they are reasonably able to do so, 
  (a) permit access to such records, assets and security held by the company or any entity in which the company has a substantial investment, and 
  (b) provide such information and explanations as are, in the opinion of the auditor, necessary to enable the auditor to perform the duties of auditor of the company. 
  
  ### Directors to provide information
  
  (2) On the request of the auditor of a company, the directors of the company shall, to the extent that they are reasonably able to do so, 
  (a) obtain from the present or former directors, officers, employees and representatives of any entity in which the company has a substantial investment the information and explanations that such persons are reasonably able to provide and that are, in the opinion of the auditor, necessary to enable the auditor to perform the duties of auditor of the company; and 
  (b) provide the auditor with the information and explanations so obtained. 
  
  ### No civil liability
  
  (3) A person who in good faith makes an oral or written communication under subsection (1) or (2) shall not be liable in any civil action arising from having made the communication. 
  
  ### Auditor’s report and extended examination
  
  348 (1) The Superintendent may, in writing, require that the auditor of a company report to the Superintendent on the extent of the auditor’s procedures in the examination of the annual statement and may, in writing, require that the auditor enlarge or extend the scope of that examination or direct that any other particular procedure be performed in any particular case, and the auditor shall comply with any such requirement of the Superintendent and report to the Superintendent thereon. 
  
  ### Special examination
  
  (2) The Superintendent may, in writing, require that the auditor of a company make a particular examination relating to the adequacy of the procedures adopted by the company for the safety of its creditors, shareholders and policyholders, or any other examination as, in the Superintendent’s opinion, the public interest may require, and report to the Superintendent thereon. 
  
  ### Idem
  
  (3) The Superintendent may direct that a special audit of a company be made if, in the opinion of the Superintendent, it is so required and may appoint for that purpose an accountant or a firm of accountants qualified pursuant to subsection 338(1) to be an auditor of the company. 
  
  ### Expenses payable by company
  
  (4) The expenses entailed by any examination or audit referred to in any of subsections (1) to (3) are payable by the company on being approved in writing by the Superintendent. 
  
  ### Auditor’s report
  
  349 (1) The auditor shall, not less than twenty-one days before the date of the annual meeting of the shareholders and policyholders of the company, make a report in writing to them on the annual statement. 
  
  ### Audit for shareholders and policyholders
  
  (2) In each report required under subsection (1), the auditor shall state whether, in the auditor’s opinion, the annual statement presents fairly, in accordance with the accounting principles referred to in subsection 331(4), the financial position of the company as at the end of the financial year to which it relates and the results of the operations and changes in the financial position of the company for that financial year. 
  
  ### Auditor’s remarks
  
  (3) In each report referred to in subsection (2), the auditor shall include such remarks as the auditor considers necessary when 
  (a) the examination has not been made in accordance with the auditing standards referred to in subsection 346(2); 
  (b) the annual statement has not been prepared on a basis consistent with that of the preceding financial year; or 
  (c) the annual statement does not present fairly, in accordance with the accounting principles referred to in subsection 331(4), the financial position of the company as at the end of the financial year to which it relates or the results of the operations or changes in the financial position of the company for that financial year. 
  
  ### Report on directors’ statement
  
  350 (1) The auditor of a company shall, if required by the shareholders and policyholders, audit and report to them on any financial statement submitted to them by the directors, and the report shall state whether, in the auditor’s opinion, the financial statement presents fairly the information required by the shareholders and policyholders. 
  
  ### Making of report
  
  (2) A report of the auditor made under subsection (1) shall be attached to the financial statement to which it relates and a copy of the statement and report shall be sent by the directors to every shareholder, to every policyholder who is entitled pursuant to paragraph 143(1)(b) to receive notice of an annual meeting of shareholders and policyholders and to the Superintendent. 
  
  ### Report to officers
  
  351 (1) It is the duty of the auditor of a company to report in writing to the chief executive officer and chief financial officer of the company any transactions or conditions that have come to the auditor’s attention affecting the well-being of the company that in the auditor’s opinion are not satisfactory and require rectification and, without restricting the generality of the foregoing, the auditor shall, as occasion requires, make a report to those officers in respect of 
  (a) transactions of the company that have come to the auditor’s attention and that in the auditor’s opinion have not been within the powers of the company, and 
  (b) in the case of a life company, loans owing to the company by any person the aggregate amount of which exceeds 0.5 per cent of the regulatory capital of the company and in respect of which, in the auditor’s opinion, loss to the company is likely to occur, but when a report required under paragraph (b) has been made in respect of loans to any person, it is not necessary to report again in respect of loans to that person unless, in the opinion of the auditor, the amount of the loss likely to occur has increased. 
  
  ### Transmission of report
  
  (2) Where the auditor of a company makes a report under subsection (1), 
  (a) the auditor shall transmit the report, in writing, to the chief executive officer, chief financial officer and the actuary of the company; 
  (b) the report shall be presented to the first meeting of the directors following its receipt; 
  (c) the report shall be incorporated in the minutes of that meeting; and 
  (d) the auditor shall, at the time of transmitting the report to the chief executive officer and chief financial officer, provide the audit committee of the company and the Superintendent with a copy. 
  
  ### Auditor of subsidiaries
  
  352 (1) A company shall take all necessary steps to ensure that its auditor is duly appointed as the auditor of each of its subsidiaries. 
  
  ### Subsidiary outside Canada
  
  (2) Subsection (1) applies in the case of a subsidiary that carries on its operations in a country other than Canada unless the laws of that country do not permit the appointment of the auditor of the company as the auditor of that subsidiary. 
  
  ### Exception
  
  (3) Subsection (1) does not apply in respect of any particular subsidiary where the company, after having consulted its auditor, is of the opinion that the total assets of the subsidiary are not a material part of the total assets of the company. 
  
  ### Auditor’s attendance
  
  353 (1) The auditor of a company is entitled to receive notice of every meeting of the audit committee and the conduct review committee of the company and, at the expense of the company, to attend and be heard at that meeting. 
  
  ### Attendance
  
  (2) If so requested by a member of the audit committee, the auditor shall attend every meeting of the audit committee held during the member’s term of office. 
  
  ### Calling meeting
  
  354 (1) The auditor of a company or a member of the audit committee may call a meeting of the audit committee. 
  
  ### Right to interview
  
  (2) The chief internal auditor of a company or any officer or employee of the company acting in a similar capacity shall, at the request of the auditor of the company and on receipt of reasonable notice, meet with the auditor. 
  
  ### Notice of errors
  
  355 (1) A director or an officer of a company shall forthwith notify the audit committee and the auditor of the company of any error or misstatement of which the director or officer becomes aware in an annual statement or other financial statement on which the auditor or any former auditor has reported. 
  
  ### Error noted by auditor
  
  (2) If the auditor or a former auditor of a company is notified or becomes aware of an error or misstatement in an annual statement or other financial statement on which the auditor reported and in the auditor’s opinion the error or misstatement is material, the auditor or former auditor shall inform each director of the company accordingly. 
  
  ### Duty of directors
  
  (3) Where under subsection (2) the auditor or a former auditor of a company informs the directors of an error or misstatement in an annual statement or other financial statement, the directors shall 
  (a) prepare and issue a revised annual statement or financial statement; or 
  (b) otherwise inform the shareholders and policyholders referred to in subsection 334(1) and the Superintendent of the error or misstatement. 
  
  ## Qualified Privilege 
  
  ### Qualified privilege for statements
  
  356 Any oral or written statement or report made under this Act by the auditor or a former auditor of a company has qualified privilege. 
  
  # DIVISION XIV 
  
  ## Actuaries 
  
  ## Appointment 
  
  ### Notice of appointment
  
  357 A company shall, forthwith after the appointment of the actuary of the company, notify the Superintendent in writing of the appointment. 
  358 and 359  [Repealed, 1997, c. 15, s. 236]  
  
  ### Officer precluded
  
  359.1 (1) The chief executive officer or chief operating officer or a person performing like functions may not be appointed or hold the position of actuary of a company unless authorized in writing by the Superintendent. 
  
  ### Duration of authorization
  
  (2) An authorization under subsection (1) ceases to be in effect on the day specified therein but not later than the day that is six months after it is issued, and a person appointed or holding the position of actuary pursuant to the authorization shall not hold that position after that day. 
  
  ### Chief financial officer
  
  359.2 (1) The chief financial officer or a person performing like functions may not be appointed as or hold the position of actuary of a company unless 
  (a) the audit committee of the company has provided the Superintendent with a written statement indicating that it is satisfied that the duties of both positions in the company will be adequately performed and that the actuarial duties will be performed in an independent manner; and 
  (b) the appointment or holding of the position is authorized by the Superintendent. 
  
  ### Authorization
  
  (2) An authorization under paragraph (1)(b) may contain limitations and conditions, including a limitation on the time during which the person referred to in the authorization may hold the position of actuary of the company. 
  
  ### Termination of holding of position
  
  (3) A person holding the position of actuary pursuant to an authorization under paragraph (1)(b) shall not hold that position after the time limit referred to in subsection (2). 
  
  ## Vacancies 
  
  ### Revocation of appointment
  
  360 (1) The directors of a company may revoke the appointment of the actuary of the company. 
  
  ### Notice of revocation
  
  (2) A company shall, forthwith after the revocation of the appointment of the actuary of the company, notify the Superintendent in writing of the revocation. 
  
  ### Ceasing to hold office
  
  361 (1) A person ceases to hold office as the actuary of a company when 
  (a) the person resigns as actuary of the company; 
  (b) the person ceases to be an actuary; 
  (c) the person dies; or 
  (d) the appointment of the person as actuary of the company is revoked by the directors of the company. 
  
  ### Effective date of resignation
  
  (2) The resignation of an actuary becomes effective at the time a written resignation is sent to the company or at the time specified in the resignation, whichever is later. 
  
  ### Filling vacancy
  
  362 Where a vacancy occurs in the office of actuary of a company, the directors shall forthwith notify the Superintendent of and fill the vacancy. 
  
  ### Statement of actuary
  
  363 An actuary of a company who resigns or whose appointment is revoked shall submit to the directors of the company and the Superintendent a written statement of the circumstances and reasons why the actuary resigned or why, in the actuary’s opinion, the actuary’s appointment was revoked. 
  
  ### Duty of replacement actuary
  
  364 (1) Where an actuary of a company resigns or the appointment of an actuary of a company is revoked, no person shall accept an appointment or consent to be appointed as actuary of the company before requesting and receiving from the other actuary the written statement referred to in section 363. 
  
  ### Exception
  
  (2) A person may accept an appointment or consent to be appointed as actuary of a company if no reply is received from the other actuary within fifteen days after a request under subsection (1) is made. 
  
  ### Effect of non-compliance
  
  (3) Unless subsection (2) applies, an appointment as actuary of a company is void if subsection (1) is not complied with. 
  
  ## Valuations and Reports 
  
  ### Actuary’s valuation
  
  365 (1) The actuary of a company shall value 
  (a) the actuarial and other policy liabilities of the company as at the end of a financial year; and 
  (b) any other matter specified in any direction that may be made by the Superintendent. 
  
  ### Actuarial practices
  
  (2) The actuary’s valuation shall be in accordance with generally accepted actuarial practice with such changes as may be determined by the Superintendent and any additional directions that may be made by the Superintendent. 
  
  ### Superintendent may appoint actuary
  
  365.1 (1) The Superintendent may appoint an actuary to value the matters referred to in paragraph 365(1)(a) or (b) in relation to a company if the Superintendent is of the opinion that the appointment is necessary. That actuary may not be an actuary of the company. 
  
  ### Expenses payable by company
  
  (2) The expenses incurred in carrying out a valuation under subsection (1) are payable by the company on being approved in writing by the Superintendent. 
  
  ### Right to information
  
  366 (1) On the request of the actuary of a company, the present or former directors, officers, employees or representatives of the company shall, to the extent that they are reasonably able to do so, 
  (a) permit access to such records held by the company, and 
  (b) provide such information and explanations as are, in the opinion of the actuary, necessary to enable the actuary to perform the duties of actuary of the company. 
  
  ### No civil liability
  
  (2) A person who in good faith makes an oral or written communication under subsection (1) shall not be liable in any civil action arising from having made the communication. 
  
  ### Actuary’s report
  
  367 (1) The actuary of a company shall, not less than twenty-one days before the date of the annual meeting of the shareholders and policyholders of the company, make a report in the prescribed form to them on the valuation made under section 365 and on any other matter that is prescribed. 
  
  ### Idem
  
  (2) In each report required under subsection (1), the actuary shall state whether, in the actuary’s opinion, the annual statement presents fairly the results of the valuation made under section 365. 
  
  ### Report to directors
  
  368 The actuary of a company shall meet either with the directors of the company or, where the directors so choose, with the audit committee of the company at least once during each financial year in order to report, in accordance with generally accepted actuarial practice and any direction that may be made by the Superintendent, on the financial position of the company and, where so specified in such a direction, the expected future financial condition of the company. 
  
  ### Report to officers
  
  369 (1) The actuary of a company shall report in writing to the chief executive officer and chief financial officer of the company any matters that have come to the actuary’s attention in the course of carrying out the actuary’s duties and that in the actuary’s opinion have material adverse effects on the financial condition of the company and require rectification. 
  
  ### Transmission of report
  
  (2) An actuary of a company who makes a report under subsection (1) shall forthwith provide a copy of it to the directors of the company. 
  
  ### Failure to take action
  
  (3) Where, in the opinion of the actuary of the company, suitable action is not being taken to rectify the matters referred to in subsection (1), the actuary shall forthwith send a copy of the report to the Superintendent and advise the directors that the actuary has done so. 
  
  ## Qualified Privilege 
  
  ### Qualified privilege for statements
  
  370 (1) Any oral or written statement or report made under this Act by the actuary or former actuary of a company has qualified privilege. 
  
  ### No civil liability
  
  (2) The actuary or former actuary of a company who in good faith makes an oral or written statement or report under section 363 or 369 shall not be liable in any civil action seeking indemnification for damages attributable to the actuary or former actuary having made the statement or report. 
  
  # DIVISION XV 
  
  ## Remedial Actions 
  
  ### Derivative action
  
  371 (1) Subject to subsection (2), a complainant or the Superintendent may apply to a court for leave to bring an action under this Act in the name and on behalf of a company or any of its subsidiaries, or to intervene in an action under this Act to which the company or a subsidiary of the company is a party, for the purpose of prosecuting, defending or discontinuing the action on behalf of the company or the subsidiary. 
  
  ### Conditions precedent
  
  (2) No action may be brought and no intervention in an action may be made under subsection (1) by a complainant unless the court is satisfied that 
  (a) the complainant has, not less than 14 days before bringing the application or as otherwise ordered by the court, given notice to the directors of the company or the company’s subsidiary of the complainant’s intention to apply to the court under subsection (1) if the directors of the company or the company’s subsidiary do not bring, diligently prosecute or defend or discontinue the action; 
  (b) the complainant is acting in good faith; and 
  (c) it appears to be in the interests of the company or the subsidiary that the action be brought, prosecuted, defended or discontinued. 
  
  ### Notice to Superintendent
  
  (3) A complainant under subsection (1) 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. 
  
  ### Powers of court
  
  372 (1) In connection with an action brought or intervened in under subsection 371(1), the court may at any time make any order it thinks fit including, without limiting the generality of the foregoing, 
  (a) an order authorizing the Superintendent, the complainant or any other person to control the conduct of the action; 
  (b) an order giving directions for the conduct of the action; 
  (c) an order directing that any amount adjudged payable by a defendant in the action be paid, in whole or in part, directly to former and present security holders or policyholders of the company who are entitled to participate in its profits or of the subsidiary instead of to the company or to the subsidiary; and 
  (d) an order requiring the company or the subsidiary to pay reasonable legal fees incurred by the Superintendent or the complainant in connection with the action. 
  
  ### Jurisdiction
  
  (2) Notwithstanding subsection (1), the court may not make any order in relation to any matter that would, under this Act, require the approval of the Minister or the Superintendent. 
  
  ### Status of shareholder approval
  
  373 (1) An application made or an action brought or intervened in under this Division need not be stayed or dismissed by reason only that it is shown that an alleged breach of a right or duty owed to the company or its subsidiary has been or might be approved by the shareholders or policyholders of the company or subsidiary or both, but evidence of approval by the shareholders or policyholders may be taken into account by the court in making an order under section 372. 
  
  ### Court approval to discontinue
  
  (2) An application made or an action brought or intervened in under this Division shall not be stayed, discontinued, settled or dismissed for want of prosecution without the approval of the court given on such terms as the court thinks fit and, if the court determines that the interests of any complainant might be substantially affected by any stay, discontinuance, settlement or dismissal, the court may order any party to the application or action to give notice to the complainant. 
  
  ### No security for costs
  
  374 (1) A complainant is not required to give security for costs in any application made or any action brought or intervened in under subsection 371(1) or section 375. 
  
  ### Interim costs
  
  (2) In an application made or an action brought or intervened in under this Division, the court may at any time order the company or its subsidiary to pay to the complainant interim costs, including legal fees and disbursements, but the complainant may be held accountable by the court for those interim costs on final disposition of the application or action. 
  
  ### Application to rectify records
  
  375 (1) If the name of a person is alleged to be or to have been wrongly entered or retained in, or wrongly deleted or omitted from, the securities register or any other record of a company, the company, a security holder of the company or any aggrieved person may apply to a court for an order that the securities register or record be rectified. 
  
  ### Notice to Superintendent
  
  (2) An applicant under this section 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. 
  
  ### Powers of court
  
  (3) In connection with an application under this section, the court may make any order it thinks fit including, without limiting the generality of the foregoing, 
  (a) an order requiring the securities register or other record of the company to be rectified; 
  (b) an order restraining a company from calling or holding a meeting of shareholders or policyholders or paying a dividend to shareholders before the rectification; 
  (c) an order determining the right of a party to the proceedings to have the party’s name entered or retained in, or deleted or omitted from, the securities register or records of the company, whether the issue arises between two or more security holders or alleged security holders, or between the company and any security holder or alleged security holder; and 
  (d) an order compensating a party who has incurred a loss. 
  
  # DIVISION XVI 
  
  ## Liquidation and Dissolution 
  
  ## Interpretation 
  
  ### Definition of 
  *court* 
  
  376 In this Division, 
  *court* means a court having jurisdiction in the place where the company has its head office.  
  
  ## Application 
  
  ### Application of Division
  
  377 (1) This Division does not apply to a company that is insolvent within the meaning of the Winding-up and Restructuring Act.  
  
  ### Staying proceedings on insolvency
  
  (2) Any proceedings taken under this Division to dissolve or to liquidate and dissolve a company shall be stayed if the company is at any time found to be insolvent within the meaning of the Winding-up and Restructuring Act.  
  
  ### Mutual companies, etc.
  
  378 This Division does not apply to companies that 
  (a) are mutual companies; or 
  (b) have participating policyholders or policyholders who are entitled to vote at annual meetings of shareholders and policyholders. 
  
  ### Returns to Superintendent
  
  379 A liquidator appointed under this Part to wind up the business of a company shall provide the Superintendent with such information relating to the business and affairs of the company in such form as the Superintendent requires. 
  
  ## Simple Liquidation 
  
  ### No property and no liabilities
  
  380 (1) A company that has no property and no liabilities may, if authorized by a special resolution of the shareholders or, if there are no shareholders, by a resolution of all the directors, apply to the Minister for letters patent dissolving the company. 
  
  ### 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 company. 
  
  ### Effect of letters patent
  
  (3) A company in respect of which letters patent are issued under subsection (2) ceases to exist on the day stated in the letters patent. 
  
  ### Proposing liquidation
  
  381 (1) The voluntary liquidation and dissolution of a company, other than a company referred to in subsection 380(1), 
  (a) may be proposed by its directors; or 
  (b) may be initiated by way of a proposal made by a shareholder who is entitled to vote at an annual meeting of shareholders in accordance with sections 147 and 148. 
  
  ### Terms must be set out
  
  (2) A notice of any meeting of shareholders at which the voluntary liquidation and dissolution of a company is to be proposed shall set out the terms of the proposal. 
  
  ### Shareholders’ resolution
  
  382 Where the voluntary liquidation and dissolution of a company is proposed, the company may apply to the Minister for letters patent dissolving the company if authorized by a special resolution of the shareholders or, where the company has issued more than one class of shares, by special resolution of each class of shareholders whether or not those shareholders are otherwise entitled to vote. 
  
  ### Approval of Minister required
  
  383 (1) No action directed toward the voluntary liquidation and dissolution of a company shall be taken by a company, other than as provided in sections 381 and 382, until an application made by the company pursuant to section 382 has been approved by the Minister. 
  
  ### Conditional approval
  
  (2) If the Minister is satisfied on the basis of an application made under section 382 that the circumstances warrant the voluntary liquidation and dissolution of a company, the Minister may, by order, approve the application. 
  
  ### Effect of approval
  
  (3) Where the Minister has approved an application made pursuant to section 382 with respect to a company, the company shall not carry on business except to the extent necessary to complete its voluntary liquidation. 
  
  ### Liquidation process
  
  (4) Where the Minister has approved an application made pursuant to section 382 with respect to a company, the company shall 
  (a) cause notice of the approval to be sent to each known claimant, except policyholders, against and creditor of the company; 
  (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 shareholders, discharge or provide for all its obligations and do all other acts required to liquidate its business; and 
  (d)  [Repealed, 1997, c. 15, s. 239]  
  (e) 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 shareholders according to their respective rights. 
  
  ### Dissolution instrument
  
  384 (1) Unless a court has made an order in accordance with subsection 385(1), the Minister may, if satisfied that the company has complied with subsection 383(4) and that all the circumstances so warrant, issue letters patent dissolving the company. 
  
  ### Company dissolved
  
  (2) A company 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 
  
  ### Application for court supervision
  
  385 (1) The Superintendent or any interested person may, at any time during the liquidation of a company, 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 386 to 398 and on such application the court may so order and make any further order it thinks fit. 
  
  ### Idem
  
  (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. 
  
  ### 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. 
  
  ### Court supervision thereafter
  
  386 (1) When a court makes an order under subsection 385(1), the liquidation of the company shall continue under the supervision of the court. 
  
  ### Commencement of liquidation
  
  (2) The supervision of the liquidation of a company by the court pursuant to an order made under subsection 385(1) commences on the day the order is made. 
  
  ### Powers of court
  
  387 In connection with the liquidation and dissolution of a company, the court may, where it is satisfied that the company 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, make any order it thinks fit including, without limiting the generality of the foregoing, 
  (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 company; 
  (f) an order, at any stage of the proceedings, restraining the directors and officers of the company from 
  (i) exercising any of their powers, or 
  (ii) collecting or receiving any debt or other property of the company, and from paying out or transferring any property of the company, except as permitted by the court; 
  (g) an order determining and enforcing the duty or liability of any present or former director, officer, shareholder or policyholder 
  (i) to the company, or 
  (ii) for an obligation of the company; 
  (h) an order approving the payment, satisfaction or compromise of claims against the company 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 company, 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 company; 
  (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 394 to 396, an order approving any proposed, interim or final distribution to shareholders, if any, or incorporators, in money or in property; 
  (m) an order disposing of any property belonging to creditors, shareholders, policyholders, and incorporators who cannot be found; 
  (n) on the application of any director, officer, shareholder, policyholder, incorporator, 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 company all of its remaining property; and 
  (o) after the liquidator has rendered the liquidator’s final account to the court, an order directing the company to apply to the Minister for letters patent dissolving the company. 
  
  ### Cessation of business and powers
  
  388 (1) Where a court makes an order for the liquidation of a company, 
  (a) the company 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 shareholders, if any, are vested in the liquidator and cease to be vested in the directors or shareholders, except as specifically authorized by the court. 
  
  ### Delegation by liquidator
  
  (2) A liquidator may delegate any of the powers vested by paragraph (1)(b) to the directors or shareholders, if any. 
  
  ### Appointment of liquidator
  
  389 When making an order for the liquidation of a company or at any time thereafter, the court may appoint any person, including a director, an officer or a shareholder of the company or any other company, as liquidator of the company. 
  
  ### Vacancy in liquidator’s office
  
  390 Where an order for the liquidation of a company has been made and the office of liquidator is or becomes vacant, the property of the company is under the control of the court until the office of liquidator is filled. 
  
  ### Duties of liquidator
  
  391 (1) A liquidator shall 
  (a) forthwith after appointment give notice thereof to the Superintendent and to each claimant and creditor of the company known to the liquidator; 
  (b) forthwith after appointment publish notice thereof 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 has transacted any business within the preceding twelve months, requiring  
  (i) any person indebted to the company 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 company to deliver it to the liquidator at the time and place specified in the notice, and 
  (iii) any person having a claim against the company, whether liquidated, unliquidated, future or contingent, other than a policyholder having an unliquidated claim, to present particulars thereof 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 company; 
  (d)  [Repealed, 1997, c. 15, s. 240]  
  (e) open and maintain a trust account for the moneys received by the liquidator in the course of the liquidation of the company; 
  (f) keep accounts of the moneys received and paid out by the liquidator in the course of the liquidation of the company; 
  (g) maintain separate lists of each class of creditors, shareholders, policyholders and other persons having claims against the company; 
  (h) if at any time the liquidator determines that the company is unable to pay or adequately provide for the discharge of its obligations, apply to the court for directions; 
  (i) 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 annual statement of the company prepared in accordance with subsection 331(1) or prepared in such manner as the liquidator thinks proper or as the court requires; and 
  (j) after the final accounts are approved by the court, distribute any remaining property of the company among the shareholders, if any, or incorporators, according to their respective rights. 
  
  ### 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 and on behalf of the company; 
  (c) carry on the business of the company as required for an orderly liquidation; 
  (d) sell by public auction or private sale any property of the company; 
  (e) do all acts and execute documents in the name and on behalf of the company; 
  (f) borrow money on the security of the property of the company; 
  (g) settle or compromise any claims by or against the company; and 
  (h) do all other things necessary for the liquidation of the company and distribution of its property. 
  
  ### Due diligence
  
  392 A liquidator is not liable if they exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on 
  (a) financial statements of the company represented to the liquidator by an officer of the company or in a written report of the auditor of the company fairly to reflect the financial condition of the company; or 
  (b) a report of a person whose profession lends credibility to a statement made by them. 
  
  ### Examination of others
  
  393 (1) Where a liquidator has reason to believe that any property of the company is in the possession or under the control of a person or that a person has concealed, withheld or misappropriated any such 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. 
  
  ### Restoration and compensation
  
  (2) Where an examination conducted pursuant to subsection (1) discloses that a person has concealed, withheld or misappropriated any property of the company, the court may order that person to restore the property or pay compensation to the liquidator. 
  
  ### Costs of liquidation
  
  394 A liquidator shall pay the costs of liquidation out of the property of the company and shall pay or make adequate provision for all claims against the company. 
  
  ### Final accounts
  
  395 (1) Within one year after the appointment of a liquidator and after paying or making adequate provision for all claims against the company, 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 company to its shareholders, if any, or to the incorporators, according to their respective rights; or 
  (b) for an extension of time, setting out the reasons therefor. 
  
  ### Shareholder application
  
  (2) If a liquidator fails to make the application required by subsection (1), a shareholder of the company or, if there are no shareholders of the company, 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. 
  
  ### Notification of final accounts
  
  (3) A liquidator shall give notice of the liquidator’s intention to make an application under subsection (1) to the Superintendent, to each inspector appointed under section 387, to each shareholder of the company or, if there are no shareholders, to each incorporator and to any person who provided a security or fidelity bond for the liquidation. 
  
  ### 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 company has transacted any business within the preceding twelve months or as otherwise directed by the court.  
  
  ### Final order
  
  396 (1) If the court approves the final accounts rendered by a liquidator, the court shall make an order 
  (a) directing the company to apply to the Minister for letters patent dissolving the company; 
  (b) directing the custody or disposal of the documents, records and registers of the company; and 
  (c) discharging the liquidator except in respect of the duty of a liquidator under subsection (2). 
  
  ### Delivery of order
  
  (2) The liquidator shall forthwith send a certified copy of the order referred to in subsection (1) to the Superintendent. 
  
  ### Right to distribution of money
  
  397 (1) If in the course of the liquidation of a company the shareholders resolve to, or the liquidator proposes to, 
  (a) exchange all or substantially all of the remaining property of the company for securities of another entity that are to be distributed to the shareholders or to the incorporators, or 
  (b) distribute all or part of the remaining property of the company to the shareholders or to the incorporators in kind, a shareholder or incorporator may apply to the court for an order requiring the distribution of the remaining property of the company to be in money. 
  
  ### Powers of court
  
  (2) On an application under subsection (1), the court may order 
  (a) all of the remaining property of the company to be converted into and distributed in money; or 
  (b) the claim of any shareholder or incorporator applying under this section to be satisfied by a distribution in money. 
  
  ### 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 company attributable to the shareholder 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 company in favour of the shareholder or incorporator for the amount of the share of the property of the company attributable to the shareholder or incorporator. 
  
  ### Dissolution by letters patent
  
  398 (1) On an application made pursuant to an order under paragraph 396(1)(a), the Minister may issue letters patent dissolving the company. 
  
  ### Company dissolved
  
  (2) A company 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 
  
  ### Definition of 
  *shareholder* and 
  *incorporator* 
  
  399 In sections 401 and 402, 
  *shareholder* and 
  *incorporator* include the heirs and personal representatives of a shareholder or incorporator.  
  
  ### Continuation of actions
  
  400 (1) Notwithstanding the dissolution of a company under this Part, 
  (a) a civil, criminal or administrative action or proceeding commenced by or against the company before its dissolution may be continued as if the company had not been dissolved; 
  (b) a civil, criminal or administrative action or proceeding may be brought against the company within two years after its dissolution as if the company had not been dissolved; and 
  (c) any property that would have been available to satisfy any judgment or order if the company had not been dissolved remains available for that purpose. 
  
  ### Service on company
  
  (2) Service of a document on a company after its dissolution may be effected by serving the document on a person shown as a director in the incorporating instrument of the company or, if applicable, in the latest return sent to the Superintendent under section 668. 
  
  ### Limitations on liability
  
  401 (1) Notwithstanding the dissolution of a company, a shareholder or incorporator to whom any of its property has been distributed is liable to any person claiming under subsection 400(1) to the extent of the amount received by that shareholder or incorporator on the distribution. 
  
  ### Limitation
  
  (2) An action to enforce liability under subsection (1) may not be commenced except within two years after the date of the dissolution of the company. 
  
  ### 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 shareholders or incorporators as a class, subject to such conditions as the court thinks fit. 
  
  ### 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 shareholder or incorporator; 
  (b) determine, subject to subsection (1), the amount that each person who was a shareholder or incorporator must contribute towards satisfaction of the plaintiff’s claim; and 
  (c) direct payment of the amounts so determined. 
  
  ### Where creditor cannot be found
  
  402 Where a creditor, shareholder or incorporator to whom property is to be distributed on the dissolution of a company cannot be found, the portion of the property to be distributed to that creditor, shareholder or incorporator shall be converted into money and paid in accordance with section 404. 
  
  ### Vesting in Crown
  
  403 Subject to subsection 400(1) and sections 404 and 405, property of a company that has not been disposed of at the date of the dissolution of the company vests in Her Majesty in right of Canada. 
  
  ### Unclaimed money on winding-up
  
  404 (1) Where the business of a company is being wound up under this Division, the liquidator or the company 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 company to a creditor, shareholder or incorporator of the company to whom payment thereof has not, for any reason, been made. 
  
  ### Records
  
  (2) Where a liquidator or a company makes a payment to the Minister under subsection (1) with respect to a creditor, shareholder or incorporator, the liquidator or company shall concurrently forward to the Minister all documents, records and registers in the possession of the liquidator or company that relate to the entitlement of the creditor, shareholder or incorporator. 
  
  ### Payment to Receiver General
  
  (3) The Minister shall pay to the Receiver General all amounts paid to the Minister under subsection (1). 
  
  ### Liquidator and company discharged
  
  (4) Payment by a liquidator or a company to the Minister under subsection (1) discharges the liquidator and the company 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. 
  
  ### Recovery
  
  405 If at any time a person establishes an entitlement to any moneys paid to the Receiver General under this Division, the Receiver General shall pay an equivalent amount to that person out of the Consolidated Revenue Fund. 
  
  ### Custody of records after dissolution
  
  406 A person who has been granted custody of the documents, records and registers of a dissolved company shall keep them available for production for six years following the date of the dissolution of the company or until the expiration of such shorter period as may be ordered by the court when it orders the dissolution. 
  
  # PART VII 
  
  ## Ownership 
  
  # DIVISION I 
  
  ## Interpretation 
  
  ### Definitions
  
  406.1 The following definitions apply in this Part.  
  *agent* means  
  (a) in relation to Her Majesty in right of Canada or of a province, any agent of Her Majesty in either of those rights, and includes a municipal or public body empowered to perform a function of government in Canada or any entity empowered to perform a function or duty on behalf of Her Majesty in either of those rights but does not include 
  (i) an official or entity performing a function or duty in connection with the administration or management of the estate or property of a natural person, 
  (ii) an official or entity performing a function or duty in connection with the administration, management or investment of a fund established to provide compensation, hospitalization, medical care, annuities, pensions or similar benefits to natural persons, or moneys derived from such a fund, or 
  (iii) the trustee of any trust for the administration of a fund to which Her Majesty in either of those rights contributes and of which an official or entity that is an agent of Her Majesty in either of those rights is a trustee; and 
  (b) in relation to the government of a foreign country or any political subdivision thereof, a person empowered to perform a function or duty on behalf of the government of the foreign country or political subdivision, other than a function or duty in connection with the administration or management of the estate or property of a natural person. ( mandataire)   
  *eligible agent* means an agent or agency of Her Majesty in right of Canada or of a province or an agent or agency of a government of a foreign country or any political subdivision of a foreign country  
  (a) whose mandate is publicly available; 
  (b) that controls the assets of an investment fund in a manner intended to maximize long-term risk-adjusted returns and that fund is 
  (i) one to which, as the case may be, Her Majesty in right of Canada or of a province or the government of a foreign country or political subdivision contributes, or 
  (ii) established to provide compensation, hospitalization, medical care, annuities, pensions or similar benefits to natural persons; and 
  (c) whose decisions with respect to the assets of the fund referred to in paragraph (b) are not influenced in any significant way by, as the case may be, Her Majesty in right of Canada or of the province or the government of the foreign country or the political subdivision. ( mandataire admissible)  
  
  ### Associates
  
  406.2 (1) For the purpose of determining ownership of a company by an eligible agent, where two persons, at least one of whom is an eligible agent, are associated with each other, those persons are deemed to be a single eligible agent who beneficially owns the aggregate number of shares of the company beneficially owned by them. 
  
  ### Associates
  
  (2) For the purposes of subsection (1), a person is associated with another person if 
  (a) each person is an agent or agency of Her Majesty in right of Canada; 
  (b) each person is an agent or agency of Her Majesty in right of the same province; 
  (c) each person is an agent or agency of a government of the same foreign country or a political subdivision of the same foreign country; 
  (d) one person is Her Majesty in right of Canada and the other person is an agent or agency of Her Majesty in that right; 
  (e) one person is Her Majesty in right of a province and the other person is an agent or agency of Her Majesty in right of that province; or 
  (f) one person is a government of a foreign country or any political subdivision of a foreign country and the other person is its agent or agency. 
  
  # DIVISION II 
  
  ## Constraints on Ownership 
  
  ### Constraining acquisition
  
  407 (1) No person, or entity controlled by a person, shall, without the approval of the Minister, purchase or otherwise acquire any share of a company or purchase or otherwise acquire control of any entity that holds any share of a company if 
  (a) the acquisition would cause the person to have a significant interest in any class of shares of the company; or 
  (b) where the person has a significant interest in a class of shares of the company, the acquisition would increase the significant interest of the person in that class of shares. 
  
  ### Amalgamation, etc., constitutes acquisition
  
  (2) If the entity that would result from an amalgamation, a merger or a reorganization would have a significant interest in a class of shares of a company, the entity is deemed to be acquiring a significant interest in that class of shares of the company through an acquisition for which the approval of the Minister is required under subsection (1). 
  
  ### Exemption
  
  (3) On application by a company, other than a converted company in respect of which subsection (4) or (11) applies or a company to which subsection (5) or (12) applies, the Superintendent may exempt from the application of subsection (1) and section 408 any class of non-voting shares of the company if 
  (a) the aggregate book value of the shares of the class is not more than 30 per cent of the aggregate book value of all the outstanding shares of the company; or 
  (b) in the case of a mutual company, the aggregate book value of the shares of the class is not more than 30 per cent of the aggregate book value of all the outstanding shares of the company and the surplus of the company. 
  
  ### Limitations on share holdings
  
  (4) Despite subsection (1), no person may be a major shareholder of a converted company having an aggregate of surplus and minority interests of five billion dollars or more according to its last annual statement dated before the effective date of the letters patent of conversion of the converted company. 
  
  ### Exception
  
  (5) Subsection (4) does not apply to a widely held company that controls, within the meaning of paragraph 3(1)(d), a converted company if it 
  (a) controlled the converted company on the day on which the letters patent of conversion that gave effect to the conversion of the converted company became effective and it has continued to control, within the meaning of that paragraph, the converted company since that day; or 
  (b) acquired control, within the meaning of that paragraph, of the converted company under section 28.1 or 28.2 and it has continued to control, within the meaning of that paragraph, the converted company since the day it acquired control. 
  
  ### Exception — widely held insurance holding company
  
  (6) Subsection (4) does not apply to a widely held insurance holding company that controls, within the meaning of paragraph 3(1)(d), the converted company if 
  (a) the insurance holding company acquired control, within the meaning of that paragraph, of the converted company or of the company to which subsection (5) applies, as the case may be, under section 714 or 715 and the insurance holding company has continued to control, within the meaning of that paragraph, the converted company since the day the insurance holding company acquired control; or 
  (b) the converted company was a subsidiary of the company to which subsection (5) applies that was continued under section 721 as the insurance holding company and the insurance holding company has continued to control, within the meaning of paragraph 3(1)(d), the converted company since the day it came into existence as an insurance holding company. 
  
  ### Exception — other entities
  
  (7) Subsection (4) does not apply to an entity that controls, within the meaning of paragraph 3(1)(d), the converted company if the entity is controlled, within the meaning of paragraph 3(1)(d), by a company to which subsection (5) applies, or by an insurance holding company to which subsection (6) applies, that is permitted under that subsection to be a major shareholder of the converted company. 
  
  ### Exception
  
  (8) The Minister may, at any time after the day that is two years after December 31, 1999, by order, determine that subsection (4) no longer applies in respect of any particular company. 
  
  ### Limitation on share holdings
  
  (9) Despite subsection (1), no person may be a major shareholder of a company to which subsection (5) applies. 
  
  ### Exception
  
  (10) Subsection (9) does not apply to a widely held insurance holding company that controls, within the meaning of paragraph 3(1)(d), a company to which subsection (5) applies if the insurance holding company acquired control, within the meaning of that paragraph, of the company under section 714 or 715 and the insurance holding company has continued to control, within the meaning of that paragraph, the company since the day the insurance holding company acquired control. 
  
  ### Limitations on share holdings
  
  (11) Despite subsection (1), until a day that is two years after December 31, 1999, no person may have a significant interest in any class of shares of a converted company having an aggregate of surplus and minority interests in an amount that is one billion dollars or more but less than five billion dollars, according to its last annual statement dated before the effective date of the letters patent of conversion of the converted company. 
  
  ### Exception
  
  (12) Subsection (11) does not apply to a company if no person has a significant interest in any class of shares of the company and the company controls, within the meaning of paragraph 3(1)(d), the converted company if it 
  (a) controlled the converted company on the day on which the letters patent of conversion that gave effect to the conversion of the converted company became effective and it has continued to control, within the meaning of that paragraph, the converted company since that day; or 
  (b) acquired control, within the meaning of that paragraph, of the converted company under section 28.1 or 28.2 and it has continued to control, within the meaning of that paragraph, the converted company since the day it acquired control. 
  
  ### Exception — insurance holding company
  
  (13) Subsection (11) does not apply to an insurance holding company if no person has a significant interest in any class of shares of the insurance holding company and the insurance holding company controls, within the meaning of paragraph 3(1)(d), the converted company if 
  (a) the insurance holding company acquired control, within the meaning of that paragraph, of the converted company or of the company to which subsection (12) applies, as the case may be, under section 714 or 715 and the insurance holding company has continued to control, within the meaning of that paragraph, the converted company since the day the insurance holding company acquired control; or 
  (b) the converted company was a subsidiary of the company to which subsection (12) applies that was continued under section 721 as the insurance holding company and the insurance holding company has continued to control, within the meaning of that paragraph, the converted company since the day it came into existence as an insurance holding company. 
  
  ### Exception — other entities
  
  (14) Subsection (11) does not apply to an entity that controls, within the meaning of paragraph 3(1)(d), the converted company if the entity is controlled, within the meaning of that paragraph, by a company to which subsection (12) applies, or by an insurance holding company to which subsection (13) applies, that is permitted under that subsection to have a significant interest in any class of shares of the converted company. 
  
  ### Limitation on share holdings
  
  (15) Despite subsection (1), no person may have a significant interest in any class of shares of a company to which subsection (12) applies. 
  
  ### Exception
  
  (16) Subsection (15) does not apply to an insurance holding company that controls, within the meaning of paragraph 3(1)(d), a company to which subsection (12) applies if 
  (a) no person has a significant interest in any class of shares of the insurance holding company; and 
  (b) the insurance holding company acquired control, within the meaning of that paragraph, under section 714 or 715 of the company to which subsection (12) applies and the insurance holding company has continued to control, within the meaning of that paragraph, the company since the day the insurance holding company acquired control. 
  
  ### Deeming
  
  (17) For the purposes of this Act, if the Minister makes an order under subsection (8) to the effect that subsection (4) no longer applies in respect of a particular company, 
  (a) the particular company is deemed, as of the effective date of the order, to no longer be a company in respect of which subsection (4) applies; 
  (b) a widely held company that controls, within the meaning of paragraph 3(1)(d), the particular company in the circumstances referred to in subsection (5) is deemed, as of the effective date of the order, to no longer be a company to which subsection (5) applies; and 
  (c) a widely held insurance holding company that controls, within the meaning of paragraph 3(1)(d), the particular company in the circumstances referred to in subsection (6) is deemed, as of the effective date of the order, to no longer be an insurance holding company to which subsection (6) applies. 
  
  ### Deeming
  
  (18) For the purposes of this Act, after the day that is two years after December 31, 1999, 
  (a) a converted company having an aggregate of surplus and minority interests in an amount that is one billion dollars or more but less than five billion dollars, according to its last annual statement dated before the effective date of the letters patent of conversion of the converted company is deemed to no longer be a company in respect of which subsection (11) applies; 
  (b) a company that controls, within the meaning of paragraph 3(1)(d), a converted company referred to in paragraph (a) in the circumstances referred to in subsection (12) is deemed to no longer be a company to which subsection (12) applies; and 
  (c) an insurance holding company that controls, within the meaning of paragraph 3(1)(d), a converted company referred to in paragraph (a) in the circumstances referred to in subsection (13) is deemed to no longer be an insurance holding company to which subsection (13) applies. 
  
  ### Life companies — major shareholder
  
  407.01 (1) If a converted company in respect of which subsection 407(4) applies or a company to which subsection 407(5) applies controls a life company and a person becomes a major shareholder of the life company or of any entity that also controls the life company, the converted company or company, as the case may be, must do all things necessary to ensure that, on the day that is one year after the person became a major shareholder of the life company or entity that controls the life company, 
  (a) the converted company or the company no longer controls the life company; or 
  (b) the life company or the entity that controls the life company does not have any major shareholder other than the converted company or the company, as the case may be, or any entity that the converted company or the company controls. 
  
  ### Exemption
  
  (2) Subsection (1) does not apply in respect of a life company with equity of less than two hundred and fifty million dollars, or any other amount that may be prescribed. 
  
  ### Extension
  
  (3) If general market conditions so warrant and the Minister is satisfied that the converted company or the company has used its best efforts to be in compliance with subsection (1) on the required day, the Minister may specify a later day as the day from and after which it must comply with that subsection. 
  
  ### Life companies — major shareholder
  
  407.011 (1) Despite subsection 407.01(1), if a converted company in respect of which subsection 407(4) applies or a company to which subsection 407(5) applies controls a life company in respect of which subsection 407.01(1) does not apply by reason of subsection 407.01(2) and the equity of the life company reaches two hundred and fifty million dollars or more or any other amount that is prescribed and on the day the equity of the life company reaches two hundred and fifty million dollars or more, or the prescribed amount, as the case may be, a person is a major shareholder of the life company or of any entity that also controls the life company, the converted company or company must do all things necessary to ensure that, on the day that is three years after that day, 
  (a) the converted company or company no longer controls the life company; or 
  (b) the life company or the entity that controls the life company does not have any major shareholder other than the converted company or the company or any entity that the converted company or company controls. 
  
  ### Extension
  
  (2) If general market conditions so warrant and the Minister is satisfied that the converted company or the company has used its best efforts to be in compliance with subsection (1) on the required day, the Minister may specify a later day as the day from and after which it must comply with that subsection. 
  
  ### Life companies — significant interest
  
  407.02 (1) If a converted company in respect of which subsection 407(11) applies or a company to which subsection 407(12) applies controls a life company and a person acquires a significant interest in any class of shares of the life company or of any entity that also controls the life company, the converted company or company, as the case may be, must do all things necessary to ensure that, on the day that is one year after the person acquired the significant interest in the class of shares of the life company or entity that controls the life company, 
  (a) the converted company or the company no longer controls the life company; or 
  (b) no person has a significant interest in any class of shares of the life company or the entity that controls the life company, other than the converted company or the company, as the case may be, or any entity that the converted company or the company controls. 
  
  ### Exemption
  
  (2) Subsection (1) does not apply in respect of a life company with equity of less than two hundred and fifty million dollars, or any other amount that may be prescribed. 
  
  ### Extension
  
  (3) If general market conditions so warrant and the Minister is satisfied that the converted company or the company has used its best efforts to be in compliance with subsection (1) on the required day, the Minister may specify a later day as the day from and after which it must comply with that subsection. 
  
  ### Prohibition against significant interest
  
  407.03 (1) No person who has a significant interest in any class of shares of a widely held converted company in respect of which subsection 407(4) applies or of a widely held company to which subsection 407(5) applies may have a significant interest in any class of shares of a subsidiary of the converted company or company, as the case may be, that is a life company or an insurance holding company. 
  
  ### Prohibition against significant interest
  
  (2) No person who has a significant interest in any class of shares of a life company may have a significant interest in any class of shares of 
  (a) a widely held converted company in respect of which subsection 407(4) applies that controls the life company; 
  (b) a widely held company to which subsection 407(5) applies that controls the life company; or 
  (c) a widely held insurance holding company to which subsection 407(6) applies that controls the life company. 
  
  ### No acquisition of control without approval
  
  407.1 (1) No person shall acquire control, within the meaning of paragraph 3(1)(d), of a company without the approval of the Minister. 
  
  ### Amalgamation, etc., constitutes acquisition
  
  (2) If the entity that would result from an amalgamation, a merger or a reorganization would control, within the meaning of paragraph 3(1)(d), a company, the entity is deemed to be acquiring control, within the meaning of that paragraph, of the company through an acquisition for which the approval of the Minister is required under subsection (1). 
  
  ### Prohibition against control
  
  407.2 (1) Despite section 407.1, no person shall control, within the meaning of paragraph 3(1)(d), a converted company in respect of which subsection 407(4) or (11) applies or a company to which subsection 407(5) or (12) applies. 
  
  ### Exception
  
  (2) Subsection (1) does not apply to a company to which subsection 407(5) or (12) applies or to an insurance holding company to which subsection 407(6) or (13) applies that is permitted to control, within the meaning of paragraph 3(1)(d), under those subsections, the converted company. 
  
  ### Exception
  
  (2.1) Subsection (1) does not apply to an insurance holding company to which subsection 407(10) or (16) applies that is permitted to control, within the meaning of paragraph 3(1)(d), under those subsections, the company. 
  
  ### Exception — other entities
  
  (3) Subsection (1) does not apply to an entity that controls, within the meaning of paragraph 3(1)(d), the converted company or company, as the case may be, if the entity is controlled, within the meaning of that paragraph, by a company to which subsection 407(5) or (12) applies, or an insurance holding company to which subsection 407(6) or (13) applies, that is permitted to be a major shareholder of the converted company or company, as the case may be, or to have a significant interest in any class of shares of the converted company or company, as the case may be. 
  
  ### Loss of control
  
  (4) Despite subsections (1) and 407(4), if the converted company referred to in subsection (1) is a converted company in respect of which subsection 407(4) applies, a company to which subsection 407(5) applies or an insurance holding company to which subsection 407(6) applies may be a major shareholder of the converted company and cease to control, within the meaning of paragraph 3(1)(d), the converted company if the company or the insurance holding company, as the case may be, has entered into an agreement with the Minister to do all things necessary to ensure that it is not a major shareholder of the converted company on the expiration of the day specified in the agreement. 
  
  ### Exception
  
  (4.1) Despite subsections (1) and 407(9), if the company referred to in subsection (1) is a company to which subsection 407(5) applies, an insurance holding company to which subsection 407(6) applies may be a major shareholder of the company and cease to control, within the meaning of paragraph 3(1)(d), the company if the insurance holding company has entered into an agreement with the Minister to do all things necessary to ensure that it is not a major shareholder of the company on the expiration of the day specified in the agreement. 
  
  ### Extension
  
  (5) If general market conditions so warrant and the Minister is satisfied that the company or the insurance holding company, as the case may be, has used its best efforts to be in compliance with subsection (4) or (4.1) on the required day, the Minister may specify a later day as the day from and after which it must comply with that subsection. 
  
  ### Loss of control
  
  (6) Despite subsections (1) and 407(11), if the converted company referred to in subsection (1) is a converted company in respect of which subsection 407(11) applies, a company to which subsection 407(12) applies or an insurance holding company to which subsection 407(13) applies may have a significant interest in a class of shares of the converted company and cease to control, within the meaning of paragraph 3(1)(d), the converted company if the company or the insurance holding company, as the case may be, has entered into an agreement with the Minister to do all things necessary to ensure that it does not have a significant interest in any class of shares of the converted company on the expiration of the day specified in the agreement. 
  
  ### Exception
  
  (6.1) Despite subsections (1) and 407(15), if the company referred to in subsection (1) is a company to which subsection 407(12) applies, an insurance holding company to which subsection 407(13) applies may have a significant interest in a class of shares of the company and cease to control, within the meaning of paragraph 3(1)(d), the company if the insurance holding company has entered into an agreement with the Minister to do all things necessary to ensure that it does not have a significant interest in any class of shares of the company on the expiration of the day specified in the agreement. 
  
  ### Extension
  
  (7) If general market conditions so warrant and the Minister is satisfied that the company or the insurance holding company, as the case may be, has used its best efforts to be in compliance with subsection (6) or (6.1) on the required day, the Minister may specify a later day as the day from and after which it must comply with that subsection. 
  
  ### Constraining registration
  
  408  No company shall, unless the acquisition of the share has been approved by the Minister, record in its securities register a transfer or issue of any share of the company to any person or to any entity controlled by a person if 
  (a) the transfer or issue of the share would cause the person to have a significant interest in any class of shares of the company; or 
  (b) where the person has a significant interest in a class of shares of the company, the transfer or issue of the share would increase the significant interest of the person in that class of shares of the company. 
  (2) and (3)  [Repealed, 1997, c. 15, s. 243]  
  
  ### Exception — small holdings
  
  408.1 Despite section 408, if, as a result of a transfer or issue of shares of a class of shares of a company to a person, other than an eligible agent, the total number of shares of that class registered in the securities register of the company in the name of that person would not exceed 5,000 and would not exceed 0.1% of the outstanding shares of that class, the company is entitled to assume that no person is acquiring or increasing a significant interest in that class of shares of the company as a result of that issue or transfer of shares. 
  
  ### Where approval not required
  
  409 (1) Despite subsections 407(1) and (2) and section 408, the approval of the Minister is not required in respect of a company, other than a converted company in respect of which subsection 407(4) applies or a company to which subsection 407(5) applies, if a person with a significant interest in a class of shares of the company or an entity controlled by a person with a significant interest in a class of shares of the company purchases or otherwise acquires shares of that class, or acquires control of any entity that holds any share of that class, and the number of shares of that class purchased or otherwise acquired, or the acquisition of control of the entity, as the case may be, would not increase the significant interest of the person in that class of shares of the company to a percentage that is greater than the percentage referred to in subsection (2) or (3), whichever is applicable. 
  
  ### Percentage
  
  (2) Subject to subsection (3), for the purposes of subsection (1), the percentage is 5 percentage points in excess of the significant interest of the person in that class of shares of the company on the later of June 1, 1992 and the day of the most recent purchase or acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares of the company, or of control of an entity that held shares of that class of shares of the company, for which approval was given by the Minister. 
  
  ### When approval not required
  
  (3) If a person has a significant interest in a class of shares of a company and the person’s percentage of that class has decreased after the date of the most recent purchase or other acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares of the company, or of control of an entity that held shares of that class of shares of the company, for which approval was given by the Minister, the percentage for the purposes of subsection (1) is the percentage that is the lesser of 
  (a) 5 percentage points in excess of the significant interest of the person in that class of shares of the company on the later of June 1, 1992 and the day of the most recent purchase or other acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares of the company, or of control of an entity that held shares of that class of shares of the company, for which approval was given by the Minister, and 
  (b) 10 percentage points in excess of the lowest significant interest of the person in that class of shares of the company at any time after the later of June 1, 1992 and the day of the most recent purchase or other acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares of the company, or of control of an entity that held shares of that class of shares of the company, for which approval was given by the Minister. 
  
  ### Exception — eligible agent
  
  (3.1) If the person referred to in subsection (1) is an eligible agent or an entity controlled by an eligible agent, then the Minister may reduce the percentage referred to in subsection (2) or (3). 
  
  ### Exception
  
  (4) Subsection (1) does not apply if the purchase or other acquisition of shares or the acquisition of control referred to in that subsection would 
  (a) result in the acquisition of control of the company by the person referred to in that subsection; 
  (b) where the person controls the company but the voting rights attached to the aggregate of any voting shares of the company beneficially owned by the person and by entities controlled by the person do not exceed 50 per cent of the voting rights attached to all of the outstanding voting shares of the company, cause the voting rights attached to that aggregate to exceed 50 per cent of the voting rights attached to all of the outstanding voting shares of the company; 
  (c) result in the acquisition of a significant interest in a class of shares of the company by an entity controlled by the person and the acquisition of that investment is not exempted by the regulations; or 
  (d) result in an increase in a significant interest in a class of shares of the company by an entity controlled by the person by a percentage that is greater than the percentage referred to in subsection (2) or (3), whichever is applicable, and the increase is not exempted by the regulations. 
  
  ### Regulations
  
  (5) The Governor in Council may make regulations 
  (a) exempting from the application of paragraph (4)(c) the acquisition of a significant interest in a class of shares of the company by an entity controlled by the person; and 
  (b) exempting from the application of paragraph (4)(d) an increase in a significant interest in a class of shares of the company by an entity controlled by the person by a percentage that is greater than the percentage referred to in subsection (2) or (3), whichever applies. 
  
  ### When approval not required
  
  410 (1) Despite subsections 407(1) and (2) and section 408, the approval of the Minister is not required if 
  (a) the Superintendent has, by order, directed the company to increase its capital and shares of the company are issued and acquired in accordance with the terms and conditions, if any, that may be specified in the order; or 
  (b) a person, other than an eligible agent, who controls, within the meaning of paragraph 3(1)(a), the company acquires additional shares of the company. 
  
  ### Exception
  
  (1.1) Paragraph (1)(a) does not apply in respect of a converted company in respect of which subsection 407(4) or (11) applies or a company to which subsection 407(5) or (12) applies. 
  
  ### Pre-approval
  
  (2) For the purposes of subsections 407(1) and (2) and section 408, the Minister may approve 
  (a) the purchase or other acquisition of such number or percentage of shares of a company as may be required in a particular transaction or series of transactions; or 
  (b) the purchase or other acquisition of up to a specified number or percentage of shares of a company within a specified period. 
  
  ### Public holding requirement
  
  411 (1) Every company shall, from and after the day determined under this section in respect of that company, have, and continue to have, voting shares that carry at least 35 per cent of the voting rights attached to all of the outstanding voting shares of the company and that are 
  (a) shares of one or more classes of shares that are listed and posted for trading on a recognized stock exchange in Canada; and 
  (b) shares none of which is beneficially owned by a person who is a major shareholder of the company in respect of the voting shares of the company or by any entity that is controlled by a person who is a major shareholder of the company in respect of such shares. 
  
  ### Determination of day
  
  (2) If the company has equity of two billion dollars or more on the day it comes into existence, the day referred to in subsection (1) is the day that is three years after that day and, in the case of any other company, the day referred to in subsection (1) is the day that is three years after the day of the first annual meeting of the shareholders and policyholders of the company held after the equity of the company first reaches two billion dollars. 
  
  ### Extension
  
  (3) If general market conditions so warrant and the Minister is satisfied that a company has used its best efforts to be in compliance with this section on the day determined under subsection (2), the Minister may specify a later day as the day from and after which the company must comply with subsection (1). 
  
  ### Limit on assets
  
  412 (1) Unless an exemption order with respect to the company is granted under section 414, if a company fails to comply with section 411 in any month, the Minister may, by order, require the company not to have, until it complies with that section, average total assets in any three month period ending on the last day of a subsequent month exceeding the company’s average total assets in the three month period ending on the last day of the month immediately before the month specified in the order. 
  
  ### Average total assets
  
  (2) For the purposes of subsection (1), the average total assets of a company in a three month period shall be computed by adding the total assets of the company as calculated for the month end of each of the three months in the period and by dividing the sum by three. 
  
  ### Increase of capital
  
  413 (1) Where the Superintendent has, by order, directed a company to increase its capital and shares of the company are issued and acquired in accordance with such terms and conditions as may be specified in the order, section 411 shall not apply in respect of the company until such time as the Superintendent may, by order, specify. 
  (2)  [Repealed, 1997, c. 15, s. 245]  
  
  ### Exemption by Minister
  
  414 (1) On application by a company and subject to any terms and conditions that the Minister considers appropriate, the Minister may by order exempt the company from the requirements of section 411 if the Minister considers it appropriate to do so. 
  
  ### Compliance with section 411
  
  (2) The company shall comply with section 411 as of the day on which the exemption order expires. 
  
  ### Limit on assets
  
  (3) If a company fails to comply with section 411 on the day referred to in subsection (2), it shall not, until it complies with that section, have average total assets in any three month period ending on the last day of a subsequent month exceeding its average total assets in the three month period ending on the last day of the month immediately preceding the day referred to in subsection (2) or on any later day that the Minister may specify by order. 
  
  ### Application of s. 412(2)
  
  (4) Subsection 412(2) applies for the purposes of subsection (3). 
  
  ### Continuation of exemption
  
  414.1 (1) Despite subsection 414(2), if an exemption order that was granted in respect of a company under subsection 414(3) as it read before the day on which this section comes into force provides that it expires if the holding body corporate ceases to comply with section 411, the company is not required to comply with that section until six months after the day on which the holding body corporate ceased to comply with that section if the failure to comply is as a result of 
  (a) a distribution to the public of voting shares of the holding body corporate; 
  (b) a redemption or purchase of voting shares of the holding body corporate; 
  (c) the exercise of any option to acquire voting shares of the holding body corporate; or 
  (d) the conversion of any convertible securities into voting shares of the holding body corporate. 
  
  ### Shares acquiring voting rights
  
  (2) Despite subsection 414(2), if as a result of an event that has occurred and is continuing shares of a holding body corporate referred to in subsection (1) acquire voting rights in such number as to cause the holding body corporate to no longer be in compliance with section 411, the company is not required to comply with that section until six months after the day on which the holding body corporate ceased to comply with that section or any later day that the Minister may by order specify. 
  
  ### Exception
  
  415 (1) Where a company fails to comply with section 411 as the result of 
  (a) a distribution to the public of voting shares of the company, 
  (b) a redemption or purchase of voting shares of the company, 
  (c) the exercise of any option to acquire voting shares of the company, or 
  (d) the conversion of any convertible securities into voting shares of the company, section 412 shall not apply in respect of that company until the expiration of six months after the day the company failed to comply with section 411. 
  
  ### Shares acquiring voting rights
  
  (2) Where, as the result of an event that has occurred and is continuing, shares of a company acquire voting rights in such number as to cause the company to no longer be in compliance with section 411, section 412 shall not apply in respect of that company until the expiration of six months after the day the company ceased to be in compliance with section 411 or such later day as the Minister may, by order, specify. 
  (3) and (4)  [Repealed, 2005, c. 54, s. 295]  
  
  ### Mutualization
  
  (5) Where the Minister approves a proposal to convert a company into a mutual company under section 226, section 412 does not apply in respect of the company until the expiration of the period that the Minister may fix. 
  
  ### Acquisition of control permitted
  
  416 (1) Subject to subsection (2) and sections 408 and 417, section 411 does not apply in respect of a company if a person acquires control of a company with equity of two billion dollars or more through the purchase or other acquisition of all or any number of the shares of the company by the person or by any entity controlled by the person. 
  
  ### Undertaking required
  
  (2) Subsection (1) applies only if the person provides the Minister with an undertaking satisfactory to the Minister to do all things necessary so that, within three years after the acquisition, or any other period that the Minister may specify, the company has voting shares that carry at least 35 per cent of the voting rights attached to all of the outstanding voting shares of the company and that are 
  (a) shares of one or more classes of shares that are listed and posted for trading on a recognized stock exchange in Canada; and 
  (b) shares none of which is beneficially owned by a person who is a major shareholder of the company in respect of the voting shares of the company or by any entity that is controlled by a person who is a major shareholder of the company in respect of such shares. 
  
  ### Application of section 411
  
  417 At the expiration of the period for compliance with an undertaking referred to in subsection 416(2), section 411 shall apply in respect of the company. 
  
  ### Restriction on voting rights
  
  418 (1) If, with respect to any company, a particular person contravenes subsection 407(1), (4), (9), (11) or (15) or section 407.03, 407.1 or 407.2 or fails to comply with an undertaking referred to in subsection 416(2) or with any term or condition imposed under section 421, no person, and no entity controlled by the particular person, shall, in person or by proxy, exercise any voting rights 
  (a) that are attached to shares of the company beneficially owned by the particular person or any entity controlled by the particular person; or 
  (b) that are subject to an agreement entered into by the particular person, or any entity controlled by the particular person, pertaining to the exercise of the voting rights. 
  
  ### Subsection (1) ceases to apply
  
  (2) Subsection (1) ceases to apply in respect of a person when, as the case may be, 
  (a) the shares to which the contravention relates have been disposed of; 
  (b) the person ceases to control the company within the meaning of paragraph 3(1)(d); 
  (c) if the person failed to comply with an undertaking referred to in subsection 416(2), the company complies with section 411; or 
  (d) if the person failed to comply with a term or condition imposed under section 421, the person complies with the term or condition. 
  
  ### Saving
  
  (3) Despite subsection (1), if a person contravenes subsection 407(4) by reason only that, as a result of an event that has occurred and is continuing and is not within the control of the person, shares of the converted company beneficially owned by the person or by any entity controlled by the person acquire voting rights in such number so as to cause the person to be a major shareholder of the converted company, the Minister may, after consideration of the circumstances, permit the person and any entity controlled by the person to exercise voting rights, in person or by proxy, in respect of any class of voting shares of the converted company beneficially owned by them that do not in aggregate exceed 20 per cent of the voting rights attached to that class of voting shares. 
  
  ### Saving
  
  (4) Despite subsection (1), if a person contravenes subsection 407(9) by reason only that, as a result of an event that has occurred and is continuing and is not within the control of the person, shares of the company beneficially owned by the person or by any entity controlled by the person acquire voting rights in such number so as to cause the person to be a major shareholder of the company, the Minister may, after consideration of the circumstances, permit the person and any entity controlled by the person to exercise voting rights, in person or by proxy, in respect of any class of voting shares of the company beneficially owned by them that do not in aggregate exceed 20 per cent of the voting rights attached to that class of voting shares. 
  
  ## Approval Process 
  
  ### Application for approval
  
  419 (1) An application for an approval of the Minister required under this Part must be filed with the Superintendent and contain the information, material and evidence that the Superintendent may require. 
  
  ### Applicant
  
  (2) If, with respect to any particular transaction, this Part applies to more than one person, any one of those persons may make the application to the Minister for approval on behalf of all of those persons. 
  
  ### Matters for consideration
  
  420 (1) Subject to subsection (1.1), if an application for an approval under section 407 is made, the Minister, in determining whether or not to approve the transaction, shall take into account all matters that the Minister considers relevant to the application, including 
  (a) the nature and sufficiency of the financial resources of the applicant or applicants as a source of continuing financial support for the company; 
  (b) the soundness and feasibility of the plans of the applicant or applicants for the future conduct and development of the business of the company; 
  (c) the business record and experience of the applicant or applicants; 
  (d) the character and integrity of the applicant or applicants or, if the applicant or any of the applicants is a body corporate, its reputation for being operated in a manner that is consistent with the standards of good character and integrity; 
  (e) whether the company will be operated responsibly by persons with the competence and experience suitable for involvement in the operation of a financial institution; 
  (f) if the company is a converted company in respect of which the Minister has issued an order under subsection 407(8) or a converted company in respect of which subsection 407(11) applied at any time, or a company that controls, within the meaning of paragraph 3(1)(d), such a converted company, the opinion of the Superintendent regarding the extent to which the corporate structure of the applicant or applicants and their affiliates may affect the supervision and regulation of the company, having regard to 
  (i) the nature and extent of the proposed financial services activities to be carried out by the company and its affiliates, and 
  (ii) the nature and degree of supervision and regulation applying to the proposed financial services activities to be carried out by the affiliates of the company; 
  (g) the impact of any integration of the businesses and operations of the applicant or applicants with those of the company on the conduct of those businesses and operations; and 
  (h) the best interests of the financial system in Canada. 
  
  ### Exception
  
  (1.1) Except for an application by an eligible agent for an approval under section 407, and subject to subsection 407.2(1), the Minister shall take into account only paragraph (1)(d) if the application is in respect of a transaction that would result in the applicant or applicants holding 
  (a) more than 10 per cent but no more than 20 per cent of any class of the outstanding voting shares of a converted company in respect of which subsection 407(4) applies or of a company to which subsection 407(5) applies; or 
  (b) more than 10 per cent but no more than 30 per cent of any class of the outstanding non-voting shares of such a converted company or company. 
  
  ### National treatment
  
  (2) Where a transaction in respect of which subsection 407(1) or (2) applies would cause a company to become a subsidiary of a foreign institution that is engaged in the insurance business, that does not have any other company as its subsidiary and that is a non-WTO Member foreign institution, the Minister shall not approve the transaction unless the Minister is satisfied that treatment as favourable for companies to which this Act applies exists or will be provided in the jurisdiction in which the foreign institution principally carries on business, either directly or through a subsidiary. 
  
  ### Part XII of the Bank Act 
  
  (3) Nothing in subsection (1) or (2) affects the operation of Part XII of the Bank Act.  
  
  ### Terms and conditions
  
  421 The Minister may impose any terms and conditions in respect of an approval given under this Part that the Minister considers necessary to ensure compliance with any provision of this Act. 
  
  ### Certifying receipt of application
  
  422 (1) If, in the opinion of the Superintendent, an application filed under this Part contains all the required information, the Superintendent shall without delay refer the application to the Minister and send a receipt to the applicant certifying the date on which the completed application was received by the Superintendent. 
  
  ### Incomplete application
  
  (2) If, in the opinion of the Superintendent, an application filed under this Part is incomplete, the Superintendent shall send a notice to the applicant specifying the information required by the Superintendent to complete the application. 
  
  ### Notice of decision to applicant
  
  423 (1) Subject to subsections (2) and (3) and 424(1), the Minister shall, within a period of thirty days after the certified date referred to in subsection 422(1), send to the applicant 
  (a) a notice approving the transaction to which the application relates; or 
  (b) where the Minister is not satisfied that the transaction to which the application relates should be approved, a notice to that effect, advising the applicant of the right to make representations to the Minister in respect of the matter. 
  
  ### Notice of decision
  
  (2) Subject to subsections (4) and 424(2), the notice referred to in paragraph (1)(a) or (b) shall be sent by the Minister within a period of 45 days after the certified date referred to in subsection 422(1) in the following cases: 
  (a) the application involves the acquisition of control of a company; 
  (b) the application is made by an eligible agent or an entity controlled by an eligible agent; or 
  (c) an application is made for the approval referred to in subsection 428(3). 
  
  ### Extension of period for notice
  
  (3) Where the Minister is unable to complete the consideration of an application within the period referred to in subsection (1), the Minister shall, 
  (a) within that period, send a notice to that effect to the applicant; and 
  (b) within a further period of thirty days after the date of the sending of the notice referred to in paragraph (a) or within such other further period as may be agreed on by the applicant and the Minister, send a notice referred to in paragraph (1)(a) or (b) to the applicant. 
  
  ### Idem
  
  (4) Where the Minister considers it appropriate to do so, the Minister may extend the period referred to in subsection (2) for one or more periods of forty-five days. 
  
  ### Reasonable opportunity to make representations
  
  424 (1) Where, after receipt of the notice referred to in paragraph 423(1)(b), the applicant advises the Minister that the applicant wishes to make representations, the Minister shall provide the applicant with a reasonable opportunity within a period of thirty days after the date of the notice, or within such further period as may be agreed on by the applicant and the Minister, to make representations in respect of the matter. 
  
  ### Reasonable opportunity to make representations
  
  (2) If, after receipt of the notice sent in accordance with subsection 423(2) that the Minister is not satisfied that the transaction to which the application relates should be approved, the applicant advises the Minister that the applicant wishes to make representations, the Minister shall provide the applicant with a reasonable opportunity within a period of 45 days after the date of the notice, or within any further period that may be agreed on by the applicant and the Minister, to make representations in respect of the matter. 
  
  ### Notice of decision
  
  425 (1) Within a period of thirty days after the expiration of the period for making representations referred to in subsection 424(1), the Minister shall, in the light of any such representations and having regard to the matters to be taken into account, send a notice to the applicant indicating whether or not the Minister approves the share transaction to which the application relates. 
  
  ### Idem
  
  (2) Within a period of forty-five days after the expiration of the period for making representations referred to in subsection 424(2), the Minister shall, in the light of any such representations and having regard to the matters to be taken into account, send a notice to the applicant indicating whether or not the Minister approves the share transaction to which the application relates. 
  
  ### Deemed approval
  
  426 Where the Minister does not send a notice under subsection 423(1) or (3) or 425(1) within the period provided for in those subsections, the Minister is deemed to have approved the share transaction to which the application relates. 
  426.1  [Repealed, 1994, c. 47, s. 124]  
  
  ### Mutual company constraints
  
  427 Subject to such regulations as the Governor in Council may make for the purpose, a mutual company may by by-law impose, change or remove restrictions on the issue, transfer or ownership of shares of any class issued under section 63, in order to prevent a person from having a significant interest in that class. 
  
  ### Constraining registration — Crown and foreign governments
  
  428 (1) No company shall record in its securities register a transfer or issue of any share of the company to 
  (a) Her Majesty in right of Canada or of a province or any agent or agency of Her Majesty in either of those rights; or 
  (b) the government of a foreign country or any political subdivision thereof, or any agent or agency thereof. 
  
  ### Exception
  
  (2) Despite subsection (1), a company may record in its securities register a transfer or issue of any share of the company to a foreign institution that is controlled by the government of a foreign country or any political subdivision of a foreign country, or by any agent or agency of a foreign government, if the share that is transferred or issued is beneficially owned by the foreign institution or by an entity controlled by the foreign institution. 
  
  ### Exception
  
  (3) Despite subsection (1), a company may, with the Minister’s approval, record in its securities register the issue of any share of the company to an eligible agent. 
  
  ### Application made jointly
  
  (4) The application for the approval referred to in subsection (3) must be made jointly by the company and the eligible agent. 
  
  ### Matters for consideration
  
  (5) The Minister, in determining whether to grant the approval referred to in subsection (3), shall take into account all matters that he or she considers relevant, including those set out in paragraphs 420(1)(a) to (h). 
  
  ### Consequence of revocation of approval
  
  (6) If an approval referred to in subsection (3) is revoked, the company shall delete any entry in its securities register in respect of the recording of the issuance of shares to the eligible agent. 
  
  ### Disposition of shareholdings
  
  (7) If a company or an eligible agent fails to comply with any undertaking or term or condition in relation to an approval referred to in subsection (3), or if an eligible agent ceases to be an eligible agent, the Minister may, if the Minister considers it to be in the public interest to do so, by order, direct the eligible agent or former eligible agent and any person controlled by the eligible agent or former eligible agent to dispose of any number of shares of the company beneficially owned by the eligible agent or former eligible agent or the persons controlled by the eligible agent or former eligible agent that the Minister specifies in the order, within the time specified in the order and in the proportion, if any, as between the eligible agent or former eligible agent and the persons controlled by the eligible agent or former eligible agent that is specified in the order. 
  
  ### Representations
  
  (8) No direction shall be made under subsection (7) unless the Minister has provided each person to whom the direction relates and the company concerned with a reasonable opportunity to make representations in respect of the subject-matter of the direction. 
  
  ### Appeal
  
  (9) Any person with respect to whom a direction has been made under subsection (7) may, within 30 days after the date of the direction, appeal the matter in accordance with section 1020. 
  429  [Repealed, 1994, c. 47, s. 125]  
  430 (1)  [Repealed, 1994, c. 47, s. 126]  
  
  ### Suspension of voting rights held by governments
  
  (2) Notwithstanding section 152, where any voting shares of a company are beneficially owned by 
  (a) Her Majesty in right of Canada or of a province or any agency of Her Majesty in either of those rights, or 
  (b) the government of a foreign country or any political subdivision thereof, or any agency thereof, no person shall, in person or by proxy, exercise the voting rights attached to those shares. 
  
  ### Exception
  
  (2.1) Subsection (2) does not apply to a foreign institution that is controlled by the government of a foreign country or any political subdivision of a foreign country, or by any agent or agency of a foreign government, if the shares referred to in subsection (2) are beneficially owned by the foreign institution or by an entity controlled by the foreign institution. 
  
  ### Transitional
  
  (3) Subsection (2) does not apply in respect of a government or agency referred to in that subsection that, on September 27, 1990, beneficially owned shares of a former-Act company where the exercise of the voting rights attached to those shares was not prohibited under subsection 36(2) of the Canadian and British Insurance Companies Act, as that subsection read immediately prior to June 1, 1992.  
  
  ### Transitional
  
  (4) Subsection (3) ceases to apply where a government or agency referred to in that subsection acquires beneficial ownership of any additional voting shares of the former-Act company in such number that the percentage of the voting rights attached to all of the voting shares of the former-Act company beneficially owned by the government or agency is greater than the percentage of the voting rights attached to all of the voting shares of the former-Act company that were beneficially owned by the government or agency on September 27, 1990. 
  
  ### Exception — eligible agent
  
  (5) Subsection (2) does not apply in respect of the exercise of voting rights attached to any share referred to in subsection 428(3). 
  
  ### Consequence of suspension of approval
  
  (6) If an approval referred to in subsection 428(3) is suspended, the eligible agent shall not exercise, in person or by proxy, any voting rights attached to any share of the company that is beneficially owned by the eligible agent. 
  431 and 431.1  [Repealed, 1994, c. 47, s. 127]  
  
  # DIVISION III 
  
  ## Directions 
  
  ### Disposition of shareholdings
  
  432 (1) If, with respect to any company, a person contravenes subsection 407(1), (4), (9), (11) or (15) or section 407.03, 407.1 or 407.2 or fails to comply with an undertaking referred to in subsection 416(2) or with any term or condition imposed under section 421, the Minister may, if the Minister considers it in the public interest to do so, by order, direct that person and any person controlled by that person to dispose of any number of shares of the company beneficially owned by any of those persons that the Minister specifies in the order, within the time specified in the order and in the proportion, if any, as between the person and the persons controlled by that person that is specified in the order. 
  
  ### Representations
  
  (2) No direction shall be made under subsection (1) unless the Minister has provided each person to whom the direction relates and the company concerned with a reasonable opportunity to make representations in respect of the subject-matter of the direction. 
  
  ### Appeal
  
  (3) Any person with respect to whom a direction has been made under subsection (1) may, within thirty days after the date of the direction, appeal the matter in accordance with section 1020. 
  (4)  [Repealed, 2001, c. 9, s. 415]  
  
  ### Disposition — threat to integrity or security
  
  432.1 (1) If the Minister is of the opinion that a person’s holding or beneficial ownership of shares of a company poses a threat to the integrity or security of the company or the financial system in Canada or a threat to national security, the Minister may, by order, direct that person and any person controlled by that person to dispose of any number of shares of the company held or beneficially owned by any of the persons that the Minister specifies in the order, within the time specified in the order and in the proportion, if any, as between the person and the persons controlled by the person that is specified in the order. 
  
  ### Suspension of rights
  
  (2) A direction made under subsection (1) may also suspend any of the rights under Part VI attached to the shares referred to in that subsection until the shares are disposed of in accordance with the direction. 
  
  ### Representations
  
  (3) No direction shall be made under subsection (1) unless the Minister has provided each person to whom the direction relates and the company concerned with a reasonable opportunity to make representations. 
  
  ### Temporary direction
  
  (4) If, in the Minister’s opinion, the length of time required for representations to be made under subsection (3) might be prejudicial to the public interest, the Minister may make a temporary direction to suspend any of the rights under Part VI attached to any of the shares referred to in subsection (1). 
  
  ### Cessation of effect
  
  (5) A temporary direction ceases to have effect on the earlier of 
  (a) the expiry of 30 days after the day on which it takes effect or of a shorter period that is specified in the temporary direction, and 
  (b) if a direction is made under subsection (1) in respect of the shares, the day on which that direction takes effect. 
  
  ### Appeal
  
  (6) Any person with respect to whom a direction has been made under subsection (1) may, within 30 days after the day on which the direction was made, appeal the matter in accordance with section 1020. 
  
  ### Notice — Committee and Review Agency
  
  (7) If a direction has been made under subsection (1) or (4) for reasons related to national security, the Minister shall, within 30 days after the day on which the direction was made, notify 
  (a) the Committee, as defined in section 2 of the National Security and Intelligence Committee of Parliamentarians Act ; and  
  (b) the Review Agency, as defined in section 2 of the National Security and Intelligence Review Agency Act.  
  
  ### Application to court
  
  433 (1) If a person fails to comply with a direction made under subsection 428(7), 432(1) or 432.1(1), an application on behalf of the Minister may be made to a court for an order to enforce the direction. 
  
  ### Court order
  
  (2) A court may, on an application under subsection (1), make such order as the circumstances require to give effect to the terms of the direction and may, without limiting the generality of the foregoing, require the company concerned to sell the shares that are the subject-matter of the direction. 
  
  ### Appeal
  
  (3) An appeal from an order of a court under this section lies in the same manner as, and to the same court to which, an appeal may be taken from any other order of the court. 
  
  ## General Provisions 
  
  ### Interest of securities underwriter
  
  434 This Part does not apply to a securities underwriter in respect of shares of a body corporate or ownership interests in an unincorporated entity that are acquired by the underwriter in the course of a distribution to the public of those shares or ownership interests and that are held by the underwriter for a period of not more than six months. 
  
  ### Arrangements to effect compliance
  
  435 (1) The directors of a company may make such arrangements as they deem necessary to carry out the intent of this Part and, in particular, but without limiting the generality of the foregoing, may 
  (a) require any person in whose name a share of the company is held to submit a declaration setting out 
  (i) the beneficial ownership of the share, and 
  (ii) such other information as the directors deem relevant for the purposes of this Part; 
  (b) require any person who wishes to have a transfer of a share registered in the name of, or to have a share issued to, that person to submit a declaration referred to in paragraph (a) as though the person were the holder of that share; and 
  (c) determine the circumstances in which a declaration referred to in paragraph (a) is to be required, the form of the declaration and the times at which it is to be submitted. 
  
  ### Order of Superintendent
  
  (2) The Superintendent may, by order, direct a company to obtain from any person in whose name a share of the company is held a declaration setting out the name of every entity controlled by that person and containing information concerning 
  (a) the ownership or beneficial ownership of the share; and 
  (b) such other related matters as are specified by the Superintendent. 
  
  ### Compliance required
  
  (3) As soon as possible after receipt by a company of a direction under subsection (2), 
  (a) the company shall comply with the direction; and 
  (b) every person who is requested by the company to provide a declaration containing information referred to in subsection (1) or (2) shall comply with the request. 
  
  ### Outstanding declaration: effect
  
  (4) Where, pursuant to this section, a declaration is required to be submitted by a shareholder or other person in respect of the issue or transfer of any share, a company may refuse to issue the share or register the transfer unless the required declaration is submitted. 
  
  ### Reliance on information
  
  436 A company and any person who is a director or an officer, employee or agent of the company may rely on any information contained in a declaration required by the directors pursuant to section 435 or on any information otherwise acquired in respect of any matter that might be the subject of such a declaration, and no action lies against the company or any such person for anything done or omitted to be done in good faith in reliance on any such information. 
  437  [Repealed, 1994, c. 47, s. 128]  
  
  ### Exemption regulations
  
  438 The Governor in Council may, by regulation, exempt from any of the provisions of this Part any share transaction or any class of share transactions involving the transfer of shares on the death of the beneficial owner thereof, or any arrangement made in contemplation of the death of the beneficial owner, to one or more members of the beneficial owner’s family, or to one or more trustees on their behalf. 
  
  ###  Competition Act 
  
  439 Nothing in, or done under the authority of, this Act affects the operation of the Competition Act.  
  
  # PART VIII 
  
  ## Business and Powers 
  
  ## General 
  
  ### Main business
  
  440 (1) Subject to this Act, a company shall not engage in or carry on any business other than such business generally as appertains to the business of providing financial services. 
  
  ### Idem
  
  (2) For greater certainty, a company may 
  (a) act as a financial agent, receiver, liquidator or sequestrator; 
  (b) provide investment counselling services and portfolio management services; and 
  (c) issue payment, credit or charge cards and, in cooperation with others including other financial institutions, operate a payment, credit or charge card plan. 
  
  ### Additional activities
  
  441 (1) In addition, a company may 
  (a) act as an agent for vendors, purchasers, mortgagors, mortgagees, lessors or lessees of real property and provide consulting or appraisal services in respect of real property; 
  (b) hold, manage and otherwise deal with real property; 
  (c) provide information processing services in Canada that the company has developed for its own use and that are an integral part of the company’s operations to entities in which the company has a substantial investment that do not provide information processing services to other entities; 
  (d) outside Canada, or with the prior written approval of the Minister, in Canada, engage in any of the following activities, namely, 
  (i) collecting, manipulating and transmitting 
  (A) information that is primarily financial or economic in nature, 
  (B) information that relates to the business of a permitted entity, as defined in subsection 490(1), or 
  (C) any other information that the Minister may, by order, specify, 
  (ii) providing advisory or other services in the design, development or implementation of information management systems, 
  (iii) designing, developing or marketing computer software, and 
  (iv) designing, developing, manufacturing or selling, as an ancillary activity to any activity referred to in any of subparagraphs (i) to (iii) that the company is engaging in, computer equipment integral to the provision of information services related to the business of financial institutions or to the provision of financial services; 
  (d.1) with the prior written approval of the Minister, develop, design, hold, manage, manufacture, sell or otherwise deal with data transmission systems, information sites, communication devices or information platforms or portals that are used 
  (i) to provide information that is primarily financial or economic in nature, 
  (ii) to provide information that relates to the business of a permitted entity, as defined in subsection 490(1), or 
  (iii) for a prescribed purpose or in prescribed circumstances; 
  (e) promote merchandise and services to the holders of any payment, credit or charge card issued by the company; 
  (f) engage in the sale of 
  (i) tickets, including lottery tickets, on a non-profit public service basis in connection with special, temporary and infrequent non-commercial celebrations or projects that are of local, municipal, provincial or national interest, 
  (ii) urban transit tickets, and 
  (iii) tickets in respect of a lottery sponsored by the federal government or a provincial or municipal government or an agency of any such government or governments; 
  (g) act as a custodian of property; 
  (h) with the consent of the Minister 
  (i) provide safety and risk prevention services and services respecting risk management and claims adjustment, where the provision of those services is reasonably ancillary to the business of insurance carried on by the company, 
  (ii) operate rehabilitation and training and development centres, where the operation of those centres is reasonably ancillary to the business of insurance carried on by the company, 
  (iii) provide computer systems to independent insurance brokers and agents, where the provision of those systems is reasonably ancillary to the business of insurance carried on by the company, 
  (iv) provide support to independent insurance brokers and agents, where the provision of that support is reasonably ancillary to the business of insurance carried on by the company, 
  (v) operate repair and appraisal centres, where the operation of those centres is reasonably ancillary to the business of insurance carried on by the company, and 
  (vi) carry on any other activities that are reasonably ancillary to the business of insurance carried on by the company; and 
  (i) provide identification, authentication or verification services. 
  
  ### Additional activities — life companies
  
  (1.1) A life company may engage, under prescribed terms and conditions, if any are prescribed, in specialized business management or advisory services. 
  
  ### Terms and conditions
  
  (2) A consent given under paragraph (1)(h) is subject to the terms and conditions imposed by the Minister. 
  
  ### Restriction
  
  (3) Except as authorized by or under this Act, a company shall not deal in goods, wares or merchandise or engage in any trade or other business. 
  
  ### Regulations
  
  (4) The Governor in Council may make regulations 
  (a) respecting what a company may or may not do with respect to the carrying on of the activities referred to in any of paragraphs (1)(d) and (d.1) and subsection (1.1); 
  (b) imposing terms and conditions in respect of 
  (i) the provision of services referred to in paragraphs (1)(a) and 440(2)(b), and 
  (ii) the carrying on of the activities referred to in any of paragraphs (1)(d) and (d.1) and subsection (1.1); and 
  (c) respecting the circumstances in which companies may be exempted from the requirement to obtain the approval of the Minister before carrying on a particular activity referred to in paragraph (1)(d) or (d.1). 
  
  ### Networking
  
  442 (1) A company may 
  (a) act as agent for any person in respect of the provision of any service that is provided by a financial institution, a permitted entity as defined in subsection 490(1) or a prescribed entity; 
  (b) enter into an arrangement with any person in respect of the provision of that service; or 
  (c) refer any person to any such financial institution or entity. 
  
  ### Regulations
  
  (2) The Governor in Council may make regulations respecting the disclosure of 
  (a) the name of the principal for whom a company is acting as agent pursuant to subsection (1); and 
  (b) whether any commission is being earned by a company when acting as agent pursuant to subsection (1). 
  
  ## Classes of Insurance 
  
  ### Restriction to specified classes of insurance
  
  443 (1) A company shall not insure a risk unless the risk falls within a class of insurance that is specified in the order of the Superintendent approving the commencement and carrying on of business by the company. 
  
  ### Continuation of certificate limitations
  
  (2) A class of insurance specified in a certificate of registry, issued under Part III of the Canadian and British Insurance Companies Act, or in any other authorization, that had not expired or been withdrawn before the coming into force of this Part is deemed to be specified in an order of the Superintendent approving the commencement and carrying on of business by the company.  
  
  ### Restriction to reinsurance
  
  444 (1) A company may reinsure, but shall not otherwise insure, a risk falling within a class of insurance specified in the order of the Superintendent approving the commencement and carrying on of business by the company if the order limits the company to the reinsurance of those risks. 
  
  ### Continuation of certificate conditions
  
  (2) A condition that limits a company to the reinsurance of risks falling within a class of insurance and that is contained in a certificate of registry issued under Part III of the Canadian and British Insurance Companies Act, or in any other authorization, that had not expired or been withdrawn before the coming into force of this Part is deemed to be a limitation in an order of the Superintendent approving the commencement and carrying on of business by the company.  
  
  ### No new composite companies
  
  445 The Superintendent may not make or vary an order approving the commencement and carrying on of business by a company if the company would as a result be permitted to insure both risks falling within the class of life insurance and risks falling within any other class of insurance other than accident and sickness insurance, credit protection insurance and other approved products insurance. 
  446  [Repealed, 2007, c. 6, s. 218]  
  
  ### Separate accounts
  
  447 A company that is authorized to insure risks falling within the class of life insurance and risks falling within one or more other classes of insurance shall maintain separate accounts in respect of each class of insurance within which it is authorized to insure risks. 
  
  ### Annuities and endowment insurance restricted to life companies
  
  448 Property and casualty companies and marine companies shall not issue annuities or policies of endowment insurance. 
  
  ### Compensation association
  
  449 (1) Every company that is insuring risks that fall within a class of insurance shall become and remain a member of any compensation association designated by order of the Minister for that class of insurance. 
  
  ### Designation limitation
  
  (1.1) A compensation association shall not be designated under subsection (1) unless, in the opinion of the Minister, it has the authority to levy an assessment on each of its members. 
  
  ### Exceptions
  
  (2) Subsection (1) does not apply 
  (a) to a company that may reinsure but may not otherwise insure risks; 
  (b) in respect of a class of insurance that, in the opinion of the Minister, is adequately covered by some other compensation plan; 
  (c) in respect of the insurance against the loss of, or damage to, property caused by fire, by lightning, by an explosion due to ignition, by smoke or by breakage of or leakage from a sprinkler, from other fire protection equipment or from another fire protection system by a company that is a member of the Fire Mutuals Guarantee Fund; or 
  (d) in respect of a class of insurance for which the Minister has not designated a compensation association. 
  
  ## Segregated Funds 
  
  ### Segregated funds restricted to life companies
  
  450 A property and casualty company, or a marine company, shall not issue policies — or accept or retain, on the direction of a policyholder or beneficiary, policy dividends or bonuses, or policy proceeds that are payable on the surrender or maturity of the policy or on the death of the person whose life is insured — if the liabilities of the company in respect of the policies or the amounts accepted or retained vary in amount depending on the market value of a fund consisting of a specified group of assets. 
  
  ### Where segregated funds required
  
  451 A life company that issues policies described in section 450 or accepts or retains amounts so described shall, in respect of those policies or amounts, 
  (a) maintain separate accounts; and 
  (b) establish and maintain one or more funds consisting of assets that are segregated from the other assets of the company and that are specified as the assets on the market value of which the liabilities of the company in respect of those policies or amounts depend. 
  
  ### Establishment and maintenance of segregated funds
  
  452 For the purpose of establishing or maintaining a segregated fund required to be established and maintained by section 451, a company may, subject to the regulations and, in the case of a transfer from a participating account maintained pursuant to section 456, to section 463, transfer an amount to the separate account maintained in respect of the segregated fund. 
  
  ### Transfers from segregated funds
  
  453 A company may return the current value of an amount transferred under section 452 to the account from which the amount was transferred. 
  
  ### Claims against segregated funds
  
  454 A claim against a segregated fund maintained as required by section 451 under a policy or for an amount in respect of which the fund is maintained has priority over any other claim against the assets of that fund, including the claims referred to in section 161 of the Winding-up and Restructuring Act, except to the extent that the payment of that other claim is secured by a security interest in or on a specific, identifiable asset of the segregated fund.  
  
  ### Restriction of claims
  
  455 The liability of a company under a policy or for an amount in respect of which a segregated fund is maintained pursuant to section 451 
  (a) does not, except to the extent that the assets of the fund are insufficient to satisfy a claim for any minimum amount that the company agrees to pay under the policy or in respect of the amount, give rise to a claim against any assets of the company, other than the assets of that fund, but 
  (b) to the extent that the assets of the fund are insufficient to satisfy such a claim, gives rise to a claim against the assets of the company, other than the assets of that fund, that has the priority referred to in subsection 161(2) of the Winding-up and Restructuring Act.  
  
  ## Participating Policies 
  
  ### Participating account
  
  456 A company shall maintain accounts, in the form and manner determined by the Superintendent, in respect of participating policies, separately from those maintained in respect of other policies. 
  
  ### Allocation of income
  
  457 There shall be credited to, or debited from, a participating account maintained pursuant to section 456 that portion of the investment income or losses of the company for a financial year, including accrued capital gains or losses, whether or not realized, that is determined in accordance with a method that is 
  (a) in the written opinion of the actuary of the company, fair and equitable to the participating policyholders; 
  (b) approved by resolution of the directors, after considering the written opinion of the actuary of the company; and 
  (c) not disallowed by the Superintendent, on the ground that it is not fair and equitable to the participating policyholders, within sixty days after receiving the resolution. 
  
  ### Allocation of expenses
  
  458 There shall be debited from a participating account maintained pursuant to section 456 that portion of the expenses, including taxes, of the company for a financial year that is determined in accordance with a method that is 
  (a) in the written opinion of the actuary of the company, fair and equitable to the participating policyholders; 
  (b) approved by resolution of the directors, after considering the written opinion of the actuary of the company; and 
  (c) not disallowed by the Superintendent, on the ground that it is not fair and equitable to the participating policyholders, within sixty days after receiving the resolution. 
  
  ### Filing of allocation method
  
  459 A company the directors of which by resolution approve a method of allocating its investment income and losses and expenses to a participating account maintained pursuant to section 456 shall, within thirty days after making the resolution, file a copy of it with the Superintendent, together with a copy of the written opinion of the actuary of the company and any other information relevant to the allocation method that the Superintendent requests. 
  
  ### Review of allocation method
  
  460 The actuary of a company shall annually report in writing to the directors on the fairness and equitableness of the method used by the company for allocating its investment income and losses and expenses to a participating account maintained pursuant to section 456. 
  
  ### Payments to shareholders from participating account
  
  461 A company that has share capital may, from a participating account maintained pursuant to section 456, in a financial year and at any time within six months after the end of that financial year, make a payment to its shareholders, or transfer an amount to an account (other than a participating shareholder account as defined in section 83.01) from which a payment can be made to its shareholders, if 
  (a) the aggregate of the amounts so paid or transferred in that financial year does not exceed the percentage of the portion of the profits of the participating account that is determined by the directors as the portion to be distributed for that financial year to the shareholders and participating policyholders, which percentage shall not exceed the number, expressed as a percentage, that is the aggregate of 
  (i) 10 multiplied by the lesser of 
  (A) the sum of the opening balances for that financial year of all participating accounts of the company, and 
  (B) two hundred and fifty million dollars, 
  (ii) 7.5 multiplied by the amount, if any, by which the lesser of 
  (A) the sum of the opening balances for that financial year of all participating accounts of the company, and 
  (B) five hundred million dollars exceeds two hundred and fifty million dollars, 
  (iii) 5 multiplied by the amount, if any, by which the lesser of 
  (A) the sum of the opening balances for that financial year of all participating accounts of the company, and 
  (B) one billion dollars exceeds five hundred million dollars, and 
  (iv) 2.5 multiplied by the amount, if any, by which the sum of the opening balances for that financial year of all participating accounts of the company exceeds one billion dollars, divided by the sum of the opening balances for that financial year of all the participating accounts; 
  (b) the company pays dividends or bonuses to its participating policyholders out of the profits of the participating account for that financial year in accordance with its dividend or bonus policy established pursuant to paragraph 165(2)(e); and 
  (c) the payment to the shareholders, or the transfer to the account from which a payment can be made to the shareholders, would not, in the opinion of the actuary of the company, materially affect the company’s ability to continue to comply with its dividend or bonus policy or to maintain the levels or rates of dividends or bonuses paid to the company’s participating policyholders. 
  
  ### Transfers from participating account
  
  462 The only transfers that may be made from a participating account maintained pursuant to section 456 are 
  (a) transfers made pursuant to sections 461 and 463; 
  (b) transfers made in respect of transfers or reinsurance of all or any portion of the participating policies in respect of which the participating account is maintained; 
  (c) transfers, with the approval of the Superintendent, of amounts that can be reasonably attributed to sources not related to the participating policies in respect of which the account is or has been maintained, if the transfer would not, in the opinion of the actuary of the company, materially affect the company’s ability to continue to comply with its dividend or bonus policy, maintain the levels or rates of dividends or bonuses paid to the company’s participating policyholders or meet the company’s obligations under its participating policies; and 
  (d) transfers made in respect of the conversion of a mutual company into a company with common shares. 
  
  ### Transfers to segregated funds from participating account
  
  463 (1) A company may transfer from a participating account maintained pursuant to section 456 to a segregated fund maintained pursuant to section 451 an amount not exceeding the amount determined in accordance with the formula is 25 per cent of the unappropriated earned surplus of that account; is the aggregate amount of all previous transfers from that account to the segregated funds; and is the aggregate amount returned to the participating account from the segregated funds. 
  
  ### Ceiling
  
  (2) The aggregate amount of all transfers from participating accounts maintained pursuant to section 456 to the segregated funds maintained pursuant to section 451 may not exceed the amount determined in accordance with the formula is 10 per cent of the aggregate unappropriated earned surplus of the participating accounts; is the aggregate amount of all previous transfers from those accounts to those funds; and is the aggregate amount returned to those accounts from those funds. 
  
  ### Declaration of policy dividend or bonus
  
  464 (1) Subject to this section, the directors of a company that issues participating policies may declare, and the company may pay or otherwise satisfy, a dividend, bonus or other benefit on those policies in accordance with its dividend or bonus policy established pursuant to paragraph 165(2)(e). 
  
  ### Report of actuary
  
  (2) The company’s actuary shall, in writing, report to the directors on the fairness to participating policyholders of a proposed dividend, bonus or other benefit and whether it is in accordance with the policy. The directors shall consider the actuary’s report before declaring the dividend, bonus or other benefit. 
  
  ### Generally accepted actuarial practice
  
  (2.1) The report of the actuary referred to in subsection (2) shall be prepared in accordance with generally accepted actuarial practice with such changes as may be determined by the Superintendent and any additional directions that may be made by the Superintendent. 
  
  ### When dividend not to be declared
  
  (3) The directors of a company shall not declare a dividend, bonus or other benefit to participating policyholders if there are reasonable grounds for believing that the company is, or the payment or other satisfaction would cause the company to be, in contravention of subsection 515(1), any regulation made under subsection 515(2) or any order made under subsection 515(3). 
  
  ## Adjustable Policies 
  
  ### Report of actuary
  
  464.1 (1) The actuary of a company that has adjustable policyholders shall, annually and in writing, report to the directors on whether the changes that the company made in respect of its adjustable policies during the preceding 12 months are in accordance with the criteria established under paragraph 165(2)(e.2) and are fair to the adjustable policyholders. 
  
  ### Generally accepted actuarial practice
  
  (1.1) The report of the actuary referred to in subsection (1) shall be prepared in accordance with generally accepted actuarial practice with such changes as may be determined by the Superintendent and any additional directions that may be made by the Superintendent. 
  
  ### Information to policyholder
  
  (2) A company that made changes in respect of its adjustable policies during the preceding 12 months shall within the prescribed period send the prescribed information to the policyholder, if the adjustable policy was issued in Canada or if it confers voting rights. 
  
  ### Information to policyholder — renewal
  
  (3) In the case of the renewal of an adjustable policy, the company shall within the prescribed period send the prescribed information to the policyholder. 
  
  ## Reinsurance 
  
  ### Regulations
  
  465 (1) The Governor in Council may make regulations limiting the extent to which a company may cause itself to be reinsured against risks undertaken under its policies. 
  
  ### Regulation may provide for discretion
  
  (2) A regulation made pursuant to subsection (1) may provide that the Superintendent may, by order, determine the matters or exercise the discretion that the regulation may specify. 
  
  ## Restrictions 
  
  ### Restriction on fiduciary activities
  
  466 No company shall act in Canada as 
  (a) an executor, administrator or official guardian or a guardian, tutor, curator, judicial adviser or committee of a mentally incompetent person; or 
  (b) a trustee for a trust. 
  
  ### Restriction on deposit taking
  
  467 Except as otherwise permitted by this Act, a company shall not accept deposits. 
  
  ### Restriction on securities activities
  
  468 A company shall not deal in Canada in securities to the extent prohibited or restricted by such regulations as the Governor in Council may make for the purposes of this section. 
  
  ### Prohibition
  
  468.1 (1) It is prohibited for a company to issue a debt obligation in relation to which the amounts of principal and interest owing are guaranteed to be paid from loans or other assets held by an entity that is created and organized for the principal purpose of holding those loans or other assets and with the intention of legally isolating those loans or other assets from the company, unless 
  (a) the debt obligation is a covered bond as defined in section 21.5 of the National Housing Act ;  
  (b) the company is a registered issuer as defined in section 21.5 of that Act other than one whose right to issue covered bonds has been suspended; and 
  (c) the debt obligation is issued under a registered program as defined in section 21.5 of that Act. 
  
  ### Exception
  
  (2) The Governor in Council may make regulations exempting any type of debt obligation from the application of subsection (1). 
  
  ### Restriction on residential mortgages
  
  469 (1) A company shall not make a loan in Canada on the security of residential property in Canada for the purpose of purchasing, renovating or improving that property, or refinance such a loan, if the amount of the loan, together with the amount then outstanding of any mortgage having an equal or prior claim against the property, would exceed 80 per cent of the value of the property at the time of the loan. 
  
  ### Exception
  
  (2) Subsection (1) does not apply in respect of 
  (a) a loan made or guaranteed under the National Housing Act or any other Act of Parliament by or pursuant to which a different limit on the value of property on the security of which the company may make a loan is established;  
  (b) a loan if repayment of the amount of the loan that exceeds the maximum amount set out in subsection (1) is guaranteed or insured by a government agency or a private insurer approved by the Superintendent; 
  (c) the acquisition by the company from an entity of securities issued or guaranteed by the entity that are secured on any residential property, whether in favour of a trustee or otherwise, or the making of a loan by the company to the entity against the issue of such securities; or 
  (d) a loan secured by a mortgage where 
  (i) the mortgage is taken back by the company on a property disposed of by the company, including where the disposition is by way of a realization of a security interest, and 
  (ii) the mortgage secures payment of an amount payable to the company for the property. 
  
  ### Restriction on charges to borrowers
  
  469.1 (1) Subject to any regulations made under subsection (2), a company that has obtained insurance or a guarantee against default on a loan made in Canada on the security of residential property shall not charge a borrower an amount for the insurance or guarantee that exceeds the actual cost to the company of the insurance or guarantee. 
  
  ### Regulations
  
  (2) The Governor in Council may make regulations 
  (a) respecting the determination of the actual cost to a company for the purposes of subsection (1); 
  (b) respecting the circumstances in which a company is exempt from the application of subsection (1); 
  (c) respecting, in relation to insurance or a guarantee against default on a loan made by a company in Canada on the security of residential property, 
  (i) the arrangements into which the company, its representatives and its employees may or may not enter, and 
  (ii) the payments or benefits that the company, its representatives and its employees may or may not accept from an insurer or the insurer’s affiliates; and 
  (d) respecting any other matters necessary to carry out the purposes of subsection (1). 
  
  ### Regulations — disclosure
  
  (3) The Governor in Council may make regulations respecting the disclosure by a company of information relating to insurance or a guarantee against default on a loan made by the company in Canada on the security of residential property, including regulations respecting 
  (a) the information that must be disclosed, including information relating to 
  (i) the person who benefits from the insurance or guarantee, 
  (ii) the arrangements between the company, its representatives or its employees and the insurer or the insurer’s affiliates, and 
  (iii) the payments and benefits that the company, its representatives and its employees accept from an insurer or the insurer’s affiliates; 
  (b) the time and place at which, the form and manner in which and the persons to whom information is to be disclosed; and 
  (c) the circumstances under which a company is not required to disclose information. 
  
  ### Policies re security interests
  
  470 (1) The directors of a company shall establish and the company shall adhere to policies regarding the creation of security interests in property of the company to secure obligations of the company and the acquisition by the company of beneficial interests in property that is subject to security interests. 
  
  ### Order to amend policies
  
  (2) The Superintendent may, by order, direct a company to amend its policies as specified in the order. 
  
  ### Compliance
  
  (3) A company shall comply with an order made under subsection (2) within the time specified in the order. 
  
  ### Regulations and guidelines
  
  470.1 The Governor in Council may make regulations and the Superintendent may make guidelines respecting the creation by a company of security interests in its property to secure obligations of the company and the acquisition by the company of beneficial interests in property that is subject to security interests. 
  
  ### Exception
  
  470.2 Sections 470 and 470.1 do not apply in respect of a security interest created by a company to secure an obligation of the company to the Bank of Canada. 
  
  ### Restriction on receivers
  
  471 A company shall not grant to a person the right to appoint a receiver or a receiver and manager of the property or business of the company. 
  
  ### Restriction on partnerships
  
  472 (1) Except with the approval of the Superintendent, a company may not be a general partner in a limited partnership or a partner in a general partnership. 
  
  ### Meaning of 
  *general partnership* 
  
  (2) For the purposes of subsection (1), 
  *general partnership* means any partnership other than a limited partnership.  
  
  ## Restrictions Specific to Life Companies 
  
  ### General restriction
  
  473 (1) A life company shall not, and shall not permit its prescribed subsidiaries to, enter into any debt obligation, within the meaning assigned to that expression by the regulations, or issue any share, other than a common share, if as a result the aggregate of the total debt obligations of the company, determined in the prescribed manner, and the stated capital of the company would exceed the prescribed percentage of the total assets of the company. 
  
  ### Exception
  
  (2) A life company need not include in the aggregate amount calculated for the purposes of subsection (1) the value of any debt obligation or the stated capital of any shares if the value of the debt obligation or the stated capital of the shares is included as part of the regulatory capital of the company. 
  
  ### Restriction on guarantees
  
  474 (1) A life company shall not guarantee on behalf of any person the payment or repayment of any sum of money unless 
  (a) the sum of money is a fixed sum of money with or without interest thereon; and 
  (b) the person on whose behalf the company has undertaken to guarantee the payment or repayment has an unqualified obligation to reimburse the company for the full amount of the payment or repayment to be guaranteed. 
  
  ### Exception
  
  (2) Paragraph (1)(a) does not apply where the person on whose behalf the company has undertaken to guarantee a payment or repayment is a subsidiary of the company. 
  (3)  [Repealed, 1997, c. 15, s. 254]  
  
  ### Regulations
  
  (4) The Governor in Council may make regulations imposing terms and conditions in respect of guarantees permitted by this section. 
  
  ### Restriction on leasing
  
  475 A life company shall not engage in Canada in any personal property leasing activity in which a financial leasing entity, within the meaning of subsection 490(1), is not permitted to engage. 
  
  ## Restrictions Specific to Property and Casualty Companies and Marine Companies 
  
  ### General restriction
  
  476 (1) A property and casualty company, or a marine company, shall not, and shall not permit its prescribed subsidiaries to, enter into any debt obligation, within the meaning assigned to that expression by the regulations, or issue any share, other than a common share, if as a result the aggregate of the total debt obligations of the company, determined in the prescribed manner, and the stated capital of the company would exceed the prescribed percentage of the total assets of the company. 
  
  ### Exception
  
  (2) A property and casualty company, or a marine company, need not include in the aggregate amount calculated for the purposes of subsection (1) the value of any debt obligation if the value of the debt obligation is included as part of the regulatory capital of the company. 
  
  ### Restriction on guarantees
  
  477 (1) A property and casualty company, or a marine company, shall not guarantee on behalf of any person the payment or repayment of any sum of money unless the person on whose behalf the company has undertaken to guarantee the payment or repayment is a subsidiary of the company and has an unqualified obligation to reimburse the company for the full amount of the payment or repayment to be guaranteed. 
  
  ### Saving
  
  (2) Subsection (1) does not prevent a property and casualty company, or a marine company, from insuring a risk falling within a class of insurance that is specified in the order of the Superintendent approving the commencement and carrying on of business by the company. 
  
  ### Restriction on leasing
  
  478 A property and casualty company, or a marine company, shall not engage in Canada in any financial leasing of personal property. 
  
  ## Borrowing Costs 
  
  ### Definition of 
  *cost of borrowing* 
  
  479 For the purposes of this section and sections 479.1 to 487, 
  *cost of borrowing* means, in respect of a loan or an advance on the security or against the cash surrender value of a policy made by a company,  
  (a) the interest or discount applicable to the loan or advance; 
  (b) any amount charged in connection with the loan or advance that is payable by the borrower to the company; and 
  (c) any charge prescribed to be included in the cost of borrowing. For those purposes, however, 
  *cost of borrowing* does not include any charge prescribed to be excluded from the cost of borrowing.  
  
  ### Rebate of borrowing costs
  
  479.1 (1) Where a company makes a loan in respect of which the disclosure requirements of section 480 apply and the loan is not secured by a mortgage on real property and is required to be repaid either on a fixed future date or by instalments, the company shall, if there is a prepayment of the loan, rebate to the borrower a portion of the charges included in the cost of borrowing in respect of the loan. 
  
  ### Exception
  
  (2) The charges to be rebated do not include the interest or discount applicable to the loan. 
  
  ### Regulations
  
  (3) The Governor in Council may make regulations governing the rebate of charges under subsection (1). The rebate shall be made in accordance with those regulations. 
  
  ### Disclosing borrowing costs — loans
  
  480 (1) A company shall not make a loan to a natural person that is repayable in Canada unless the cost of borrowing, as calculated and expressed in accordance with section 481, and other prescribed information have been disclosed by the company to the borrower at the prescribed time and place and in the prescribed form and manner. 
  
  ### Non-application
  
  (2) Subsection (1) does not apply in respect of a loan that is of a prescribed class of loans. 
  
  ### Calculating borrowing costs
  
  481 The cost of borrowing shall be calculated, in the prescribed manner, on the basis that all obligations of the borrower are duly fulfilled and shall be expressed as a rate per annum and, in prescribed circumstances, as an amount in dollars and cents. 
  
  ### Additional disclosure
  
  482 (1) Where a company makes a loan in respect of which the disclosure requirements of section 480 are applicable and the loan is required to be repaid either on a fixed future date or by instalments, the company shall disclose to the borrower, in accordance with the regulations, 
  (a) whether the borrower has the right to repay the amount borrowed before the maturity of the loan and, if applicable, 
  (i) any terms and conditions relating to that right, including the particulars of the circumstances in which the borrower may exercise that right, and 
  (ii) whether, in the event that the borrower exercises the right, any portion of the cost of borrowing is to be rebated, the manner in which any such rebate is to be calculated or, if a charge or penalty will be imposed on the borrower, the manner in which the charge or penalty is to be calculated; 
  (b) in the event that an amount borrowed is not repaid at maturity or, if applicable, an instalment is not paid on the day the instalment is due to be paid, particulars of the charges or penalties to be paid by the borrower because of the failure to repay or pay in accordance with the contract governing the loan; 
  (c) at the prescribed time and place and in the prescribed form and manner, any prescribed changes respecting the cost of borrowing or the loan agreement; 
  (d) particulars of any other rights and obligations of the borrower; and 
  (e) any other prescribed information, at the prescribed time and place and in the prescribed form and manner. 
  
  ### Disclosure in credit card applications
  
  (1.1) A company shall, in accordance with the regulations, at the prescribed time and place and in the prescribed form and manner, provide prescribed information in any application forms or related documents that it prepares for the issuance of credit, payment or charge cards and provide prescribed information to any person applying to it for a credit, payment or charge card. 
  
  ### Disclosure re credit cards
  
  (2) Where a company issues or has issued a credit, payment or charge card to a natural person, the company shall, in addition to disclosing the costs of borrowing in respect of any loan obtained through the use of the card, disclose to the person, in accordance with the regulations, 
  (a) any charges or penalties described in paragraph (1)(b); 
  (b) particulars of the person’s rights and obligations; 
  (c) any charges for which the person becomes responsible by accepting or using the card; 
  (d) at the prescribed time and place and in the prescribed form and manner, any prescribed changes respecting the cost of borrowing or the loan agreement; and 
  (e) any other prescribed information, at the prescribed time and place and in the prescribed form and manner. 
  
  ### Additional disclosure re other loans
  
  (3) Where a company enters into or has entered into an arrangement, including a line of credit, for the making of a loan in respect of which the disclosure requirements of section 480 apply and the loan is not a loan in respect of which subsection (1) or (2) applies, the company shall, in addition to disclosing the costs of borrowing, disclose to the person to whom the loan is made, in accordance with the regulations, 
  (a) any charges or penalties described in paragraph (1)(b); 
  (b) particulars of the person’s rights and obligations; 
  (c) any charges for which the person is responsible under the arrangement; 
  (d) at the prescribed time and place and in the prescribed form and manner, any prescribed changes respecting the cost of borrowing under the arrangement; and 
  (e) any other prescribed information, at the prescribed time and place and in the prescribed form and manner. 
  
  ### Renewal statement
  
  482.1 If a company makes a loan in respect of which the disclosure requirements of section 480 apply and the loan is secured by a mortgage on real property, the company shall disclose to the borrower, at the prescribed time and place and in the prescribed form and manner, any information that is prescribed respecting the renewal of the loan. 
  
  ### Disclosure in advertising
  
  483 No person shall authorize the publication, issue or appearance of any advertisement in Canada relating to arrangements referred to in subsection 482(3), loans, credit cards, payment cards or charge cards, offered to natural persons by a company, and purporting to disclose prescribed information about the cost of borrowing or about any other matter unless the advertisement discloses prescribed information at the prescribed time and place and in the prescribed form and manner. 
  
  ### Disclosing borrowing costs — advances
  
  484 If regulations have been made respecting the manner in which the cost of borrowing is to be disclosed in respect of an advance on the security or against the cash surrender value of a policy, a company shall not make such an advance unless the cost of borrowing, as calculated and expressed in accordance with the regulations, has, at the prescribed time and place and in the prescribed form and manner, been disclosed by the company or otherwise as prescribed to the policyholder at or before the time when the advance is made. 
  
  ### Regulations re borrowing costs
  
  485 The Governor in Council may make regulations 
  (a) respecting the time and place at which, and the form and manner in which, a company is to disclose to a borrower 
  (i) the cost of borrowing, 
  (ii) any rebate of the cost of borrowing, and 
  (iii) any other information relating to a loan, arrangement, credit card, payment card or charge card referred to in section 482; 
  (b) respecting the contents of any statement disclosing the cost of borrowing and other information required to be disclosed by a company to a borrower; 
  (c) respecting the manner of calculating the cost of borrowing; 
  (d) respecting the circumstances under which the cost of borrowing is to be expressed as an amount in dollars and cents; 
  (e) specifying any class of loans that are not to be subject to section 479.1 or subsection 480(1) or 482(1) or (3) or section 482.1 or 483 or the regulations or any specified provisions of the regulations; 
  (f) specifying any class of advances that are not to be subject to section 484 or the regulations or any specified provisions of the regulations; 
  (g) respecting the time and place at which, and the form and manner in which, any rights, obligations, charges or penalties referred to in sections 479.1 to 484 are to be disclosed; 
  (h) prohibiting the imposition of any charge or penalty referred to in section 482 or providing that the charge or penalty, if imposed, will not exceed a prescribed amount; 
  (i) respecting the nature or amount of any charge or penalty referred to in paragraph 482(1)(b), (2)(a) or (3)(a) and the costs of the company that may be included or excluded in the determination of the charge or penalty; 
  (j) respecting the method of calculating the amount of rebate of the cost of borrowing, or the portion of the cost of borrowing referred to in subparagraph 482(1)(a)(ii); 
  (k) respecting advertisements made by a company regarding arrangements referred to in subsection 482(3), loans, credit cards, payment cards or charge cards; 
  (l) respecting the renewal of loans; and 
  (m) respecting such other matters or things as are necessary to carry out the purposes of sections 479.1 to 484. 
  
  ## Complaints 
  
  ### Procedures for dealing with complaints
  
  486 (1) A company shall 
  (a) establish procedures for dealing with complaints made by persons having requested or received products or services in Canada from the company; 
  (b) designate an officer or employee of the company to be responsible for implementing those procedures; and 
  (c) designate one or more officers or employees of the company to receive and deal with those complaints. 
  
  ### Procedures to be filed with Commissioner
  
  (2) A company shall file with the Commissioner a copy of its procedures established under paragraph (1)(a). 
  
  ### How procedures to be made available
  
  (3) A company shall make its procedures established under paragraph (1)(a) available 
  (a) on its websites through which products or services are offered in Canada; and 
  (b) in written format to be sent to any person who requests them. 
  
  ### Information on contacting Agency
  
  (4) A company shall also make prescribed information on how to contact the Agency available whenever it makes its procedures established under paragraph (1)(a) available under subsection (3). 
  
  ### Obligation to be member of complaints body
  
  486.1 In any province, if there is no law of the province that makes a company subject to the jurisdiction of an organization that deals with complaints made by persons having requested or received products or services in the province from a company, the company shall be a member of an organization that is not controlled by it and that deals with those complaints that have not been resolved to the satisfaction of the persons under procedures established by companies under paragraph 486(1)(a). 
  
  ### Information on contacting Agency
  
  487 (1) A company shall, in accordance with the regulations, at the prescribed time and place and in the prescribed form and manner, provide a person requesting or receiving a product or service from it with prescribed information on how to contact the Agency if the person has a complaint about an arrangement referred to in subsection 482(3), a payment, credit or charge card, the disclosure of or manner of calculating the cost of borrowing in respect of a loan or an advance on the security or against the cash surrender value of a policy, or about any other obligation of the company under a consumer provision. 
  
  ### Report
  
  (2) The Commissioner shall prepare a report, to be included in the report referred to in section 34 of the Financial Consumer Agency of Canada Act, respecting  
  (a) procedures for dealing with complaints established by companies pursuant to paragraph 486(1)(a); and 
  (b) the number and nature of complaints that have been brought to the attention of the Agency by persons who have requested or received a product or service from a company. 
  
  ## Miscellaneous 
  
  ### Prepayment protected
  
  488 (1) A company shall not make a loan to a natural person that is repayable in Canada, the terms of which prohibit prepayment of the money advanced or any instalment thereon before its due date. 
  
  ### Non-application of subsection (1)
  
  (2) Subsection (1) does not apply in respect of a loan 
  (a) that is secured by a mortgage on real property; or 
  (b) that is made for business purposes and the principal amount of which is more than $100,000 or such other amount as may be prescribed. 
  
  ### Regulations — activities
  
  488.1 The Governor in Council may make regulations respecting any matters involving a company’s dealings, or its employees’ or representatives’ dealings, with customers or the public, including 
  (a) what a company may or may not do in carrying out any of the activities in which it is permitted to engage, or in providing any of the services that it may provide, under section 440 and any ancillary, related or incidental activities or services; and 
  (b) the time and place at which and the form and manner in which any of those activities are to be carried out or any of those services are to be provided. 
  
  ### Regulations re customer information
  
  489 The Governor in Council may make regulations 
  (a) requiring a company or society to establish procedures regarding the collection, retention, use and disclosure of any information about its customers or members or any class of customers or members; 
  (b) requiring a company or society to establish procedures for dealing with complaints made by a customer or member about the collection, retention, use or disclosure of information about the customer or member; 
  (c) respecting the disclosure by a company or society of information relating to the procedures referred to in paragraphs (a) and (b); 
  (d) requiring a company or society to designate its officers and employees who are responsible for 
  (i) implementing the procedures referred to in paragraph (b), and 
  (ii) receiving and dealing with complaints made by a customer or member of the company or society about the collection, retention, use or disclosure of information about the customer or member; 
  (e) requiring a company or society to report information relating to 
  (i) complaints made by customers or members of the company or society about the collection, retention, use or disclosure of information, and 
  (ii) the actions taken by the company or society to deal with the complaints; and 
  (f) defining “information”, “collection” and “retention” for the purposes of paragraphs (a) to (e) and the regulations made under those paragraphs. 
  
  ### Public accountability statements
  
  489.1 (1) A company with equity of $1 billion or more shall, in accordance with regulations made under subsection (4), annually publish a statement describing the contribution of the company and its prescribed affiliates to the Canadian economy and society. 
  
  ### Filing
  
  (2) A company shall, at the prescribed time and place and in the prescribed form and manner, file a copy of the statement with the Commissioner. 
  
  ### Provision of statement to public
  
  (3) A company shall, at the prescribed time and place and in the prescribed form and manner, disclose the statement to its customers and to the public. 
  
  ### Regulations
  
  (4) The Governor in Council may make regulations prescribing 
  (a) the name, contents and form of a statement referred to in subsection (1) and the time and place at which and the manner in which it must be prepared; 
  (b) affiliates of a company referred to in subsection (1); 
  (c) the time and place at which and the form and manner in which a statement must be filed under subsection (2); and 
  (d) the time and place at which and the form and manner in which a statement mentioned in subsection (3) is to be disclosed, respectively, to a company’s customers and to the public. 
  
  ### Regulations re disclosure
  
  489.2 The Governor in Council may, subject to any other provisions of this Act relating to the disclosure of information, make regulations respecting the disclosure of information by companies or any prescribed class of companies, including regulations respecting 
  (a) the information that must be disclosed, including information relating to 
  (i) any product or service or prescribed class of products or services offered by them, 
  (ii) any of their policies, procedures or practices relating to the offer by them of any product or service or prescribed class of products or services, 
  (iii) anything they are required to do or to refrain from doing under a consumer provision, and 
  (iv) any other matter that may affect their dealings, or their employees’ or representatives’ dealings, with customers or the public; 
  (b) the time and place at which, the form and manner in which and the persons to whom information is to be disclosed; and 
  (c) the content and form of any advertisement by companies or any prescribed class of companies relating to any matter referred to in paragraph (a). 
  
  ### Provisions that do not apply
  
  489.3 (1) Paragraphs 165(2)(f) and (g) and sections 479 to 489.2 do not apply in respect of a company if 
  (a) the order approving the commencement and carrying on of business by the company restricts it to the reinsurance of risks within a class of insurance specified in the order; 
  (b) it has provided the Commissioner with a declaration stating that it is not dealing with a prescribed group of consumers or carrying on any prescribed activity; and 
  (c) after providing the declaration, it continues to not deal with that prescribed group. 
  
  ### Notice if action taken that causes provisions to apply
  
  (2) The company must give notice to the Commissioner if it subsequently deals with the prescribed group referred to in the declaration. 
  
  # PART IX 
  
  ## Investments 
  
  ## Definitions and Application 
  
  ### Definitions
  
  490 (1) The definitions in this subsection apply in this Part.  
  *business growth fund* means Canadian Business Growth Fund (GP) Inc., a corporation incorporated under the Canada Business Corporations Act. (fonds de croissance des entreprises)   
  *closed-end fund* means an entity whose activities are limited to investing the funds of the entity so as to provide investment diversification and professional investment management to the holders of its securities, and whose securities are  
  (a) fixed in number and distributed to the public in an offering under a preliminary prospectus, prospectus, short-form prospectus or similar document in accordance with the laws of a province or a foreign jurisdiction; 
  (b) traded on an exchange or an over-the-counter market; and 
  (c) liquidated on a fixed future termination date, the proceeds of which are allocated to the holders of the securities on a proportional basis. ( fonds d’investissement à capital fixe)   
  *commercial loan* means  
  (a) any loan made or acquired by a company, other than 
  (i) a loan to a natural person in an amount of two hundred and fifty thousand dollars or less, 
  (ii) a loan to the Government of Canada, the government of a province, a municipality, or to any agency thereof, or to the government of a foreign country or any political subdivision thereof, or any agency thereof, or to a prescribed international agency, 
  (iii) a loan that is guaranteed by, or fully secured by securities issued by, a government, a municipality or an agency referred to in subparagraph (ii), 
  (iv) a loan that is secured by a mortgage on real property, if 
  (A) the mortgage is on residential property and the amount of the loan, together with the amount then outstanding of any mortgage having an equal or prior claim against the property, does not exceed 80% of the value of the property at the time the loan is made or acquired, or 
  (B) the mortgage is on real property other than residential property and 
  (I) the amount of the loan, together with the amount then outstanding of any mortgage having an equal or prior claim against the property, does not exceed 80% of the value of the property at the time the loan is made or acquired, and 
  (II) at the time the loan is made or acquired, the property provides an annual income sufficient to pay all annual expenses related to the property, including the payments owing under the mortgage and the mortgages having an equal or prior claim against the property, 
  (v) a loan that is secured by a mortgage on real property, if 
  (A) the mortgage is on residential property and 
  (I) the amount of the loan, together with the amount then outstanding of any mortgage having an equal or prior claim against the property, exceeds 80% of the value of the property at the time the loan is made or acquired, and 
  (II) repayment of the amount of the loan that exceeds 80% of the value of the property is guaranteed or insured by a government agency or private insurer approved by the Superintendent, 
  (B) the mortgage is on real property other than residential property and 
  (I) the amount of the loan, together with the amount then outstanding of any mortgage having an equal or prior claim against the property, exceeds 80% of the value of the property at the time the loan is made or acquired, 
  (II) repayment of the amount of the loan that exceeds 80% of the value of the property is guaranteed or insured by a government agency or private insurer approved by the Superintendent, and 
  (III) at the time the loan is made or acquired, the property provides an annual income sufficient to pay all annual expenses related to the property, including the payments owing under the mortgage and the mortgages having an equal or prior claim against the property, or 
  (C) the loan is one referred to in paragraph 469(2)(d), 
  (vi) a loan that 
  (A) consists of a deposit made by the company with another financial institution, 
  (B) is fully secured by a deposit with any financial institution, including the company, 
  (C) is fully secured by debt obligations guaranteed by any financial institution other than the company, or 
  (D) is fully secured by a guarantee of a financial institution other than the company, 
  (vii) an advance on the security of or against the cash surrender value of a policy, or 
  (viii) a loan to an entity controlled by the company; 
  (b) an investment in debt obligations, other than 
  (i) debt obligations that are 
  (A) guaranteed by any financial institution other than the company, 
  (B) fully secured by deposits with any financial institution, or 
  (C) fully secured by debt obligations that are guaranteed by any financial institution other than the company, 
  (ii) debt obligations issued by the Government of Canada, the government of a province, a municipality, or by any agency thereof, or by the government of a foreign country or any political subdivision thereof, or by any agency thereof, or by a prescribed international agency, 
  (iii) debt obligations that are guaranteed by, or fully secured by securities issued by, a government, a municipality or an agency referred to in subparagraph (ii), 
  (iv) debt obligations that are widely distributed, as that expression is defined by the regulations, or 
  (v) debt obligations of an entity controlled by the company; and 
  (c) an investment in shares of a body corporate or ownership interests in an unincorporated entity, other than 
  (i) shares or ownership interests that are widely distributed, as that expression is defined by the regulations, 
  (ii) shares or ownership interests of an entity controlled by the company, or 
  (iii) participating shares. ( prêt commercial)   
  *factoring entity* means a factoring entity as defined in the regulations. (entité s’occupant d’affacturage)   
  *finance entity* means a finance entity as defined in the regulations. (entité s’occupant de financement)   
  *financial leasing entity* means an entity  
  (a) the activities of which are limited to the financial leasing of personal property and such related activities as are prescribed and whose activities conform to such restrictions and limitations thereon as are prescribed; and 
  (b) that, in conducting the activities referred to in paragraph (a) in Canada, does not 
  (i) direct its customers or potential customers to particular dealers in the leased property or the property to be leased, 
  (ii) enter into lease agreements with persons in respect of any motor vehicle having a gross vehicle weight, as that expression is defined by the regulations, of less than twenty-one tonnes, or 
  (iii) enter into lease agreements with natural persons in respect of personal household property, as that expression is defined by the regulations. ( entité s’occupant de crédit-bail)   
  *loan* includes an acceptance, advance on the security of or against the cash surrender value of a policy, endorsement or other guarantee, a deposit, a financial lease, a conditional sales contract, a repurchase agreement and any other similar arrangement for obtaining funds or credit but does not include investments in securities. (prêt ou emprunt)   
  *motor vehicle* means a motorized vehicle designed to be used primarily on a public highway for the transportation of persons or things, but does not include  
  (a) a fire-engine, bus, ambulance or utility truck; or 
  (b) any other special purpose motorized vehicle that contains significant special features that make it suitable for a specific purpose. ( véhicule à moteur)   
  *mutual fund distribution entity* means an entity whose principal activity is acting as a selling agent of units, shares or other interests in a mutual fund and acting as a collecting agent in the collection of payments for any such interests if  
  (a) the proceeds of the sales of any such interests, less any sales commissions and service fees, are paid to the mutual fund; and 
  (b) the existence of a sales commission and service fee in respect of the sale of any such interest is disclosed to the purchaser of the interest before the purchase of the interest. ( courtier de fonds mutuels)   
  *mutual fund entity* means an entity  
  (a) whose activities are limited to the investing of the funds of the entity so as to provide investment diversification and professional investment management to the holders of its securities; and 
  (b) whose securities entitle their holders to receive, on demand, or within a specified period after demand, an amount computed by reference to the value of a proportionate interest in the whole or in a part of its net assets, including a separate fund or trust account of the entity. ( entité s’occupant de fonds mutuels)   
  *participating share* means a share of a body corporate that carries the right to participate in the earnings of the body corporate to an unlimited degree and to participate in a distribution of the remaining property of the body corporate on dissolution. (action participante)   
  *permitted entity* means an entity in which a company is permitted to acquire a substantial investment under section 495. (entité admissible)   
  *prescribed subsidiary* means a subsidiary that is one of a prescribed class of subsidiaries. (filiale réglementaire)   
  *specialized financing entity* means a specialized financing entity as defined in the regulations. (entité s’occupant de financement spécial)  
  
  ### Members of a company’s group
  
  (2) For the purpose of this Part, a member of a company’s group is any of the following: 
  (a) an entity referred to in any of paragraphs 495(1)(a) to (f) that controls the company; 
  (b) a subsidiary of the company or of an entity referred to in any of paragraphs 495(1)(a) to (f) that controls the company; 
  (c) an entity in which the company, or an entity referred to in any of paragraphs 495(1)(a) to (f) that controls the company, has a substantial investment; or 
  (d) a prescribed entity in relation to the company. 
  
  ### Exclusion of assets and liabilities of segregated funds
  
  (3) A reference in this Part to the assets or liabilities of a company does not include 
  (a) assets of a segregated fund maintained pursuant to section 451; or 
  (b) liabilities of the company under the policies and for the amounts in respect of which such a fund is maintained. 
  
  ### Non-application of Part
  
  491 This Part does not apply in respect of 
  (a) assets of a segregated fund maintained pursuant to section 451; 
  (b) the holding of a security interest in real property, unless the security interest is prescribed under paragraph 509(a) to be an interest in real property; or 
  (c) the holding of a security interest in securities of an entity. 
  
  ## General Constraints on Investments 
  
  ### Investment standards
  
  492 The directors of a company shall establish and the company shall adhere to investment and lending policies, standards and procedures that a reasonable and prudent person would apply in respect of a portfolio of investments and loans to avoid undue risk of loss and obtain a reasonable return. 
  
  ### Limit — business growth fund
  
  492.1 (1) The aggregate value of all ownership interests in the business growth fund and the entities that the business growth fund controls that a company and its subsidiaries hold must not exceed $200,000,000. 
  
  ### Application
  
  (2) For the purposes of subsection (1), the value of an ownership interest is determined by the amount paid for it at the time of its issuance. 
  
  ### Restriction on control and substantial investments
  
  493 (1) Subject to subsections (2) to (4.4), no company shall acquire control of, or hold, acquire or increase a substantial investment in, any entity other than a permitted entity. 
  
  ### Exception: indirect investments
  
  (2) A company may, subject to Part XI, acquire control of, or acquire or increase a substantial investment in, an entity other than a permitted entity by way of 
  (a) an acquisition of control of an entity referred to in any of paragraphs 495(1)(a) to (j), or of a prescribed entity, that controls or has a substantial investment in the entity; or 
  (b) an acquisition of shares or ownership interests in the entity by 
  (i) an entity referred to in any of paragraphs 495(1)(a) to (j), or a prescribed entity, that is controlled by the company, or 
  (ii) an entity controlled by an entity referred to in any of paragraphs 495(1)(a) to (j), or a prescribed entity, that is controlled by the company. 
  
  ### Exception: temporary investments, realizations and loan workouts
  
  (3) A company may, subject to Part XI, acquire control of, or acquire or increase a substantial investment in, an entity by way of 
  (a) a temporary investment permitted by section 498; 
  (b) an acquisition of shares of a body corporate or of ownership interests in an unincorporated entity permitted by section 499; or 
  (c) a realization of security permitted by section 500. 
  
  ### Exception: specialized financing regulations
  
  (4) A life company may, subject to Part XI, acquire control of, or hold, acquire or increase a substantial investment in, an entity other than a permitted entity if it does so in accordance with regulations made under paragraph 494(d) concerning specialized financing. 
  
  ### Business growth fund
  
  (4.1) Subject to section 492.1, subsections (4.2) to (4.4) and Part XI, a company may hold, acquire or increase a substantial investment in the business growth fund or any entity that the business growth fund controls. 
  
  ### For greater certainty
  
  (4.2) For greater certainty, a company is prohibited from acquiring control of the business growth fund or any entity that the business growth fund controls. 
  
  ### Prohibition — entity
  
  (4.3) A company is prohibited from holding or acquiring a substantial investment in the business growth fund or any entity that the business growth fund controls if the business growth fund or any entity that the business growth fund controls holds or acquires shares of, or other ownership interests in, any of the following entities, or in any entity that controls any of the following entities: 
  (a) an entity referred to in any of paragraphs 495(1)(a) to (j); 
  (b) an entity that is primarily engaged in the leasing of motor vehicles in Canada for the purpose of extending credit to a customer or financing a customer’s acquisition of a motor vehicle; 
  (c) an entity that is primarily engaged in providing temporary possession of personal property, including motor vehicles, to customers in Canada for a purpose other than to finance the customer’s acquisition of the property; 
  (d) an entity that acts as an insurance broker or agent in Canada; or 
  (e) an entity that is engaged in any prescribed activity. 
  
  ### Prohibition — capital and loans
  
  (4.4) A company is prohibited from holding or acquiring a substantial investment in the business growth fund or any entity that the business growth fund controls if the business growth fund or any entity that the business growth fund controls holds shares of, or other ownership interests in, an entity or holds a loan made to an entity and, in respect of that entity and its affiliates, the aggregate value of the following exceeds $100,000,000: 
  (a) all ownership interests that are held by the company, the company’s subsidiaries, the business growth fund or the entities that the business growth fund controls, the value of those ownership interests as determined by the amount paid for them at the time each was first acquired by any of those entities; and 
  (b) the outstanding principal of all loans held by the business growth fund or the entities that the business growth fund controls. 
  
  ### Exception: uncontrolled event
  
  (5) A company is deemed not to contravene subsection (1) if the company acquires control of, or acquires or increases a substantial investment in, an entity solely as the result of an event not within the control of the company. 
  
  ### Non-application of subsection (2)
  
  (5.1) No company shall, under subsection (2), acquire control of, or acquire or increase a substantial investment in, an entity referred to in paragraph 495(1)(j). 
  
  ### Holding
  
  (5.2) If a company holds a substantial investment in an entity referred to in paragraph 495(1)(j) that it acquired or increased under subsection (2) before the coming into force of subsection (5.1), the company may continue to hold that substantial investment. 
  
  ### Application of other provision
  
  (6) Despite having acquired control of, or a substantial investment in, an entity under a particular provision of this Part, a company may continue to control the entity or hold the substantial investment in the entity as though it had made the acquisition under another provision of this Part so long as the conditions of that other provision are met. 
  
  ### Timing of deemed acquisition
  
  (7) If a company decides to exercise its right under subsection (6), the company is deemed to be acquiring the control or the substantial investment under the other provision. 
  
  ### Regulations
  
  494 The Governor in Council may make regulations 
  (a) respecting the determination of the amount or value of loans, investments and interests for the purposes of this Part; 
  (b) respecting the loans and investments, and the maximum aggregate amount of all loans and investments, that may be made or acquired by a company and its prescribed subsidiaries to or in a person and any persons connected with that person; 
  (c) specifying the classes of persons who are connected with any person for the purposes of paragraph (b); and 
  (d) concerning specialized financing for the purposes of subsection 493(4). 
  
  ## Subsidiaries and Equity Investments 
  
  ### Permitted investments
  
  495 (1) Subject to subsections (6) to (8) and Part XI, a company may acquire control of, or acquire or increase a substantial investment in 
  (a) a company or a society; 
  (b) an insurance holding company; 
  (c) a bank; 
  (d) a bank holding company; 
  (e) a body corporate to which the Trust and Loan Companies Act applies;  
  (f) an association to which the Cooperative Credit Associations Act applies;  
  (g) a trust, loan or insurance corporation incorporated or formed by or under an Act of the legislature of a province; 
  (h) a cooperative credit society incorporated or formed, and regulated, by or under an Act of the legislature of a province; 
  (i) an entity that is incorporated or formed by or under an Act of Parliament or of the legislature of a province and that is primarily engaged in dealing in securities; or 
  (j) an entity that is incorporated or formed, and regulated, otherwise than by or under an Act of Parliament or of the legislature of a province and that is primarily engaged outside Canada in a business that, if carried on in Canada, would be the business of banking, the business of a cooperative credit society, the business of insurance, the business of providing fiduciary services or the business of dealing in securities. 
  
  ### Permitted investments — life companies
  
  (2) Subject to subsections (3) and (6) to (8) and Part XI, a life company may acquire control of, or acquire or increase a substantial investment in, an entity, other than an entity referred to in any of paragraphs (1)(a) to (j), whose business is limited to one or more of the following: 
  (a) engaging in any financial service activity or in any other activity that a life company is permitted to engage in under subsection 440(2) or section 441 or 442, other than paragraph 441(1)(h); 
  (b) acquiring or holding shares of, or ownership interests in, entities in which a company is permitted under this Part to hold or acquire; 
  (c) engaging in the provision of any services exclusively to any or all of the following, so long as the entity is providing those services to the company or any member of the company’s group: 
  (i) the company, 
  (ii) any member of the company’s group, 
  (iii) any entity that is primarily engaged in the business of providing financial services, 
  (iv) any permitted entity in which an entity referred to in subparagraph (iii) has a substantial investment, or 
  (v) any prescribed person, if it is doing so under prescribed terms and conditions, if any are prescribed; 
  (d) engaging in any activity that a life company is permitted to engage in, other than an activity referred to in paragraph (a) or (e), that relates to 
  (i) the promotion, sale, delivery or distribution of a financial product or financial service that is provided by the life company or any member of the life company’s group, or 
  (ii) if a significant portion of the business of the entity involves an activity referred to in subparagraph (i), the promotion, sale, delivery or distribution of a financial product or financial service that is provided by any other entity that is primarily engaged in the business of providing financial services; 
  (e) engaging in the activities referred to in the definition closed-end fund, mutual fund distribution entity or mutual fund entity in subsection 490(1); and  
  (f) engaging in prescribed activities, under prescribed terms and conditions, if any are prescribed. 
  
  ### Permitted infrastructure entities
  
  (2.1) Subject to subsection (3) and Part XI, a life company may — under any prescribed terms and conditions — acquire control of, or acquire or increase a substantial investment in, a permitted infrastructure entity. 
  
  ### Restriction
  
  (3) A life company may not acquire control of, or acquire or increase a substantial investment in, an entity whose business includes any activity referred to in any of paragraphs (2)(a) to (e), or in any regulation made under paragraph 2.2(b), if the entity engages in the business of accepting deposit liabilities or if the activities of the entity include 
  (a) activities that a company is not permitted to engage in under any of sections 466, 469 and 475; 
  (b) dealing in securities, except as may be permitted under paragraph (2)(e) or as may be permitted to a company under paragraph 440(2)(b); 
  (c) activities that a company is not permitted to engage in under any regulation made under section 489 if the entity engages in the activities of a finance entity or of any other entity as may be prescribed; 
  (d) acquiring control of or acquiring or holding a substantial investment in another entity unless 
  (i) in the case of an entity, other than a permitted infrastructure entity, that is controlled by the company, the company itself would be permitted under this Part to acquire a substantial investment in the other entity, 
  (ii) in the case of an entity, other than a permitted infrastructure entity, that is not controlled by the company, the company itself would be permitted to acquire a substantial investment in the other entity under subsection (1), (2) or (2.1) or 493(2), paragraph 493(3)(b) or (c) or subsection 493(4), or 
  (iii) in the case of a permitted infrastructure entity, whether or not that entity is controlled by the company, the company itself would be permitted to acquire a substantial investment in the other entity under subsection (2.1); or 
  (e) any prescribed activity. 
  
  ### Exception
  
  (3.1) Despite paragraph (3)(a), a life company may acquire control of, or acquire or increase a substantial investment in, any entity that acts as a trustee for a trust if the entity has been permitted under the laws of a province to act as a trustee for a trust and the following conditions are satisfied: 
  (a) the entity acts as a trustee only with respect to a closed-end fund or mutual fund entity; and 
  (b) if the entity engages in other business, that business is limited to engaging in one or more of the following: 
  (i) the activities of a mutual fund distribution entity, 
  (ii) any activity that a company is permitted to engage in under subsection 441(1.1), and 
  (iii) the provision of investment counselling services and portfolio management services. 
  
  ### Permitted investments — property and casualty companies and marine companies
  
  (4) Subject to subsections (5) to (8) and Part XI, a property and casualty company, or a marine company, may acquire control of, or acquire or increase a substantial investment in, an entity, other than an entity referred to in any of paragraphs (1)(a) to (j), whose business is limited to one or more of the following: 
  (a) engaging in any financial service activity or in any other activity that a property and casualty company, or a marine company, is permitted to engage in under subsection 440(2) or section 441 or 442, other than paragraph 441(1)(h); 
  (b) acquiring or holding shares of, or ownership interests in, entities in which a property and casualty company, or a marine company, is permitted under this Part to hold or acquire; 
  (c) engaging in the provision of any services exclusively to any or all of the following, so long as the entity is providing those services to the company or any member of the company’s group: 
  (i) the company, 
  (ii) any member of the company’s group, 
  (iii) any entity that is primarily engaged in the business of providing financial services, 
  (iv) any permitted entity in which an entity referred to in subparagraph (iii) has a substantial investment, or 
  (v) any prescribed person, if it is doing so under prescribed terms and conditions, if any are prescribed; 
  (d) engaging in any activity that a property and casualty company, or a marine company, is permitted to engage in, other than an activity referred to in paragraph (a) or (e), that relates to 
  (i) the promotion, sale, delivery or distribution of a financial product or financial service that is provided by the company or any member of the company’s group, or 
  (ii) if a significant portion of the business of the entity involves an activity referred to in subparagraph (i), the promotion, sale, delivery or distribution of a financial product or financial service that is provided by any other entity that is primarily engaged in the business of providing financial services; 
  (e) engaging in the activities referred to in the definition closed-end fund, mutual fund distribution entity or mutual fund entity in subsection 490(1); and  
  (f) engaging in prescribed activities, under prescribed terms and conditions, if any are prescribed. 
  
  ### Restriction — property and casualty companies and marine companies
  
  (5) A property and casualty company, or a marine company, may not acquire control of, or acquire or increase a substantial investment in, an entity whose business includes any activity referred to in any of paragraphs (4)(a) to (e) if the entity engages in the business of accepting deposit liabilities or if the activities of the entity include 
  (a) activities that a company is not permitted to engage in under any of sections 466, 469 and 478; 
  (b) dealing in securities, except as may be permitted under paragraph (4)(e) or as may be permitted to a company under paragraph 440(2)(b); 
  (c) any financial intermediary activity that exposes the entity to material market or credit risk, including the activities of a finance entity, a factoring entity and a financial leasing entity; 
  (c.1) the activities of a specialized financing entity; 
  (d) acquiring control of or acquiring or holding a substantial investment in another entity unless 
  (i) in the case of an entity that is controlled by the company, the company itself would be permitted under this Part to acquire a substantial investment in the other entity, or 
  (ii) in the case of an entity that is not controlled by the company, the company itself would be permitted to acquire a substantial investment in the other entity under subsection (1) or (4) or 493(2) or paragraph 493(3)(b) or (c); or 
  (e) any prescribed activity. 
  
  ### Exception
  
  (5.1) Despite paragraph (5)(a), a property and casualty company, or a marine company, may acquire control of, or acquire or increase a substantial investment in, any entity that acts as a trustee for a trust if the entity has been permitted under the laws of a province to act as a trustee for a trust and the following conditions are satisfied: 
  (a) the entity acts as a trustee only with respect to a closed-end fund or mutual fund entity; and 
  (b) if the entity engages in other business, that business is limited to engaging in one or more of the following: 
  (i) the activities of a mutual fund distribution entity, and 
  (ii) the provision of investment counselling services and portfolio management services. 
  
  ### Control
  
  (6) Subject to subsection (10) and the regulations, a company may not acquire control of, or acquire or increase a substantial investment in, 
  (a) an entity referred to in any of paragraphs (1)(a) to (j), unless 
  (i) the company controls, within the meaning of paragraph 3(1)(d), the entity, or would thereby acquire control, within the meaning of that paragraph, of the entity, or 
  (ii) the company is permitted by regulations made under paragraph 501(a) to acquire or increase the substantial investment; 
  (b) an entity whose business includes one or more of the activities referred to in paragraph (2)(a) and that engages, as part of its business, in any financial intermediary activity that exposes the entity to material market or credit risk, including a finance entity, a factoring entity and a financial leasing entity, unless 
  (i) the company controls, within the meaning of paragraph 3(1)(d), the entity, or would thereby acquire control, within the meaning of that paragraph, of the entity, or 
  (ii) the company is permitted by regulations made under paragraph 501(a) to acquire or increase the substantial investment; or 
  (c) an entity whose business includes an activity referred to in paragraph (2)(b) or (4)(b), including a specialized financing entity, unless 
  (i) the company controls, within the meaning of paragraph 3(1)(d), the entity, or would thereby acquire control, within the meaning of that paragraph, of the entity, 
  (ii) the company is permitted by regulations made under paragraph 501(a) to acquire or increase the substantial investment, or 
  (iii) subject to prescribed terms and conditions, if any are prescribed, the activities of the entity do not include the acquisition or holding of control of, or the acquisition or holding of shares or other ownership interests in, an entity referred to in paragraph (a) or (b) or an entity that is not a permitted entity. 
  
  ### Minister’s approval
  
  (7) Subject to the regulations, a company may not, without the prior written approval of the Minister, 
  (a) acquire control of an entity referred to in paragraphs (1)(g) to (i) from a person who is not a member of the company’s group; 
  (b) acquire control of an entity referred to in paragraph (1)(j) or (6)(b), other than an entity whose activities are limited to the activities of one or more of the following entities, if the control is acquired from an entity referred to in any of paragraphs (1)(a) to (f) that is not a member of the company’s group: 
  (i) a factoring entity, or 
  (ii) a financial leasing entity; 
  (b.1) acquire control of an entity referred to in paragraph (1)(j) if the company is a company with equity of two billion dollars or more and is the value of the entity’s consolidated assets, as it would have been reported in the entity’s annual financial statements if those statements had been prepared immediately before the acquisition, is the aggregate of the values of the consolidated assets of all other entities referred to in paragraph (1)(j) that the company has acquired control of within the preceding 12 months, as the value for each entity would have been reported in its annual financial statements if those statements had been prepared immediately before the acquisition of control of that entity, and is 10% of the value of the company’s consolidated assets, as shown in the company’s last annual statement that was prepared before its first acquisition of control of an entity referred to in paragraph (1)(j) within the preceding 12 months; 
  (c) acquire control of, or acquire or increase a substantial investment in, an entity whose business includes one or more of the activities referred to in paragraph (2)(d) or (4)(d); 
  (d) acquire control of, or acquire or increase a substantial investment in, an entity that engages in Canada in an activity described in paragraph 441(1)(d); 
  (d.1) acquire control of, or acquire or increase a substantial investment in, an entity that engages in an activity described in paragraph 441(1)(d.1); or 
  (e) acquire control of, or acquire or increase a substantial investment in, an entity engaging in an activity prescribed for the purposes of paragraph (2)(f) or (4)(f). 
  
  ### Matters for consideration
  
  (7.1) In addition to any matters or conditions provided for in this Act that are relevant to the granting of an approval, the Minister may, in considering whether to grant the approval under paragraph (7)(b.1), take into account all matters that he or she considers relevant in the circumstances, including 
  (a) the stability of the financial system in Canada; and 
  (b) the best interests of the financial system in Canada. 
  
  ### Superintendent’s approval
  
  (8) Subject to subsection (9) and the regulations, a company may not acquire control of, or acquire or increase a substantial investment in, an entity referred to in any of paragraphs (1)(g) to (j) and (6)(b) and (c) unless the company obtains the approval of the Superintendent. 
  
  ### Exception
  
  (9) Subsection (8) does not apply in respect of a particular transaction if 
  (a) the company is acquiring control of an entity, other than a specialized financing entity, and the only reason for which the company would, but for this subsection, require approval for the acquisition is that the entity carries on activities referred to in paragraph (2)(b) or (4)(b); 
  (b) the company is acquiring control of an entity whose activities are limited to the activities of a factoring entity or a financial leasing entity; 
  (b.1) the company is acquiring control of, or acquiring or increasing a substantial investment in, an entity whose activities are limited to acquiring or holding shares of, or ownership interests in, permitted infrastructure entities; or 
  (c) the Minister has approved the transaction under subsection (7) or is deemed to have approved it under subsection 496(1); 
  (d) subject to subsection (9.1), the company is acquiring control of an entity (referred to in this paragraph as the “target entity”) referred to in paragraph (6)(b) or (c) and is the aggregate of the values, as they would have been reported in the company’s annual financial statements if those statements were prepared on the day of the acquisition of control of the target entity, of 
  (i) the target entity’s consolidated assets, 
  (ii) the assets of the company and of any subsidiary of the company that were acquired, at any time within the 12 months preceding the acquisition of control of the target entity, from any entity that, at that time, held any of the assets referred to in subparagraph (i), and 
  (iii) the consolidated assets of any entity referred to in paragraph (6)(b) or (c) the control of which is acquired by the company at the same time as the acquisition of control of the target entity — or within the 12 months preceding the acquisition of control of the target entity if, at any time within those 12 months, that entity and the target entity were affiliates — excluding any assets referred to in subparagraph (i) or (ii) and the consolidated assets of an entity in respect of which no approval of the Superintendent is required under any of paragraphs (a) to (c), is the value of the company’s consolidated assets, as shown in its last annual statement prepared before the acquisition of control of the target entity, and is 
  (i) 0.01, in the case of a company with equity of 12 billion dollars or more, or 
  (ii) 0.02, in the case of any other company; or 
  (e) the company is acquiring or increasing a substantial investment in an entity (referred to in this paragraph as the “target entity”) without acquiring control of it, and is the aggregate of the values, as they would have been reported in the company’s annual financial statements if those statements were prepared on the day of the acquisition or increase of the substantial investment in the target entity, of 
  (i) the shares of, or other ownership interests in, the target entity that the company or a subsidiary of the company is acquiring in the transaction that results in the acquisition or increase of a substantial investment in the target entity, and the shares of, or other ownership interests in, the target entity that are held by an entity the control of which the company is acquiring in the transaction that results in the acquisition or increase of a substantial investment in the target entity, 
  (ii) the shares of, or other ownership interests in, the target entity that are held by the company or a subsidiary of the company and that were acquired by the company or the subsidiary within the 12 months preceding the transaction referred to in subparagraph (i), and 
  (iii) the shares of, or other ownership interests in, the target entity that are held by a subsidiary of the company the control of which was acquired by the company within the 12 months preceding the transaction referred to in subparagraph (i), excluding any shares or other ownership interests referred to in subparagraph (ii), is the value of the company’s consolidated assets, as shown in its last annual statement prepared before the transaction that results in the acquisition or increase of the substantial investment in the target entity, and is 
  (i) 0.005, in the case of a company with equity of 12 billion dollars or more, or 
  (ii) 0.01, in the case of any other company. 
  
  ### No exception for deemed acquisition
  
  (9.1) The exception in paragraph (9)(d) does not apply with respect to a deemed acquisition of control under subsection 493(7). 
  
  ### Control not required
  
  (10) A company need not control an entity referred to in paragraph (1)(j), or an entity that is incorporated or formed otherwise than by or under an Act of Parliament or of the legislature of a province, if the laws or customary business practices of the country under the laws of which the entity was incorporated or formed do not permit the company to control the entity. 
  
  ### Prohibition on giving up control in fact
  
  (11) A company that, under subsection (6), controls an entity may not, without the prior written approval of the Minister, give up control, within the meaning of paragraph 3(1)(d), of the entity while it continues to control the entity. 
  
  ### Giving up control
  
  (12) A company that, under subsection (6), controls an entity may, with the prior written approval of the Superintendent, give up control of the entity while keeping a substantial investment in the entity if 
  (a) the company is permitted to do so by regulations made under paragraph 501(c); or 
  (b) the entity meets the conditions referred to in subparagraph (6)(c)(iii). 
  
  ### Subsections do not apply
  
  (13) If a company controls, within the meaning of paragraph 3(1)(a), (b) or (c), an entity, subsections (7) and (8) do not apply in respect of any subsequent increases by the company of its substantial investment in the entity so long as the company continues to control the entity. 
  
  ### Approval for indirect investments
  
  496 (1) If a company obtains the approval of the Minister under subsection 495(7) to acquire control of, or to acquire or increase a substantial investment in, an entity and, through that acquisition or increase, the company indirectly acquires control of, or acquires or increases a substantial investment in, another entity that would require the approval of the Minister under subsection 495(7) or the Superintendent under subsection 495(8) and that indirect acquisition or increase is disclosed to the Minister in writing before the approval is obtained, the company is deemed to have obtained the approval of the Minister or the Superintendent for that indirect acquisition or increase. 
  
  ### Approval for indirect investments
  
  (2) If a company obtains the approval of the Superintendent under subsection 495(8) to acquire control of, or to acquire or increase a substantial investment in, an entity and, through that acquisition or increase the company indirectly acquires control of, or acquires or increases a substantial investment in, another entity that would require the approval of the Superintendent under that subsection and that indirect acquisition or increase is disclosed to the Superintendent in writing before the approval is obtained, the company is deemed to have obtained the approval of the Superintendent for that indirect acquisition or increase. 
  
  ### Undertakings
  
  497 (1) If a company controls a permitted entity, other than an entity referred to in any of paragraphs 495(1)(a) to (f), the company shall provide the Superintendent with any undertakings that the Superintendent may require regarding 
  (a) the activities of the entity; and 
  (b) access to information about the entity. 
  
  ### Undertakings
  
  (2) If a company acquires control of an entity referred to in any of paragraphs 495(1)(g) to (j), the company shall provide the Superintendent with any undertakings concerning the entity that the Superintendent may require. 
  
  ### Agreements with other jurisdictions
  
  (3) The Superintendent may enter into an agreement with the appropriate official or public body responsible for the supervision of any entity referred to in any of paragraphs 495(1)(g) to (j) in each province or in any other jurisdiction concerning any matters referred to in paragraphs (1)(a) and (b) or any other matter the Superintendent considers appropriate. 
  
  ### Access to records
  
  (4) Despite any other provision of this Part, a company shall not control a permitted entity, other than an entity referred to in any of paragraphs 495(1)(a) to (f), unless, in the course of the acquisition of control or within a reasonable time after the control is acquired, the company obtains from the permitted entity an undertaking to provide the Superintendent with reasonable access to the records of the permitted entity. 
  
  ## Exceptions and Exclusions 
  
  ### Temporary investments in entity
  
  498 (1) Subject to subsection (4), a company may, by way of a temporary investment, acquire control of, or acquire or increase a substantial investment in, an entity but, within two years, or any other period that may be specified or approved by the Superintendent, after acquiring control or after acquiring or increasing the substantial investment, as the case may be, it shall do all things necessary to ensure that it no longer controls the entity or has a substantial investment in the entity. 
  
  ### Transitional
  
  (2) Despite subsection (1), if a company that was in existence immediately before June 1, 1992 had an investment in an entity on September 27, 1990 that is a substantial investment within the meaning of section 10 and the company subsequently increases that substantial investment by way of a temporary investment, the company shall, within two years, or any other period that is specified or approved by the Superintendent, after increasing the substantial investment, do all things necessary to ensure that its substantial investment in the entity is no greater than it was on September 27, 1990. 
  
  ### Extension
  
  (3) The Superintendent may, in the case of any particular company that makes an application under this subsection, extend the period of two years, or the other period specified or approved by the Superintendent, that is referred to in subsection (1) or (2) for any further period or periods, and on any terms and conditions, that the Superintendent considers necessary. 
  
  ### Temporary investment
  
  (4) If a company, by way of temporary investment, acquires control of, or acquires or increases a substantial investment in, an entity for which the approval of the Minister would have been required under subsection 495(7) if the company had acquired the control, or acquired or increased the substantial investment, under section 495, the company must, within 90 days after acquiring control or after acquiring or increasing the substantial investment, 
  (a) apply to the Minister for approval to retain control of the entity or to continue to hold the substantial investment in the entity for a period specified by the Minister or for an indeterminate period on any terms and conditions that the Minister considers appropriate; or 
  (b) do all things necessary to ensure that, on the expiry of the 90 days, it no longer controls the entity or does not have a substantial investment in the entity. 
  
  ### Indeterminate extension
  
  (5) If a company, by way of temporary investment, acquires control of, or acquires or increases a substantial investment in, an entity for which the approval of the Superintendent would have been required under subsection 495(8) if the company had acquired the control, or acquired or increased the substantial investment, under section 495, the Superintendent may, on application, permit the company to retain control of the entity or to continue to hold the substantial investment in the entity for an indeterminate period, on any terms and conditions that the Superintendent considers appropriate. 
  
  ### Loan workouts
  
  499 (1) Despite anything in this Part, if a company or any of its subsidiaries has made a loan to an entity and, under the terms of the agreement between the company, or any of its subsidiaries, and the entity with respect to the loan and any other documents governing the terms of the loan, a default has occurred, the company may acquire 
  (a) if the entity is a body corporate, all or any of the shares of the body corporate; 
  (b) if the entity is an unincorporated entity, all or any of the ownership interests in the entity; 
  (c) all or any of the shares or all or any of the ownership interests in any entity that is an affiliate of the entity; 
  (d) all or any of the shares of a body corporate that is primarily engaged in holding shares of, ownership interests in or assets acquired from the entity or any of its affiliates; or 
  (e) all or any of the ownership interests in any entity that is primarily engaged in holding shares of, ownership interests in or assets acquired from the entity or any of its affiliates. 
  
  ### Obligation of company
  
  (2) If a company acquires shares or ownership interests in an entity under subsection (1), the company shall, within five years after acquiring them, do all things necessary to ensure that the company does not control the entity or have a substantial investment in the entity. 
  
  ### Transitional
  
  (3) Despite subsection (1), if a company that was in existence immediately before June 1, 1992 had an investment in an entity on September 27, 1990 that is a substantial investment within the meaning of section 10 and the company later increases that substantial investment by way of an investment made under subsection (1), the company shall, within five years after increasing the substantial investment, do all things necessary to ensure that its substantial investment in the entity is no greater than it was on September 27, 1990. 
  
  ### Extension
  
  (4) The Superintendent may, in the case of any particular company that makes an application under this subsection, extend the period of five years referred to in subsection (2) or (3) for any further period or periods, and on any terms and conditions, that the Superintendent considers necessary. 
  
  ### Exception — entities controlled by foreign governments
  
  (5) Despite anything in this Part, if a company has made a loan to, or holds a debt obligation of, the government of a foreign country or an entity controlled by the government of a foreign country and, under the terms of the agreement between the company and that government or the entity, as the case may be, and any other documents governing the terms of the loan or debt obligation, a default has occurred, the company may acquire all or any of the shares of, or ownership interests in, that entity or in any other entity designated by that government, if the acquisition is part of a debt restructuring program of that government. 
  
  ### Time for holding shares
  
  (6) If a company acquires any shares or ownership interests under subsection (5), the company may, on any terms and conditions that the Superintendent considers appropriate, hold those shares or ownership interests for an indeterminate period or for any other period that the Superintendent may specify. 
  
  ### Exception
  
  (7) If, under subsection (1), a company acquires control of, or acquires or increases a substantial investment in, an entity that it would otherwise be permitted to acquire or increase under section 495, the company may retain control of the entity or continue to hold the substantial investment for an indeterminate period if the approval in writing of the Minister is obtained before the end of the period referred to in subsection (2) or (3), including any extension of it granted under subsection (4). 
  
  ### Realizations
  
  500 (1) Despite anything in this Act, a company may acquire 
  (a) an investment in a body corporate, 
  (b) an interest in an unincorporated entity, or 
  (c) an interest in real property, if the investment or interest is acquired through the realization of a security interest held by the company or any of its subsidiaries. 
  
  ### Disposition
  
  (2) Subject to subsection 77(2), if a company acquires control of, or acquires a substantial investment in, an entity by way of the realization of a security interest held by the company or any of its subsidiaries, the company shall, within five years after the day on which control or the substantial investment is acquired, do all things necessary, or cause its subsidiary to do all things necessary, as the case may be, to ensure that the company no longer controls the entity or has a substantial investment in the entity. 
  
  ### Transitional
  
  (3) Despite subsection (2), if a company that was in existence immediately before June 1, 1992 had an investment in an entity on September 27, 1990 that is a substantial investment within the meaning of section 10 and the company later increases that substantial investment by way of a realization of a security interest under subsection (1), the company shall, within five years after increasing the substantial investment, do all things necessary to ensure that its substantial investment in the entity is no greater than it was on September 27, 1990. 
  
  ### Extension
  
  (4) The Superintendent may, in the case of any particular company that makes an application under this subsection, extend the period of five years referred to in subsection (2) or (3) for any further period or periods, and on any terms and conditions, that the Superintendent considers necessary. 
  
  ### Exception
  
  (5) If, under subsection (1), a company acquires control of, or acquires or increases a substantial investment in, an entity that it would otherwise be permitted to acquire or increase under section 495, the company may retain control of the entity or continue to hold the substantial investment for an indeterminate period if the approval in writing of the Minister is obtained before the end of the period referred to in subsection (2) or (3), including any extension of it granted under subsection (4). 
  
  ### Regulations restricting ownership
  
  501 The Governor in Council may make regulations 
  (a) for the purposes of subsection 495(6), permitting the acquisition of control or the acquisition or increase of substantial investments, or prescribing the circumstances under which that subsection does not apply or the companies or other entities in respect of which that subsection does not apply, including prescribing companies or other entities on the basis of the activities they engage in; 
  (b) for the purposes of subsection 495(7) or (8), permitting the acquisition of control or the acquisition or increase of substantial investments, or prescribing the circumstances under which either of those subsections does not apply or the companies or other entities in respect of which either of those subsections does not apply, including prescribing companies or other entities on the basis of the activities they engage in; 
  (c) for the purposes of subsection 495(12), permitting a company to give up control of an entity; 
  (d) restricting the ownership by a company of shares of a body corporate or of ownership interests in an unincorporated entity under sections 495 to 500 and imposing terms and conditions applicable to companies that own such shares or interests; and 
  (e) for the purposes of subsection 495(2.1), establishing terms and conditions respecting the acquisition of control of, or the acquisition or increase of a substantial investment in, a permitted infrastructure entity by a life company. 
  
  ## Portfolio Limits 
  
  ### Exclusion from portfolio limits
  
  502 (1) Subject to subsection (3), the value of all loans, investments and interests acquired by a company and any of its prescribed subsidiaries under section 499 or as a result of a realization of a security interest is not to be included in calculating the value of loans, investments and interests of the company and its prescribed subsidiaries under sections 503 to 508 
  (a) for a period of twelve years following the day on which the interest was acquired, in the case of an interest in real property; and 
  (b) for a period of five years after the day on which the loan, investment or interest was acquired, in the case of a loan, investment or interest, other than an interest in real property. 
  
  ### Extension
  
  (2) The Superintendent may, in the case of any particular company, extend any period referred to in subsection (1) for any further period or periods, and on any terms and conditions, that the Superintendent considers necessary. 
  
  ### Exception
  
  (3) Subsection (1) does not apply to an investment or interest described in that subsection if the investment or interest is defined by a regulation made under section 509 to be an interest in real property and 
  (a) the company or the subsidiary acquired the investment or interest as a result of the realization of a security interest securing a loan that was defined by a regulation made under section 509 to be an interest in real property; or 
  (b) the company or the subsidiary acquired the investment or interest under section 499 as a result of a default referred to in that section in respect of a loan that was defined by a regulation made under section 509 to be an interest in real property. 
  
  ## Commercial Lending by Life Companies 
  
  ### Lending limit: companies with regulatory capital of $25 million or less
  
  503 Subject to section 504, a life company that has twenty-five million dollars or less of regulatory capital shall not, and shall not permit its prescribed subsidiaries to, make or acquire a commercial loan or acquire control of a permitted entity that holds commercial loans if the aggregate value of all commercial loans held by the company and its prescribed subsidiaries exceeds, or the making or acquisition of the commercial loan or acquisition of control of the entity would cause the aggregate value of all commercial loans held by the company and its prescribed subsidiaries to exceed, 5 per cent of the total assets of the company. 
  
  ### Lending limit: regulatory capital over $25 million
  
  504 A life company that has twenty-five million dollars or less of regulatory capital that is controlled by a financial institution that has the equivalent of more than twenty-five million dollars of regulatory capital or a life company that has more than twenty-five million dollars of regulatory capital may make or acquire commercial loans or acquire control of a permitted entity that holds commercial loans if the aggregate value of all commercial loans held by the company and its prescribed subsidiaries would thereby exceed the limit set out in section 503 only with the prior approval in writing of the Superintendent and in accordance with any terms and conditions that the Superintendent may specify. 
  
  ## Consumer and Commercial Lending by Property and Casualty Companies and Marine Companies 
  
  ### Lending limit — property and casualty companies and marine companies
  
  505 A property and casualty company, or a marine company, shall not, and shall not permit its prescribed subsidiaries to, make or acquire a commercial loan or a loan to a natural person, or acquire control of a permitted entity that holds commercial loans or loans to natural persons, if the aggregate value of all such loans held by the company and its prescribed subsidiaries exceeds, or the making or acquisition of the loan or the acquisition of control of the permitted entity would cause the aggregate value of all such loans held by the company and its prescribed subsidiaries to exceed, the prescribed percentage of the total assets of the company. 
  
  ## Real Property 
  
  ### Limit on total property interest
  
  506 A company shall not, and shall not permit its prescribed subsidiaries to, purchase or otherwise acquire an interest in real property or make an improvement to any real property in which the company or any of its prescribed subsidiaries has an interest if the aggregate value of all interests of the company in real property exceeds, or the acquisition of the interest or the making of the improvement would cause that aggregate value to exceed, an amount determined in accordance with the regulations. 
  
  ## Equities 
  
  ### Limits on equity acquisitions
  
  507 A company shall not, and shall not permit its prescribed subsidiaries to, 
  (a) purchase or otherwise acquire any participating shares of any body corporate or any ownership interests in any unincorporated entity, other than those of a permitted entity in which the company has, or by virtue of the acquisition would have, a substantial investment, or 
  (b) acquire control of an entity that holds shares or ownership interests referred to in paragraph (a), if the aggregate value of 
  (c) all participating shares, excluding participating shares of permitted entities in which the company has a substantial investment, and 
  (d) all ownership interests in unincorporated entities, other than ownership interests in permitted entities in which the company has a substantial investment, beneficially owned by the company and its prescribed subsidiaries exceeds, or the purchase or acquisition would cause that aggregate value to exceed, an amount determined in accordance with the regulations. 
  
  ## Aggregate Limit 
  
  ### Aggregate limit
  
  508 A company shall not, and shall not permit its prescribed subsidiaries to, 
  (a) purchase or otherwise acquire 
  (i) participating shares of a body corporate, other than those of a permitted entity in which the company has, or by virtue of the acquisition would have, a substantial investment, 
  (ii) ownership interests in an unincorporated entity, other than ownership interests in a permitted entity in which the company has, or by virtue of the acquisition would have, a substantial investment, or 
  (iii) interests in real property, or 
  (b) make an improvement to real property in which the company or any of its prescribed subsidiaries has an interest if the aggregate value of 
  (c) all participating shares and ownership interests referred to in subparagraphs (a)(i) and (ii) that are beneficially owned by the company and its prescribed subsidiaries, and 
  (d) all interests of the company in real property referred to in subparagraph (a)(iii) exceeds, or the acquisition or the making of the improvement would cause that aggregate value to exceed, an amount determined in accordance with the regulations. 
  
  ## Miscellaneous 
  
  ### Regulations
  
  509 For the purposes of this Part, the Governor in Council may make regulations 
  (a) defining the interests of a company in real property; 
  (b) determining the method of valuing those interests; 
  (c) exempting classes of companies from the application of sections 502 to 508; or 
  (d) respecting the determination of an amount for the purpose of each of sections 506, 507 and 508. 
  
  ### Divestment order
  
  510 (1) The Superintendent may, by order, direct a company to dispose of, within any period that the Superintendent considers reasonable, any loan, investment or interest made or acquired in contravention of this Part. 
  
  ### Divestment order
  
  (2) If, in the opinion of the Superintendent, 
  (a) an investment by a company or any entity it controls in shares of a body corporate or in ownership interests in an unincorporated entity enables the company to control the body corporate or the unincorporated entity, or 
  (b) the company or any entity it controls has entered into an arrangement whereby it or its nominee may veto any proposal put before 
  (i) the board of directors of a body corporate, or 
  (ii) a similar group or committee of an unincorporated entity, or whereby no proposal may be approved except with the consent of the company, the entity it controls or the nominee, the Superintendent may, by order, require the company, within any period that the Superintendent considers reasonable, to do all things necessary to ensure that the company no longer controls the body corporate or unincorporated entity or has the ability to veto or otherwise defeat any proposal referred to in paragraph (b). 
  
  ### Divestment order
  
  (3) If 
  (a) a company 
  (i) fails to provide or obtain within a reasonable time the undertakings referred to in subsection 497(1), (2) or (4), or 
  (ii) is in default of an undertaking referred to in subsection 497(1) or (2) and the default is not remedied within ninety days after the day of receipt by the company of a notice from the Superintendent of the default, or 
  (b) a permitted entity referred to in subsection 497(4) is in default of an undertaking referred to in subsection 497(4) and the default is not remedied within ninety days after the day of receipt by the company of a notice from the Superintendent of the default, the Superintendent may, by order, require the company, within any period that the Superintendent considers reasonable, to do all things necessary to ensure that the company no longer has a substantial investment in the entity to which the undertaking relates. 
  
  ### Exception
  
  (4) Subsection (2) does not apply in respect of an entity in which a company has a substantial investment permitted by this Part. 
  
  ### Deemed temporary investment
  
  511 If a company controls or has a substantial investment in an entity as permitted by this Part and the company 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 495(7) or (8), the company is deemed to have acquired, on the day the company becomes aware of the change, a temporary investment in respect of which section 498 applies. 
  
  ### Asset transactions
  
  512 (1) A company 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 is the value of the assets; is the total value of all assets that the company and its subsidiaries acquired from or transferred to that person in the twelve months ending immediately before the acquisition or transfer; and is ten per cent of the total value of the assets of the company, as shown in the last annual statement of the company prepared before the acquisition or transfer. 
  
  ### 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. 
  
  ### 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);  
  (b) assets that are acquired or transferred under a transaction or series of transactions by a company with another financial institution as a result of the company’s participation in one or more syndicated loans with that financial institution; 
  (c) assets that are acquired or transferred under a transaction that is approved by the Minister or the Superintendent under subsection 254(2) or (2.01); 
  (d) shares of, or ownership interests in, an entity for which the approval of the Minister under Part VII or subsection 495(7) is required or the approval of the Superintendent under subsection 495(8) is required; 
  (e) assets that are acquired or transferred under a transaction approved by the Minister under subsection 715(1) of this Act or subsection 678(1) of the Bank Act ;  
  (f) assets, other than real property, acquired or disposed of under an arrangement that has been approved by the Superintendent under subsection 527(3); or 
  (g) assets acquired or disposed of with the approval of the Superintendent under subsection 527(4). 
  (3)  [Repealed, 2007, c. 6, s. 239]  
  
  ### 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 company 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 company 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 company if the annual statement had been prepared, in accordance with the accounting principles referred to in subsection 331(4), immediately before the transfer. 
  
  ### Total value of all assets
  
  (5) For the purposes of subsection (1), the total value of all assets that the company 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 company, the fair market value of the assets of the entity at the date of the acquisition. 
  
  ### Total value of all assets
  
  (6) For the purposes of subsection (1), the total value of all assets that the company 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 company 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 company 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. 
  
  ### Transitional
  
  513 Nothing in this Part requires 
  (a) the termination of a loan made before February 7, 2001; 
  (b) the termination of a loan made after that date as a result of a commitment made before that date; 
  (c) the disposal of an investment made before that date; or 
  (d) the disposal of an investment made after that date as a result of a commitment made before that date. But if the loan or investment would be precluded or limited by this Part, the amount of the loan or investment may not, except as provided in subsections 498(2), 499(3) and 500(3), be increased after that date. 
  
  ### Deeming
  
  514 A loan or investment referred to in section 513 is deemed not to be prohibited by the provisions of this Part. 
  
  # PART X 
  
  ## Adequacy of Capital and Liquidity and Assets 
  
  ### Adequacy of capital and liquidity — companies and societies
  
  515 (1) A company and society shall, in relation to its operations, maintain adequate capital and adequate and appropriate forms of liquidity and shall comply with any regulations in relation to adequate capital and adequate and appropriate forms of liquidity. 
  
  ### Regulations and guidelines
  
  (2) The Governor in Council may make regulations and the Superintendent may make guidelines respecting the maintenance by companies and societies of adequate capital and adequate and appropriate forms of liquidity. 
  
  ### Directives
  
  (3) Notwithstanding that a company or society is complying with regulations or guidelines made under subsection (2), the Superintendent may, by order, direct the company or society to increase its capital or to provide additional liquidity in any forms and amounts that the Superintendent may require. 
  
  ### Compliance
  
  (4) A company and society shall comply with an order made under subsection (3) within the time that the Superintendent specifies in the order. 
  516  [Repealed, 2007, c. 6, s. 240]  
  
  ### Notice of value
  
  517 Where an appraisal of any asset held by a company or any of its subsidiaries has been made by the Superintendent and the value determined by the Superintendent to be the appropriate value of the asset varies materially from the value placed by the company or subsidiary on the asset, the Superintendent shall send to the company, the auditor of the company, the actuary of the company and the audit committee of the company a written notice of the appropriate value of the asset as determined by the Superintendent. 
  
  # PART XI 
  
  ## Self-dealing 
  
  ## Interpretation and Application 
  
  ### Definition of 
  *senior officer* 
  
  517.1 For the purposes of this Part, a 
  *senior officer* of a body corporate is a person who is  
  (a) a director of the body corporate who is a full-time employee of the body corporate; 
  (b) the chief executive officer, chief operating officer, president, secretary, treasurer, controller, chief financial officer, chief accountant, chief auditor or chief actuary of the body corporate; 
  (c) a natural person who performs functions for the body corporate similar to those performed by a person referred to in paragraph (b); 
  (d) the head of the strategic planning unit of the body corporate; 
  (e) the head of the unit of the body corporate that provides legal services or human resources services to the body corporate; or 
  (f) any other officer reporting directly to the body corporate’s board of directors, chief executive officer or chief operating officer. 
  
  ### Related party of company
  
  518 (1) For the purposes of this Part, a person is a related party of a company where the person 
  (a) is a person who has a significant interest in a class of shares of the company; 
  (b) is a director or senior officer of the company or of a body corporate that controls the company or is acting in a similar capacity in respect of an unincorporated entity that controls the company; 
  (c) is the spouse or common-law partner, or a child who is less than eighteen years of age, of a person described in paragraph (a) or (b); 
  (d) is an entity that is controlled by a person referred to in any of paragraphs (a) to (c); 
  (e) is an entity in which a person who controls the company has a substantial investment; 
  (f) is an entity in which the spouse or common-law partner, or a child who is less than eighteen years of age, of a person who controls the company has a substantial investment; or 
  (g) is a person, or a member of a class of persons, designated under subsection (4) or (5) as, or deemed under subsection (6) to be, a related party of the company. 
  (h)  [Repealed, 1997, c. 15, s. 277]  
  
  ### Exception — subsidiaries and substantial investments of companies
  
  (2) If an entity in which a company has a substantial investment would, but for this subsection, be a related party of the company only because a person who controls the company controls the entity or has a substantial investment in the entity, and the person does not control the entity or have a substantial investment in the entity otherwise than through the person’s controlling interest in the company, the entity is not a related party of the company. 
  
  ### Deeming
  
  (3) The holding body corporate of a company is deemed not to be a person referred to in paragraph (1)(a) if the holding body corporate is a foreign company. 
  
  ### Designated related party
  
  (4) For the purposes of this Part, the Superintendent may, with respect to a particular company, designate as a related party of the company 
  (a) any person or class of persons whose direct or indirect interest in or relationship with the company or a related party of the company might reasonably be expected to affect the exercise of the best judgment of the company in respect of a transaction; or 
  (b) any person who is a party to any agreement, commitment or understanding referred to in section 9 if the company referred to in that section is the particular company. 
  
  ### Idem
  
  (5) Where a person is designated as a related party of a company pursuant to subsection (4), the Superintendent may also designate any entity in which the person has a substantial investment and any entity controlled by such an entity to be a related party of the company. 
  
  ### Deemed related party
  
  (6) Where, in contemplation of a person becoming a related party of a company, the company enters into a transaction with the person, the person is deemed for the purposes of this Part to be a related party of the company in respect of that transaction. 
  
  ### Holders of exempted shares
  
  (7) The Superintendent may, by order, designate a class of non-voting shares of a company for the purpose of this subsection. If a class of non-voting shares of a company is so designated, a person is deemed, notwithstanding paragraph (1)(a), not to be a related party of the company if the person would otherwise be a related party of the company only because the person has a significant interest in that class. 
  
  ### Determination of substantial investment
  
  (8) For the purpose of determining whether an entity or a person has a substantial investment for the purposes of paragraph (1)(e) or (f), the references to “control” and “controlled” in section 10 shall be construed as references to “control, within the meaning of section 3, determined without regard to paragraph 3(1)(d)” and “controlled, within the meaning of section 3, determined without regard to paragraph 3(1)(d)”, respectively. 
  
  ### Determination of control
  
  (9) For the purposes of paragraph (1)(d), 
  *controlled* means “controlled, within the meaning of section 3, determined without regard to paragraph 3(1)(d)”.  
  
  ### Non-application of Part
  
  519 (1) This Part does not apply in respect of any transaction entered into prior to the coming into force of this Part but, after the coming into force of this Part, any modification of, addition to, or renewal or extension of a prior transaction is subject to this Part. 
  
  ### Idem
  
  (2) This Part does not apply in respect of 
  (a) assets of a segregated fund maintained pursuant to section 451 if 
  (i) all the policies in respect of which the fund is maintained are held by one person or all the amounts in respect of which it is maintained are retained on the direction of one person, or 
  (ii) the assets of the fund reflect the securities upon which a generally recognized market index is based and the weighting of those securities in that index; 
  (b) the issue by the company of shares of any class when fully paid for in money or when issued 
  (i) in accordance with any provisions for the conversion of other issued and outstanding securities of the company into shares of that class, 
  (ii) as a share dividend, 
  (iii) in exchange for shares of a body corporate that has been continued as a company under Part III, 
  (iv) in accordance with the terms of an amalgamation under Part VI, 
  (v) by way of consideration in accordance with the terms of a sale agreement under Part VI, or 
  (vi) with the approval in writing of the Superintendent, in exchange for shares of another body corporate; 
  (c) the payment of dividends or policy dividends or bonuses by a company; 
  (d) transactions that consist of the payment or provision by a company to persons who are related parties of the company of salaries, fees, stock options, policy premiums, pension benefits, incentive benefits or other benefits or remuneration in their capacity as directors, officers or employees of the company; 
  (e) transactions approved by the Minister under subsection 715(1) of this Act or subsection 678(1) of the Bank Act ; or  
  (f) if a company is controlled by a widely held insurance holding company or a widely held bank holding company, transactions approved by the Superintendent that are entered as part of, or in the course of, a restructuring of the holding company or of any entity controlled by it. 
  
  ### Exception
  
  (3) Nothing in paragraph (2)(d) exempts from the application of this Part the payment by a company of fees or other remuneration to a person for 
  (a) the provision of services referred to in paragraph 528(1)(a); or 
  (b) duties outside the ordinary course of business of the company. 
  
  ### Exception for holding body corporate
  
  (4) A holding body corporate of a company is not a related party of the company if the holding body corporate is a Canadian financial institution that is referred to in any of paragraphs (a) to (d) of the definition 
  *financial institution* in subsection 2(1).  
  
  ### Substantial investment — related party exception
  
  (5) Where a holding body corporate of a company is, because of subsection (4), not a related party of the company, any entity in which the holding body corporate has a substantial investment is not a related party of the company if no related party of the company has a substantial investment in the entity otherwise than through the control of the holding body corporate. 
  
  ### Meaning of 
  *transaction* 
  
  520 (1) For the purposes of this Part, entering into a transaction with a related party of a company includes 
  (a) making a guarantee on behalf of the related party; 
  (b) making an investment in any securities of the related party; 
  (c) taking an assignment of or otherwise acquiring a loan made by a third party to the related party; 
  (d) taking a security interest in the securities of the related party; and 
  (e) causing the company to be reinsured by the related party against any risk undertaken by the company under its policies. 
  
  ### Interpretation
  
  (2) For the purposes of this Part, the fulfilment of an obligation under the terms of any transaction, including the payment of interest on a loan or deposit and the making of a payment or an advance under a policy, is part of the transaction, and not a separate transaction. 
  
  ### Meaning of 
  *loan* 
  
  (3) For the purposes of this Part, 
  *loan* includes a deposit, a financial lease, a conditional sales contract, a repurchase agreement and any other similar arrangement for obtaining funds or credit, but does not include investments in securities or the making of an acceptance, endorsement or other guarantee.  
  
  ### Security of a related party
  
  (4) For the purposes of this Part, 
  *security* of a related party includes an option, transferable by delivery, to demand delivery of a specified number or amount of shares of the related party at a fixed price within a specified time.  
  
  ## Prohibited Related Party Transactions 
  
  ### Prohibited transactions
  
  521 (1) Except as provided in this Part, a company shall not, directly or indirectly, enter into any transaction with a related party of the company. 
  
  ### Transaction of entity
  
  (2) Without limiting the generality of subsection (1), a company is deemed to have indirectly entered into a transaction in respect of which this Part applies where the transaction is entered into by an entity that is controlled by the company. 
  
  ### Exception
  
  (3) Subsection (2) does not apply where an entity that is controlled by a company is a financial institution incorporated or formed under the laws of a province and is subject to regulation and supervision, satisfactory to the Minister, regarding transactions with related parties of the company. 
  
  ### Idem
  
  (4) Subsection (2) does not apply in respect of transactions entered into by an entity that is controlled by a company if the transaction is a prescribed transaction or is one of a class of prescribed transactions. 
  
  ## Permitted Related Party Transactions 
  
  ### Nominal value transactions
  
  522 Notwithstanding anything in this Part, a company may enter into a transaction with a related party of the company if the value of the transaction is nominal or immaterial to the company when measured by criteria that have been established by the conduct review committee of the company and approved in writing by the Superintendent. 
  
  ### Reinsurance
  
  523 (1) A company may, subject to subsection (2) and to Division III of Part VI, cause itself to be reinsured by a related party of the company against any risk undertaken by the company under its policies. 
  
  ### Restriction re related parties
  
  (2) Except with the approval of the Superintendent, a company may cause itself to be reinsured in respect of risks undertaken under its policies by a related party of the company only if the related party is 
  (a) a company; or 
  (b) a foreign company that, in Canada, reinsures those risks. 
  
  ### Exception
  
  (3) The approval of the Superintendent under subsection (2) is not required if the reinsurance transaction was approved by the Minister or the Superintendent under subsection 254(2) or (2.01). 
  
  ### Risks of related party
  
  524 A company may, subject to Division III of Part VI, reinsure any risks undertaken by a related party of the company. 
  
  ### Secured loans
  
  525 A company may make a loan to or a guarantee on behalf of a related party of the company or take an assignment of or otherwise acquire a loan to a related party of the company if 
  (a) the loan or guarantee is fully secured by securities of or guaranteed by the Government of Canada or the government of a province; or 
  (b) the loan is a loan permitted by section 469 made to a related party who is a natural person on the security of a mortgage of the principal residence of that related party. 
  
  ### Borrowing, etc., from related party
  
  526 (1) A company may borrow money from or issue debt obligations to a related party of the company. 
  
  ### Segregated funds
  
  (2) A company may issue policies to a related party of the company or accept or retain on the direction of a policyholder or beneficiary who is a related party amounts that are payable as 
  (a) policy dividends or bonuses, or 
  (b) policy proceeds on the surrender or maturity of the policy or on the death of the person whose life is insured where the liabilities of the company in respect of the policies or the amounts accepted or retained vary in amount depending on the market value of a specified group of assets. 
  
  ### Acquisition of assets
  
  527 (1) A company may purchase or otherwise acquire from a related party of the company 
  (a) securities of or guaranteed by the Government of Canada or the government of a province; 
  (b) assets fully secured by securities of or guaranteed by the Government of Canada or the government of a province; or 
  (c) goods for use in the ordinary course of business. 
  
  ### Sale of assets
  
  (2) Subject to section 512, a company may sell any assets of the company to a related party of the company if 
  (a) the consideration for the assets is fully paid in money; and 
  (b) there is an active market for those assets. 
  
  ### Asset transactions with financial institutions
  
  (3) Notwithstanding any of the provisions of subsections (1) and (2), a company may, in the normal course of business and pursuant to arrangements that have been approved by the Superintendent in writing, acquire or dispose of any assets, other than real property, from or to a related party of the company that is a financial institution. 
  
  ### Asset transactions in restructuring
  
  (4) Notwithstanding any of the provisions of subsections (1) and (2), a company may acquire any assets from, or dispose of any assets to, a related party of the company as part of, or in the course of, a restructuring, if the acquisition or disposition has been approved in writing by the Superintendent. 
  
  ### Idem
  
  (5) A company may lease assets 
  (a) from a related party of the company for use in the ordinary course of business of the company, or 
  (b) to a related party of the company, if the lease payments are made in money. 
  
  ### Approval under subsection 254(2) or (2.01)
  
  (6) A company or society may acquire any assets from, or dispose of any assets to, a related party of the company under a transaction that is approved by the Minister or the Superintendent under subsection 254(2) or (2.01). 
  
  ### Services
  
  528 (1) A company may enter into a transaction with a related party of the company if the transaction 
  (a) subject to subsection (2), consists of a written contract for the purchase by the company of services used in the ordinary course of business; 
  (b) subject to subsection (4), involves the provision of services normally offered to the public by the company in the ordinary course of business; 
  (c) consists of a written contract with a financial institution or an entity in which the company is permitted to have a substantial investment pursuant to section 495 that is a related party of the company 
  (i) for the networking of any services provided by the company or the financial institution or entity, or 
  (ii) for the referral of any person by the company to the financial institution or entity, or for the referral of any person by the financial institution or entity to the company; 
  (d) consists of a written contract for such pension or benefit plans or their management or administration as are incidental to directorships or to the employment of officers or employees of the company or its subsidiaries; or 
  (e) involves the provision by the company of management, advisory, accounting, information processing or other services in relation to any business of the related party. 
  
  ### Restriction
  
  (2) Where a company has entered into a contract pursuant to paragraph (1)(a) and the contract, when taken together with all other such contracts entered into by the company, results in all or substantially all of the management functions of the company being exercised by persons who are not employees of the company, the Superintendent may, by order, if the Superintendent considers that result to be inappropriate, require the company, within such time as may be specified in the order, to take all steps necessary to ensure that management functions that are integral to the carrying on of business by the company are exercised by employees of the company to the extent specified in the order. 
  
  ### Exception
  
  (3) Despite subsection 521(2), a company is deemed not to have indirectly entered into a transaction in respect of which this Part applies if the transaction is entered into by an entity that is controlled by the company and the business of which is limited to the activity referred to in paragraph 495(2)(c) and the transaction is on terms and conditions at least as favourable to the company as market terms and conditions, as defined in subsection 534(2). 
  
  ### Services
  
  (4) The provision of services, for the purposes of paragraph (1)(b), does not include the making of loans or guarantees. 
  
  ### Transactions with holding companies
  
  528.1 (1) Subject to subsection (2) and sections 528.2 and 528.3, if a widely held insurance holding company or a widely held bank holding company has a significant interest in any class of shares of a company, the company may enter into any transaction with the holding company or with any other related party of the company that is an entity in which the holding company has a substantial investment. 
  
  ### Policies and procedures
  
  (2) The company shall adhere to policies and procedures established under subsection 204(3) when entering into the transaction. 
  
  ### Restriction
  
  528.2 (1) If a company enters into a transaction with a related party of the company with whom the company may enter into transactions under subsection 528.1(1) and that is not a federal financial institution, the company shall not directly or indirectly make, take an assignment of or otherwise acquire a loan to the related party, make an acceptance, endorsement or other guarantee on behalf of the related party or make an investment in the securities of the related party if, immediately following the transaction, the aggregate financial exposure, as that expression is defined by the regulations, of the company would exceed 
  (a) in respect of all transactions of the company with the related party, the prescribed percentage of the company’s regulatory capital or, if no percentage is prescribed, five per cent of the company’s regulatory capital; or 
  (b) in respect of all transactions of the company with such related parties of the company, the prescribed percentage of the company’s regulatory capital or, if no percentage is prescribed, ten per cent of the company’s regulatory capital. 
  
  ### Order
  
  (2) If the Superintendent is of the opinion that it is necessary for the protection of the interests of the policyholders and creditors of a company, the Superintendent may, by order, 
  (a) reduce the limit in paragraph (1)(a) or (b) that would otherwise apply to the company; and 
  (b) impose limits on transactions by the company with related parties with whom the company may enter into transactions under subsection 528.1(1) that are federal financial institutions. 
  
  ### Order
  
  (3) The Superintendent may, by order, increase the limit in paragraph (1)(a) or (b) that would otherwise apply to a company on transactions by the company with related parties that are financial institutions that are regulated in a manner acceptable to the Superintendent. 
  
  ### Assets transactions
  
  528.3 (1) Despite subsection 527(3), a company shall not, without the approval of the Superintendent and its conduct review committee, directly or indirectly acquire assets from a related party of the company with whom the company may enter into transactions under subsection 528.1(1) that is not a federal financial institution, or directly or indirectly transfer assets to such a related party if is the value of the assets; is the total value of all assets that the company directly or indirectly acquired from, or directly or indirectly transferred to, that related party in the 12 months ending immediately before the acquisition or transfer, other than assets acquired by or transferred to the company under transactions permitted by section 522; and is five per cent, or the percentage that may be prescribed, of the total value of the assets of the company, as shown in the last annual statement of the company prepared before the acquisition or transfer. 
  
  ### Exception
  
  (2) The prohibition in subsection (1) does not apply in respect of assets purchased or otherwise acquired under subsection 527(1), assets sold under subsection 527(2) or any other assets that may be prescribed. 
  
  ### Exception
  
  (3) The approval of the Superintendent under this section is not required if 
  (a) the company acquires or transfers assets under a transaction that is approved by the Minister or the Superintendent under subsection 254(2) or (2.01); 
  (b) the company or its subsidiary acquires shares of, or ownership interests in, an entity for which the approval of the Minister under Part VII or subsection 495(7) is required or the approval of the Superintendent under subsection 495(8) is required. 
  
  ### 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 company after the acquisition, the fair market value of the assets; and 
  (b) in the case of assets that are transferred, the book value of the assets as stated in the last annual statement of the company prepared before the transfer or, if the assets are shares of, or ownership interests in, an entity the assets of which were included in the last annual statement of the company before the transfer, the value of the assets as stated in the annual statement. 
  
  ### Total value of all assets
  
  (5) For the purposes of subsection (1), the total value of all assets that the company 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 company, the fair market value of the assets of the entity at the date of the acquisition. 
  
  ### Total value of all assets
  
  (6) For the purposes of subsection (1), the total value of all assets that the company or any of its subsidiaries has transferred during the period of twelve months referred to in subsection (1) is the book value of the assets as stated in the last annual statement of the company prepared before the transfer or, if the assets are shares of, or ownership interests in, an entity the assets of which were included in the last annual statement of the company before the transfer, the value of the assets of the entity as stated in the annual statement. 
  
  ### Directors and officers and their interests
  
  529 (1) Subject to subsection (2) and sections 530 and 531, a company may enter into any transaction with a related party of the company if the related party is 
  (a) a natural person who is a related party of the company only because the person is 
  (i) a director or senior officer of the company or of an entity that controls the company, or 
  (ii) the spouse or common-law partner, or a child who is less than eighteen years of age, of a director or senior officer of the company or of an entity that controls the company; or 
  (b) an entity that is a related party of the company only because the entity is controlled by 
  (i) a director or senior officer of the company or of an entity that controls the company, or 
  (ii) the spouse or common-law partner, or a child who is less than eighteen years of age, of a director or senior officer referred to in subparagraph (i). 
  
  ### Loans to full-time officers
  
  (2) A company may, with respect to a related party of the company referred to in subsection (1) who is a full-time senior officer of the company, make, take an assignment of or otherwise acquire a loan to the related party only if the aggregate principal amount of all outstanding loans to the related party that are held by the company and its subsidiaries, together with the principal amount of the proposed loan, does not exceed the greater of twice the annual salary of the related party and $100,000. 
  
  ### Exception
  
  (3) Subsection (2) does not apply in respect of 
  (a) loans referred to in paragraph 525(b), and 
  (b) margin loans referred to in section 531, and the amount of any such loans to a related party of a company shall not be included in determining, for the purposes of subsection (2), the aggregate principal amount of all outstanding loans made by the company to the related party. 
  
  ### Preferred terms — loan to senior officer
  
  (4) Notwithstanding section 534, a company may make a loan, other than a margin loan, to a senior officer of the company on terms and conditions more favourable to the officer than market terms and conditions, as defined in subsection 534(2), if the terms and conditions of the loan have been approved by the conduct review committee of the company. 
  
  ### Preferred terms — loan to spouse or common-law partner
  
  (5) Notwithstanding section 534, a company may make a loan referred to in paragraph 525(b) to the spouse or common-law partner of a senior officer of the company on terms and conditions more favourable than market terms and conditions, as defined in subsection 534(2), if the terms and conditions of the loan have been approved by the conduct review committee of the company. 
  
  ### Preferred terms — other financial services
  
  (6) Notwithstanding section 534, a company may offer financial services, other than loans or guarantees, to a senior officer of the company, or to the spouse or common-law partner, or a child who is less than eighteen years of age, of a senior officer of the company, on terms and conditions more favourable than market terms and conditions, as defined in subsection 534(2), if 
  (a) the financial services are offered by the company to employees of the company on those favourable terms and conditions; and 
  (b) the conduct review committee of the company has approved the practice of making those financial services available on those favourable terms and conditions to senior officers of the company or to the spouses or common-law partners, or the children under eighteen years of age, of senior officers of the company. 
  
  ### Board approval required
  
  530 (1) Except with the concurrence of at least two thirds of the directors present at a meeting of the board of directors of the company, a company shall not, with respect to a related party of the company referred to in subsection 529(1), 
  (a) make, take an assignment of or otherwise acquire a loan to the related party, including a margin loan referred to in section 531, 
  (b) make a guarantee on behalf of the related party, or 
  (c) make an investment in the securities of the related party if, immediately following the transaction, the aggregate of 
  (d) the principal amount of all outstanding loans to the related party that are held by the company and its subsidiaries, other than 
  (i) loans referred to in paragraph 525(b), and 
  (ii) if the related party is a full-time senior officer of the company, loans to the related party that are permitted by subsection 529(2), 
  (e) the sum of all outstanding amounts guaranteed by the company and its subsidiaries on behalf of the related party, and 
  (f) where the related party is an entity, the book value of all investments by the company and its subsidiaries in the securities of the entity would exceed 2 per cent of the regulatory capital of the company. 
  
  ### Limit on transactions with directors, officers and their interests
  
  (2) A company shall not, with respect to a related party of the company referred to in subsection 529(1), 
  (a) make, take an assignment of or otherwise acquire a loan to the related party, including a margin loan referred to in section 531, 
  (b) make a guarantee on behalf of the related party, or 
  (c) make an investment in the securities of the related party if, immediately following the transaction, the aggregate of 
  (d) the principal amount of all outstanding loans to all related parties of the company referred to in subsection 529(1) that are held by the company and its subsidiaries, other than 
  (i) loans referred to in section 525, and 
  (ii) loans permitted by subsection 529(2), 
  (e) the sum of all outstanding amounts guaranteed by the company and its subsidiaries on behalf of all related parties of the company referred to in subsection 529(1), and 
  (f) the book value of all investments by the company and its subsidiaries in the securities of all entities that are related parties of the company referred to in subsection 529(1) would exceed 50 per cent of the regulatory capital of the company. 
  
  ### Exclusion of de minimis transactions 
  
  (3) Loans, guarantees and investments that are referred to in section 522 shall not be included in calculating the aggregate of loans, guarantees and investments referred to in subsections (1) and (2). 
  
  ### Margin loans
  
  531 The Superintendent may establish terms and conditions with respect to the making by a company of margin loans to a director or senior officer of the company. 
  
  ### Exemption by order
  
  532 (1) A company may enter into a transaction with a related party of the company if the Superintendent, by order, has exempted the transaction from the provisions of section 521. 
  
  ### Conditions for order
  
  (2) The Superintendent shall not make an order referred to in subsection (1) unless the Superintendent is satisfied that the decision of the company to enter into the transaction has not been and is not likely to be influenced in any significant way by a related party of the company and does not involve in any significant way the interests of a related party of the company. 
  
  ### Prescribed transactions
  
  533 A company may enter into a transaction with a related party of the company if the transaction is a prescribed transaction or one of a class of prescribed transactions. 
  
  ## Restrictions on Permitted Transactions 
  
  ### Market terms and conditions
  
  534 (1) Except as provided in subsections 529(4) to (6), any transaction entered into with a related party of the company shall be on terms and conditions that are at least as favourable to the company as market terms and conditions. 
  
  ### Meaning of 
  *market terms and conditions* 
  
  (2) For the purposes of subsection (1), 
  *market terms and conditions* means  
  (a) in respect of a service or a loan facility offered to the public by the company in the ordinary course of business, terms and conditions that are no more or less favourable than those offered to the public by the company in the ordinary course of business; and 
  (b) in respect of any other transaction, 
  (i) terms and conditions, including those relating to price, rent or interest rate, that might reasonably be expected to apply in a similar transaction in an open market under conditions requisite to a fair transaction between parties who are at arm’s length and who are acting prudently, knowledgeably and willingly, or 
  (ii) if the transaction is one that would not reasonably be expected to occur in an open market between parties who are at arm’s length, terms and conditions, including those relating to price, rent or interest rate, that would reasonably be expected to provide the company with fair value, having regard to all the circumstances of the transaction, and that would be consistent with the parties to the transaction acting prudently, knowledgeably and willingly. 
  535 and 536  [Repealed, 1997, c. 15, s. 283]  
  
  ## Disclosure 
  
  ### Company obligation
  
  537 (1) Where, in respect of any proposed transaction permitted by this Part, other than those referred to in section 522, a company has reason to believe that the other party to the transaction is a related party of the company, the company shall take all reasonable steps to obtain from the other party full disclosure, in writing, of any interest or relationship, direct or indirect, that would make the other party a related party of the company. 
  
  ### Reliance on information
  
  (2) A company and any person who is a director or an officer, employee or agent of the company may rely on any information contained in any disclosure received by the company pursuant to subsection (1) or any information otherwise acquired in respect of any matter that might be the subject of such a disclosure and no action lies against the company or any such person for anything done or omitted in good faith in reliance on any such information. 
  
  ### Notice to Superintendent
  
  538 If a company has entered into a transaction that the company is prohibited by this Part from entering into, or a company has entered into a transaction for which approval is required under subsection 530(1) without having obtained the approval, the company shall, on becoming aware of that fact, notify the Superintendent without delay. 
  
  ## Remedial Actions 
  
  ### Order to void contract or to grant other remedy
  
  539 (1) If a company enters into a transaction that it is prohibited from entering into by this Part, the company or the Superintendent may apply to a court for an order setting aside the transaction or for any other appropriate remedy, including an order directing that the related party of the company involved in the transaction account to the company for any profit or gain realized or that any director or senior officer of the company who authorized the transaction compensate the company for any loss or damage incurred by the company. 
  
  ### Time limit
  
  (2) An application under subsection (1) in respect of a particular transaction may only be made within the period of three months following the day the notice referred to in section 538 in respect of the transaction is given to the Superintendent or, if no such notice is given, the day the Superintendent becomes aware of the transaction. 
  
  ### Certificate
  
  (3) For the purposes of subsection (2), a document purporting to have been issued by the Superintendent, certifying the day on which the Superintendent became aware of the transaction, shall, in the absence of evidence to the contrary, be received in evidence as conclusive proof of that fact without proof of the signature or of the official character of the person appearing to have signed the document and without further proof. 
  
  # PART XII 
  
  ## Fraternal Benefit Societies 
  
  ## Interpretation 
  
  ### Definitions
  
  540 (1) In this Part,  
  *by-law* includes the incorporating instrument of a society; (règlement administratif)   
  *permitted entity* means an entity in which a society is permitted to acquire a substantial investment under section 554; (entité admissible)   
  *subordinate branch* means a division of a society as described in the by-laws of the society; (succursale secondaire)   
  *supreme governing body* means a board of directors or any other group within a society having ultimate authority for managing the business and affairs of the society. (conseil supérieur de direction)  
  
  ### Members of a society’s group
  
  (2) For the purpose of section 554, a member of a society’s group is any of the following: 
  (a) a subsidiary of the society; 
  (b) an entity in which the society has a substantial investment; or 
  (c) a prescribed entity in relation to the society. 
  
  ### Words of Part IX
  
  (3) Words and expressions that are defined for the purposes of Part IX and referred to in this Part, other than “permitted entity”, have, for the purposes of this Part, the meanings assigned to them by that Part with any modifications that the circumstances require. 
  
  ## Powers 
  
  ### Granting of sickness benefits by subordinate branch
  
  541 No by-law of a society shall empower or purport to empower any subordinate branch of the society to grant sickness benefits to any member of the branch unless the by-law makes adequate provision to secure on an actuarial basis the solvency of the sick benefit fund of the branch. 
  
  ### Society’s business
  
  542 (1) Except as otherwise permitted by this Act, a society shall not carry on a business that does not relate to the business of the insuring of risks in respect of its members or the spouses, common-law partners or children of its members. 
  
  ### Additional activities
  
  (2) A society may 
  (a) with the consent of the Minister, engage in activities that are reasonably ancillary to the society’s insurance business; 
  (b) engage in fraternal, benevolent or religious activities; 
  (c) hold, manage and otherwise deal with real property; 
  (d) act as an agent for a person, or enter into any other arrangement with a person, in respect of the provision of a service by 
  (i) a financial institution that is primarily engaged in an insurance business, or 
  (ii) a body corporate in which a society is permitted by section 554 to have a substantial investment; and 
  (e) refer persons to a financial institution or body corporate described in paragraph (d). 
  
  ### By-law required
  
  (3) A society shall not carry on the business of insuring risks unless it is authorized to do so by a by-law of the society passed on the recommendation of the society’s actuary and approved by the Superintendent. 
  
  ### Classes of insurance
  
  (4) A society shall not insure a risk that is not within a class of insurance that is specified in the order of the Superintendent approving the commencement and carrying on of business by the society. The classes that may be specified in that order are the class of life insurance, the class of accident and sickness insurance or both of those classes. 
  
  ### Restriction on leasing
  
  (5) A society shall not engage in Canada in any financial leasing of personal property. 
  
  ### Separate accounts
  
  542.01 A society shall maintain a separate account in respect of each class of insurance in which it is authorized to insure risks. 
  
  ### Actuary’s certificate
  
  542.02 A society’s actuary shall certify whether the society’s rates of benefit are reasonable, and whether the amounts of insurance to be issued by the society are reasonable, having regard to 
  (a) the conditions and circumstances for the issuance of policies by the society; 
  (b) the sufficiency of the rates of contribution to provide for those benefits and those amounts of insurance; and 
  (c) the reasonableness of the loan values, cash values and other equities that may be provided under the policies. 
  
  ### Segregated fund restriction
  
  542.03 (1) Only a society that is authorized to insure risks within the class of life insurance may 
  (a) issue policies where the liabilities of the society in respect of the policies vary in amount depending on the market value of a fund consisting of a specified group of assets; or 
  (b) accept or retain, on the direction of a policyholder or beneficiary, policy dividends or bonuses or policy proceeds that are payable on the surrender or maturity of the policy or on the death of the person whose life is insured, where the liabilities of the society in respect of the amounts accepted or retained vary in amount depending on the market value of a fund consisting of a specified group of assets. 
  
  ### Segregated funds required
  
  (2) A society that issues policies described in paragraph (1)(a) or accepts or retains amounts described in paragraph (1)(b) shall 
  (a) maintain separate accounts in respect of those policies or amounts; and 
  (b) establish and maintain one or more funds consisting of assets that are segregated from the other assets of the society and that are specified as the assets on the market value of which the liabilities of the society in respect of those policies or amounts depend. 
  
  ### Creation and maintenance of segregated funds
  
  (3) For the purpose of establishing or maintaining a segregated fund required by subsection (2), a society may, subject to the regulations, transfer an amount to the separate account maintained in respect of the segregated fund. 
  
  ### Transfers from segregated funds
  
  (4) A society may return the current value of an amount transferred under subsection (3) to the account from which the amount was transferred. 
  
  ### Claims against segregated funds
  
  (5) A claim against a segregated fund maintained under subsection (2) under a policy, or for an amount in respect of which the fund is maintained, has priority over any other claim against the assets of that fund, including the claims referred to in section 161 of the Winding-up and Restructuring Act, except to the extent that the payment of that other claim is secured by a security interest in or on a specific, identifiable asset of the segregated fund.  
  
  ### Where fund can satisfy claim
  
  (6) The liability of a society under a policy or for an amount in respect of which a segregated fund is maintained under subsection (2) does not, except to the extent that the assets of the fund are insufficient to satisfy a claim for any minimum amount that the society agrees to pay under the policy or in respect of the amount, give rise to a claim against any assets of the society, other than the assets of that fund. 
  
  ### Where fund cannot satisfy claim
  
  (7) To the extent that the assets of the fund are insufficient to satisfy the liability of a society under a policy or for an amount in respect of which a segregated fund is maintained under subsection (2), that liability gives rise to a claim against the assets of the society, other than the assets of that fund, and that claim has the priority referred to in subsection 161(2) of the Winding-up and Restructuring Act.  
  
  ### Regulations
  
  542.04 (1) The Governor in Council may make regulations limiting the extent to which a society may cause itself to be reinsured against risks undertaken under its policies. 
  
  ### Regulation may delegate to Superintendent
  
  (2) A regulation made under subsection (1) may provide that the Superintendent may, by order, determine the matters or exercise the discretion that the regulation specifies. 
  
  ### Restriction on issuance of annuities and endowment insurance
  
  542.05 A society may issue annuities or policies of endowment insurance only if it is authorized to insure risks within the class of life insurance. 
  
  ### Residential mortgages restriction
  
  542.06 (1) A society shall not make a loan in Canada on the security of residential property in Canada for the purpose of purchasing, renovating or improving the property, if the amount of the loan, together with the amount then outstanding of any mortgage having an equal or prior claim against the property, would exceed 80 per cent of the value of the property at the time of the loan. 
  
  ### Exception
  
  (2) Subsection (1) does not apply in respect of 
  (a) a loan made or guaranteed under the National Housing Act or any other Act of Parliament by or under which a different limit on the value of property on the security of which the society may make a loan is established;  
  (b) a loan if repayment of the amount of the loan that exceeds the maximum amount set out in subsection (1) is guaranteed or insured by a government agency or private insurer approved by the Superintendent; 
  (c) the acquisition by the society from an entity of securities issued or guaranteed by the entity that are secured on any residential property, whether in favour of a trustee or otherwise, or the making of a loan by the society to the entity against the issue of those securities; or 
  (d) a loan secured by a mortgage where 
  (i) the mortgage is taken back by the society on a property disposed of by the society, including where the disposition is by way of the realization of a security interest, and 
  (ii) the mortgage secures payment of an amount payable to the society for the property. 
  
  ### Restriction on charges to borrowers
  
  542.061 (1) Subject to any regulations made under subsection (2), a society that has obtained insurance or a guarantee against default on a loan made in Canada on the security of residential property shall not charge a borrower an amount for the insurance or guarantee that exceeds the actual cost to the society of the insurance or guarantee. 
  
  ### Regulations
  
  (2) The Governor in Council may make regulations 
  (a) respecting the determination of the actual cost to a society for the purposes of subsection (1); 
  (b) respecting the circumstances in which a society is exempt from the application of subsection (1); 
  (c) respecting, in relation to insurance or a guarantee against default on a loan made by a society in Canada on the security of residential property, 
  (i) the arrangements into which the society, its representatives and its employees may or may not enter, and 
  (ii) the payments or benefits that the society, its representatives and its employees may or may not accept from an insurer or the insurer’s affiliates; and 
  (d) respecting any other matters necessary to carry out the purposes of subsection (1). 
  
  ### Regulations — disclosure
  
  (3) The Governor in Council may make regulations respecting the disclosure by a society of information relating to insurance or a guarantee against default on a loan made by the society in Canada on the security of residential property, including regulations respecting 
  (a) the information that must be disclosed, including information relating to 
  (i) the person who benefits from the insurance or guarantee, 
  (ii) the arrangements between the society, its representatives or its employees and the insurer or the insurer’s affiliates, and 
  (iii) the payments and benefits that the society, its representatives and its employees accept from an insurer or the insurer’s affiliates; 
  (b) the time and place at which, the form and manner in which and the persons to whom information is to be disclosed; and 
  (c) the circumstances under which a society is not required to disclose information. 
  
  ### Policies re security interests
  
  542.07 (1) The directors of a society shall establish and the society shall adhere to policies regarding the creation of security interests in property of the society to secure obligations of the society and the acquisition by the society of beneficial interests in property that is subject to security interests. 
  
  ### Order to amend policies
  
  (2) The Superintendent may, by order, direct a society to amend its policies as specified in the order. 
  
  ### Compliance
  
  (3) A society shall comply with an order made under subsection (2) within the time specified in the order. 
  
  ### Regulations and guidelines
  
  542.071 The Governor in Council may make regulations and the Superintendent may make guidelines respecting the creation by a society of security interests in its property to secure obligations of the society and the acquisition by the society of beneficial interests in property that is subject to security interests. 
  
  ### Restriction on receivers
  
  542.08 A society shall not grant to a person the right to appoint a receiver or a receiver and manager of the property or business of the society. 
  
  ### Restriction on partnerships
  
  542.09 Except with the approval of the Superintendent, a society may not be a general partner in a limited partnership or a partner in any partnership other than a limited partnership. 
  
  ### General restriction
  
  542.1 (1) A society shall not, and shall not permit its prescribed subsidiaries to, enter into any debt obligation, within the meaning assigned to that expression by the regulations, or permit its prescribed subsidiaries to issue any share, other than a common share, if as a result the aggregate of the total debt obligations of the society, determined in the prescribed manner, and the stated capital of the society would exceed the prescribed percentage of the total assets of the society. 
  
  ### Exception
  
  (2) A society need not include in the aggregate amount calculated for the purpose of subsection (1) the value of any debt obligation or the stated capital of any shares if the value of the debt obligation or the stated capital of the shares is included as part of the regulatory capital of the society. 
  
  ### Restriction on guarantees
  
  542.11 (1) A society shall not guarantee on behalf of any person the payment or repayment of any sum of money unless 
  (a) the sum of money is a fixed sum of money with or without interest on it; and 
  (b) the person on whose behalf the society has undertaken to guarantee the payment or repayment has an unqualified obligation to reimburse the society for the full amount of the payment or repayment to be guaranteed. 
  
  ### Exception
  
  (2) Paragraph (1)(a) does not apply where the person on whose behalf the society has undertaken to guarantee a payment or repayment is a subsidiary of the society. 
  
  ### Regulations
  
  (3) The Governor in Council may make regulations imposing terms and conditions in respect of guarantees permitted by this section. 
  
  ### Prepayment protected
  
  542.12 (1) A society shall not make a loan to a natural person if the loan would be repayable in Canada and the terms would prohibit prepayment of the money advanced or any instalment of that money before its due date. 
  
  ### Non-application of subsection (1)
  
  (2) Subsection (1) does not apply in respect of a loan 
  (a) that is secured by a mortgage on real property; or 
  (b) that is made for business purposes and the principal amount of which is more than $100,000 or such other amount as may be prescribed. 
  
  ## Corporate Governance 
  
  ### Majority to reside in Canada
  
  543 A majority of the members of the supreme governing body of every society shall at the time of their election or appointment be individuals who are resident in Canada. 
  
  ### Head office
  
  544 (1) A society shall at all times have a head office in the province specified in its incorporating instrument or by-laws. 
  
  ### Change of head office — different province
  
  (2) Despite anything contained in its incorporating instrument, any society may, by by-law passed and approved by the votes of at least two thirds of the members entitled to vote by the by-laws of the society who are present or represented at a special meeting duly called for considering the by-law, change the head office of the society from one province to another. 
  
  ### Change of head office — within a province
  
  (2.1) The supreme governing body of a society may, by resolution passed and approved by at least two thirds of the votes cast at a meeting, change the address of the head office within the province specified in the society’s by-laws. 
  
  ### Notice of change of address
  
  (2.2) If there is a change of address of the head office of a society, the society shall send a notice of the change to the Superintendent within fifteen days after the change. 
  
  ### Maximum period
  
  (3) A society shall establish by by-law the maximum period of time within which meetings of the society shall be held. 
  
  ### Change of name
  
  544.1 (1) Despite anything contained in its incorporating instrument, a society may, by by-law passed and approved by the votes of at least two thirds of the members entitled to vote by the by-laws of the society who are present or represented at a special meeting duly called for considering the by-law, change the name of the society. 
  
  ### Effective date
  
  (2) A by-law referred to in subsection (1) is not effective until the Superintendent approves it. 
  
  ### Appointing proxyholder
  
  545 (1) A member who is entitled to vote by by-law of a society may, if the by-laws of the society so provide, by executing an instrument of proxy, appoint a proxyholder or one or more alternate proxyholders, who are not required to be members of the society, to attend and act at the meeting in the manner and to the extent authorized by the proxy and with the authority conferred by the proxy. 
  
  ### Validity of proxies
  
  (2) An instrument of proxy is not valid at a meeting of a society unless it is filed with the secretary of the society at least ten days before the date of the meeting and it may be revoked at any time. 
  
  ### Societies to inform members of rights
  
  (3) A society for which an order approving the commencement and carrying on of business of life insurance has been made under this Act that has members who are entitled to vote at meetings of the society shall advise each of those members at least once a year by means of a statement printed in prominent type on a premium notice, premium receipt or dividend notice or otherwise, of the rights of the member to attend and to vote in person or by proxy at those meetings and to obtain a blank instrument of proxy on request therefor in writing to the secretary of the society, but in the case of a member who is not in receipt of a regular annual premium notice from the society, notice of the rights of the member to attend and to vote at meetings of the society may be given only at least once every five years. 
  
  ### Valuation balance sheet to be sent to members
  
  546 Every society for which an order approving the commencement and carrying on of business has been made under this Act shall, not later than June 1 in each year, mail to each member of the society a copy of the valuation balance sheet in the prescribed form and an explanation of the facts concerning the condition of the society or, in lieu thereof, shall publish in its official paper that balance sheet and explanation and mail a copy of the issue of the paper containing the balance sheet and explanation to each of the society’s members. 
  
  ### Auditors and actuaries
  
  547 (1) Divisions XIII and XIV of Part VI apply to societies with such modifications as the circumstances require. 
  
  ### Appointment of actuary
  
  (2) The directors of a former-Act society shall, forthwith after the coming into force of this Part, appoint the actuary of the society. 
  
  ### By-laws
  
  548 (1) Unless this Act otherwise provides, the supreme governing body of a society may by resolution make, amend or repeal any by-law that regulates the business or affairs of the society. 
  
  ### Deemed by-laws
  
  (2) Any matter provided for in the incorporating instrument of a former-Act society on the coming into force of this Part that, under this Act, would be provided for in the by-laws of a society is deemed to be provided for in the by-laws of the society. 
  
  ### Copies to Superintendent
  
  (3) Within thirty days after a by-law of a society comes into effect or is amended, the society shall send a copy of the by-law or the amendment to the Superintendent. A society shall send to the Superintendent, within six months after the coming into force of this subsection, its by-laws that are in effect on the coming into force of this subsection. 
  
  ### Return
  
  549 (1) Every society shall, each year before June 30 of that year, provide the Superintendent with a return showing 
  (a) the name, residence and citizenship of each director of the society; 
  (b) the mailing address of each director; 
  (c) the bodies corporate of which each director referred to in paragraph (a) is an officer or director and the firms of which each director is a member; 
  (d) the names of the directors referred to in paragraph (a) who are officers or employees of the society, and the positions they occupy; 
  (e) the date of expiration of the term of each director referred to in paragraph (a); and 
  (f) the name, address and date of appointment of the auditor of the society. 
  
  ### Information
  
  (2) Where 
  (a) any information relating to a director or auditor of a society shown in the latest return made to the Superintendent under subsection (1), other than information referred to in paragraph (1)(c), becomes inaccurate or incomplete, 
  (b) a vacancy in the position of auditor of the society occurs or is filled by another person, or 
  (c) a vacancy on the supreme governing body of the society occurs or is filled, the society shall forthwith provide the Superintendent with such information as is required to maintain the return in a complete and accurate form. 
  
  ### Sections 261, 262 and 266 to 270 apply
  
  549.1 (1) Sections 261, 262 and 266 to 270 apply to societies, with the modifications that the circumstances require. 
  
  ### For greater certainty
  
  (2) For greater certainty, subsection 262(3.1) does not apply to societies. 
  
  ## Investments 
  
  ## Application 
  
  ### Non-application of sections 551 to 570
  
  550 Sections 551 to 570 do not apply in respect of 
  (a) any interest in real property arising through the holding of a security interest in real property; 
  (b) any interest in an entity arising through the holding of a security interest in securities of that entity; or 
  (c) assets of a segregated fund maintained as required by subsection 542.03(2). 
  
  ## General Constraints on Investments 
  
  ### Investment standards
  
  551 The directors of a society shall establish and the society shall adhere to investment and lending policies, standards and procedures that a reasonable and prudent person would apply in respect of a portfolio of investments and loans to avoid undue risk of loss and obtain a reasonable return. 
  
  ### Limit — business growth fund
  
  551.1 (1) The aggregate value of all ownership interests in the business growth fund and the entities that the business growth fund controls that a society and its subsidiaries hold must not exceed $200,000,000. 
  
  ### Application
  
  (2) For the purposes of subsection (1), the value of an ownership interest is determined by the amount paid for it at the time of its issuance. 
  
  ### Restriction on control and substantial investments
  
  552 (1) Subject to subsections (2) to (3.4), no society shall acquire control of, or hold, acquire or increase a substantial investment in, any entity other than a permitted entity. 
  
  ### Exception: indirect investments
  
  (2) A society may acquire control of, or acquire or increase a substantial investment in, an entity other than a permitted entity by way of 
  (a) an acquisition of control of an entity referred to in any of paragraphs 554(1)(a) to (c), or of a prescribed entity, that controls or has a substantial investment in the entity; or 
  (b) an acquisition of shares or ownership interests in the entity by 
  (i) an entity referred to in any of paragraphs 554(1)(a) to (c), or a prescribed entity, that is controlled by the society, or 
  (ii) an entity controlled by an entity referred to in any of paragraphs 554(1)(a) to (c), or a prescribed entity, that is controlled by the society. 
  
  ### Exception: temporary investments, realizations and loan workouts
  
  (3) A society may acquire control of, or acquire or increase a substantial investment in, an entity by way of 
  (a) a temporary investment permitted by section 557; 
  (b) an acquisition of shares of a body corporate or of ownership interests in an unincorporated entity permitted by section 558; or 
  (c) a realization of security permitted by section 559. 
  
  ### Business growth fund
  
  (3.1) Subject to section 551.1 and subsections (3.2) to (3.4), a society may hold, acquire or increase a substantial investment in the business growth fund or any entity that the business growth fund controls. 
  
  ### For greater certainty
  
  (3.2) For greater certainty, a society is prohibited from acquiring control of the business growth fund or any entity that the business growth fund controls. 
  
  ### Prohibition — entity
  
  (3.3) A society is prohibited from holding or acquiring a substantial investment in the business growth fund or any entity that the business growth fund controls if the business growth fund or any entity that the business growth fund controls holds or acquires shares of, or other ownership interests in, any of the following entities, or in any entity that controls any of the following entities: 
  (a) an entity referred to in any of paragraphs 495(1)(a) to (j); 
  (b) an entity that is primarily engaged in the leasing of motor vehicles in Canada for the purpose of extending credit to a customer or financing a customer’s acquisition of a motor vehicle; 
  (c) an entity that is primarily engaged in providing temporary possession of personal property, including motor vehicles, to customers in Canada for a purpose other than to finance the customer’s acquisition of the property; 
  (d) an entity that acts as an insurance broker or agent in Canada; or 
  (e) an entity that is engaged in any prescribed activity. 
  
  ### Prohibition — capital and loans
  
  (3.4) A society is prohibited from holding or acquiring a substantial investment in the business growth fund or any entity that the business growth fund controls if the business growth fund or any entity that the business growth fund controls holds shares of, or other ownership interests in, an entity or holds a loan made to an entity and, in respect of that entity and its affiliates, the aggregate value of the following exceeds $100,000,000: 
  (a) all ownership interests that are held by the society, the society’s subsidiaries, the business growth fund or the entities that the business growth fund controls, the value of those ownership interests as determined by the amount paid for them at the time each was first acquired by any of those entities; and 
  (b) the outstanding principal of all loans held by the business growth fund or the entities that the business growth fund controls. 
  
  ### Exception: uncontrolled event
  
  (4) A society is deemed not to contravene subsection (1) if the society acquires control of, or acquires or increases a substantial investment in, an entity solely as the result of an event not within the control of the society. 
  
  ### Non-application of subsection (2)
  
  (4.1) No society shall, under subsection (2), acquire control of, or acquire or increase a substantial investment in, an entity referred to in paragraph 554(1)(c). 
  
  ### Holding
  
  (4.2) If a society holds a substantial investment in an entity referred to in paragraph 554(1)(c) that it acquired or increased under subsection (2) before the coming into force of subsection (4.1), the society may continue to hold that substantial investment. 
  
  ### Application of other provision
  
  (5) Despite having acquired control of, or a substantial investment in, an entity under a particular provision of this Part, a society may continue to control the entity or hold the substantial investment in the entity as though it had made the acquisition under another provision of this Part so long as the conditions of that other provision are met. 
  
  ### Timing of deemed acquisition
  
  (6) If a society decides to exercise its right under subsection (5), the society is deemed to be acquiring the control or the substantial investment under the other provision. 
  
  ### Regulations re limits
  
  553 The Governor in Council may make regulations 
  (a) respecting the determination of the amount or value of loans, investments and interests for the purposes of sections 550 to 570; 
  (b) respecting the loans and investments, and the maximum aggregate amount of all loans and investments, that may be made or acquired by a society and its prescribed subsidiaries to or in a person and any persons connected with that person; and 
  (c) specifying the classes of persons who are connected with any person for the purposes of paragraph (b). 
  
  ## Subsidiaries and Equity Investments 
  
  ### Permitted investments
  
  554 (1) Subject to subsections (4) and (5), a society may acquire control of, or acquire or increase a substantial investment in, 
  (a) a company or a society; 
  (b) an insurance corporation incorporated or formed by or under an Act of the legislature of a province; or 
  (c) an entity that is incorporated or formed, and regulated, otherwise than by or under an Act of Parliament or of the legislature of a province and that is primarily engaged outside Canada in a business that, if carried on in Canada, would be the business of insurance. 
  
  ### Permitted investments
  
  (2) Subject to subsections (3) to (5), a society may acquire control of, or acquire or increase a substantial investment in, an entity, other than an entity referred to in any of paragraphs (1)(a) to (c), whose business is limited to one or more of the following: 
  (a) engaging in any financial service activity or in any other activity that a property and casualty company is permitted to engage in under subsection 440(2) or section 441 or 442, other than paragraph 441(1)(h); 
  (b) acquiring or holding shares of, or ownership interests in, entities in which a society is permitted under this Part to hold or acquire; 
  (c) engaging in the provision of any services exclusively to any or all of the following, so long as the entity is providing those services to the society or any member of the society’s group: 
  (i) the society, 
  (ii) any member of the society’s group, 
  (iii) any entity that is primarily engaged in the business of providing financial services, 
  (iv) any permitted entity in which an entity referred to in subparagraph (iii) has a substantial investment, or 
  (v) any prescribed person, if it is doing so under prescribed terms and conditions, if any are prescribed; 
  (d) engaging in any activity that a society is permitted to engage in, other than an activity referred to in paragraph (a) or (e), that relates to 
  (i) the promotion, sale, delivery or distribution of a financial product or financial service that is provided by the society or any member of the society’s group, or 
  (ii) if a significant portion of the business of the entity involves an activity referred to in subparagraph (i), the promotion, sale, delivery or distribution of a financial product or financial service that is provided by any other entity that is primarily engaged in the business of providing financial services; 
  (e) engaging in the activities referred to in the definition 
  *closed-end fund*, 
  *mutual fund distribution entity* or 
  *mutual fund entity* in subsection 490(1); and  
  (f) engaging in prescribed activities, under prescribed terms and conditions, if any are prescribed. 
  
  ### Permitted infrastructure entities
  
  (2.1) Subject to subsection (3), a society may — under any prescribed terms and conditions — acquire control of, or acquire or increase a substantial investment in, a permitted infrastructure entity. 
  
  ### Restriction
  
  (3) A society may not acquire control of, or acquire or increase a substantial investment in, an entity whose business includes any activity referred to in any of paragraphs (2)(a) to (e), or in any regulation made under paragraph 2.2(b), if the entity engages in the business of accepting deposit liabilities or if the activities of the entity include 
  (a) activities that a property and casualty company is not permitted to engage in under any of sections 466, 469 and 478; 
  (b) any financial intermediary activity that exposes the entity to material market or credit risk, including the activities of a finance entity, a factoring entity and a financial leasing entity; 
  (b.1) the activities of a specialized financing entity; 
  (c) dealing in securities, except as may be permitted under paragraph (2)(e) or as may be permitted to a company under paragraph 440(2)(b); 
  (d) acquiring control of or acquiring or holding a substantial investment in another entity unless 
  (i) in the case of an entity, other than a permitted infrastructure entity, that is controlled by the society, the society itself would be permitted under this Part to acquire a substantial investment in the other entity, 
  (ii) in the case of an entity, other than a permitted infrastructure entity, that is not controlled by the society, the society itself would be permitted to acquire a substantial investment in the other entity under subsection (1), (2) or (2.1) or 552(2) or paragraph 552(3)(b) or (c), or 
  (iii) in the case of a permitted infrastructure entity, whether or not that entity is controlled by the society, the society itself would be permitted to acquire a substantial investment in the other entity under subsection (2.1); or 
  (e) any prescribed activity. 
  
  ### Exception
  
  (3.1) Despite paragraph (3)(a), a society may acquire control of, or acquire or increase a substantial investment in, any entity that acts as a trustee of a trust if the entity has been authorized under the laws of a province to act as a trustee of a trust and the entity is 
  (a) a closed-end fund; 
  (b) a mutual fund entity; or 
  (c) an entity whose business is limited to engaging in one or more of the following: 
  (i) the activities of a mutual fund distribution entity, 
  (ii) any activity that a company is permitted to engage in under subsection 441(1.1), and 
  (iii) the provision of investment counselling services and portfolio management services. 
  
  ### Control
  
  (4) Subject to subsection (6) and the regulations, a society may not acquire control of, or acquire or increase a substantial investment in, 
  (a) an entity referred to in any of paragraphs (1)(a) to (c), unless the society controls, within the meaning of paragraph 3(1)(d), the entity, or would thereby acquire control, within the meaning of that paragraph, of the entity; or 
  (b) an entity whose business includes an activity referred to in paragraph (2)(b), unless 
  (i) the society controls, within the meaning of paragraph 3(1)(d), the entity, or 
  (ii) subject to prescribed terms and conditions, if any are prescribed, the activities of the entity do not include the acquisition or holding of control of, or the acquisition or holding of shares or other ownership interests in, an entity referred to in paragraph (a) or an entity that is not a permitted entity. 
  
  ### Minister’s approval
  
  (5) Subject to the regulations, a society may not, without the prior written approval of the Minister, acquire control of, or acquire or increase a substantial investment in, a permitted entity other than a permitted infrastructure entity or an entity whose activities are limited to acquiring or holding shares of, or ownership interests in, permitted infrastructure entities. 
  
  ### Control not required
  
  (6) A society need not control an entity referred to in paragraph (1)(c), or an entity that is incorporated or formed otherwise than by or under an Act of Parliament or of the legislature of a province, if the laws or customary business practices of the country under the laws of which the entity was incorporated or formed do not permit the society to control the entity. 
  
  ### Prohibition on giving up control in fact
  
  (7) A society that, under subsection (4), controls an entity may not, without the prior written approval of the Minister, give up control, within the meaning of paragraph 3(1)(d), of the entity while it continues to control the entity. 
  
  ### Subsections do not apply
  
  (8) If a society controls, within the meaning of paragraph 3(1)(a), (b) or (c), an entity, subsection (5) does not apply in respect of any subsequent increases by the society to its substantial investment in the entity so long as the society continues to control the entity. 
  
  ### Regulations
  
  (9) The Governor in Council may make regulations 
  (a) for the purposes of subsection (4), permitting the acquisition of control or the acquisition or increase of substantial investments, or prescribing the circumstances under which that subsection does not apply or the societies or other entities in respect of which that subsection does not apply, including prescribing societies or other entities on the basis of the activities they engage in; 
  (b) for the purposes of subsection (5), permitting the acquisition of control or the acquisition or increase of substantial investments, or prescribing the circumstances under which that subsection does not apply or the societies or other entities in respect of which that subsection does not apply, including prescribing societies or other entities on the basis of the activities they engage in; and 
  (c) for the purposes of subsection (2.1), establishing terms and conditions respecting the acquisition of control of, or the acquisition or increase of a substantial investment in, a permitted infrastructure entity by a society. 
  
  ### Approval for indirect investments
  
  555 If a society obtains the approval of the Minister under subsection 554(5) to acquire control of, or to acquire or increase a substantial investment in, an entity and, through that acquisition or increase, the society indirectly acquires control of, or acquires or increases a substantial investment in, another entity that would require the approval of the Minister under subsection 554(5) and that indirect acquisition or increase is disclosed to the Minister in writing before the approval is obtained, the society is deemed to have obtained the approval of the Minister for that indirect acquisition or increase. 
  
  ### Undertakings
  
  556 (1) If a society controls a permitted entity, other than an entity referred to in any of paragraphs 554(1)(a) to (c), the society shall provide the Superintendent with any undertakings that the Superintendent may require regarding 
  (a) the activities of the entity; and 
  (b) access to information about the entity. 
  
  ### Undertakings
  
  (2) If a society acquires control of an entity referred to in paragraph 554(1)(b) or (c), the society shall provide the Superintendent with any undertakings concerning the entity that the Superintendent may require. 
  
  ### Agreements with other jurisdictions
  
  (3) The Superintendent may enter into an agreement with the appropriate official or public body responsible for the supervision of any entity referred to in paragraph 554(1)(b) or (c) in each province or in any other jurisdiction concerning any matters referred to in paragraphs (1)(a) and (b) or any other matter the Superintendent considers appropriate. 
  
  ### Access to records
  
  (4) Despite any other provision of this Part, a society shall not control a permitted entity, other than an entity referred to in paragraph 554(1)(a), unless, in the course of the acquisition of control or within a reasonable time after the control is acquired, the society obtains from the permitted entity an undertaking to provide the Superintendent with reasonable access to the records of the permitted entity. 
  
  ## Exceptions and Exclusions 
  
  ### Temporary investments in entity
  
  557 (1) Subject to subsection (4), a society may, by way of a temporary investment, acquire control of, or acquire or increase a substantial investment in, an entity but, within two years, or any other period that may be specified or approved by the Superintendent, after acquiring control or after acquiring or increasing the substantial investment, as the case may be, it shall do all things necessary to ensure that it no longer controls the entity or has a substantial investment in the entity. 
  
  ### Transitional
  
  (2) Despite subsection (1), if a society that was in existence immediately before June 1, 1992 had an investment in an entity on September 27, 1990 that is a substantial investment within the meaning of section 10 and the society subsequently increases that substantial investment by way of a temporary investment, the society shall, within two years, or any other period that is specified or approved by the Superintendent, after increasing the substantial investment, do all things necessary to ensure that its substantial investment in the entity is no greater than it was on September 27, 1990. 
  
  ### Extension
  
  (3) The Superintendent may, in the case of any particular society that makes an application under this subsection, extend the period of two years, or the other period specified or approved by the Superintendent, that is referred to in subsection (1) or (2) for any further period or periods, and on any terms and conditions, that the Superintendent considers necessary. 
  
  ### Temporary investment
  
  (4) If a society, by way of temporary investment, acquires control of, or acquires or increases a substantial investment in, an entity for which the approval of the Minister would have been required under subsection 554(5) if the society had acquired the control, or acquired or increased the substantial investment, under section 554, the society must, within 90 days after acquiring control or after acquiring or increasing the substantial investment, 
  (a) apply to the Minister for approval to retain control of the entity or to continue to hold the substantial investment in the entity for a period specified by the Minister or for an indeterminate period on any terms and conditions that the Minister considers appropriate; or 
  (b) do all things necessary to ensure that, on the expiry of the 90 days, it no longer controls the entity or does not have a substantial investment in the entity. 
  
  ### Loan workouts
  
  558 (1) Despite anything in this Part, if a society or any of its subsidiaries has made a loan to an entity and, under the terms of the agreement between the society, or any of its subsidiaries, and the entity with respect to the loan and any other documents governing the terms of the loan, a default has occurred, the society may acquire 
  (a) if the entity is a body corporate, all or any of the shares of the body corporate; 
  (b) if the entity is an unincorporated entity, all or any of the ownership interests in the entity; 
  (c) all or any of the shares or all or any of the ownership interests in any entity that is an affiliate of the entity; or 
  (d) all or any of the shares of a body corporate that is primarily engaged in holding shares of, ownership interests in or assets acquired from the entity or any of its affiliates. 
  
  ### Obligation
  
  (2) If a society acquires shares or ownership interests in an entity under subsection (1), the society shall, within five years after acquiring them, do all things necessary to ensure that the society does not control the entity or have a substantial investment in the entity. 
  
  ### Transitional
  
  (3) Despite subsection (1), if a society that was in existence immediately before June 1, 1992 had an investment in an entity on September 27, 1990 that is a substantial investment within the meaning of section 10 and the society later increases that substantial investment by way of an investment made under subsection (1), the society shall, within five years after increasing the substantial investment, do all things necessary to ensure that its substantial investment in the entity is no greater than it was on September 27, 1990. 
  
  ### Extension
  
  (4) The Superintendent may, in the case of any particular society that makes an application under this subsection, extend the period of five years referred to in subsection (2) or (3) for any further period or periods, and on any terms and conditions, that the Superintendent considers necessary. 
  
  ### Exception — entities controlled by foreign governments
  
  (5) Despite anything in this Part, if a society has made a loan to, or holds a debt obligation of, the government of a foreign country or an entity controlled by the government of a foreign country and, under the terms of the agreement between the society and that government or the entity, as the case may be, and any other documents governing the terms of the loan or debt obligation, a default has occurred, the society may acquire all or any of the shares of, or ownership interests in, that entity or in any other entity designated by that government, if the acquisition is part of a debt restructuring program of that government. 
  
  ### Time for holding shares
  
  (6) If a society acquires any shares or ownership interests under subsection (5), the society may, on any terms and conditions that the Superintendent considers appropriate, hold those shares or ownership interests for an indeterminate period or for any other period that the Superintendent may specify. 
  
  ### Exception
  
  (7) If, under subsection (1), a society acquires control of, or acquires or increases a substantial investment in, an entity that it would otherwise be permitted to acquire or increase under section 554, the society may retain control of the entity or continue to hold the substantial investment for an indeterminate period, if the approval in writing of the Minister is obtained before the end of the period referred to in subsection (2) or (3), including any extension of it granted under subsection (4). 
  
  ### Realizations
  
  559 (1) Despite anything in this Act, a society may acquire 
  (a) an investment in a body corporate, 
  (b) an interest in an unincorporated entity, or 
  (c) an interest in real property, if the investment or interest is acquired through the realization of a security interest held by the society or any of its subsidiaries. 
  
  ### Disposition
  
  (2) If a society acquires control of, or acquires a substantial investment in, an entity by way of the realization of a security interest held by the society or any of its subsidiaries, the society shall, within five years after the day on which control or the substantial investment is acquired, do all things necessary, or cause its subsidiary to do all things necessary, as the case may be, to ensure that the society no longer controls the entity or has a substantial investment in the entity. 
  
  ### Transitional
  
  (3) Despite subsection (2), if a society that was in existence immediately before June 1, 1992 had an investment in an entity on September 27, 1990 that is a substantial investment within the meaning of section 10 and the society later increases that substantial investment by way of a realization of a security interest under subsection (1), the society shall, within five years after increasing the substantial investment, do all things necessary to ensure that its substantial investment in the entity is no greater than it was on September 27, 1990. 
  
  ### Extension
  
  (4) The Superintendent may, in the case of any particular society that makes an application under this subsection, extend the period of five years referred to in subsection (2) or (3) for any further period or periods, and on any terms and conditions, that the Superintendent considers necessary. 
  
  ### Exception
  
  (5) If, under subsection (1), a society acquires control of, or acquires or increases a substantial investment in, an entity that it would otherwise be permitted to acquire or increase under section 554, the society may retain control of the entity or continue to hold the substantial investment for an indeterminate period if the approval in writing of the Minister is obtained before the end of the period referred to in subsection (2) or (3), including any extension of it granted under subsection (4). 
  
  ### Regulations restricting ownership
  
  560 The Governor in Council may make regulations restricting the ownership under sections 554 to 559 by a society of shares of a body corporate or of ownership interest in an unincorporated entity and imposing terms and conditions applicable to societies that own such shares or interests. 
  
  ## Portfolio Limits 
  
  ### Exclusion from portfolio limits
  
  561 (1) The value of all loans, investments and interests acquired by a society and any of its prescribed subsidiaries as a result of a realization of a security interest or pursuant to section 558 shall not be included in calculating the value of loans, investments and interests of the society and its prescribed subsidiaries under sections 562 to 566 
  (a) for a period of twelve years following the day on which the interest was acquired, in the case of an interest in real property; and 
  (b) for a period of five years after the day on which the loan, investment or interest was acquired, in the case of a loan, investment or interest, other than an interest in real property. 
  
  ### Extension
  
  (2) The Superintendent may, in the case of any particular society, extend any period referred to in subsection (1) for such further period or periods, and on such terms and conditions, as the Superintendent considers necessary. 
  
  ## Consumer and Commercial Lending by Societies 
  
  ### Lending limit
  
  562 A society shall not, and shall not permit its prescribed subsidiaries to, 
  (a) make or acquire a commercial loan or a loan to a natural person, or 
  (b) acquire control of a permitted entity that holds commercial loans or loans to natural persons where the aggregate value of all such loans held by the society and its prescribed subsidiaries exceeds, or the acquisition or making of the loan or the acquisition of control of the body corporate would cause the aggregate value of all such loans held by the society and its prescribed subsidiaries to exceed, the prescribed percentage of the total assets of the society. 
  
  ## Real Property 
  
  ### Limit on total property interest
  
  563 A society shall not, and shall not permit its prescribed subsidiaries to, 
  (a) purchase or otherwise acquire an interest in real property, or 
  (b) make an improvement to any real property in which the society or any of its prescribed subsidiaries has an interest if the aggregate value of all interests of the society in real property exceeds, or the acquisition of the interest or the making of the improvement would cause that aggregate value to exceed, an amount determined in accordance with the regulations. 
  
  ### Regulations
  
  564 For the purposes of this Part, the Governor in Council may make regulations 
  (a) defining the interests of a society in real property; 
  (b) determining the method of valuing those interests; and 
  (c) respecting the determination of an amount for the purpose of each of sections 563, 565 and 566. 
  
  ## Equities 
  
  ### Limits on equity acquisitions
  
  565 A society shall not, and shall not permit its prescribed subsidiaries to, 
  (a) purchase or otherwise acquire any participating shares of any body corporate or any ownership interests in any unincorporated entity, other than those of a permitted entity in which the society has, or by virtue of the acquisition would have, a substantial investment, or 
  (b) acquire control of an entity that holds shares or ownership interests referred to in paragraph (a), if the aggregate value of 
  (c) all participating shares, excluding participating shares of permitted entities in which the society has a substantial investment, and 
  (d) all ownership interests in unincorporated entities, other than ownership interests in permitted entities in which the society has a substantial investment, beneficially owned by the society and its prescribed subsidiaries exceeds, or the purchase or acquisition would cause that aggregate value to exceed, an amount determined in accordance with the regulations. 
  
  ## Aggregate Limit 
  
  ### Aggregate limit
  
  566 A society shall not, and shall not permit its prescribed subsidiaries to, 
  (a) purchase or otherwise acquire 
  (i) participating shares of a body corporate, other than those of a permitted entity in which the society has, or by virtue of the acquisition would have, a substantial investment, 
  (ii) ownership interests in an unincorporated entity, other than ownership interests in a permitted entity in which the society has, or by virtue of the acquisition would have, a substantial investment, or 
  (iii) interests in real property, or 
  (b) make an improvement to real property in which the society or any of its prescribed subsidiaries has an interest if the aggregate value of 
  (c) all participating shares and ownership interests referred to in subparagraphs (a)(i) and (ii) that are beneficially owned by the society and its prescribed subsidiaries, and 
  (d) all interests of the society in real property referred to in subparagraph (a)(iii) exceeds, or the acquisition or the making of the improvement would cause that aggregate value to exceed, an amount determined in accordance with the regulations. 
  
  ## Miscellaneous 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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 is the value of the assets; 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 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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 
  
  ### 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. 
  
  ### 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 
  
  ### 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.  
  
  ### 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 
  
  ### 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 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### Delegation by liquidator
  
  (2) A liquidator may delegate any of the powers vested by paragraph (1)(b) to the directors or members, if any. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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.  
  
  ### 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). 
  
  ### Delivery of order
  
  (2) The liquidator shall without delay send a certified copy of the order referred to in subsection (1) to the Superintendent. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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 
  
  ### Definitions
  
  570.23 In sections 570.25 and 570.26, 
  *member* and 
  *incorporator* include the heirs and personal representatives of a member or incorporator.  
  
  ### 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. 
  
  ### 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). 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### 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. 
  
  ### Payment to Receiver General
  
  (3) The Minister shall pay to the Receiver General all amounts paid to the Minister under subsection (1). 
  
  ### 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. 
  
  ### Recovery
  
  570.29 If at any time a person establishes an entitlement to any money paid to the Receiver General under this Part, the Receiver General shall pay an equivalent amount to that person out of the Consolidated Revenue Fund. 
  
  ### Custody of records after dissolution
  
  570.3 A person who has been granted custody of the documents, records and registers of a dissolved society shall keep them available for production for six years after the date of the dissolution of the society or until the end of such shorter period as may be ordered by the court when it orders the dissolution. 
  
  # PART XIII 
  
  ## Foreign Companies 
  
  ## Interpretation 
  
  ### Definitions
  
  571 In this Part,  
  *association* means an association of persons formed in a foreign country on the plan known as Lloyd’s, whereby each member of the association participating in a policy becomes liable for a stated, limited or proportionate part of the whole amount payable under the policy; (association)   
  *chief agency* means the principal office of a foreign company in Canada; (agence principale)   
  *chief agent*, in respect of a foreign company, means the natural person appointed pursuant to subsection 579(3) and named as such in the power of attorney referred to in paragraph 579(1)(b); (agent principal)   
  *exchange* means a group of persons formed in a foreign country for the purpose of exchanging reciprocal contracts of indemnity or inter-insurance with each other through the same attorney, where the principal office of the exchange is in a foreign country; (groupe d’échange)   
  *foreign entity* means an entity incorporated or formed by or under the laws of a country other than Canada, and includes an association and an exchange; (entité étrangère)   
  *foreign fraternal benefit society* means a fraternal benefit society incorporated outside Canada; (société de secours étrangère)   
  *foreign life company* means a foreign company that is authorized to insure risks that fall within the class of life insurance; (société d’assurance-vie étrangère)   
  *foreign marine company* means a foreign company that is authorized to solely insure risks within the class of marine insurance; (société d’assurance maritime étrangère)   
  *foreign property and casualty company* means a foreign company other than a foreign life company or a foreign marine company. (société d’assurances multirisques étrangère)   
  *fraternal benefit society* [Repealed, 1997, c. 15, s. 299]  
  
  ## Application 
  
  ### Application — insurance business in Canada
  
  572 This Part applies only in respect of the insurance business in Canada of a foreign entity. 
  
  ### Exception
  
  572.1 Despite section 572, this Part does not apply in respect of the insurance against injury to persons or loss of or damage to property, or liability for such injury, loss or damage, caused by nuclear energy, including ionizing radiation and contamination by radioactive substances, to the extent that, in the opinion of the Superintendent, that insurance is not available within Canada. 
  
  ## Insurance of Risks 
  
  ### Restriction on insuring of risks unless authorized
  
  573 (1) A foreign entity shall not insure in Canada a risk unless it is authorized by order made under subsection 574(1). 
  
  ### Restriction to specified classes of insurance
  
  (2) A foreign company shall not insure in Canada a risk unless the risk falls within a class of insurance that is specified in the order made under subsection 574(1) in respect of the foreign company. 
  
  ### Restriction on issuance of annuities or endowment insurance
  
  (3) Unless authorized to insure in Canada risks falling within the class of life insurance, a foreign company shall not issue annuities or policies of endowment insurance in Canada. 
  
  ### Transitional
  
  (4) A certificate of registry issued to a foreign entity under the Foreign Insurance Companies Act or Part VIII of the Canadian and British Insurance Companies Act, or any other authorization, that had not expired or been withdrawn before June 1, 1992 is deemed to be an order made under subsection 574(1) and the foreign entity remains subject to any and all other conditions and limitations contained in the certificate or other authorization.  
  
  ### Continuance of certificate limitations
  
  (5) A class of insurance specified in a certificate of registry or other authorization referred to in subsection (4) is deemed to be specified in an order of the Superintendent approving the insuring in Canada of risks by the foreign company. 
  
  ### Application for order
  
  574 (1) On application by a foreign entity, the Superintendent may, with the approval of the Minister but subject to the other provisions of this Part, make an order approving the insuring in Canada of risks by the foreign entity. 
  
  ### Reciprocal treatment
  
  (2) If the application is made by a foreign entity that is not controlled by a WTO Member resident, the Minister shall not approve the making of an order under subsection (1) unless the Minister is satisfied that treatment as favourable for companies to which this Act applies exists or will be provided in the jurisdiction in which the foreign entity principally carries on business, either directly or through a subsidiary. 
  
  ### Policies and procedures — integrity or security
  
  574.1 A foreign company shall establish and adhere to policies and procedures to protect itself against threats to its integrity or security in relation to its business in Canada. 
  
  ### Prohibited names
  
  575 (1) An order made under subsection 574(1) may not provide for the use of a name that 
  (a) is prohibited by an Act of Parliament; 
  (b) is, in the opinion of the Superintendent, deceptively misdescriptive; 
  (c) is the same as or, in the opinion of the Superintendent, substantially the same as or confusingly similar to, any existing trademark, trade name or corporate name of a body corporate, except where 
  (i) the trademark or trade name is being changed or the body corporate is being dissolved or is changing its corporate name, and 
  (ii) consent to the use of the trademark, trade name or corporate name is signified to the Superintendent in any manner that the Superintendent may require; 
  (d) is the same as or, in the opinion of the Superintendent, substantially the same as or confusingly similar to, the known name under or by which any entity carries on business or is identified; or 
  (e) is reserved under section 45 for a company or society or proposed company or society. 
  
  ### Affiliated entity
  
  (2) Despite subsection (1), an order made under subsection 574(1) may provide for the use of a name that is the same or substantially the same as that of an entity with which the foreign entity is affiliated, within the meaning of subsection 6(2), if that other entity consents to the use of the name. 
  
  ### Representations to Superintendent
  
  (3) If the Superintendent does not make an order for one of the reasons specified in subsection (1), he or she must, by a notice in writing to that effect, give the foreign entity and any other interested party an opportunity to make representations. 
  
  ### Change of name
  
  576 (1) On the application of a foreign company, the Superintendent may, subject to subsection 575(1), by further order, change the name under which a foreign company insures risks. 
  (2)  [Repealed, 2007, c. 6, s. 261]  
  
  ### Direction to change of name
  
  577 (1) If through inadvertence or otherwise a foreign company is permitted by an order made under subsection 574(1) to insure risks under a name that is prohibited by section 575, the Superintendent may direct the foreign company to change the name without delay. 
  
  ### Revoking name
  
  (2) Where a foreign company has been directed under subsection (1) to change the name under which it insures risks and has not, within sixty days after the service of the direction, changed that name to a name that is not prohibited by this Part, the Superintendent may revoke the name under which the foreign company insures risks and assign to it a name and, until changed in accordance with subsection 576(1), the name under which the foreign company is to insure risks is thereafter the name so assigned. 
  
  ### French, English or foreign form of name
  
  578 (1) The name under which a foreign company is authorized to insure risks, as set out in the order made under subsection 574(1), may be in an English form, a French form, an English form and a French form, a combined English and French form or a form combining words in a language other than English or French with one of the forms specified in this subsection. 
  
  ### Other name
  
  (2) Subject to subsections (3) and (4), a foreign company may carry on its insurance business in Canada under a name other than the name set out in the order made under subsection 574(1) in respect of the foreign company. 
  
  ### Direction to change name
  
  (3) If a foreign company carries on its insurance business in Canada under a name other than a name set out in the order made under subsection 574(1) in respect of the foreign company, the Superintendent may direct the foreign company not to use that other name if the Superintendent is of the opinion that the other name is a name referred to in any of paragraphs 575(1)(a) to (e). 
  
  ### Publication of name
  
  (4) A foreign company shall set out, or cause to be set out, its name and, if different, the name under which it is authorized to insure risks, in legible characters in all contracts, premium notices, applications for policies, policies, negotiable instruments and other documents evidencing rights and obligations with respect to other parties that are issued or made by or on behalf of the foreign company. 
  
  ### Publication of statement
  
  (5) A foreign company shall set out or cause to be set out in legible characters in all premium notices, applications for policies and policies that are issued or made by or on behalf of the foreign company a statement that the document was issued or made in the course of its insurance business in Canada. 
  
  ### Continuation of registered names
  
  (6) The name of a foreign company, as set out in a certificate of registry referred to in subsection 573(4), or in any other authorization, is deemed to be set out in an order of the Superintendent made under subsection 574(1) in respect of the foreign company. 
  
  ### Application
  
  579 (1) An application for an order under subsection 574(1) must be filed with the Superintendent, together with the information, material and evidence that the Superintendent may require, including 
  (a) documents relating to the constitution of the foreign entity; 
  (b) a power of attorney to the chief agent appointed under subsection (3), in the form that the Superintendent may require; 
  (c) a statement, in the form that the Superintendent may require, of the financial condition of the foreign entity and of the business of insurance undertaken by the foreign entity, and any additional statements or information that the Superintendent may require as to its solvency and its ability to meet all of its obligations; 
  (d) evidence satisfactory to the Superintendent that the foreign entity is authorized under the laws of the country where it is incorporated or formed to insure risks within each class of insurance in Canada that that foreign entity has applied to insure; 
  (e) in the case of a foreign fraternal benefit society, 
  (i) a report of an actuary appointed by the foreign fraternal benefit society, in the form that the Superintendent may require, on the results of an actuarial valuation made by the actuary, as of the preceding December 31 or as of any later date specified by the Superintendent, of each of the benefit funds maintained by the foreign fraternal benefit society, having regard to the prospective liabilities of and contributions to each fund, and 
  (ii) the opinion of the actuary that the assets of the foreign fraternal benefit society applicable to each fund, taken at the value accepted by the Superintendent, together with the premiums, dues and other contributions to be received after the date of the valuation from the members according to the scale in force at the date of the valuation, are sufficient to provide for the payment at maturity of all of the obligations of the fund without deduction or abatement; and 
  (f) a copy of the resolution respecting the investment and lending policies, standards and procedures that the foreign entity is to establish and adhere to in accordance with subsection 615(1). 
  
  ### Contents of power of attorney
  
  (2) A power of attorney referred to in paragraph (1)(b) must expressly authorize the chief agent to receive all notices under the laws of Canada from the Minister or the Superintendent. 
  
  ### Appointment of chief agent
  
  (3) A foreign company shall appoint a natural person who is ordinarily resident in Canada to be its chief agent for the purposes of this Part. 
  
  ### Publishing notice of intention
  
  580 Before filing an application referred to in subsection 579(1), a foreign entity must, at least once a week for four consecutive weeks, publish, in a form satisfactory to the Superintendent, a notice of intention to make the application in the Canada Gazette and in a newspaper in general circulation at or near the place where its chief agency is to be situated if it is granted an order under subsection 574(1).  
  
  ### Conditions for order
  
  581 (1) The Superintendent shall not make an order under subsection 574(1) in respect of a foreign entity until it has been shown to the satisfaction of the Superintendent that all relevant requirements of this Act have been complied with and that the foreign entity has 
  (a) vested in trust assets of at least five million dollars or any greater amount that the Superintendent specifies; 
  (b) appointed an actuary under section 623 and an auditor under section 633; and 
  (c) established its chief agency. 
  
  ### Conditions of order
  
  (2) The order may contain any conditions or limitations that are consistent with this Act and that the Superintendent considers appropriate. 
  
  ### Permissible securities
  
  582 (1) The assets of a foreign entity to be vested in trust under paragraph 581(1)(a) are to consist of unencumbered securities of or guaranteed by Canada or a province. 
  
  ### Other permissible securities
  
  (2) Those assets may also consist of other securities at the accepted value and on the conditions established by the Superintendent. 
  
  ### Contents of order
  
  583 An order made under subsection 574(1) in respect of a foreign company must set out 
  (a) the name of the foreign company and, if different, the name under which it is authorized to insure risks; 
  (b) the day on which the order becomes effective; 
  (c) the classes of insurance risks that the foreign company is authorized to insure; and 
  (d) the conditions or limitations that are consistent with this Act that are considered appropriate by the Superintendent. 
  
  ### Public notice
  
  584 (1) On the making of an order under subsection 574(1) in respect of a foreign company, the foreign company must publish a notice of the making of the order in a newspaper in general circulation at or near the place where its chief agency is located. 
  
  ### Notice in Canada Gazette 
  
  (2) The Superintendent shall cause to be published in the Canada Gazette a notice of the making of the order referred to in subsection (1).  
  
  ### Publication of list
  
  585 Unless the regulations provide otherwise, the Superintendent shall cause to be published quarterly in the Canada Gazette a list of  
  (a) foreign companies; 
  (b) the classes of insurance specified in the orders of the Superintendent approving the insurance of risks by them; 
  (c) their chief agents; and 
  (d) the province in which their chief agencies are situated. 
  
  ### Variations
  
  586 (1) In respect of an order made under subsection 574(1) in respect of a foreign company, the Superintendent may at any time, by further order, 
  (a) specify additional classes of insurance risks that the foreign company is authorized to insure; 
  (b) make the order subject to conditions or limitations that are consistent with this Act and that are considered appropriate by the Superintendent; or 
  (c) amend or revoke any authorization contained in the order or any condition or limitation to which the order is subject. 
  
  ### Representations
  
  (2) Before making any such further order, the Superintendent must give the foreign company an opportunity to make representations regarding that further order. 
  (3) to (6)  [Repealed, 1996, c. 6, s. 85]  
  
  ### Change of chief agent
  
  587 (1) A foreign company that changes its chief agent shall, without delay after doing so, file with the Superintendent a further power of attorney appointing the new chief agent. 
  
  ### Change of address
  
  (2) A foreign company that changes the address of its chief agency shall, within 15 days after doing so, send a notice of the change of address to the Superintendent. 
  
  ### Restricted transactions
  
  587.1 (1) Except in accordance with this section or an order made under subsection 678.6(1), a foreign company shall not cause itself to be reinsured, on an assumption basis, against all or any portion of the risks undertaken under its policies. 
  
  ### Approval of the Superintendent
  
  (2) A foreign company may, with the approval of the Superintendent, cause itself to be reinsured, on an assumption basis, against all or any portion of the risks undertaken under its policies, by one or more of the following entities: 
  (a) a company or society; 
  (b) another foreign company that, in Canada, reinsures those risks; or 
  (c) a body corporate incorporated or formed by or under the laws of a province, if the Superintendent has entered into satisfactory arrangements concerning the reinsurance with either or both of the body corporate and the appropriate official or public body responsible for the supervision of the body corporate. 
  
  ### Prescribed transactions
  
  (3) The approval of the Superintendent is not required for a prescribed transaction or a transaction in a prescribed class of transactions. 
  
  ### Procedure
  
  (4) The foreign company must, at least 30 days before it applies for the Superintendent’s approval, publish a notice in the Canada Gazette and in a newspaper in general circulation at or near the place where its chief agency is situated stating the day on or after which it will apply.  
  
  ### Information
  
  (5) If a foreign company publishes a notice referred to in subsection (4), the Superintendent may direct the foreign company to provide its policyholders with any information that the Superintendent may require. 
  
  ### Report of independent actuary
  
  (6) An application for approval must, if the Superintendent so requires, be accompanied by the report of an independent actuary on the proposed reinsurance agreement. 
  
  ### Inspection
  
  (7) If a foreign company publishes a notice referred to in subsection (4), it must make the agreement for the transaction that the Superintendent is asked to approve available at its chief agency for the inspection of its policyholders for at least 30 days after the publication of the notice and must provide a copy of the agreement to any policyholder who requests one by writing to the chief agency. 
  
  ### Superintendent may shorten periods
  
  (8) If the Superintendent is of the opinion that it is in the best interests of a group of policyholders affected by the transaction that the Superintendent is asked to approve, the Superintendent may shorten the periods of 30 days referred to in subsections (4) and (7). 
  
  ### Regulations
  
  (9) The Governor in Council may make regulations respecting the circumstances in which foreign companies are deemed to be causing themselves to be reinsured, on an assumption basis, against risks undertaken under their policies. 
  
  ### Approval by Superintendent
  
  587.2 A transaction referred to in subsection 587.1(2) has no effect until it has been approved by the Superintendent. 
  
  ### Notice to Superintendent
  
  587.3 (1) A foreign company proposing to transfer all or substantially all of its policies must give notice of the proposal to the Superintendent. 
  
  ### Information
  
  (2) After receiving the notice, the Superintendent may direct the foreign company to provide its policyholders with any information that the Superintendent may require. 
  
  ## Classes of Insurance 
  
  ### Restriction to reinsurance
  
  588 (1) A foreign company may reinsure, but shall not otherwise insure, a risk falling within a class of insurance specified in the order made under subsection 574(1) in respect of the foreign company if the order limits the foreign company to the reinsurance of those risks. 
  
  ### Continuation of certificate conditions
  
  (2) A condition that limits a foreign company to the reinsurance of risks falling within a class of insurance and that is contained in a certificate of registry issued under the Foreign Insurance Companies Act or under Part VIII of the Canadian and British Insurance Companies Act, or in any other authorization, that had not expired or been withdrawn before June 1, 1992 is deemed to be a condition in an order made under subsection 574(1) in respect of the foreign company.  
  
  ### No new foreign composite companies
  
  589 The Superintendent may not make or vary an order made under subsection 574(1) in respect of a foreign company if the foreign company would as a result be permitted to insure both risks falling within the class of life insurance and risks falling within any other class of insurance other than accident and sickness insurance, credit protection insurance and other approved products insurance. 
  
  ### Saving for existing foreign composite companies
  
  590 (1) Despite section 589, subsections 573(4) and 588(2) permit a foreign company to which was issued under the Foreign Insurance Companies Act or Part VIII of the Canadian and British Insurance Companies Act a certificate of registry or other authorization specifying both risks falling within the class of life insurance and risks falling within some other class of insurance, other than accident and sickness insurance, accident insurance, personal accident insurance and sickness insurance, to insure those risks.  
  
  ### Separate accounts for life insurance
  
  (2) A foreign company referred to in subsection (1) shall maintain an account and funds in respect of the insurance of risks falling within the classes of life insurance and accident and sickness insurance, accident insurance, personal accident insurance and sickness insurance separately from those maintained in respect of the insurance of risks falling within any other class of insurance. 
  
  ### Compensation association
  
  591 (1) Every foreign company that is insuring risks that fall within a class of insurance shall become and remain a member of any compensation association designated by order of the Minister for that class of insurance. 
  
  ### Designation limitation
  
  (1.1) A compensation association shall not be designated under subsection (1) unless, in the opinion of the Minister, it has the authority to levy an assessment on each of its members of not less than eighty-five one hundredths of one per cent of the member’s average annual premium income from policies that are eligible for compensation from the association. 
  
  ### Exceptions
  
  (2) Subsection (1) does not apply 
  (a) to a foreign company that may reinsure but may not otherwise insure risks; 
  (b) in respect of a class of insurance that, in the opinion of the Minister, is adequately covered by some other compensation plan for that class of insurance; 
  (c) in respect of the insuring in Canada of risks against the loss of, or damage to, property caused by fire, by lightning, by an explosion due to ignition, by smoke or by breakage of or leakage from a sprinkler, from other fire protection equipment or from another fire protection system by a foreign company that is a member of the Fire Mutuals Guarantee Fund; or 
  (d) to a foreign company that is a foreign fraternal benefit society or an exchange. 
  
  ## Segregated Funds 
  
  ### Segregated funds restricted to foreign life companies
  
  592 Unless authorized to insure risks that fall within the class of life insurance, a foreign company shall not 
  (a) insure risks under policies, or 
  (b) accept or retain on the direction of a policyholder or beneficiary policy dividends or bonuses, or policy proceeds that are payable on the surrender or maturity of the policy or on the death of the person whose life is insured, where the liabilities of the foreign company in respect of the policies or the amounts accepted or retained vary in amount depending on the market value of a fund consisting of a specified group of assets. 
  
  ### Where segregated funds required
  
  593 A foreign company that issues policies described in section 592 or accepts or retains amounts so described shall, in respect of those policies or amounts, 
  (a) maintain separate accounts; and 
  (b) establish and maintain one or more funds consisting of assets in Canada that are segregated from the other assets in Canada of the foreign company and that are specified as the assets on the market value of which the liabilities of the foreign company in respect of those policies or amounts depend. 
  
  ### Claims against segregated funds
  
  594 A claim against a segregated fund maintained as required by section 593 under a policy or for an amount in respect of which the fund is maintained has priority over any other claim against the assets of that fund, including the claims referred to in section 161 of the Winding-up and Restructuring Act, except to the extent that the payment of that other claim is secured by a security interest in or on a specific, identifiable asset of the segregated fund.  
  
  ### Restriction of claims
  
  595 The liability of a foreign company under a policy or for an amount in respect of which a segregated fund is maintained pursuant to section 593 
  (a) does not, except to the extent that the assets of the fund are insufficient to satisfy a claim for any minimum amount that the foreign company agrees to pay under the policy or in respect of the amount, give rise to a claim against any assets in Canada of the foreign company, other than the assets of that fund, but 
  (b) to the extent that the assets of the fund are insufficient to satisfy such a claim, gives rise to a claim against the assets in Canada of the foreign company, other than the assets of that fund, that has the priority referred to in subsection 161(2) of the Winding-up and Restructuring Act.  
  
  ## Reinsurance 
  
  ### Regulations
  
  596 (1) The Governor in Council may make regulations limiting the extent to which foreign companies may cause themselves to be reinsured against risks undertaken under their policies. 
  
  ### Regulation may provide for discretion
  
  (2) A regulation made pursuant to subsection (1) may provide that the Superintendent may, by order, determine the matters or exercise the discretion that the regulation may specify. 
  
  ### Restriction re related parties
  
  597 (1) Except with the approval of the Superintendent, a foreign company may cause itself to be reinsured, in respect of risks undertaken under its policies, by a related party of the foreign company only if the related party is 
  (a) a company; or 
  (b) a foreign company that, in Canada, reinsures those risks. 
  
  ### Meaning of 
  *related party* 
  
  (2) For the purposes of this section, 
  *related party*, in relation to a foreign company, means a 
  *related party* within the meaning of Part XI, with such modifications as the circumstances require.  
  
  ## Borrowing Costs 
  
  ### Definition of 
  *cost of borrowing* 
  
  598 For the purposes of this section and sections 598.1 to 605, 
  *cost of borrowing* means, in respect of a loan or an advance on the security or against the cash surrender value of a policy made by a foreign company,  
  (a) the interest or discount applicable to the loan or advance; 
  (b) any amount charged in connection with the loan or advance that is payable by the borrower to the foreign company; and 
  (c) any charge prescribed to be included in the cost of borrowing. For those purposes, however, 
  *cost of borrowing* does not include any charge prescribed to be excluded from the cost of borrowing.  
  
  ### Rebate of borrowing costs
  
  598.1 (1) Where a foreign company makes a loan in respect of which the disclosure requirements of section 599 apply, and the loan is not secured by a mortgage on real property and is required to be repaid either on a fixed future date or by instalments, the foreign company shall, if there is a prepayment of the loan, rebate to the borrower a portion of the charges included in the cost of borrowing in respect of the loan. 
  
  ### Exception
  
  (2) The charges to be rebated do not include the interest or discount applicable to the loan. 
  
  ### Regulations
  
  (3) The Governor in Council may make regulations governing the rebate of charges under subsection (1). The rebate shall be made in accordance with those regulations. 
  
  ### Disclosing borrowing costs
  
  599 (1) A foreign company shall not include in its assets in Canada any loan to a natural person that is repayable in Canada unless the cost of borrowing, as calculated and expressed in accordance with section 600, and other prescribed information have been disclosed by the foreign company to the borrower at the prescribed time and place and in the prescribed form and manner. 
  
  ### Non-application
  
  (2) Subsection (1) does not apply in respect of a loan that is of a prescribed class of loans. 
  
  ### Calculating borrowing costs
  
  600 The cost of borrowing shall be calculated, in the prescribed manner, on the basis that all obligations of the borrower are duly fulfilled and shall be expressed as a rate per annum and, in prescribed circumstances, as an amount in dollars and cents. 
  
  ### Additional disclosure
  
  601 (1) Where a foreign company makes a loan in respect of which the disclosure requirements of section 599 are applicable and the loan is required to be repaid either on a fixed future date or by instalments, the foreign company shall disclose to the borrower, in accordance with the regulations, 
  (a) whether the borrower has the right to repay the amount borrowed before the maturity of the loan and, if applicable, 
  (i) any terms and conditions relating to that right, including the particulars of the circumstances in which the borrower may exercise that right, and 
  (ii) whether, in the event that the borrower exercises the right, any portion of the cost of borrowing is to be rebated, the manner in which any such rebate is to be calculated or, if a charge or penalty will be imposed on the borrower, the manner in which the charge or penalty is to be calculated; 
  (b) in the event that an amount borrowed is not repaid at maturity or, if applicable, an instalment is not paid on the day the instalment is due to be paid, particulars of the charges or penalties to be paid by the borrower because of the failure to repay or pay in accordance with the contract governing the loan; 
  (c) at the prescribed time and place and in the prescribed form and manner, any changes respecting the cost of borrowing or the loan agreement; 
  (d) particulars of any other rights and obligations of the borrower; and 
  (e) any other prescribed information, at the prescribed time and place and in the prescribed form and manner. 
  
  ### Disclosure in credit card applications
  
  (2) A foreign company shall, in accordance with the regulations, at the prescribed time and place and in the prescribed form and manner, provide prescribed information in any application forms or related documents that it prepares for the issuance of credit, payment or charge cards in Canada and provide prescribed information to any person applying to it in Canada for a credit, payment or charge card. 
  
  ### Disclosure re credit cards
  
  (3) Where a foreign company issues in Canada or has issued in Canada a credit, payment or charge card to a natural person, the foreign company shall, in addition to disclosing the costs of borrowing in respect of any loan that is obtained through the use of the card and that is repayable in Canada, disclose to the person, in accordance with the regulations, 
  (a) any charges or penalties described in paragraph (1)(b); 
  (b) particulars of the person’s rights and obligations; 
  (c) any charges for which the person becomes responsible by accepting or using the card; 
  (d) at the prescribed time and place and in the prescribed form and manner, any prescribed changes respecting the cost of borrowing or the loan agreement; and 
  (e) any other prescribed information, at the prescribed time and place and in the prescribed form and manner. 
  
  ### Additional disclosure re other loans
  
  (4) Where a foreign company enters into or has entered into an arrangement, including a line of credit, for the making of a loan in respect of which the disclosure requirements of section 599 apply and the loan is not one in respect of which subsection (1) or (3) applies, the foreign company shall, in addition to disclosing the costs of borrowing, disclose to the person, in accordance with the regulations, 
  (a) any charges or penalties described in paragraph (1)(b); 
  (b) particulars of the person’s rights and obligations; 
  (c) any charges for which the person is responsible under the arrangement; 
  (d) at the prescribed time and place and in the prescribed form and manner, any prescribed changes respecting the cost of borrowing or the loan agreement; and 
  (e) any other prescribed information, at the prescribed time and place and in the prescribed form and manner. 
  
  ### Renewal statement
  
  601.1 If a foreign company makes a loan in respect of which the disclosure requirements of section 599 apply and the loan is secured by a mortgage on real property, the foreign company shall disclose to the borrower, at the prescribed time and place and in the prescribed form and manner, any information that is prescribed respecting the renewal of the loan. 
  
  ### Disclosure in advertising
  
  601.2 No person shall authorize the publication, issue or appearance of any advertisement in Canada relating to arrangements referred to in subsection 601(4), loans, credit cards, payment cards or charge cards, offered to natural persons by a foreign company, and purporting to disclose prescribed information about the cost of borrowing or about any other matter unless the advertisement discloses prescribed information at the prescribed time and place and in the prescribed form and manner. 
  
  ### Disclosing borrowing costs — advances
  
  602 If regulations have been made respecting the manner in which the cost of borrowing is to be disclosed in respect of an advance on the security or against the cash surrender value of a policy, a foreign company shall not make such an advance unless the cost of borrowing, as calculated and expressed in accordance with the regulations, has, at the prescribed time and place and in the prescribed form and manner, been disclosed by the foreign company or otherwise as prescribed to the policyholder at or before the time when the advance is made. 
  
  ### Regulations re borrowing costs
  
  603 The Governor in Council may make regulations 
  (a) respecting the time and place at which, and the form and manner in which, a foreign company is to disclose to a borrower 
  (i) the cost of borrowing, 
  (ii) any rebate of the cost of borrowing, and 
  (iii) any other information relating to a loan, arrangement, credit card, payment card or charge card referred to in section 601; 
  (b) respecting the contents of any statement disclosing the cost of borrowing and other information required to be disclosed by a foreign company to a borrower; 
  (c) respecting the manner of calculating the cost of borrowing; 
  (d) respecting the circumstances under which the cost of borrowing is to be expressed as an amount in dollars and cents; 
  (e) specifying any class of loans that are not to be subject to section 598.1, subsection 599(1) or 601(1) or (4) or section 601.1 or 601.2 or the regulations or any specified provisions of the regulations; 
  (f) specifying any class of advances that are not to be subject to section 602 or the regulations or any specified provisions of the regulations; 
  (g) respecting the time and place at which, and the form and manner in which, any rights, obligations, charges or penalties referred to in sections 598.1 to 602 are to be disclosed; 
  (h) prohibiting the imposition of any charge or penalty referred to in section 601 or providing that the charge or penalty, if imposed, will not exceed a prescribed amount; 
  (i) respecting the nature or amount of any charge or penalty referred to in paragraph 601(1)(b), (3)(a) or (4)(a) and the costs of the foreign company that may be included or excluded in the determination of the charge or penalty; 
  (j) respecting the method of calculating the amount of rebate of the cost of borrowing, or the portion of the cost of borrowing referred to in subparagraph 601(1)(a)(ii); 
  (k) respecting advertisements made by a foreign company regarding arrangements referred to in subsection 601(4), loans, credit cards, payment cards or charge cards; 
  (l) respecting the renewal of loans; and 
  (m) respecting such other matters or things as are necessary to carry out the purposes of sections 598.1 to 602. 
  
  ## Complaints 
  
  ### Procedures for dealing with complaints
  
  604 (1) A foreign company shall 
  (a) establish procedures for dealing with complaints made by persons having requested or received products or services in Canada from the foreign company; 
  (b) designate one of its officers or employees in Canada, or an agent in Canada, to be responsible for implementing those procedures; and 
  (c) designate one or more of its officers or employees in Canada, or agents in Canada, to receive and deal with those complaints. 
  
  ### Procedures to be filed with Commissioner
  
  (2) A foreign company shall file with the Commissioner a copy of its procedures established under paragraph (1)(a). 
  
  ### How procedures to be made available
  
  (3) A foreign company shall make its procedures established under paragraph (1)(a) available 
  (a) on its websites through which products or services are offered in Canada; and 
  (b) in written format to be sent to any person who requests them. 
  
  ### Information on contacting Agency
  
  (4) A foreign company shall also make prescribed information on how to contact the Agency available whenever it makes its procedures established under paragraph (1)(a) available under subsection (3). 
  
  ### Obligation to be member of complaints body
  
  604.1 In any province, if there is no law of the province that makes a foreign company subject to the jurisdiction of an organization that deals with complaints made by persons having requested or received products or services in the province from a foreign company, the foreign company shall be a member of an organization in Canada that is not controlled by it and that deals with those complaints that have not been resolved to the satisfaction of the persons under procedures established under paragraph 604(1)(a). 
  
  ### Information on contacting Agency
  
  605 (1) A foreign company shall, in accordance with the regulations, at the prescribed time and place and in the prescribed form and manner, provide a person in Canada requesting or receiving a product or service in Canada from it with prescribed information on how to contact the Agency if the person has a complaint about an arrangement referred to in subsection 601(3), a payment, credit or charge card referred to in subsection 601(2), the disclosure of or manner of calculating the cost of borrowing in respect of a loan repayable in Canada or an advance on the security or against the cash surrender value of a policy, or about any other obligation of the foreign company under a consumer provision. 
  
  ### Report
  
  (2) The Commissioner shall prepare a report, to be included in the report referred to in section 34 of the Financial Consumer Agency of Canada Act, respecting  
  (a) procedures for dealing with complaints established by foreign companies pursuant to paragraph 604(1)(a); and 
  (b) the number and nature of complaints that have been brought to the attention of the Agency by persons who have requested or received a product or service from a foreign company. 
  
  ## Miscellaneous 
  
  ### Prepayment protected
  
  606 (1) A foreign company shall not include in its assets in Canada any loan to a natural person that is repayable in Canada, the terms of which prohibit prepayment of the money advanced or any instalment thereon before its due date. 
  
  ### Non-application of subsection (1)
  
  (2) Subsection (1) does not apply in respect of a loan 
  (a) that is secured by a mortgage on real property; or 
  (b) that is made for business purposes and the principal amount of which is more than $100,000 or such other amount as may be prescribed. 
  
  ### Regulations — activities
  
  606.1 The Governor in Council may make regulations respecting any matters involving a foreign company’s dealings, or its employees’ or representatives’ dealings, with customers or the public, including 
  (a) what a foreign company may or may not do in carrying out any of the activities in which it is permitted to engage, or in providing any of the services that it may provide, under this Act and any ancillary, related or incidental activities or services; and 
  (b) the time and place at which and the form and manner in which any of those activities are to be carried out or any of those services are to be provided. 
  
  ### Regulations re customer information
  
  607 The Governor in Council may make regulations 
  (a) requiring a foreign company to establish procedures regarding the collection, retention, use and disclosure of any information about its customers in Canada or any class of customers in Canada; 
  (b) requiring a foreign company to establish procedures for dealing with complaints made by a customer in Canada about the collection, retention, use or disclosure of information about the customer; 
  (c) respecting the disclosure by a foreign company of information relating to the procedures referred to in paragraphs (a) and (b); 
  (d) requiring a foreign company to designate the officers and employees of the company who are responsible for 
  (i) implementing the procedures referred to in paragraph (b), and 
  (ii) receiving and dealing with complaints made by a customer, in Canada, of the foreign company about the collection, retention, use or disclosure of information about the customer; 
  (e) requiring a foreign company to report information relating to 
  (i) complaints made by its customers in Canada about the collection, retention, use or disclosure of information, and 
  (ii) its actions taken to deal with the complaints; and 
  (f) defining 
  *information*, 
  *collection* and 
  *retention* for the purposes of paragraphs (a) to (e) and the regulations made under those paragraphs.  
  
  ### Regulations re disclosure
  
  607.1 The Governor in Council may, subject to any other provisions of this Act relating to the disclosure of information, make regulations respecting the disclosure of information by foreign companies or any prescribed class of foreign companies, including regulations respecting 
  (a) the information that must be disclosed, including information relating to 
  (i) any product or service or prescribed class of products or services offered by them, 
  (ii) any of their policies, procedures or practices relating to the offer by them of any product or service or prescribed class of products or services, 
  (iii) anything they are required to do or to refrain from doing under a consumer provision, and 
  (iv) any other matter that may affect their dealings, or their employees’ or representatives’ dealings, with customers or the public; 
  (b) the time and place at which, the form and manner in which and the persons to whom information is to be disclosed; and 
  (c) the content and form of any advertisement by foreign companies or any prescribed class of foreign companies relating to any matter referred to in paragraph (a). 
  
  ### Provisions that do not apply
  
  607.2 (1) Sections 598 to 607.1 do not apply in respect of a foreign company if 
  (a) the order made under subsection 574(1) in respect of the foreign company restricts it to the reinsurance of risks within a class of insurance specified in the order; 
  (b) the foreign company has provided the Commissioner with a declaration stating that it is not dealing with a prescribed group of consumers; and 
  (c) after providing the declaration, the foreign company continues to not deal with that prescribed group. 
  
  ### Notice if action taken that causes provisions to apply
  
  (2) The foreign company must give notice to the Commissioner if it subsequently deals with the prescribed group referred to in the declaration. 
  
  ## Adequacy of Assets 
  
  ### Adequacy of assets and appropriate forms of liquidity
  
  608 (1) A foreign company shall maintain in Canada an adequate margin of assets over liabilities in respect of its insurance business in Canada as shown in the records it is required to maintain under section 647, and adequate and appropriate forms of liquidity, and shall comply with any regulations in relation to an adequate margin of assets over liabilities and adequate and appropriate forms of liquidity. 
  
  ### Liabilities
  
  (2) For the purposes of subsection (1), the liabilities in Canada of a foreign company include the reserve included in the annual return required under subsection 665(2). 
  
  ### Guidelines
  
  (3) The Superintendent may make guidelines in respect of any matter referred to in paragraph 610(1)(a). 
  
  ### Directives
  
  (4) Even though a foreign company is complying with regulations made under paragraph 610(1)(a) or guidelines made under subsection (3), the Superintendent may, by order, direct the foreign company to increase the margin of its assets over its liabilities that it is required to maintain in Canada or to provide additional liquidity in the forms and the amounts that the Superintendent requires. 
  
  ### Compliance
  
  (5) A foreign company shall comply with an order made under subsection (4) within the time that the Superintendent specifies in the order. 
  
  ### Adequacy of assets
  
  609 (1) A foreign company shall, in relation to each class of insurance risks that it is permitted to insure, maintain in Canada, in accordance with the regulations, assets the total value of which shall be determined in accordance with the regulations. 
  
  ### Guidelines
  
  (1.1) The Superintendent may make guidelines in respect of any matter referred to in paragraph 610(1)(b). 
  
  ### Directives
  
  (2) Even though a foreign company is complying with regulations made under paragraph 610(1)(b) or guidelines made under subsection (1.1), the Superintendent may, by order, direct the foreign company to increase the assets that it is required to maintain in Canada. 
  
  ### Compliance
  
  (3) A foreign company shall comply with an order made under subsection (2) within such time as the Superintendent specifies therein. 
  
  ### Regulations
  
  610 (1) The Governor in Council may make regulations 
  (a) respecting the maintenance by foreign companies of an adequate margin of assets in Canada over liabilities in Canada and adequate and appropriate forms of liquidity; 
  (b) respecting the maintenance by foreign companies of assets in Canada of a particular value, which regulations may make special provision for associations and exchanges; 
  (c) prescribing rules for determining the value, location and protection of the assets of foreign companies; 
  (d) governing the determination of the reserves to be included in the liabilities of foreign companies; 
  (e) determining the method of calculating the value of interests of foreign companies in real property for the purposes of section 618; and 
  (f) prescribing anything that is required or authorized by this Part to be prescribed. 
  
  ### Regulation may provide for discretion
  
  (2) A regulation made pursuant to paragraph (1)(b) may provide that the Superintendent may, by order, determine the matters or exercise the discretion that the regulations may specify. 
  
  ### Vesting in trust
  
  611 (1) The assets that a foreign company is required to maintain in Canada under sections 608 and 609 and the regulations made under section 610 must be vested in trust in a Canadian financial institution chosen by the foreign company. 
  
  ### Conflict of interest
  
  (2) No Canadian financial institution may be appointed as trustee if at the time of the appointment there is a material conflict of interest between the Canadian financial institution’s role as trustee and any other of its roles. 
  
  ### Trust deed
  
  (3) A trust deed must be approved by the Superintendent before it is entered into. 
  
  ### Determination of value of assets in Canada
  
  (4) The Superintendent shall determine the value at which assets shall be accepted for the purposes of this Part. 
  
  ### Maintenance of value of assets in Canada
  
  (5) The trustee of a foreign company may deal with the assets in Canada in any manner provided for in the trust deed, but in such a way that the value for the purposes of this Part of the assets in Canada does not fall below that required by this Part. 
  
  ### Inadmissible assets
  
  612 (1) A foreign company may not vest in trust 
  (a) securities issued by or debt obligations of the foreign company or one of its affiliates; 
  (b) real property, or ground rents or mortgages on real property, situated outside Canada; 
  (c) shares or ownership interests, however designated, in any entity in such number as would constitute a substantial investment in that entity without regard to any shares or ownership interests held by any other entity; or 
  (d) a loan made in Canada on the security of residential property in Canada for the purpose of purchasing, renovating or improving that property, if the amount of the loan, together with the amount then outstanding of any mortgage having an equal or prior claim against the property, would exceed 80 per cent of the value of the property at the time of the loan. 
  
  ### Exception
  
  (2) Despite paragraphs (1)(a) and (c), a foreign company may vest in trust a substantial investment in an entity that is primarily engaged in 
  (a) holding, managing or otherwise dealing with real property; or 
  (b) holding shares or ownership interests in entities that are primarily engaged in any of the activities referred to in paragraph (a). 
  
  ### Idem
  
  (3) Notwithstanding paragraph (1)(d), a foreign company may vest in trust 
  (a) a loan made or guaranteed under the National Housing Act or any other Act of Parliament by or pursuant to which a different limit on the value of property on the security of which the foreign company may make a loan is established;  
  (b) a loan if repayment of the amount of the loan that exceeds the maximum amount set out in subsection (1) is guaranteed or insured by a government agency or a private insurer approved by the Superintendent; or 
  (c) securities issued or guaranteed by an entity that are secured on any residential property, whether in favour of a trustee or otherwise, or a loan made by the foreign company to the entity against the issue of such securities. 
  
  ## Investments 
  
  ## Definitions and Application 
  
  ### Definition of 
  *commercial loan* 
  
  613 In sections 615 to 620, 
  *commercial loan* has the same meaning as in Part IX.  
  
  ### Non-application
  
  614 (1) Sections 612 and 615 to 620 do not apply in respect of assets of a foreign company held in relation to a segregated fund maintained pursuant to section 593. 
  
  ### Exclusion of liabilities of segregated funds
  
  (2) A reference in sections 615 to 619 and in regulations made under section 620 to the assets in Canada or the liabilities in Canada of a foreign company does not include liabilities of the foreign company for the policies and amounts in respect of which a segregated fund is maintained pursuant to section 593. 
  
  ## General Constraints on Investments 
  
  ### Investment standards
  
  615 (1) A foreign company shall, in respect of its assets in Canada, establish and adhere to investment and lending policies, standards and procedures that a reasonable and prudent person would apply in respect of a portfolio of investments and loans to avoid undue risk of loss and obtain a reasonable return. 
  
  ### Resolution of board of directors
  
  (2) A foreign company to which subsection 573(4) applies shall, during the period of ninety days following the coming into force of this Part, file with the Superintendent a certified copy of a resolution of its board of directors establishing the investment and lending policies, standards and procedures referred to in subsection (1). 
  
  ## Commercial Lending by Foreign Life Companies 
  
  ### Lending limit — foreign life companies
  
  616 (1) The total accepted value of commercial loans vested in trust by a foreign life company for the classes of life insurance, accident and sickness insurance, credit protection insurance and other approved products insurance shall not at any time exceed the prescribed percentage of the value of its assets in Canada for those classes. 
  
  ### Lending limit — foreign composite companies
  
  (2) The total accepted value of the commercial loans and loans to natural persons vested in trust by a foreign life company for the classes of insurance other than life insurance, accident and sickness insurance, credit protection insurance and other approved products insurance, shall not at any time exceed the prescribed percentage of the value of its assets in Canada for those classes. 
  
  ## Consumer and Commercial Lending by Foreign Property and Casualty Companies and Foreign Marine Companies 
  
  ### Lending limit — foreign property and casualty companies and foreign marine companies
  
  617 The total accepted value of the commercial loans and loans to natural persons vested in trust by a foreign property and casualty company, or a foreign marine company, shall not at any time exceed the prescribed percentage of the value of its assets in Canada. 
  
  ## Real Property 
  
  ### Limit on total property interest — foreign life companies
  
  618 (1) The total accepted value of interests in real property vested in trust by a foreign life company for the classes of life insurance, accident and sickness insurance, credit protection insurance and other approved products insurance shall not at any time exceed the prescribed percentage of the value of its assets in Canada for those classes. 
  
  ### Limit on total property interest — foreign composite companies
  
  (2) The total accepted value of interests in real property vested in trust by a foreign life company for the classes of insurance other than life insurance, accident and sickness insurance, credit protection insurance and other approved products insurance, shall not at any time exceed the prescribed percentage of the value of its assets in Canada for those classes. 
  
  ### Limit on total property interest — foreign property and casualty companies and foreign marine companies
  
  (3) The total accepted value of interests in real property vested in trust by a foreign property and casualty company, or a foreign marine company, shall not at any time exceed the prescribed percentage of the value of its assets in Canada. 
  
  ## Equities 
  
  ### Limit on equity acquisitions — foreign life companies
  
  619 (1) The total accepted value of the participating shares, within the meaning of Part IX, of any body corporate and any ownership interests, howsoever designated, in any unincorporated entities vested in trust by a foreign life company for the classes of life insurance, accident and sickness insurance, credit protection insurance and other approved products insurance shall not at any time exceed the prescribed percentage of the value of its assets in Canada for those classes. 
  
  ### Limit on equity acquisitions — foreign composite companies
  
  (2) The total accepted value of the participating shares, within the meaning of Part IX, of any body corporate and any ownership interests, howsoever designated, in any unincorporated entities vested in trust by a foreign life company for the classes of insurance, other than life insurance, accident and sickness insurance, credit protection insurance and other approved products insurance, shall not at any time exceed the prescribed percentage of the value of its assets in Canada for those classes. 
  
  ### Limit on equity acquisitions — foreign property and casualty companies and foreign marine companies
  
  (3) The total accepted value of the participating shares, within the meaning of Part IX, of any body corporate and any ownership interests, howsoever designated, in any unincorporated entities vested in trust by a foreign property and casualty company, or a foreign marine company, shall not at any time exceed the prescribed percentage of the value of its assets in Canada. 
  
  ## Aggregate Limit 
  
  ### Limit on aggregate value
  
  620 The aggregate value of each of the following total accepted values, namely, 
  (a) the total accepted values referred to in subsections 618(1) and 619(1), 
  (b) the total accepted values referred to in subsections 618(2) and 619(2), and 
  (c) the total accepted values referred to in subsections 618(3) and 619(3), shall not at any time exceed the respective prescribed percentage of the value of the assets in Canada. 
  
  ## Self-dealing 
  
  ### Prohibited transactions
  
  621 A foreign company shall not vest in trust any asset in accordance with this Part if the asset was acquired through a transaction that at the time of acquisition would be prohibited for a company pursuant to section 521. 
  
  ### Exception
  
  622 A foreign company may vest in trust an asset if the asset was acquired through a transaction described in any of sections 524 to 533 and 
  (a) the transaction was entered into on terms and conditions that are at least as favourable to the foreign company as market terms and conditions, as defined in subsection 534(2); and 
  (b) the foreign company files a notice of the vesting with the Superintendent on vesting the asset in trust. 
  
  ## Actuaries 
  
  ## Appointment 
  
  ### Appointment of actuary
  
  623 (1) A foreign company that is required by this Act to provide the Superintendent with the report of an actuary shall without delay appoint a person to be the actuary of the foreign company for its insurance business in Canada. 
  
  ### Notice of appointment
  
  (2) A foreign company shall, forthwith after the appointment of an actuary of the foreign company, notify the Superintendent in writing of the appointment. 
  624  [Repealed, 1997, c. 15, s. 318]  
  
  ### Chief agent
  
  624.1 (1) The chief agent of a foreign company may not be appointed as or hold the position of actuary of the foreign company unless authorized in writing by the Superintendent. 
  
  ### Duration of authorization
  
  (2) An authorization under subsection (1) ceases to be in effect on the day specified therein but not later than the day that is six months after it is issued, and a person appointed or holding the position of actuary pursuant to the authorization shall not hold that position after that day. 
  
  ## Vacancies 
  
  ### Revocation of appointment
  
  625 (1) A foreign company may revoke the appointment of the actuary of the foreign company. 
  
  ### Notice of revocation
  
  (2) A foreign company shall, forthwith after the revocation of the appointment of the actuary of the foreign company, notify the Superintendent in writing of the revocation. 
  
  ### Ceasing to hold office
  
  626 (1) A person ceases to hold office as the actuary of a foreign company when 
  (a) the person resigns as actuary of the foreign company; 
  (b) the person ceases to be an actuary; 
  (c) the person dies; or 
  (d) the appointment of the person as actuary of the foreign company is revoked by the foreign company. 
  
  ### Effective date of resignation
  
  (2) The resignation of an actuary of a foreign company becomes effective at the time a written resignation is sent to the foreign company or at the time specified in the resignation, whichever is later. 
  
  ### Filling vacancy
  
  (3) Where a vacancy occurs in the office of actuary of a foreign company, the foreign company shall forthwith notify the Superintendent in writing of the vacancy and fill the vacancy. 
  
  ### Statement of actuary
  
  627 (1) An actuary of a foreign company who resigns or whose appointment is revoked shall submit to the chief agent of the foreign company and the Superintendent a written statement of the circumstances and reasons why the actuary resigned or why, in the actuary’s opinion, the actuary’s appointment was revoked. 
  
  ### Duty of replacement actuary
  
  (2) Where an actuary of a foreign company resigns or the appointment of an actuary of a foreign company is revoked, no person shall accept an appointment or consent to be appointed as actuary of the foreign company before requesting and receiving from the other actuary the written statement referred to in subsection (1). 
  
  ### Exception
  
  (3) A person may accept an appointment or consent to be appointed as actuary of a company if no reply is received from the other actuary within fifteen days after a request under subsection (2) is made. 
  
  ### Effect of non-compliance
  
  (4) Unless subsection (3) applies, an appointment as actuary of a company is void if subsection (2) is not complied with. 
  
  ## Valuations and Reports 
  
  ### Right to information
  
  628 (1) On the request of the actuary of a foreign company, the present or former directors, chief agents, officers, employees or representatives of the foreign company shall, to the extent that they are reasonably able to do so, 
  (a) permit access to such records held by the foreign company, and 
  (b) provide such information and explanations as are, in the opinion of the actuary, necessary to enable the actuary to perform the duties of actuary of the foreign company. 
  
  ### No civil liability
  
  (2) A person who in good faith makes an oral or written communication under subsection (1) shall not be liable in any civil action arising from having made the communication. 
  
  ### Actuary’s valuation
  
  629 (1) The actuary of a foreign company shall value 
  (a) the actuarial and other policy liabilities of the foreign company with respect to its insurance business in Canada as at the end of a financial year; and 
  (b) any other matters specified in any direction that may be made by the Superintendent. 
  
  ### Actuarial practices
  
  (2) An actuary’s valuation shall be in accordance with generally accepted actuarial practice with such changes as may be determined by the Superintendent and any additional directions that may be made by the Superintendent. 
  
  ### Superintendent may appoint actuary
  
  629.1 (1) The Superintendent may appoint an actuary to value the matters referred to in paragraph 629(1)(a) or (b) in relation to a foreign company if the Superintendent is of the opinion that the appointment is necessary. That actuary may not be an actuary of the foreign company. 
  
  ### Expenses payable by foreign company
  
  (2) The expenses incurred in carrying out a valuation under subsection (1) are payable by the foreign company on being approved in writing by the Superintendent. 
  
  ### Report to chief agent
  
  630 The actuary of a foreign company shall meet with the chief agent of the foreign company at least once during each financial year in order to report, in accordance with generally accepted actuarial practice, on the financial position of the insurance business in Canada of the foreign company, and, where a direction that may be made by the Superintendent so specifies, the expected future financial condition of the foreign company as it affects its insurance business in Canada. 
  
  ### Report to chief agent
  
  631 (1) The actuary of a foreign company shall report in writing to the chief agent of the foreign company any matters that have come to the actuary’s attention in the course of carrying out the duties of the actuary and that in the actuary’s opinion have material adverse effects on the financial condition of the foreign company with respect to its insurance business in Canada and require rectification. 
  
  ### Transmission of report
  
  (2) An actuary of a foreign company who makes a report under subsection (1) shall forthwith provide a copy of it to the directors of the foreign company and to any person designated by them as responsible for the insurance business in Canada of the foreign company. 
  
  ### Failure to take action
  
  (3) Where, in the opinion of the actuary of the foreign company, suitable action is not taken to rectify the matters referred to in subsection (1), the actuary shall forthwith provide a copy of the report to the Superintendent and advise the chief agent of the foreign company that the actuary has done so. 
  
  ## Qualified Privilege 
  
  ### Qualified privilege for statements
  
  632 (1) Any oral or written statement or report made under this Act by the actuary or former actuary of a foreign company has qualified privilege. 
  
  ### No civil liability
  
  (2) The actuary or a former actuary of a foreign company who in good faith makes an oral or written statement under subsection 627(1) or section 631 shall not be liable in any civil action seeking indemnification for damages attributable to the actuary or former actuary having made the statement or report. 
  
  ## Auditors 
  
  ## Interpretation 
  
  ### Definitions
  
  632.1 In sections 634 to 643, the expressions 
  *firm of accountants* and 
  *member* have the meanings assigned to those expressions by section 336.  
  
  ## Appointment 
  
  ### Appointment of auditor
  
  633 (1) A foreign company shall appoint an auditor for its insurance business in Canada. 
  
  ### Notice of appointment
  
  (2) A foreign company shall, forthwith after the appointment of the auditor of the foreign company, notify the Superintendent in writing of the appointment. 
  
  ## Qualifications 
  
  ### Qualification of auditor
  
  634 (1) A natural person or firm of accountants is qualified to be an auditor of a foreign company if 
  (a) in the case of a natural person, the person is an accountant who 
  (i) is a member in good standing of an institute or association of accountants incorporated by or under an Act of the legislature of a province, 
  (ii) has at least five years experience at a senior level in performing audits of a financial institution, 
  (iii) is ordinarily resident in Canada, and 
  (iv) is independent of the foreign company and its chief agent; and 
  (b) in the case of a firm of accountants, the member of the firm jointly designated by the firm and the foreign company to conduct the audit of the foreign company on behalf of the firm is qualified in accordance with paragraph (a). 
  
  ### Independence
  
  (2) For the purposes of subsection (1), 
  (a) independence is a question of fact; and 
  (b) a person is deemed not to be independent of a foreign company if that person, a business partner of that person or a firm of accountants of which that person is a member 
  (i) is a business partner, director, officer or employee of the foreign company or of any affiliate of the foreign company or is a business partner of any director, officer or employee of the foreign company or of any affiliate of the foreign company, 
  (ii) beneficially owns or controls, directly or indirectly, a material interest in the shares of the foreign company or of any affiliate of the foreign company, or 
  (iii) has been a liquidator, trustee in bankruptcy, receiver or receiver and manager of any affiliate of the foreign company within the two years immediately preceding the person’s proposed appointment as auditor of the foreign company. 
  
  ### Business partners
  
  (2.1) For the purposes of subsection (2), 
  (a) in the case of the appointment of a natural person as the auditor of a foreign company, a business partner of the person includes a shareholder of the business partner; and 
  (b) in the case of the appointment of a firm of accountants as the auditor of a foreign company, a business partner of a member of the firm includes another member of the firm and a shareholder of the firm or of a business partner of the member. 
  
  ### Notice of designation
  
  (3) Within 15 days after the appointment of a firm of accountants as auditor of a foreign company, the foreign company and the firm of accountants shall jointly designate a member of the firm who meets the qualifications described in subsection (1) to conduct the audit of the foreign company on behalf of the firm and the foreign company shall without delay notify the Superintendent in writing of the designation. 
  
  ### New designation
  
  (4) Where for any reason a member of a firm of accountants designated pursuant to subsection (3) ceases to conduct the audit of the foreign company, the foreign company and the firm of accountants may jointly designate another member of the same firm of accountants who meets the qualifications described in subsection (1) to conduct the audit of the foreign company and the foreign company shall forthwith notify the Superintendent in writing of the designation. 
  
  ### Deemed vacancy
  
  (5) In any case where subsection (4) applies and a designation is not made pursuant to that subsection within thirty days after the designated member ceases to conduct the audit of the foreign company, there shall be deemed to be a vacancy in the office of auditor of the foreign company. 
  
  ### Duty to resign
  
  635 (1) An auditor who ceases to be qualified under section 634 shall resign forthwith after the auditor, where the auditor is a natural person, or any member of the firm of accountants, where the auditor is a firm of accountants, becomes aware that the auditor or the firm has ceased to be so qualified. 
  
  ### Disqualification order
  
  (2) Any interested person may apply to a court for an order declaring that an auditor of a foreign company has ceased to be qualified under section 634 and declaring the office of auditor to be vacant. 
  
  ## Vacancies 
  
  ### Revocation of appointment
  
  636 (1) A foreign company may revoke the appointment of an auditor of the foreign company. 
  
  ### Idem
  
  (2) The Superintendent may at any time revoke the appointment of an auditor made under subsection (3) or section 633 or 638 by notice in writing signed by the Superintendent and sent by registered mail to the auditor and to the chief agent of the foreign company addressed to the usual place of business of the auditor and the chief agent. 
  
  ### Filling vacancy
  
  (3) A vacancy created by the revocation of the appointment of an auditor under subsection (1) shall be filled by the foreign company under section 638. 
  
  ### Ceasing to hold office
  
  637 (1) An auditor of a foreign company ceases to hold office when 
  (a) the auditor resigns; 
  (b) the auditor, where the auditor is a natural person, dies; or 
  (c) the appointment of the auditor is revoked by the foreign company or the Superintendent. 
  
  ### Effective date of resignation
  
  (2) The resignation of an auditor becomes effective at the time a written resignation is sent to the foreign company or at the time specified in the resignation, whichever is later. 
  
  ### Filling vacancy
  
  638 (1) Where a vacancy occurs in the office of auditor of a foreign company, the foreign company shall forthwith fill the vacancy. 
  
  ### Where Superintendent may fill vacancy
  
  (2) Where the foreign company fails to fill a vacancy in accordance with subsection (1), the Superintendent may fill the vacancy. 
  
  ### Designation of member of firm
  
  (3) Where the Superintendent has, pursuant to subsection (2), appointed a firm of accountants to fill a vacancy, the Superintendent shall designate the member of the firm who is to conduct the audit on behalf of the firm. 
  
  ### Statement of auditor
  
  639 An auditor of a foreign company who 
  (a) resigns, or 
  (b) receives a notice or otherwise learns that another person is to be appointed in the auditor’s stead, whether because of the auditor’s resignation or revocation of appointment, shall submit to the chief agent of the foreign company and the Superintendent a written statement giving the reasons for the resignation or the reasons why the auditor opposes any proposed action. 
  
  ### Duty of replacement auditor
  
  640 (1) Where an auditor of a foreign company has resigned or the appointment of an auditor has been revoked, no person or firm shall accept an appointment or consent to be appointed as auditor of the foreign company until the person or firm has requested and received from the other auditor a written statement of the circumstances and reasons why the other auditor resigned or why, in the other auditor’s opinion, the other auditor’s appointment was revoked. 
  
  ### Exception
  
  (2) Notwithstanding subsection (1), a person or firm may accept an appointment or consent to be appointed as auditor of a foreign company if, within fifteen days after a request under that subsection is made, no reply from the other auditor is received. 
  
  ### Effect of non-compliance
  
  (3) Unless subsection (2) applies, an appointment as auditor of a foreign company is void if subsection (1) has not been complied with. 
  
  ## Examinations and Reports 
  
  ### Auditor’s examination
  
  641 (1) The auditor of a foreign company shall make such examination as the auditor considers necessary to enable the auditor to report on the annual return required by subsection 665(2) and on other financial statements required by this Act to be filed with the Superintendent. 
  
  ### Auditing standards
  
  (2) The auditor’s examination referred to in subsection (1) shall, except as otherwise specified by the Superintendent, be conducted in accordance with generally accepted auditing standards, the primary source of which is the Handbook of the Chartered Professional Accountants of Canada. 
  
  ### Reliance on actuary
  
  (3) An auditor of a foreign company may, in conducting the examination referred to in subsection (1), use the valuation by the actuary of the foreign company of 
  (a) the actuarial and other policy liabilities of the foreign company as at the end of a financial year; and 
  (b) the increase in the actuarial liabilities of the foreign company for a financial year. 
  
  ### Right to information
  
  642 (1) On the request of the auditor of a foreign company, the present or former chief agents, directors, officers, employees or representatives of the foreign company shall, to the extent that they are reasonably able to do so, 
  (a) permit access to such records, assets and security held by the foreign company, or any entity in which the foreign company has a substantial investment, in respect of the insurance business in Canada of the foreign company, and 
  (b) provide such information and explanations as are, in the opinion of the auditor, necessary to enable the auditor to perform the duties of auditor of the foreign company. 
  
  ### No civil liability
  
  (2) A person who in good faith makes an oral or written communication under subsection (1) shall not be liable in any civil action arising from having made the communication. 
  
  ### Auditor’s report and extended examination
  
  643 (1) The Superintendent may, in writing, require that the auditor of a foreign company report to the Superintendent on the extent of the auditor’s procedures in the examination of the annual return and may, in writing, require that the auditor enlarge or extend the scope of that examination or direct that any other particular procedure be performed in any particular case, and the auditor shall comply with any such requirement of the Superintendent and report to the Superintendent thereon. 
  
  ### Special examination
  
  (2) In respect of the insurance business in Canada of a foreign company, the Superintendent may, in writing, require that the auditor of the foreign company make a particular examination relating to the adequacy of the procedures adopted by the foreign company for the safety of its creditors and policyholders, or any other examination that, in the Superintendent’s opinion, the public interest may require, and report to the Superintendent on the examination. 
  
  ### Idem
  
  (3) In respect of the insurance business in Canada of a foreign company, the Superintendent may direct that a special audit of the foreign company be made if, in the opinion of the Superintendent, it is so required and may appoint for that purpose an accountant or a firm of accountants qualified pursuant to subsection 634(1) to be an auditor of the foreign company. 
  
  ### Expenses payable by foreign company
  
  (4) The expenses entailed by any examination or audit referred to in any of subsections (1) to (3) are payable by the foreign company on being approved in writing by the Superintendent. 
  
  ### Auditor’s report
  
  644 (1) The auditor of a foreign company shall, not later than the earlier of May 31 in each year and the day in each year on which the auditor is required to make a report under the laws under which the foreign company is incorporated, make a report to the chief agent in writing on the annual return required by subsection 665(2). 
  
  ### Auditor’s opinion
  
  (2) In each report required under subsection (1), the auditor shall state whether, in the auditor’s opinion, the annual return presents fairly, in accordance with the accounting principles referred to in subsection 331(4), the financial position of the insurance business in Canada of the foreign company as at the end of the financial year to which it relates and the results of the operations and changes in the financial position of the insurance business in Canada of the foreign company for that financial year. 
  
  ### Auditor’s remarks
  
  (3) In each report referred to in subsection (2), the auditor shall include such remarks as the auditor considers necessary when 
  (a) the examination has not been made in accordance with the auditing standards referred to in subsection 641(2); 
  (b) the annual return has not been prepared on a basis consistent with that of the preceding financial year; or 
  (c) the annual return does not present fairly, in accordance with the accounting principles referred to in subsection 331(4), the financial position of the insurance business in Canada of the foreign company as at the end of the financial year to which it relates or the results of the operations or changes in the financial position of the foreign company for that financial year. 
  
  ### Report to chief agent
  
  645 (1) It is the duty of the auditor of a foreign company to report in writing to the chief agent of the foreign company any transactions or conditions in respect of the insurance business in Canada of the foreign company that have come to the auditor’s attention affecting the well-being of the foreign company that in the auditor’s opinion are not satisfactory and require rectification and, without restricting the generality of the foregoing, the auditor shall, as occasion requires, make a report to the chief agent in respect of transactions in respect of the insurance business in Canada of the foreign company that have come to the auditor’s attention and that in the auditor’s opinion have not been within the powers of the foreign company. 
  
  ### Transmission of report
  
  (2) Where the auditor of a foreign company makes a report under subsection (1), the auditor shall, at the time of transmitting the report to the chief agent provide the Superintendent with a copy of the report. 
  
  ## Qualified Privilege 
  
  ### Qualified privilege for statements
  
  646 Any oral or written statement or report made under this Act by the auditor or a former auditor of a foreign company has qualified privilege. 
  
  ## Records 
  
  ### Records
  
  647 (1) A foreign company shall prepare and maintain 
  (a) copies of all orders of the Superintendent in relation to the foreign company; 
  (b) accounting records respecting its insurance business in Canada; and 
  (c) with respect to its insurance business in Canada, records showing, for each customer of, or claimant under a policy issued by, the foreign company, the amount owing to the foreign company and the nature of the liabilities of the foreign company to the customer or claimant. 
  
  ### Standards for record keeping
  
  (2) The records described in paragraphs (1)(b) and (c) shall be kept in a manner that enables the chief agent of the foreign company to provide the Superintendent with the information required by section 664 and with the annual return required by subsection 665(2). 
  
  ### Place of records
  
  (3) The records described in subsection (1) shall be kept at the chief agency of the foreign company. 
  
  ### Exception
  
  (4) Subject to subsection 268(1.1), subsection (3) does not apply to a foreign company incorporated or formed otherwise in a country or territory other than Canada in which a trade agreement listed in Schedule IV of the Bank Act is applicable or that is a subsidiary of a regulated foreign entity.  
  
  ### Examination of books
  
  648 The Superintendent may examine the books, vouchers, receipts and other documents of a foreign company relating to its insurance business in Canada for the purpose of verifying information provided to the Superintendent pursuant to section 664 or 665. 
  
  ### Sections 266 to 270 apply
  
  649 Section 266 to 270 apply, with such modifications as the circumstances require, to foreign companies. 
  
  ## Release of Assets 
  
  ### Application for release of assets in Canada
  
  650 A foreign company that proposes to cease to insure in Canada risks may apply to the Superintendent for the release of its assets in Canada. 
  
  ### Conditions of release
  
  651 Except as otherwise provided in this Act, the Superintendent may, by order, authorize the release of the assets in Canada of a foreign company if the foreign company 
  (a) has, in respect of its policies, 
  (i) obtained their surrender, 
  (ii) transferred them, 
  (iii) caused itself to be reinsured, on an assumption basis, against the risks undertaken under them, or 
  (iv) otherwise discharged its liabilities under them, or provided for their discharge in a manner satisfactory to the Superintendent; 
  (b) has discharged all of its obligations, other than liabilities under its policies, or provided for them in a manner satisfactory to the Superintendent; and 
  (c) has provided the Superintendent with proof of the publication, for four consecutive weeks, in the Canada Gazette and in at least one newspaper of general circulation at or near the place where the chief agency of the foreign company is situated, of a notice that it will apply to the Superintendent for the release of its assets in Canada on a day specified in the notice, which must be at least six weeks after the date of the notice, and calling on its creditors and policyholders opposing that release to file their opposition with the Superintendent on or before the day.  
  
  ### Release of assets to liquidator
  
  652 Despite sections 650 and 651, the assets in Canada of a foreign company that is in liquidation may, on the order of any court having jurisdiction under the Winding-up and Restructuring Act, be released to the liquidator.  
  
  ### Revocation of order
  
  653 The Superintendent may revoke the order made under subsection 574(1) in respect of a foreign company if in the opinion of the Superintendent the foreign company is not insuring in Canada risks, or if the foreign company does not 
  (a) provide information to the Superintendent as required by section 664; 
  (b) provide the annual return to the Superintendent as required by section 665; 
  (c) permit the examination authorized by section 648 or 674; or 
  (d) provide any information in its possession or control that is requested for the purpose of any such examination. 
  
  ### Deemed revocation
  
  654 An order made under subsection 574(1) in respect of a foreign company is deemed to be revoked when an order is made under section 651 or 652 authorizing the release of its assets in Canada. 
  655  [Repealed, 2007, c. 6, s. 298]  
  
  # PART XIV 
  
  ## Provincial Companies 
  
  ## Application 
  
  ### Application of other provisions
  
  656 (1) Divisions XII to XIV of Part VI, other than subsection 330(2), Parts VIII to XI and Part XX apply to provincial companies. 
  
  ### Idem
  
  (2) Subsections 15(1) and (2), sections 254 to 256 and subsections 268(1) and (2) apply, with such modifications as the circumstances require, to every provincial company for which an order for the commencement and carrying on of business under this Part has been made to the same extent that they are applicable to, or in respect of, a company, but to the extent to which any provision referred to in this section would effect an enlargement, in any respect, of the corporate powers or rights of any provincial company under its incorporating instrument, that provision does not apply to the provincial company. 
  
  ## Order to Commence and Carry on Business 
  
  ### Making of order
  
  657 (1) Forthwith on the coming into force of this Part, the Superintendent shall make an order approving the commencement and carrying on of business by every provincial company. 
  
  ### Order to specify classes of insurance
  
  (2) An order approving the commencement and carrying on of business by a provincial company under subsection (1) shall specify the classes of insurance risks that the provincial company is permitted to insure pursuant to section 443, as applied by subsection 656(1). 
  
  ### Conditions of order
  
  (3) An order approving the commencement and carrying on of business by a provincial company may contain such conditions or limitations that are consistent with this Act and relate to the business of the provincial company as the Superintendent deems expedient and necessary. 
  
  ### Variations
  
  (4) In respect of the order approving the commencement and carrying on of business by a provincial company, the Superintendent may at any time, by further order, 
  (a) specify additional classes of insurance risks that the provincial company is permitted to insure pursuant to section 443, as applied by subsection 656(1), 
  (b) make the order subject to such conditions or limitations that are consistent with this Act and that relate to the business of the provincial company as the Superintendent deems expedient and necessary, or 
  (c) amend or revoke any authorization contained in the order or any condition or limitation to which the order is subject, but before making any such further order the Superintendent shall provide the provincial company with an opportunity to make representations regarding that further order. 
  (5) and (6)  [Repealed, 1996, c. 6, s. 91]  
  
  ### Policies and procedures — integrity or security
  
  657.1 A provincial company shall establish and adhere to policies and procedures to protect itself against threats to its integrity or security, including foreign interference. 
  
  ### Undertaking
  
  658 Every provincial company for which an order has been made under section 657 shall provide the Superintendent with an undertaking in such form as may be required by the Superintendent that it will, so long as the order is not rescinded, submit to and comply with all of the provisions of this Act applicable to it in respect of the classes of insurance specified in the order and any conditions or limitations set out in the order. 
  
  ### Transitional
  
  659 A provincial company that deposited securities with the Receiver General pursuant to section 76 or 82 of the Canadian and British Insurance Companies Act shall apply for the return of those securities within such period following the coming into force of this section as may be fixed by order of the Governor in Council.  
  
  ## Duties of Directors 
  
  ### Appointment of actuary, auditor and conduct review committee
  
  660 (1) The directors of a provincial company shall 
  (a) appoint the actuary of the provincial company forthwith after the Superintendent makes an order for the provincial company under section 657; 
  (b) appoint the auditor of the provincial company for the purposes of this Act forthwith after the Superintendent makes an order for the provincial company under section 657; and 
  (c) establish a conduct review committee consisting of at least three directors who are not affiliated with the company, determined in accordance with regulations made under section 170. 
  
  ### Duties of conduct review committee
  
  (2) The conduct review committee of a provincial company shall 
  (a) require the management of the provincial company to establish procedures for complying with Part XI; 
  (b) review those procedures and their effectiveness in ensuring that the provincial company is complying with Part XI; 
  (b.1) if an insurance holding company or a bank holding company that is widely held has a significant interest in any class of shares of the provincial company, establish policies for entering into transactions referred to in section 528.1; and 
  (c) review the practices of the provincial company to ensure that any transactions with related parties of the provincial company that may have a material effect on the stability or solvency of the provincial company are identified. 
  
  ### Provincial company report to Superintendent
  
  (3) A provincial company shall report to the Superintendent on the mandate and responsibilities of the conduct review committee and the procedures established by the committee under paragraph (2)(a). 
  
  ### Committee report to directors
  
  (4) After each meeting of the conduct review committee of a provincial company, the committee shall report to the directors of the provincial company on all transactions and other matters reviewed by the committee. 
  
  ### Directors’ report to Superintendent
  
  (5) Within ninety days after the end of each financial year, the directors of a provincial company shall report to the Superintendent on the proceedings of the conduct review committee and on all transactions and other matters reviewed by the committee during the year. 
  
  ## Corporate Records 
  
  ### Provincial company to provide information
  
  661 (1) A provincial company shall provide the Superintendent with such information, material and evidence, at such times and in such form, as the Superintendent may require, and, without limiting the generality of the foregoing, the information, material and evidence shall include 
  (a) copies of its incorporating instrument and the by-laws of the provincial company; and 
  (b) copies of any of the records referred to in section 662. 
  
  ### Names of directors and auditors
  
  (2) A provincial company shall, within thirty days after each annual meeting of the provincial company, provide the Superintendent with a return showing 
  (a) the name, residence and citizenship of each director holding office immediately following the meeting; 
  (b) the mailing address of each director holding office immediately following the meeting; 
  (c) the bodies corporate of which each director referred to in paragraph (a) is an officer or director and the firms of which each director is a member; 
  (d) the affiliation, within the meaning of section 170, with the provincial company of each director referred to in paragraph (a); 
  (e) the names of the directors referred to in paragraph (a) who are officers or employees of the provincial company or any affiliate of the provincial company, and the positions they occupy; 
  (f) the name of each committee of the provincial company on which each director referred to in paragraph (a) serves; 
  (g) the date of expiration of the term of each director referred to in paragraph (a); and 
  (h) the name, address and date of appointment of the auditor of the provincial company. 
  
  ### Changes
  
  (3) Where 
  (a) any information relating to a director or auditor of a provincial company shown in the latest return made to the Superintendent under subsection (2), other than information referred to in paragraph (2)(c) or (d), becomes inaccurate or incomplete, 
  (b) a vacancy in the position of auditor of the provincial company occurs or is filled by another person, or 
  (c) a vacancy on the board of directors of the provincial company occurs or is filled, the provincial company shall forthwith provide the Superintendent with such information as is required to maintain the return in a complete and accurate form. 
  
  ### Records
  
  662 (1) A provincial company shall prepare and maintain adequate 
  (a) corporate accounting records; and 
  (b) records showing, for each customer of, or claimant under a policy issued by, the provincial company, the amount owing to the provincial company and the nature of the liabilities of the provincial company to the customer or claimant. 
  
  ### Definition of 
  *records* 
  
  (2) For the purposes of subsection (1), 
  *records* includes similar records required by law to be maintained by the provincial company before the coming into force of this section.  
  
  # PART XV 
  
  ## Regulation of Companies, Societies, Foreign Companies and Provincial Companies — Superintendent 
  
  ## Interpretation 
  
  ### Definition of société 
  
  663 In the French version of this Part, société means a société, société de secours, société étrangère or société provinciale within the meaning of section 2.  
  
  ## Supervision 
  
  ## Returns 
  
  ### Required information
  
  664 A company, society, foreign company or provincial company shall provide the Superintendent with such information, at such times and in such form as the Superintendent may require. 
  
  ### Annual return — companies, societies and provincial companies
  
  665 (1) A company, society or provincial company shall prepare annually a return of the condition and affairs of the company, society or provincial company as at the end of each financial year, showing its assets and liabilities and its income and expenditures during that financial year together with such other information as the Superintendent may deem necessary. 
  
  ### Annual return: foreign companies
  
  (2) A foreign company, in respect of its insurance business in Canada, shall prepare annually a return of the condition and affairs of the foreign company as at the end of each financial year, showing its assets and liabilities and its income and expenditures during that financial year together with such other information as the Superintendent may deem necessary. 
  (3)  [Repealed, 2007, c. 6, s. 299]  
  
  ### Accounting principles
  
  (4) The annual return shall be prepared in accordance with the accounting principles referred to in subsection 331(4). 
  666  [Repealed, 1997, c. 15, s. 323]  
  
  ### Valuation of actuarial and other policy liabilities
  
  667 (1) The liabilities of a company, society, foreign company or provincial company shown in its annual return must include as a reserve the value of the actuarial and other policy liabilities and other matters determined under section 365 or section 629. 
  
  ### Report of actuary
  
  (2) The actuary of a company, society, foreign company or provincial company shall make, and the company, society, foreign company or provincial company shall file with its annual return, a report in a form determined by the Superintendent on the reserve referred to in subsection (1). 
  
  ### Auditor’s remarks
  
  (3) The auditor of a company, society or provincial company shall attach to the annual return a report stating whether, in the auditor’s opinion, the annual return presents fairly, in accordance with accounting principles referred to in subsection 331(4), the financial position of the company, society or provincial company as at the end of the financial year to which it relates and the results of the operations and changes in the financial position of the company, society or provincial company for that financial year. 
  
  ### Idem
  
  (4) In each report referred to in subsection (3), the auditor shall include such remarks as the auditor considers necessary when 
  (a) the examination has not been made in accordance with the auditing standards referred to in subsection 346(2); 
  (b) the annual return has not been prepared on a basis consistent with that of the preceding financial year; or 
  (c) the annual return does not present fairly, in accordance with the accounting principles referred to in subsection 331(4), the financial position of the company, society or provincial company as at the end of the financial year to which it relates or the results of the operations or changes in the financial position of the company, society or provincial company for that financial year. 
  
  ### Names of directors and auditors
  
  668 (1) A company shall, within thirty days after each annual meeting of the company, provide the Superintendent with a return showing 
  (a) the name, residence and citizenship of each director holding office immediately following the meeting; 
  (b) the mailing address of each director holding office immediately following the meeting; 
  (c) the bodies corporate of which each director referred to in paragraph (a) is an officer or director and the firms of which each director is a member; 
  (d) the affiliation, within the meaning of section 170, with the company of each director referred to in paragraph (a); 
  (e) the names of the directors referred to in paragraph (a) who are officers or employees of the company or any affiliate of the company, and the positions they occupy; 
  (f) the name of each committee of the company on which each director referred to in paragraph (a) serves; 
  (g) the date of expiration of the term of each director referred to in paragraph (a); and 
  (h) the name, address and date of appointment of the auditor of the company. 
  
  ### Changes
  
  (2) Where 
  (a) any information relating to a director or auditor of a company shown in the latest return made to the Superintendent under subsection (1), other than information referred to in paragraph (1)(c) or (d), becomes inaccurate or incomplete, 
  (b) a vacancy in the position of auditor of the company occurs or is filled by another person, or 
  (c) a vacancy on the board of directors of the company occurs or is filled, the company shall forthwith provide the Superintendent with such information as is required to maintain the return in a complete and accurate form. 
  
  ### Copy of by-laws
  
  669 A company shall send to the Superintendent, within thirty days after the coming into effect of a by-law or an amendment to a by-law, a copy of the by-law or amendment. 
  
  ### Registers
  
  670 (1) The Superintendent shall cause a register to be maintained in respect of each company or society for which an order has been made approving the commencement and carrying on of business. 
  
  ### Register for company
  
  (2) The register in respect of a company shall contain a copy of 
  (a) the incorporating instrument of the company; and 
  (b) the information referred to in paragraphs 668(1)(a), (c) and (e) to (h) contained in the latest return provided to the Superintendent by the company as required by section 668. 
  (c)  [Repealed, 2001, c. 9, s. 453]  
  
  ### Register for society
  
  (3) The register in respect of a society shall contain a copy of 
  (a) the incorporating instrument of the society; and 
  (b) the information referred to in paragraphs 549(1)(a) and (c) to (f) contained in the latest return provided to the Superintendent by the society as required by subsection 549(1). 
  (c)  [Repealed, 2001, c. 9, s. 453]  
  
  ### Form
  
  (4) The register may be maintained in 
  (a) a bound or loose-leaf form or a photographic film form; or 
  (b) a system of mechanical or electronic data processing or any other information storage device that is capable of reproducing any required information in intelligible written form within a reasonable time. 
  
  ### Access
  
  (5) Persons are entitled to reasonable access to the register and may make copies of or take extracts from the information in it. 
  
  ### Evidence
  
  (6) A statement containing information in the register and purporting to be certified by the Superintendent is admissible in evidence in all courts as proof, in the absence of evidence to the contrary, of the facts stated in the statement without proof of the appointment or signature of the Superintendent. 
  
  ### Certificate
  
  670.1 On the application of a company or society that has been incorporated by a special Act of Parliament, the Superintendent may issue a certificate stating that it was incorporated by a special Act of Parliament, and may include with the certificate any information in the Superintendent’s possession that relates to the company’s or society’s incorporation. 
  
  ### Production of information and documents
  
  671 (1) The Superintendent may, by order, direct a person who controls a company or any entity that is affiliated with a company to provide the Superintendent with any information or documents that may be specified in the order if the Superintendent believes that the production of the information or documents is necessary in order to be satisfied that 
  (a) the provisions of this Act are being duly observed and that the company is in a sound financial condition; or 
  (b) the company has adequate policies and procedures to protect itself against threats to its integrity or security. 
  
  ### Time
  
  (2) Any person to whom a direction has been issued under subsection (1) shall provide the information or documents specified in the order within the time specified in the order and, where the order does not specify a time, the person shall provide the information or documents within a reasonable time. 
  
  ### Exemption
  
  (3) Subsection (1) does not apply in respect of an entity that controls a company or is affiliated with a company where that entity is a financial institution regulated 
  (a) by or under an Act of Parliament; or 
  (b) by or under an Act of the legislature of a province where the Superintendent has entered into an agreement with the appropriate official or public body responsible for the supervision of financial institutions in that province concerning the sharing of information on such financial institutions. 
  
  ### Confidential information
  
  672 (1) Subject to section 673, all information regarding the business or affairs of a company, society, foreign company or provincial company, or regarding a person dealing with any of them, that is obtained by the Superintendent, or by any person acting under the direction of the Superintendent, as a result of the administration or enforcement of any Act of Parliament, and all information prepared from that information, is confidential and shall be treated accordingly. 
  
  ### Disclosure permitted
  
  (2) Nothing in subsection (1) prevents the Superintendent from disclosing any information 
  (a) to any government agency or body that regulates or supervises financial institutions, for purposes related to that regulation or supervision, 
  (a.01) to any other agency or body that regulates or supervises financial institutions, for purposes related to that regulation or supervision, 
  (a.1) to any compensation association designated by order of the Minister pursuant to subsection 449(1) or 591(1), for purposes related to its operation, and 
  (b) to the Deputy Minister of Finance or any officer of the Department of Finance authorized in writing by the Deputy Minister of Finance or to the Governor of the Bank of Canada or any officer of the Bank of Canada authorized in writing by the Governor of the Bank of Canada, for the purposes of policy analysis related to the regulation of financial institutions, if the Superintendent is satisfied that the information will be treated as confidential by the agency, body or person to whom it is disclosed. 
  
  ### Regulations
  
  672.1 The Governor in Council may make regulations prohibiting, limiting or restricting the disclosure by companies, societies, foreign companies or provincial companies of prescribed supervisory information. 
  
  ### Evidentiary privilege
  
  672.2 (1) Prescribed supervisory information shall not be used as evidence in any civil proceedings and is privileged for that purpose. 
  
  ### No testimony or production
  
  (2) No person shall by an order of any court, tribunal or other body be required in any civil proceedings to give oral testimony or to produce any document relating to any prescribed supervisory information. 
  
  ### Exceptions to subsection (1)
  
  (3) Despite subsection (1), 
  (a) the Minister, the Superintendent or the Attorney General of Canada may, in accordance with the regulations, if any, use prescribed supervisory information as evidence in any proceedings; and 
  (b) a company, a society, a foreign company or a provincial company may, in accordance with the regulations, if any, use prescribed supervisory information as evidence in any proceedings in relation to the administration or enforcement of this Act or the Winding-up and Restructuring Act that are commenced by the company, the society, the foreign company, the provincial company, the Minister, the Superintendent or the Attorney General of Canada.  
  
  ### Exceptions to subsections (1) and (2)
  
  (4) Despite subsections (1) and (2) and section 39.1 of the Office of the Superintendent of Financial Institutions Act, a court, tribunal or other body may, by order, require the Minister, the Superintendent, a company, a society, a foreign company or a provincial company to give oral testimony or to produce any document relating to any prescribed supervisory information in any civil proceedings in relation to the administration or enforcement of this Act that are commenced by the Minister, the Superintendent, the Attorney General of Canada, the company, the society, the foreign company or the provincial company.  
  
  ### No waiver
  
  (5) The disclosure of any prescribed supervisory information, other than under subsection (3) or (4), does not constitute a waiver of the privilege referred to in subsection (1). 
  
  ### Regulations
  
  (6) The Governor in Council may, for the purposes of subsection (3), make regulations respecting the circumstances in which prescribed supervisory information may be used as evidence. 
  
  ### No waiver
  
  672.3 (1) For greater certainty, the disclosure by a company, society, foreign company or provincial company — or by a person who controls one or by an entity that is affiliated with one — to the Superintendent of any information that is subject to a privilege under the law of evidence, solicitor-client privilege or the professional secrecy of advocates and notaries or to litigation privilege does not constitute a waiver of any of those privileges or that secrecy. 
  
  ### No disclosure
  
  (2) The Superintendent shall not disclose any information referred to in subsection (1) to any person whose powers, duties or functions include 
  (a) the investigation or prosecution of an offence under any Act of Parliament or of the legislature of a province; or 
  (b) the investigation of, or conduct of proceedings in respect of, a violation under an Act referred to in paragraph (a). 
  
  ### Disclosure by Superintendent
  
  673 (1) The Superintendent shall disclose, at such times and in such manner as the Minister may determine, such information obtained by the Superintendent under this Act as the Minister considers ought to be disclosed for the purposes of the analysis of the financial condition of a company, society, foreign company or provincial company and that 
  (a) is contained in returns filed pursuant to the Superintendent’s financial regulatory reporting requirements in respect of companies, societies, foreign companies or provincial companies; or 
  (b) has been obtained as a result of an industry-wide or sectoral survey conducted by the Superintendent in relation to an issue or circumstances that could have an impact on the financial condition of companies, societies, foreign companies or provincial companies. 
  
  ### Prior consultation required
  
  (2) The Minister shall consult with the Superintendent before making any determination under subsection (1). 
  
  ### Disclosure by a company, etc.
  
  673.1 (1) A company, society, foreign company or provincial company shall make available to the public such information concerning 
  (a) the compensation of its executives, as that expression is defined by the regulations, and 
  (b) its business and affairs for the purposes of the analysis of its financial condition, in such form and manner and at such times as may be required by or pursuant to such regulations as the Governor in Council may make for the purpose. 
  
  ### Exemption by regulation
  
  (2) Paragraph (1)(a) does not apply to a company, society, foreign company or provincial company that is within such class or classes of companies, societies, foreign companies or provincial companies as may be prescribed. 
  
  ### Exceptions to disclosure
  
  673.2 Subject to any regulations made under section 489 or 607, no information obtained by a company, society, foreign company or provincial company regarding any of its customers shall be disclosed or made available under subsection 673(1) or section 673.1. 
  
  ### Report respecting disclosure
  
  673.3 The Superintendent shall prepare a report, to be included in the report referred to in section 40 of the Office of the Superintendent of Financial Institutions Act, respecting the disclosure of information by companies, societies, foreign companies or provincial companies and describing the state of progress made in enhancing the disclosure of information in the financial services industry.  
  
  ## Inspection of Companies, Societies, Foreign Companies and Provincial Companies 
  
  ### Examination of companies, etc.
  
  674 (1) The Superintendent, from time to time, but at least once in each calendar year, shall make or cause to be made any examination and inquiry into the business and affairs of each company, society, foreign company and provincial company that the Superintendent considers to be necessary or expedient to determine whether the company, society, foreign company or provincial company is complying with the provisions of this Act, whether the company, society or provincial company or the insurance business in Canada of the foreign company is in a sound financial condition and whether the company, society or provincial company has adequate policies and procedures to protect itself against threats to its integrity or security or the foreign company has adequate policies and procedures to protect itself against threats to its integrity or security in relation to its business in Canada. After the conclusion of each examination and inquiry, the Superintendent shall report on it to the Minister. 
  (1.1)  [Repealed, 2023, c. 26, s. 585]  
  
  ### Examination need not be made annually
  
  (2) If, in the opinion of the Superintendent, the circumstances so warrant in the case of a company, a provincial company or a foreign company that is not a fraternal benefit society, the examination and inquiry may be made less frequently than annually but not less frequently than triennially. 
  
  ### Examination need not be made annually
  
  (2.1) If, in the opinion of the Superintendent, the circumstances so warrant in the case of a society or a foreign company that is a fraternal benefit society, the examination and inquiry may be made less frequently than annually. 
  
  ### Access to records of company
  
  (3) The Superintendent or a person acting under the Superintendent’s direction 
  (a) has a right of access to any records, cash, assets and security held by or on behalf of a company, society or provincial company or held by or on behalf of a foreign company in respect of its insurance business in Canada; and 
  (b) may require the directors, officers, auditor and actuary of a company, society or provincial company or the chief agent, actuary and auditor of a foreign company to provide information and explanations, to the extent that they are reasonably able to do so, in respect of the condition and affairs of the company, society, foreign company or provincial company or any entity in which it has a substantial investment. 
  
  ### Power of Superintendent on inquiry
  
  675 The Superintendent has all the powers of a person appointed as a commissioner under Part II of the Inquiries Act for the purpose of obtaining evidence under oath, and may delegate those powers to any person acting under the Superintendent’s direction.  
  
  ## Remedial Powers 
  
  ## Prudential Agreements 
  
  ### Prudential agreement
  
  675.1 The Superintendent may enter into an agreement, called a “prudential agreement”, with 
  (a) a company, society or provincial company for the purposes of implementing any measure designed to maintain or improve its safety and soundness or establishing adequate policies and procedures to protect it against threats to its integrity or security; or 
  (b) a foreign company for the purposes of implementing any measure designed to protect the interests of its policyholders and creditors in relation to its insurance business in Canada or establishing adequate policies and procedures to protect it against threats to its integrity or security in relation to its business in Canada. 
  
  ## Directions of Compliance 
  
  ### Superintendent’s directions to companies, etc.
  
  676 (1) Where, in the opinion of the Superintendent, a company, society, foreign company or provincial company, or a person with respect to a company, society, foreign company or provincial company, 
  (a) is committing, or is about to commit, an act that is an unsafe or unsound practice in conducting the business of the company, society, foreign company or provincial company, or 
  (b) is pursuing or is about to pursue any course of conduct that is an unsafe or unsound practice in conducting the business of the company, society, foreign company or provincial company, the Superintendent may direct the company, society, foreign company, provincial company or person to 
  (c) cease or refrain from committing the act or pursuing the course of conduct, and 
  (d) perform such acts as in the opinion of the Superintendent are necessary to remedy the situation. 
  
  ### Directions — policies and procedures
  
  (1.1) If, in the opinion of the Superintendent, a company, society, or provincial company does not have adequate policies and procedures to protect itself against threats to its integrity or security, or a foreign company does not have adequate policies and procedures to protect itself against threats to its integrity or security in relation to its business in Canada, the Superintendent may direct the company, society, foreign company or provincial company to take any measures that in the opinion of the Superintendent are necessary to remedy the situation. 
  
  ### Opportunity for representations
  
  (2) Subject to subsection (3), no direction shall be issued to a company, society, foreign company, provincial company or person under subsection (1) or (1.1) unless the company, society, foreign company, provincial company or person is provided with a reasonable opportunity to make representations in respect of the matter. 
  
  ### Temporary direction
  
  (3) If, in the opinion of the Superintendent, the length of time required for representations to be made under subsection (2) might be prejudicial to the public interest, the Superintendent may make a temporary direction with respect to the matters referred to in paragraphs (1)(a) and (b) or subsection (1.1) having effect for a period of not more than 15 days. 
  
  ### Idem
  
  (4) Subject to section 677, a temporary direction under subsection (3) continues to have effect after the expiration of the fifteen day period referred to in that subsection if no representations are made to the Superintendent within that period or, if representations have been made, the Superintendent notifies the company, society, foreign company, provincial company or person that the Superintendent is not satisfied that there are sufficient grounds for revoking the direction. 
  677  [Repealed, 1996, c. 6, s. 94]  
  
  ### Court enforcement
  
  678 (1) Where a company, society, foreign company, provincial company or person 
  (a) is contravening or has failed to comply with a prudential agreement entered into under section 675.1 or a direction of the Superintendent issued to the company, society, foreign company, provincial company or person under subsection 676(1), (1.1.) or (3), 
  (b) is contravening this Act, or 
  (c) has omitted to do any thing under this Act that is required to be done by or on the part of the company, society, foreign company, provincial company or person, the Superintendent may, in addition to any other action that may be taken under this Act, apply to a court for an order requiring the company, society, foreign company, provincial company or person to comply with the prudential agreement or direction, cease the contravention or do any thing that is required to be done, and on such application the court may so order and make any other order it thinks fit. 
  
  ### Appeal
  
  (2) An appeal from a decision of a court under subsection (1) lies in the same manner, and to the same court, as an appeal from any other order of the court. 
  
  ## Disqualification and Removal 
  
  ### Meaning of 
  *senior officer* 
  
  678.01 In sections 678.1 and 678.2, 
  *senior officer* means the chief executive officer, secretary, treasurer, controller or actuary of a company, society or provincial company, or any other officer reporting directly to its board of directors or chief executive officer.  
  
  ### Application
  
  678.1 (1) This section applies only in respect of a company, society or provincial company 
  (a) that has been notified by the Superintendent that this section applies to it where the company, society or provincial company is subject to measures designed to maintain or improve its safety and soundness, which measures 
  (i) have been specified by the Superintendent by way of conditions or limitations in respect of the order approving the commencement and carrying on of its business, or 
  (ii) are contained in a prudential agreement entered into under section 675.1 or an undertaking given by the company, society or provincial company to the Superintendent; or 
  (b) that is the subject of a direction made under section 676 or an order made under subsection 515(3). 
  
  ### Information to be provided
  
  (2) A company, society or provincial company shall provide the Superintendent with the name of 
  (a) each person who has been nominated for election or appointment as a member of its board of directors, 
  (b) each person who has been selected by the company, society or provincial company for appointment as a senior officer, and 
  (c) each person who is newly elected as a director of the company, society or provincial company at a meeting of shareholders and policyholders and who was not proposed for election by anyone involved in the management of the company, society or provincial company, together with such other information about the background, business record and experience of the person as the Superintendent may require. 
  
  ### When information to be provided
  
  (3) The information required by subsection (2) shall be provided to the Superintendent 
  (a) at least thirty days prior to the date or proposed date of the election or appointment or within such shorter period as the Superintendent may allow; or 
  (b) in the case of a person referred to in paragraph (2)(c), within fifteen days after the date of the election of the person. 
  
  ### Disqualification or removal
  
  (4) If the Superintendent is of the opinion that, on the basis of the competence, business record, experience, conduct or character of a person, he or she is not suitable to hold that position, the Superintendent may, by order 
  (a) in the case of a person referred to in paragraph (2)(a) or (b), disqualify the person from being elected or appointed as a director of the company, society or provincial company or from being appointed as a senior officer; or 
  (b) in the case of a person referred to in paragraph (2)(c), remove the person from office as a director of the company, society or provincial company. 
  
  ### Risk of prejudice
  
  (4.1) In forming an opinion under subsection (4), the Superintendent must consider whether the interests of the policyholders and creditors of the company, society or provincial company would likely be prejudiced if the person were to take office or continue to hold office, as the case may be. 
  
  ### Representations may be made
  
  (5) The Superintendent must in writing notify the person concerned and the company, society or provincial company of any action that the Superintendent proposes to take under subsection (4) and must afford them an opportunity within 15 days after the date of the notice, or within any longer period that the Superintendent allows, to make representations to the Superintendent in relation to the matter. 
  
  ### Prohibition
  
  (6) Where an order has been made under subsection (4) 
  (a) disqualifying a person from being elected or appointed to a position, the person shall not be, and the company, society or provincial company shall not permit the person to be, elected or appointed to the position; or 
  (b) removing a director from office, the person shall not continue to hold, and the company, society or provincial company shall not permit the person to continue to hold, office as a director. 
  
  ### Removal of directors or senior officers
  
  678.2 (1) The Superintendent may, by order, remove a person from office as a director or senior officer of a company, society or provincial company if the Superintendent is of the opinion that the person is not suitable to hold that office 
  (a) on the basis of the competence, business record, experience, conduct or character of the person; or 
  (b) because the person has contravened or, by action or negligence, has contributed to the contravention of 
  (i) this Act or the regulations made under it, 
  (ii) a direction made under section 676, 
  (iii) an order made under subsection 515(3), 
  (iv) a condition or limitation in respect of the order approving the commencement and carrying on of business by the company, society or provincial company, or 
  (v) a prudential agreement entered into under section 675.1 or an undertaking given by the company, society or provincial company to the Superintendent. 
  
  ### Risk of prejudice
  
  (2) In forming an opinion under subsection (1), the Superintendent must consider whether the interests of the policyholders and creditors of the company, society or provincial company have been or are likely to be prejudiced by the person’s holding office as a director or senior officer. 
  
  ### Representations may be made
  
  (3) The Superintendent must in writing notify the person concerned and the company, society or provincial company of any removal order that the Superintendent proposes to make under subsection (1) and must afford them an opportunity within 15 days after the date of the notice, or within any longer period that the Superintendent allows, to make representations to the Superintendent in relation to the matter. 
  
  ### Suspension
  
  (4) If the Superintendent is of the opinion that the public interest may be prejudiced by the director or senior officer continuing to exercise the powers or carry out the duties and functions of that office during the period for making representations, the Superintendent may make an order suspending the director or senior officer. The suspension may not extend beyond 10 days after the expiration of that period. 
  
  ### Notice of order
  
  (5) The Superintendent shall, without delay, notify the director or senior officer, as the case may be, and the company, society or provincial company of a removal order or suspension order. 
  
  ### Consequences of removal order
  
  (6) The director or senior officer, as the case may be, ceases to hold that office as of the date the removal order is made or any later date specified in the order. 
  
  ### Appeal
  
  (7) The director or senior officer, as the case may be, or the company, society or provincial company, as the case may be, may, within 30 days after the date of receipt of notice of the removal order under subsection (5), or within any longer period that the Court allows, appeal the matter to the Federal Court. 
  
  ### Powers of Federal Court
  
  (8) The Federal Court, in the case of an appeal, may dismiss the appeal or set aside the removal order. 
  
  ### Order not stayed by appeal
  
  (9) A removal order is not stayed by an appeal. 
  
  ### Application
  
  678.3 (1) This section applies only in respect of a foreign company 
  (a) that has been notified by the Superintendent that this section applies to it where the foreign company is subject to measures designed to protect the interests of its policyholders and creditors in respect of its insurance business in Canada, which measures 
  (i) have been specified by the Superintendent by way of conditions or limitations in respect of the order made under subsection 574(1) in respect of the foreign company, or 
  (ii) are contained in a prudential agreement entered into under section 675.1 or an undertaking given by the foreign company to the Superintendent; or 
  (b) that is the subject of a direction made under section 676 or an order made under subsection 608(4) or 609(2). 
  
  ### Information to be provided
  
  (2) A foreign company shall provide the Superintendent with the name of any person who has been selected by the foreign company for appointment as chief agent together with such other information about the background, business record and experience of the person as the Superintendent may require. 
  
  ### When information to be provided
  
  (3) The information required by subsection (2) shall be provided to the Superintendent at least 30 days prior to the date of the appointment or within any shorter period that the Superintendent may allow. 
  
  ### Disqualification
  
  (4) If the Superintendent is of the opinion that, on the basis of the competence, business record, experience, conduct or character of a person, he or she is not suitable to hold the position of chief agent, the Superintendent may, by order, disqualify the person from being appointed to that office. 
  
  ### Risk of prejudice
  
  (5) In forming an opinion under subsection (4), the Superintendent must consider whether the interests of the policyholders and creditors of the foreign company in respect of its insurance business in Canada would likely be prejudiced if the person were to take office. 
  
  ### Representations may be made
  
  (6) The Superintendent must in writing notify the person concerned and the foreign company of an order that the Superintendent proposes to make under subsection (4) and must afford them an opportunity within 15 days after the date of the notice, or within any longer period that the Superintendent allows, to make representations to the Superintendent in relation to the matter. 
  
  ### Prohibition
  
  (7) If an order is made under subsection (4) disqualifying a person from being appointed as chief agent, the person shall not be, and the foreign company shall not permit the person to be, appointed to that position. 
  
  ### Removal
  
  678.4 (1) The Superintendent may, by order, remove a person from office as the chief agent of a foreign company if the Superintendent is of the opinion that the person is not suitable to hold that office 
  (a) on the basis of the competence, business record, experience, conduct or character of the person; or 
  (b) because the person has contravened or, by action or negligence, has contributed to the contravention of 
  (i) this Act or the regulations made under it, 
  (ii) a direction made under section 676, 
  (iii) an order made under subsection 608(4) or 609(2), 
  (iv) a condition or limitation in respect of the order made under subsection 574(1) in respect of the foreign company, or 
  (v) a prudential agreement entered into under section 675.1 or an undertaking given by the foreign company to the Superintendent. 
  
  ### Risk of prejudice
  
  (2) In forming an opinion under subsection (1), the Superintendent must consider whether the interests of the policyholders and creditors of the foreign company in respect of its insurance business in Canada have been or are likely to be prejudiced by the person’s holding office as chief agent. 
  
  ### Representations may be made
  
  (3) The Superintendent must in writing notify the chief agent and the foreign company of any removal order that the Superintendent proposes to make under subsection (1) and must afford them an opportunity within 15 days after the date of the notice, or within any longer period that the Superintendent allows, to make representations to the Superintendent in relation to the matter. 
  
  ### Suspension
  
  (4) If the Superintendent is of the opinion that the public interest is likely to be prejudiced by the chief agent continuing to exercise the powers or carry out the duties and functions of that office during the period for making representations, the Superintendent may make an order suspending the chief agent. The suspension may not extend beyond 10 days after the expiration of that period. 
  
  ### Notice of order
  
  (5) The Superintendent shall, without delay, notify the chief agent and the foreign company of a removal order or suspension order. 
  
  ### Consequences of removal order
  
  (6) The chief agent ceases to hold that office as of the date the removal order is made or any later date specified in the order. 
  
  ### Appeal
  
  (7) The chief agent or the foreign company may, within 30 days after the date of receipt of notice of the removal order under subsection (5), or within any longer period that the Court allows, appeal the matter to the Federal Court. 
  
  ### Powers of Federal Court
  
  (8) The Federal Court, in the case of an appeal, may dismiss the appeal or set aside the removal order. 
  
  ### Order not stayed by appeal
  
  (9) A removal order is not stayed by an appeal. 
  
  ## Supervisory Intervention 
  
  ### Direction to transfer policies or to reinsure risks — society
  
  678.5 (1) If the circumstances described in any of paragraphs 679(1.1)(a) to (e) or (f.1) to (i) exist in respect of a society, the Superintendent may, by order, subject to any terms and conditions the Superintendent may specify, direct it to transfer all or any portion of its policies to, or cause itself to be reinsured, against all or any portion of the risks undertaken under its policies, by any company, society, foreign company or body corporate incorporated or formed by or under the laws of a province that is authorized to transact the classes of insurance to be so transferred or reinsured. 
  
  ### Compliance
  
  (2) The society shall comply with the order within the time that the Superintendent specifies in the order or within any further period specified by the Superintendent. 
  
  ### Opportunity for representations
  
  (3) No order shall be issued to a society under subsection (1) unless the society is provided with a reasonable opportunity to make representations in respect of the matter. 
  
  ### Direction to transfer policies or to reinsure risks — foreign fraternal benefit society
  
  678.6 (1) If the circumstances described in any of paragraphs 679(1.2)(a) to (d) or (f) to (h) exist in respect of a foreign fraternal benefit society, the Superintendent may, by order, subject to any terms and conditions the Superintendent may specify, direct it to transfer all or any portion of its policies in respect of its insurance business in Canada to, or cause itself to be reinsured, against all or any portion of the risks undertaken under those policies, by any company, society, foreign company or body corporate incorporated or formed by or under the laws of a province that is authorized to transact the classes of insurance to be so transferred or reinsured. 
  
  ### Compliance
  
  (2) The foreign company shall comply with the order within the time that the Superintendent specifies in the order or within any further period specified by the Superintendent. 
  
  ### Opportunity for representations
  
  (3) No order shall be issued to a foreign company under subsection (1) unless the foreign company is provided with a reasonable opportunity to make representations in respect of the matter. 
  
  ### Superintendent may take control
  
  679 (1) Subject to this Act, where any of the circumstances described in subsection (1.1) exist in respect of a company, society or provincial company or any of the circumstances described in subsection (1.2) exist in respect of a foreign company, the Superintendent may 
  (a) take control, for a period not exceeding sixteen days, of the assets of the company, society or provincial company and the assets under its administration or, in the case of a foreign company, of its assets in Canada together with its other assets held in Canada under control of its chief agent, including all amounts received or receivable in respect of its insurance business in Canada; or 
  (b) unless the Minister advises the Superintendent that the Minister is of the opinion that it is not in the public interest to do so, 
  (i) take control, for a period exceeding sixteen days, of the assets of the company, society or provincial company and the assets under its administration or, in the case of a foreign company, of its assets in Canada together with its other assets held in Canada under the control of its chief agent, including all amounts received or receivable in respect of its insurance business in Canada, 
  (ii) where control of assets has been taken under paragraph (a), continue the control beyond the sixteen days referred to in that paragraph, or 
  (iii) take control of the company, society or provincial company. 
  
  ### Circumstances re other than foreign company
  
  (1.1) Control by the Superintendent under subsection (1) may be taken in respect of a company, society or provincial company, other than a foreign company, where 
  (a) the company, society or provincial company has failed to pay its liabilities or, in the opinion of the Superintendent, will not be able to pay its liabilities as they become due and payable; 
  (b)  [Repealed, 2001, c. 9, s. 463]  
  (c) the assets of the company, society or provincial company are not, in the opinion of the Superintendent, sufficient to give adequate protection to its policyholders and creditors; 
  (d) any asset appearing on the books or records of the company, society or provincial company or held under its administration is not, in the opinion of the Superintendent, satisfactorily accounted for; 
  (e) the regulatory capital of the company, society or provincial company has, in the opinion of the Superintendent, reached a level or is eroding in a manner that may detrimentally affect its policyholders or creditors; 
  (f) the company, society or provincial company has failed to comply with an order of the Superintendent made under subsection 515(3) to increase its capital or with an order of the Superintendent made under subsection 678.5(1); 
  (f.1) in the case of a company, in the opinion of the Superintendent, the company’s policyholders or creditors may be detrimentally affected because all of the common shares of the company must be disposed of under a direction made by the Minister or because there is a prohibition under this Act in respect of the exercise of the right to vote attached to all of the common shares of the company; 
  (g) in the opinion of the Superintendent, any other state of affairs exists in respect of the company, society or provincial company that may be materially prejudicial to the interests of the company’s, society’s or provincial company’s policyholders or creditors or the owners of any assets under the company’s, society’s or provincial company’s administration, including where proceedings under a law relating to bankruptcy or insolvency have been commenced in Canada or elsewhere in respect of the holding body corporate of the company or provincial company; 
  (h) in the opinion of the Superintendent, the continued operation of the company, society or provincial company by its directors or by the officers responsible for its management would be materially prejudicial to its integrity or security; or 
  (i) in the opinion of the Superintendent, the continued operation of the company, society or provincial company by its directors or by the officers responsible for its management would pose a risk to national security. 
  
  ### Circumstances re foreign company
  
  (1.2) Control by the Superintendent under subsection (1) may be taken in respect of a foreign company where 
  (a) in respect of its insurance business in Canada, it has failed to pay its liabilities or, in the opinion of the Superintendent, will not be able to pay its liabilities as they become due and payable; 
  (b)  [Repealed, 2001, c. 9, s. 463]  
  (c) its assets in Canada are not, in the opinion of the Superintendent, sufficient to give adequate protection to its policyholders and creditors in respect of its insurance business in Canada; 
  (d) any asset relating to its insurance business in Canada appearing on the books or records of the foreign company is not, in the opinion of the Superintendent, satisfactorily accounted for; 
  (e) it has failed to comply with an order of the Superintendent made under subsection 608(4) to increase the margin of its assets in Canada over its liabilities in Canada or with an order of the Superintendent made under subsection 609(2) or 678.6(1); 
  (f) in the opinion of the Superintendent, any other state of affairs exists in respect of the foreign company that may be materially prejudicial to the interests of the foreign company’s policyholders or creditors in respect of its insurance business in Canada, or to the interests of the owners of any assets under the foreign company’s administration in Canada, including where proceedings under a law relating to bankruptcy or insolvency have been commenced in Canada or elsewhere in respect of the foreign company or its holding body corporate; 
  (g) in the opinion of the Superintendent, the continued operation of the foreign company in Canada would be materially prejudicial to the integrity or security of its business in Canada; or 
  (h) in the opinion of the Superintendent, the continued operation of the foreign company in Canada would pose a risk to national security. 
  
  ### Minister’s powers
  
  (1.21) Subject to this Act, the Minister may, for reasons related to national security, direct the Superintendent to 
  (a) take control, for a period not exceeding 16 days, of the assets of the company, society or provincial company and the assets under its administration or, in the case of a foreign company, of its assets in Canada together with its other assets held in Canada under the control of its chief agent, including all amounts received or receivable in respect of its insurance business in Canada; 
  (b) take control, for a period exceeding 16 days, of the assets of the company, society or provincial company and the assets under its administration or, in the case of a foreign company, of its assets in Canada together with its other assets held in Canada under the control of its chief agent, including all amounts received or receivable in respect of its insurance business in Canada; 
  (c) if control of assets has been taken under paragraph (a), continue the control beyond the 16 days referred to in that paragraph; or 
  (d) take control of the company, society or provincial company. 
  
  ### Notice of proposed action
  
  (1.3) The Superintendent must notify a company, society, provincial company or foreign company of any action proposed to be taken in respect of it under paragraph (1)(b) and of its right to make written representations to the Superintendent within the time specified in the notice, not exceeding ten days after it receives the notice. 
  
  ### Notice — up to 16 days
  
  (1.4) If the Superintendent takes control of the assets of a company, society, provincial company or foreign company under paragraph (1.21)(a), the Superintendant shall notify the company, society, provincial company or foreign company that control has been taken at the direction of the Minister. 
  
  ### Notice — more than 16 days
  
  (1.5) If the Minister is considering whether to exercise the powers under any of paragraphs (1.21)(b) to (d), the Superintendent shall notify the company, society, provincial company or foreign company of the action that is being considered and of its right to make written representations to the Minister within the time specified in the notice, not exceeding 10 days after it receives the notice. 
  
  ### Notice — Committee and Review Agency
  
  (1.6) Within 30 days after exercising any of the powers under subsection (1.21), the Minister shall notify 
  (a) the Committee, as defined in section 2 of the National Security and Intelligence Committee of Parliamentarians Act ; and  
  (b) the Review Agency, as defined in section 2 of the National Security and Intelligence Review Agency Act.  
  
  ### Objectives of Superintendent
  
  (2) If the Superintendent has control under subsection (1) or (1.21) of the assets of a company, society, provincial company or foreign company referred to in that subsection, the Superintendent may do all things necessary or expedient to protect the rights and interests of the policyholders and creditors of the company, society or provincial company or the policyholders and creditors in respect of the foreign company’s insurance business in Canada. 
  
  ### Powers of Superintendent
  
  (3) If the Superintendent has control under subsection (1) or (1.21) of the assets of a company, society, provincial company or foreign company referred to in that subsection, 
  (a) the company, society, provincial company or foreign company shall not make, acquire or transfer any loan or make any purchase, sale or exchange of securities or any disbursement or transfer of cash of any kind without the prior approval of the Superintendent or a representative designated by the Superintendent; and 
  (b) no director, officer or employee of the company, society, provincial company or foreign company nor the chief agent of the foreign company shall have access to any cash or securities held by the company, society, provincial company or foreign company unless 
  (i) a representative of the Superintendent accompanies the director, officer or employee or the chief agent, or 
  (ii) the access is previously authorized by the Superintendent or the Superintendent’s representative. 
  680 to 682  [Repealed, 1996, c. 6, s. 96]  
  
  ### Powers of directors and officers suspended
  
  683 (1) If the Superintendent takes control of a company, society or provincial company under subparagraph 679(1)(b)(iii) or paragraph 679(1.21)(d), the powers, duties, functions, rights and privileges of the directors of the company, society or provincial company and of the officers of the company, society or provincial company responsible for its management are suspended. 
  
  ### Superintendent to manage company
  
  (2) If the Superintendent takes control of a company, society or provincial company under subparagraph 679(1)(b)(iii) or paragraph 679(1.21)(d), the Superintendent shall manage the business and affairs of the company, society or provincial company and in so doing the Superintendent 
  (a) may perform any of the duties and functions that the persons referred to in subsection (1) were performing prior to the taking of control; and 
  (b) has and may exercise any power, right or privilege that any such person had or could have exercised prior to the taking of control. 
  
  ### Persons to assist
  
  (3) If the Superintendent takes control of a company, society or provincial company under subparagraph 679(1)(b)(iii) or paragraph (1.21)(d), or of the assets of a foreign company under subparagraph 679(1)(b)(i) or (ii) or paragraph 679(1.21)(b) or (c), the Superintendent may appoint one or more persons to assist in the management of the company, society or provincial company or of the insurance business in Canada of the foreign company. 
  
  ### Expiration of control
  
  684 (1) Control by the Superintendent under subsection 679(1) of a company, society or provincial company or of the assets of a company, society or provincial company or of the assets in Canada of a foreign company together with its other assets held in Canada under the control of its chief agent including all amounts received or receivable in respect of its insurance business in Canada expires on the day on which a notice by the Superintendent is sent to 
  (a) the directors and officers who conducted the business and affairs of the company, society or provincial company, or 
  (b) the chief agent in Canada of the foreign company, stating that the Superintendent is of the opinion that the circumstances leading to the taking of control by the Superintendent have been substantially rectified and that the company, society or provincial company or the foreign company, as the case may be, can resume control of its business and affairs, assets or its insurance business in Canada, as the case may be. 
  
  ### Expiration of control — Minister’s direction
  
  (2) Control by the Superintendent under subsection 679(1.21) of a company, society or provincial company or of the assets of a company, society or provincial company or of the assets in Canada of a foreign company together with its other assets held in Canada under the control of its chief agent including all amounts received or receivable in respect of its insurance business in Canada expires on the day on which a notice by the Superintendent is sent to the directors and officers who conducted the business and affairs of the company, society or provincial company, or the chief agent in Canada of the foreign company, stating that the Minister is of the opinion, on the recommendation of the Superintendant, that corrective measures have been taken in response to the reasons related to national security and that the company, society or provincial company or the foreign company, as the case may be, can resume control of its business and affairs, assets or its insurance business in Canada, as the case may be. 
  
  ### Superintendent may request winding-up
  
  684.1 The Superintendent may, at any time before the receipt of a request under section 685 to relinquish control of a company, society or provincial company or of the assets of a company, society or provincial company or of the assets in Canada of a foreign company together with its other assets held in Canada under the control of its chief agent including all amounts received or receivable in respect of its insurance business in Canada, request the Attorney General of Canada to apply for a winding-up order under section 10.1 of the Winding-up and Restructuring Act in respect of  
  (a) the company, society or provincial company, if the assets of the company, society or provincial company are under the control of the Superintendent under subparagraph 679(1)(b)(i) or (ii) or paragraph 679(1.21)(b) or (c); 
  (b) the insurance business in Canada of the foreign company, if the assets in Canada of the foreign company together with its other assets referred to in subparagraph 679(1)(b)(i) or (ii) or paragraph 679(1.21)(b) or (c) are under the control of the Superintendent under those subparagraphs or paragraphs; or 
  (c) the company, society or provincial company, if it is under the control of the Superintendent under subparagraph 679(1)(b)(iii) or paragraph 679(1.21)(d). 
  
  ### Requirement to relinquish control
  
  685 If no action has been taken by the Superintendent under section 684.1 and, after 30 days following the taking of control by the Superintendent under subsection 679(1) or (1.21) of a company, society or provincial company or of the assets of a company, society or provincial company or of the assets in Canada of a foreign company together with its other assets held in Canada under the control of its chief agent including all amounts received or receivable in respect of its insurance business in Canada, the Superintendent receives from the board of directors of the company, society or provincial company or, in case of a foreign company, its chief agent, a notice in writing requesting the Superintendent to relinquish control, the Superintendent shall, not later than 12 days after receipt of the notice, 
  (a) comply with the request; or 
  (b) request the Attorney General of Canada to apply for a winding-up order under section 10.1 of the Winding-up and Restructuring Act in respect of the company, society or provincial company or the insurance business in Canada of the foreign company.  
  
  ## Special Assessments of Companies, Societies, Foreign Companies and Provincial Companies 
  
  ### Superintendent to ascertain amounts
  
  686 (1) The Superintendent shall, before December 31 in each year, 
  (a) ascertain the total amount of expenses incurred during the immediately preceding fiscal year in 
  (i) exercising control of a company, society or provincial company, 
  (ii) exercising control of the assets of a foreign company under subparagraph 679(1)(b)(i) or (ii) or paragraph 679(1.21)(b) or (c), 
  (iii) carrying out as liquidator the winding-up of a company, society or provincial company or of the insurance business in Canada of a foreign company, including amounts paid as interest charges on money borrowed by or on behalf of the company, society or provincial company to meet its requirements for liquid funds or as the cost of terminating leases or employment contracts or other similar expenses; and 
  (b) ascertain the portion of the expenses described in paragraph (a) that were incurred by the company, society, foreign company or provincial company in respect of its policies of accident and sickness insurance, its policies of life insurance and annuity and its other policies by multiplying those expenses by represent the total of the gross premium income of the company, society, foreign company or provincial company, as determined by the Superintendent, in respect of 
  (i) its policies of accident and sickness insurance, 
  (ii) its policies of life insurance and annuities, and 
  (iii) its other policies, respectively, during the period referred to in the description of D, and represents the total of the gross premium income of the company, society, foreign company or provincial company, as determined by the Superintendent, during the period of five calendar years preceding the first to occur of the calendar year in which the Superintendent took control of the company, society or provincial company, or in the case of a foreign company, the assets, and that in which a winding-up order was issued in respect of the company, society, foreign company or provincial company. 
  
  ### Amounts conclusive
  
  (2) The amounts ascertained by the Superintendent pursuant to subsection (1) are final and conclusive for the purposes of this section and sections 687 and 688. 
  
  ### Assessment
  
  687 As soon as possible after ascertaining the portions described in paragraph 686(1)(b), the Superintendent shall, subject to this section and to the extent and in the manner that the Governor in Council may prescribe, assess those portions against each company, society, foreign company and provincial company, other than the company, society, foreign company or provincial company in respect of which the expenses were incurred, in the following proportion: represents the net premiums during the immediately preceding calendar year of the company, society, foreign company or provincial company from 
  (i) policies of accident and sickness insurance, 
  (ii) policies of life insurance and annuities, or 
  (iii) other policies; and represents the total net premiums during the immediately preceding calendar year of all companies, societies, foreign companies and provincial companies, other than the company, society, foreign company or provincial company in respect of which the expenses were incurred, from 
  (i) policies of accident and sickness insurance, 
  (ii) policies of life insurance and annuities, or 
  (iii) other policies. 
  
  ### Application of certain provisions of the Office of the Superintendent of Financial Institutions Act 
  
  688 (1) Subsection 23(4) and section 23.2 of the Office of the Superintendent of Financial Institutions Act apply, with such modifications as the circumstances require, in respect of an assessment under section 687.  
  
  ### Definitions
  
  (2) In this section and sections 686 and 687,  
  *gross premium income* of a company, society, foreign company or provincial company means its premium income from its insurance business in Canada calculated without reduction in respect of reinsurance premiums paid or payable; (produit brut)   
  *net premiums* of a company, society, foreign company or provincial company means its gross premium income less  
  (a) premiums paid or payable in respect of the reinsurance of risks undertaken under its policies in respect of its insurance business in Canada, and 
  (b) dividends paid or allowed by it to its policyholders in respect of its insurance business in Canada. ( primes nettes)   
  *special insurance* [Repealed, 2007, c. 6, s. 309]  
  
  ### Advisory committee
  
  689 (1) The Superintendent may, from among the companies, societies, foreign companies and provincial companies that are subject to an assessment under section 687 on account of the control of a company, society or provincial company or control of the assets of a foreign company, appoint a committee of not more than six members to advise the Superintendent in respect of assets, management and all other matters pertinent to the duties and responsibilities of the Superintendent in exercising that control. 
  (2)  [Repealed, 1996, c. 6, s. 99]  
  690  [Repealed, 1996, c. 6, s. 100]  
  
  ### Expenses payable by company, etc.
  
  691 (1) If the Superintendent has taken control of a company, society or provincial company under subparagraph 679(1)(b)(iii) or paragraph 679(1.21)(d) and the control expires or is relinquished under section 684 or paragraph 685(a), the Superintendent may direct that the company, society or provincial company be liable for repayment of all or part of the expenses resulting from the taking of control of the company, society or provincial company and assessed against and paid by other companies, societies, provincial companies and foreign companies under section 687, together with any interest in respect of the expenses at any rate that is specified by the Superintendent. 
  
  ### Expenses payable by foreign company
  
  (2) If the Superintendent has taken control of the assets of a foreign company under subparagraph 679(1)(b)(i) or (ii) or paragraph 679(1.21)(b) or (c) and the control expires or is relinquished under section 684 or paragraph 685(a), the Superintendent may direct that the foreign company be liable for repayment of all or part of the expenses resulting from the taking of control of the assets of the foreign company and assessed against and paid by other companies, societies, foreign companies and provincial companies under section 687, together with any interest in respect of the expenses at any rate that is specified by the Superintendent. 
  
  ### Reduction of assessments
  
  692 Any amount paid to or recovered by Her Majesty under section 691 of this Act or paragraph 161(1)(d) or (6)(c) or subparagraph 161(8)(b)(iv) of the Winding-up and Restructuring Act in respect of a company, society, foreign company or provincial company shall be applied to the extent and the manner that may be prescribed.  
  
  # PART XVI 
  
  ## Regulation of Companies and Foreign Companies — Commissioner 
  
  ### Definition of société 
  
  693 In the French version of this Part, société means a société or société étrangère within the meaning of section 2.  
  
  ### Required information
  
  694 A company or foreign company shall provide the Commissioner with the information at the times and in the form that the Commissioner may require for the purposes of the administration of the Financial Consumer Agency of Canada Act and the consumer provisions.  
  
  ### Confidential information
  
  695 (1) Subject to subsection (2), information regarding the business or affairs of a company or foreign company or regarding persons dealing with any of them that is obtained by the Commissioner or by any person acting under the direction of the Commissioner, in the course of the exercise or performance of powers, duties and functions referred to in subsection 5(1) of the Financial Consumer Agency of Canada Act, and any information prepared from that information, is confidential and shall be treated accordingly.  
  
  ### Disclosure permitted
  
  (2) If the Commissioner is satisfied that the information will be treated as confidential by the agency, body or person to whom it is disclosed, subsection (1) does not prevent the Commissioner from disclosing it 
  (a) to any government agency or body that regulates or supervises financial institutions, for purposes related to that regulation or supervision; 
  (b) to any other agency or body that regulates or supervises financial institutions, for purposes related to that regulation or supervision; 
  (c) to any compensation association designated by order of the Minister under subsection 449(1) or 591(1), for purposes related to its operation; and 
  (d) to the Deputy Minister of Finance or any officer of the Department of Finance authorized in writing by the Deputy Minister of Finance or to the Governor of the Bank of Canada or any officer of the Bank of Canada authorized in writing by the Governor of the Bank of Canada, for the purposes of policy analysis related to the regulation of financial institutions. 
  
  ### Examination
  
  696 (1) The Commissioner, from time to time, but at least once in each calendar year, shall make or cause to be made any examination and inquiry that the Commissioner considers necessary for the purposes of satisfying the Commissioner that the applicable consumer provisions are being complied with and, after the conclusion of each examination and inquiry, shall report on it to the Minister. 
  
  ### Access to records
  
  (2) The Commissioner or a person acting under the Commissioner’s direction in carrying out his or her duties under subsection (1) 
  (a) has a right of access to any records, including electronic records, of a company or foreign company; and 
  (b) may require the directors or officers of a company or foreign company to provide information and explanations, to the extent that they are reasonably able to do so, in respect of any matter subject to examination or inquiry under subsection (1). 
  
  ### Power of Commissioner on inquiry
  
  697 The Commissioner, in carrying out his or her duties in relation to consumer provisions, has all the powers of a person appointed as a commissioner under Part II of the Inquiries Act for the purpose of obtaining evidence under oath, and may delegate those powers to any person acting under the Commissioner’s direction.  
  
  ### Compliance agreement
  
  698 The Commissioner may enter into an agreement, called a “compliance agreement”, with a company or foreign company for the purposes of implementing any measure designed to further compliance by it with the consumer provisions. 
  
  # PART XVII 
  
  ## Insurance Holding Companies 
  
  ## Purpose 
  
  ### Purpose
  
  699 The purpose of this Part is to provide for the incorporation, formation and regulation of insurance holding companies that are holding bodies corporate of life companies. 
  699.1  [Repealed, 2001, c. 9, s. 465]  
  
  # DIVISION 1 
  
  ## Interpretation 
  
  ### Definitions
  
  700 (1) The following definitions apply in this Part.  
  *affairs*, with respect to an insurance holding company, means the relationships among the insurance holding company and its affiliates and the shareholders, directors and officers of the insurance holding company and its affiliates, but does not include the business of the insurance holding company or any of its affiliates. (affaires internes)   
  *complainant*, in relation to an insurance holding company or any matter concerning an insurance holding company, means  
  (a) a registered holder or beneficial owner, and a former registered holder or beneficial owner, of a security of the insurance holding company or any of its affiliates; 
  (b) a director or an officer, or a former director or officer, of the insurance holding company or any of its affiliates; or 
  (c) any other person who, in the discretion of a court, is a proper person to make an application under section 912, 916 or 1031. ( plaignant)   
  *subordinated indebtedness* means an instrument evidencing an indebtedness of an insurance holding company that by its terms provides that the indebtedness will, in the event of the insolvency or winding-up of the insurance holding company, be subordinate in right of payment to all liabilities of the insurance holding company except those liabilities that, by their terms, rank equally with or are subordinate to such indebtedness. (titre secondaire)  
  
  ### Provisions in other Parts
  
  (2) A reference in a provision in this Part to a provision in any other Part is deemed to be a reference to that provision as it has been made applicable by this Part in respect of insurance holding companies. 
  
  ### References in other Parts
  
  (3) A reference in a provision of another Part to a provision that has been made applicable in respect of insurance holding companies by this Part is to be read as including a reference to that provision as it has been made applicable in respect of insurance holding companies. 
  
  # DIVISION 2 
  
  ## Status and Powers 
  
  ### Corporate powers
  
  701 (1) An insurance holding company has the capacity of a natural person and, subject to this Act, the rights, powers and privileges of a natural person. 
  
  ### Powers restricted
  
  (2) An insurance holding company shall not carry on any business or exercise any power that it is restricted by this Act from carrying on or exercising, or exercise any of its powers in a manner contrary to this Act. 
  
  ### Business in Canada
  
  (3) An insurance holding company may carry on business throughout Canada. 
  
  ### Powers outside Canada
  
  (4) Subject to this Act, an insurance holding company has the capacity to carry on its business, conduct its affairs and exercise its powers in any jurisdiction outside Canada to the extent and in the manner that the laws of that jurisdiction permit. 
  
  ### Policies and procedures — integrity or security
  
  701.1 An insurance holding company shall establish and adhere to policies and procedures to protect itself against threats to its integrity or security, including foreign interference. 
  
  ### No invalidity
  
  702 No act of an insurance holding company, including any transfer of property to or by an insurance holding company, is invalid by reason only that the act or transfer is contrary to the insurance holding company’s incorporating instrument or this Act. 
  
  ### By-law not necessary
  
  703 It is not necessary for an insurance holding company to pass a by-law in order to confer any particular power on the insurance holding company or its directors. 
  
  ### No personal liability
  
  704 The shareholders of an insurance holding company are not, as shareholders, liable for any liability, act or default of the insurance holding company except as otherwise provided by this Act. 
  
  ### No constructive notice
  
  705 No person is affected by or is deemed to have notice or knowledge of the contents of a document concerning an insurance holding company by reason only that the document has been filed with the Superintendent or the Minister or is available for inspection at an office of the insurance holding company. 
  
  ### Authority of directors, officers and representatives
  
  706 (1) No insurance holding company and no guarantor of an obligation of an insurance holding company may assert against a person dealing with the insurance holding company or against a person who has acquired rights from the insurance holding company that 
  (a) the insurance holding company’s incorporating instrument or any by-laws of the insurance holding company have not been complied with; 
  (b) the persons named as directors of the insurance holding company in the most recent return sent to the Superintendent under section 994 are not the directors of the insurance holding company; 
  (c) the place named in the incorporating instrument or by-laws of the insurance holding company is not the place where the head office of the insurance holding company is situated; 
  (d) a person held out by the insurance holding company as a director, officer or representative of the insurance holding company has not been duly appointed or has no authority to exercise the powers and perform the duties that are customary in the business of the insurance holding company or usual for a director, officer or representative; or 
  (e) a document issued by any director, officer or representative of the insurance holding company with actual or usual authority to issue the document is not valid or not genuine. 
  
  ### Exception — knowledge
  
  (2) Subsection (1) does not apply in respect of a person who has or ought to have knowledge of a situation described in that subsection by virtue of their relationship to the insurance holding company. 
  
  ### Sunset provision
  
  707 (1) Subject to subsections (2) and (4), insurance holding companies shall not carry on business after June 30, 2025. 
  
  ### Extension
  
  (2) The Governor in Council may, by order, extend by up to six months the time during which insurance holding companies may continue to carry on business. No more than one order may be made under this subsection. 
  
  ### Order not a regulation
  
  (3) The order is not a regulation for the purposes of the Statutory Instruments Act. However, it shall be published in Part II of the Canada Gazette.  
  
  ### Exception — dissolution
  
  (4) If Parliament dissolves on the day set out in subsection (1) or on any day within the six-month period before that day or on any day within an extension ordered under subsection (2), insurance holding companies may continue to carry on business until the end of the 180th day after the first day of the first session of the next Parliament. 
  
  # DIVISION 3 
  
  ## Incorporation, Continuance and Discontinuance 
  
  ## Formalities of Incorporation 
  
  ### Incorporation of insurance holding company
  
  708 On the application of one or more persons made in accordance with this Part, the Minister may, subject to this Division, issue letters patent incorporating an insurance holding company. 
  
  ### Restrictions on incorporation
  
  709 Letters patent incorporating an insurance holding company may not be issued if the application therefor is made by or on behalf of 
  (a) Her Majesty in right of Canada or in right of a province, an agency of Her Majesty in either of those rights, or an entity controlled by Her Majesty in either of those rights; 
  (b) the government of a foreign country or any political subdivision thereof; 
  (c) an agency of the government of a foreign country or any political subdivision thereof; or 
  (d) an entity, other than a foreign institution or any subsidiary of a foreign institution, that is controlled by the government of a foreign country or any political subdivision thereof. 
  
  ### National treatment
  
  710 (1) If a proposed insurance holding company would be a subsidiary of a foreign institution that is engaged in the insurance business, letters patent to incorporate the insurance holding company may not be issued unless the Minister is satisfied that, if the application is made by a non-WTO Member foreign institution, treatment as favourable for insurance holding companies to which this Act applies exists or will be provided in the jurisdiction in which the foreign institution principally carries on business, either directly or through a subsidiary. 
  
  ### Part XII of the Bank Act 
  
  (2) Nothing in subsection (1) affects the operation of Part XII of the Bank Act.  
  
  ### Application for incorporation
  
  711 An application for letters patent to incorporate an insurance holding company setting out the names of the first directors of the insurance holding company shall be filed with the Superintendent, together with such other information, material and evidence as the Superintendent may require. 
  
  ### Matters for consideration
  
  712 Before issuing letters patent to incorporate an insurance holding company, the Minister shall take into account all matters that the Minister considers relevant to the application, including 
  (a) the nature and sufficiency of the financial resources of the applicant or applicants as a source of continuing financial support for the company that is proposed to be its subsidiary; 
  (b) the soundness and feasibility of the plans of the applicant or applicants for the future conduct and development of the business of the company that is proposed to be its subsidiary; 
  (c) the business record and experience of the applicant or applicants; 
  (d) the character and integrity of the applicant or applicants or, if the applicant or any of the applicants is a body corporate, its reputation for being operated in a manner that is consistent with the standards of good character and integrity; 
  (e) whether the insurance holding company will be operated responsibly by persons with the competence and experience suitable for involvement in the operation of a financial institution; 
  (f) the impact of any integration of the businesses and operations of the applicant or applicants with those of the insurance holding company and its affiliates on the conduct of those businesses and operations; and 
  (g) the best interests of the financial system in Canada. 
  
  ### Contents of letters patent
  
  713 (1) There shall be set out in the letters patent incorporating an insurance holding company 
  (a) the name of the insurance holding company; 
  (b) the province in which the head office of the insurance holding company is to be situated; and 
  (c) the date that the insurance holding company came, or is to come, into existence. 
  
  ### Provisions in letters patent
  
  (2) The Minister may set out in the letters patent incorporating an insurance holding company any provision not contrary to this Act that the Minister considers advisable in order to take into account the particular circumstances of the proposed insurance holding company. 
  
  ### Terms and conditions
  
  (3) The Minister may impose such terms and conditions in respect of the issuance of letters patent incorporating an insurance holding company as the Minister considers necessary or appropriate. 
  
  ### Letters patent of incorporation on application of life company
  
  714 (1) If the Minister, under section 708, issues letters patent incorporating an insurance holding company on the application of a life company, including a converted company, there may, on the request of the company, and with the approval of the Minister, be included in the letters patent of incorporation of the insurance holding company a provision deeming shares of the insurance holding company to be issued, on a share for share basis, to all shareholders of the company in exchange for all the issued and outstanding shares of the company. 
  
  ### Effect of provision
  
  (2) Shares of an insurance holding company deemed to be issued under subsection (1) are subject to the same designation, rights, privileges and restrictions or conditions and, subject to any agreement to the contrary, to the same charges, encumbrances and other restrictions as the shares of the company for which they are exchanged and the shares of the company, on the issuance of the letters patent, become the property of the insurance holding company free and clear of any charge, encumbrance or other restriction. 
  
  ### Effect of provision
  
  (3) An exchange of shares of a company referred to in subsection (1) under a provision included in the letters patent incorporating an insurance holding company does not deprive a person who was a holder of shares of the company immediately before the exchange of any right or privilege with respect to the shares or relieve the person of any liability in respect of the shares, but that right or privilege must be exercised in accordance with this Act. 
  
  ### Transfer and voting of company shares
  
  (4) Despite subsection (3), no share of an insurance holding company that is deemed to be issued under a provision included in the letters patent incorporating an insurance holding company may subsequently be transferred or voted contrary to this Act. 
  
  ### Shareholder and policyholder approval
  
  (5) No provision described in subsection (1) may be included in letters patent issued under section 708 unless the application for the letters patent is accompanied by evidence that the request for the provision was approved by a special resolution of the shareholders and the policyholders of the company who are entitled to vote at a meeting of shareholders and policyholders called to consider the application. 
  
  ### Exchange of share certificates
  
  (6) If, under a provision included in the letters patent incorporating an insurance holding company, a share exchange is deemed to have taken place, the insurance holding company shall, within ninety days after the issuance of the letters patent, make provision for the issue of share certificates representing shares of the insurance holding company and for the exchange of those certificates for share certificates representing the shares of the company that were outstanding on the effective date of the letters patent. 
  
  ### Proposal involving fundamental change
  
  715 (1) On application, made in accordance with the regulations, by a life company, including a converted company, to give effect to a proposal to incorporate an insurance holding company as the holding body corporate of the company, to continue a body corporate as an insurance holding company of the company or to amalgamate two or more bodies corporate and continue those bodies corporate as an insurance holding company of the company — and to make any other fundamental change to the company, including an exchange of any or all of the shares of the company for shares of the insurance holding company —, the Minister may, to give effect to the proposal, 
  (a) include in the letters patent of the insurance holding company issued under section 708, 721 or 863 any provision the Minister considers necessary; or 
  (b) despite any provision of the Act specified in regulations made under paragraph (2)(e), give any approval that the Minister considers necessary. 
  
  ### Regulations
  
  (2) The Governor in Council may make regulations 
  (a) respecting applications referred to in subsection (1), including their form and the information to be contained in them, and authorizing the Superintendent to require additional information in respect of such applications; 
  (b) respecting proposals to which subsection (1) applies, including the information to be contained in the proposals and the times within which the transactions involved in them must occur; 
  (c) respecting the procedures to be followed by the company that makes an application under subsection (1); 
  (d) respecting the approval, confirmation or authorization, if any, of all or any portion of proposals to which subsection (1) applies, and including the approval of shareholders and policyholders and including the terms and conditions of those approvals, confirmations or authorizations and their effect; and 
  (e) specifying provisions of the Act for the purpose of paragraph (1)(b). 
  
  ### Notice of issue of letters patent
  
  716 The Superintendent shall cause to be published in the Canada Gazette a notice of the issuance of letters patent incorporating an insurance holding company.  
  
  ### First directors
  
  717 The first directors of an insurance holding company are the directors named in the application for letters patent to incorporate the insurance holding company. 
  
  ### Effect of letters patent
  
  718 An insurance holding company comes into existence on the date provided therefor in its letters patent. 
  
  ## Continuance 
  
  ### Federal corporations
  
  719 (1) A body corporate incorporated under the Canada Business Corporations Act or any other Act of Parliament, including a company but not including a federal credit union, may apply to the Minister for letters patent continuing the body corporate as an insurance holding company under this Part.  
  
  ### Other corporations
  
  (2) A body corporate incorporated otherwise than by or under an Act of Parliament may, if so authorized by the laws of the jurisdiction where it is incorporated, apply to the Minister for letters patent continuing the body corporate as an insurance holding company under this Part. 
  
  ### Application for continuance
  
  720 (1) Where a body corporate applies for letters patent under subsection 719(1) or (2), sections 709 to 712 apply in respect of the application, with such modifications as the circumstances require. 
  
  ### Special resolution approval
  
  (2) Where a body corporate applies for letters patent under subsection 719(1) or (2), the application must be duly authorized by a special resolution. 
  
  ### Copy of special resolution
  
  (3) A copy of the special resolution referred to in subsection (2) shall be filed with the application. 
  
  ### Power to issue letters patent
  
  721 (1) On the application of a body corporate under subsection 719(1) or (2), the Minister may, subject to this Division, issue letters patent continuing the body corporate as an insurance holding company under this Part. 
  
  ### Issue of letters patent
  
  (2) Section 713 applies in respect of the issue of letters patent under subsection (1), with such modifications as the circumstances require. 
  
  ### Effect of letters patent
  
  722 On the day set out in the letters patent continuing a body corporate as an insurance holding company under subsection 721(1), 
  (a) the body corporate becomes an insurance holding company as if it had been incorporated under this Part; and 
  (b) the letters patent are deemed to be the incorporating instrument of the continued insurance holding company. 
  
  ### Copy of letters patent
  
  723 (1) Where a body corporate is continued as an insurance holding company under this Part, the Superintendent shall without delay send a copy of the letters patent to the appropriate official or public body in the jurisdiction in which the body corporate was authorized to apply to be continued under this Part. 
  
  ### Notice of issuance of letters patent
  
  (2) The Superintendent shall publish in the Canada Gazette a notice of the issuance of letters patent continuing a body corporate as an insurance holding company under this Part.  
  
  ### Effects of continuance
  
  724 Where a body corporate is continued as an insurance holding company under this Part, 
  (a) the property of the body corporate continues to be the property of the insurance holding company; 
  (b) the insurance holding company continues to be liable for the obligations of the body corporate; 
  (c) an existing cause of action or claim by or against the body corporate or any liability of the body corporate to prosecution is unaffected; 
  (d) a civil, criminal or administrative action or proceeding pending by or against the body corporate may continue to be prosecuted by or against the insurance holding company; 
  (e) a conviction against, or any ruling, order or judgment in favour of or against, the body corporate may be enforced by or against the insurance holding company; 
  (f) a person who, on the day the body corporate becomes an insurance holding company, is the holder of a security issued by the body corporate is not deprived of any right or privilege available to the person at that time in respect of the security or relieved of any liability in respect of it, but any such right or privilege may be exercised only in accordance with this Act; and 
  (g) the by-laws of the body corporate, except those that are in conflict with this Act, continue as the by-laws of the insurance holding company. 
  
  ### Transitional
  
  725 (1) Despite any other provision of this Act or the regulations, the Minister may, on the recommendation of the Superintendent, by order, grant to an insurance holding company in respect of which letters patent were issued under subsection 721(1) permission to 
  (a) engage in a business activity specified in the order that the insurance holding company would not otherwise be permitted by this Act to engage in and that the body corporate continued as the insurance holding company was engaging in at the time the application for the letters patent was made; 
  (b) continue to have issued and outstanding debt obligations the issue of which is not authorized by this Act if the debt obligations were outstanding at the time the application for the letters patent was made; 
  (c) hold assets that the insurance holding company would not otherwise be permitted by this Act to hold, if the assets were held by the body corporate continued as the insurance holding company at the time the application for the letters patent was made; 
  (d) acquire and hold assets that the insurance holding company would not otherwise be permitted by this Act to acquire or hold, if the body corporate continued as the insurance holding company was obliged, at the time the application for the letters patent was made, to acquire those assets; and 
  (e) maintain outside Canada any records or registers required by this Act to be maintained in Canada. 
  
  ### Duration
  
  (2) The permission granted under subsection (1) shall be expressed to be granted for a period specified in the order not exceeding 
  (a) with respect to any activity described in paragraph (1)(a), thirty days after the effective date of the letters patent or, where the activity is conducted pursuant to an agreement existing on the effective date of the letters patent, the expiration of the agreement; 
  (b) with respect to any matter described in paragraph (1)(b), ten years; and 
  (c) with respect to any matter described in any of paragraphs (1)(c) to (e), two years. 
  
  ### Renewal
  
  (3) Subject to subsection (4), the Minister may, on the recommendation of the Superintendent, by order, renew a permission granted by order under subsection (1) with respect to any matter described in paragraphs (1)(b) to (d) for such further period or periods as the Minister considers necessary. 
  
  ### Limitation
  
  (4) The Minister shall not grant to an insurance holding company any permission 
  (a) with respect to matters described in paragraph (1)(b), that purports to be effective more than ten years after the effective date of the letters patent of continuance issued to continue the insurance holding company under this Part, unless the Minister is satisfied on the basis of evidence on oath provided by an officer of the insurance holding company that the insurance holding company will not be able at law to redeem at the end of the ten years the outstanding debt obligations to which the permission relates; and 
  (b) with respect to matters described in paragraphs (1)(c) and (d), that purports to be effective more than ten years after the effective date of the letters patent of continuance issued to continue the insurance holding company under this Part. 
  
  ## Discontinuance 
  
  ### Transferring to other Acts
  
  726 (1) An insurance holding company may apply to be continued only as a body corporate under any other Act of Parliament or any Act of the legislature of a province, and it may do so only with the approval in writing of the Minister. 
  
  ### Conditions for approval
  
  (2) No approval referred to in subsection (1) may be given to an insurance holding company unless the Minister is satisfied that the application of the insurance holding company has been authorized by a special resolution. 
  
  ### Meaning of 
  *insurance holding company without a life company subsidiary* 
  
  727 (1) For the purpose of this section, 
  *insurance holding company without a life company subsidiary* means an insurance holding company that does not, at any time within one year after it came into existence, have a subsidiary that is a life company or that does not, for a period of one year, have a subsidiary that is a life company.  
  
  ### Obligation to apply
  
  (2) An insurance holding company without a life company subsidiary must, within thirty days after becoming an insurance holding company without a life company subsidiary, apply to be continued under subsection 726(1). 
  
  ### Cessation of existence
  
  (3) Except for the sole purpose of winding up its affairs, an insurance holding company without a life company subsidiary that has no other subsidiary that fails to make an application under subsection (2) within the time provided for in that subsection ceases to exist on the expiration of that period. 
  
  ### Act ceases to apply
  
  728 On the day specified by the Minister, this Act ceases to apply to the body corporate continued under the other Act of Parliament or under the Act of the legislature of a province. 
  
  ### Withdrawing application
  
  729 Where a special resolution authorizing the application under subsection 726(1) so states, the directors of an insurance holding company may, without further approval of the shareholders, withdraw the application before it is acted on. 
  
  ## Corporate Name 
  
  ### Prohibited names
  
  730 An insurance holding company may not be incorporated under this Part with a name 
  (a) that is prohibited by an Act of Parliament; 
  (b) that is, in the opinion of the Superintendent, deceptively misdescriptive; 
  (c) that is the same as or, in the opinion of the Superintendent, substantially the same as or confusingly similar to any existing 
  (i) trademark or trade name, or 
  (ii) corporate name of a body corporate, except where the trademark or trade name is being changed or the body corporate is being dissolved or is changing its corporate name and consent to the use of the trademark, trade name or corporate name is signified to the Superintendent in such manner as the Superintendent may require; 
  (d) that is the same as or, in the opinion of the Superintendent, substantially the same as or confusingly similar to the known name under or by which any entity carries on business or is identified; or 
  (e) that is reserved under section 45 for a company or society or a proposed company or society or under section 734 for another insurance holding company or a proposed insurance holding company. 
  
  ### Affiliated insurance holding company
  
  731 Despite section 730 and subject to section 732, an insurance holding company that is affiliated with another entity may, with the consent of that entity, 
  (a) be incorporated with, or change its name to, substantially the same name as that of the affiliated entity; or 
  (b) subject to any terms and conditions that may be prescribed, carry on business under or identify itself by a name, other than its corporate name, that is substantially the same as the corporate name of the affiliated entity or that is another name under which or with which the affiliated entity carries on business or otherwise identifies itself. 
  
  ### Restriction
  
  732 An insurance holding company may not be incorporated or continued with, or change its name to or carry on business or identify itself by, a name that is substantially the same as that of a company unless the name contains words that, in the opinion of the Superintendent, indicate to the public that the insurance holding company is distinct from any company that is a subsidiary of the insurance holding company. 
  
  ### French or English form of name
  
  733 (1) The name of an insurance holding company may be set out in its letters patent in an English form, a French form, an English form and a French form or in a combined English and French form, and the insurance holding company may use and be legally designated by any such form. 
  
  ### Mandatory abbreviation
  
  (2) Despite any other provision of this Act and subject to the regulations, every insurance holding company shall have as part of its name, the abbreviations “ihc” or “spa”. 
  
  ### Alternate name
  
  (3) An insurance holding company may identify itself outside Canada by its name in any language and the insurance holding company may use and be legally designated by any such form of its name outside Canada. 
  
  ### Other name
  
  (4) Subject to subsection (5) and section 880, an insurance holding company may carry on business under or identify itself by a name other than its corporate name. 
  
  ### Directions
  
  (5) If an insurance holding company is carrying on business under or identifying itself by a name other than its corporate name, the Superintendent may, by order, direct the insurance holding company not to use that other name if the Superintendent is of the opinion that that other name is a name referred to in any of paragraphs 730(a) to (e). 
  
  ### Regulations
  
  (6) The Governor in Council may make regulations respecting the use of the abbreviations “ihc” or “spa” in the name of insurance holding companies. 
  
  ### Reserved name
  
  734 The Superintendent may, on request, reserve for ninety days a name for a proposed insurance holding company or for an insurance holding company that intends to change its name. 
  
  ### Directing change of name
  
  735 (1) If through inadvertence or otherwise an insurance holding company 
  (a) comes into existence or is continued with a name, or 
  (b) on an application to change its name, is granted a name that is prohibited by section 730 or 732, the Superintendent may, by order, direct the insurance holding company to change its name and the insurance holding company shall comply with that direction. 
  
  ### Revoking name
  
  (2) Where an insurance holding company has been directed under subsection (1) to change its name and has not, within sixty days after the service of the direction, changed its name to a name that is not prohibited by this Part, the Superintendent may revoke the name of the insurance holding company and assign to it a name and, until changed in accordance with section 849 or 851, the name of the insurance holding company is thereafter the name so assigned. 
  
  ### Subsidiaries
  
  736 Despite subsection 47(1), a subsidiary of an insurance holding company may, with the approval in writing of the Superintendent, use the word “ assurance ”, “ assurances ”, “insurance” or “lifeco” or any word or words of import equivalent to any of those words in its name.  
  
  ### Definition of 
  *reserved name* 
  
  737 (1) In this section, 
  *reserved name* means a name that includes as part thereof the word “ assurance ”, “ assurances ”, “insurance”, “lifeco”, “ fiduciaire ”, “fiduciary”, “ fiducie ”, “trust”, “trustco”, “loan”, “loanco” or “ prêt ” or any word or words of import equivalent to any of those words.  
  
  ### Termination of control required in certain cases
  
  (2) No person, other than a financial institution, who 
  (a) is carrying on business in Canada under a reserved name, and 
  (b) has control or acquires control of an insurance holding company, shall control the insurance holding company one year after the date of acquisition of the control. 
  
  ### Prohibition
  
  (3) No person, other than a financial institution, who 
  (a) controls an entity that is not a financial institution that carries on business in Canada under a reserved name, and 
  (b) has control or acquires control of an insurance holding company, shall control the insurance holding company one year after the date of the acquisition of the control. 
  
  ### Continuing control prohibited
  
  (4) Despite subsection (3), where a financial institution controls an entity that 
  (a) is not a financial institution, 
  (b) carries on business in Canada under a reserved name, and 
  (c) acquires control of an insurance holding company, the entity shall not control the insurance holding company one year after the date on which the entity acquires control of the insurance holding company. 
  
  ### Exceptions
  
  (5) Subsections (2) to (4) do not apply with respect to a person or entity that was carrying on business in Canada under a reserved name on June 25, 1999. 
  
  ## Publication of Information 
  
  ### Publication of information
  
  738 The Superintendent shall, within sixty days after the end of each year, cause a notice to be published in the Canada Gazette, showing  
  (a) the name of every insurance holding company; and 
  (b) the province in which the head office of the insurance holding company is situated. 
  
  # DIVISION 4 
  
  ## Organization and Commencement 
  
  ### First directors’ meeting
  
  739 (1) After letters patent incorporating an insurance holding company are issued, a meeting of the directors of the insurance holding company shall be held at which the directors may, subject to this Division, 
  (a) make by-laws; 
  (b) adopt forms of share certificates and corporate records; 
  (c) authorize the issue of shares of the insurance holding company; 
  (d) appoint officers; 
  (e) appoint an auditor to hold office until the meeting called under subsection 740(1); 
  (f) make banking arrangements; and 
  (g) deal with any other matters necessary to organize the insurance holding company. 
  
  ### Calling directors’ meeting
  
  (2) An incorporator or a director named in the application for letters patent may call the meeting referred to in subsection (1) by giving, subject to subsection 817(2), no fewer than five days notice of the purpose, time and place of the meeting to each director of the insurance holding company. 
  
  ### Calling shareholders’ meeting
  
  740 (1) After the meeting referred to in subsection 739(1) is held, the directors of the insurance holding company shall without delay call a meeting of the shareholders of the insurance holding company. 
  
  ### Meeting of shareholders or incorporators
  
  (2) The shareholders of an insurance holding company shall, by resolution at the meeting of shareholders called under subsection (1), 
  (a) approve, amend or reject any by-law made by the directors of the insurance holding company; 
  (b) subject to section 803, elect directors to hold office for a term expiring not later than the close of the third annual meeting of shareholders following the election; and 
  (c) appoint an auditor to hold office until the close of the first annual meeting of shareholders. 
  
  ### Term of first directors
  
  741 A director named in the application for letters patent to incorporate an insurance holding company holds office until the election of directors at the meeting of shareholders called under subsection 740(1). 
  
  # DIVISION 5 
  
  ## Capital Structure 
  
  ## Share Capital 
  
  ### Power to issue shares
  
  742 (1) Subject to this Part and the by-laws of the insurance holding company, shares of an insurance holding company may be issued at such times and to such persons and for such consideration as the directors of the insurance holding company may determine. 
  
  ### Shares
  
  (2) Shares of an insurance holding company shall be in registered form and shall be without nominal or par value. 
  
  ### Shares of continued insurance holding company
  
  (3) If a body corporate is continued as an insurance holding company under this Part, shares with nominal or par value issued by the body corporate before it was so continued are deemed to be shares without nominal or par value. 
  
  ### Deemed share conditions
  
  (4) If any right of a holder of a share with nominal or par value of a body corporate continued as an insurance holding company under this Part, other than a voting right, was stated or expressed in terms of the nominal or par value of the share immediately before the continuance under this Part that right is thereafter deemed to be the same right stated or expressed without reference to the nominal or par value of the share. 
  
  ### Common shares
  
  743 (1) An insurance holding company shall have one class of shares, to be designated as “common shares”, which are non-redeemable and in which the rights of the holders thereof are equal in all respects, and those rights include 
  (a) the right to vote at all meetings of shareholders except where only holders of a specified class of shares are entitled to vote; 
  (b) the right to receive dividends declared on those shares; and 
  (c) the right to receive the remaining property of the insurance holding company on dissolution. 
  
  ### Designations of shares
  
  (2) No insurance holding company shall designate more than one class of its shares as “common shares” or any variation of that term. 
  
  ### Continued insurance holding company
  
  (3) A body corporate continued as an insurance holding company under this Part that is not in compliance with subsection (2) on the date letters patent continuing it as an insurance holding company are issued shall, within twelve months after that date, redesignate its shares to comply with that subsection. 
  
  ### Classes of shares
  
  744 (1) The by-laws of an insurance holding company may provide for more than one class of shares and, if they so provide, shall set out 
  (a) the rights, privileges, restrictions and conditions attaching to the shares of each class; and 
  (b) the maximum number, if any, of shares of any class that the insurance holding company is authorized to issue. 
  
  ### Shareholder approval
  
  (2) Where a by-law referred to in subsection (1) is made, the directors of the insurance holding company shall submit the by-law to the shareholders at the next meeting of shareholders. 
  
  ### Effective date
  
  (3) A by-law referred to in subsection (1) is not effective until it is confirmed or confirmed with amendments by special resolution of the shareholders at the meeting referred to in subsection (2). 
  
  ### Shares issued in series
  
  745 (1) The by-laws of an insurance holding company may, subject to any limitations set out in them, authorize the issue of any class of shares in one or more series and may 
  (a) fix the maximum number of shares in each series and determine the designation, rights, privileges, restrictions and conditions attaching to them; and 
  (b) authorize the directors to do anything referred to in paragraph (a). 
  
  ### Series participation
  
  (2) If any cumulative dividend or amounts payable on return of capital in respect of a series of shares are not paid in full, the shares of all series of the same class participate rateably in respect of accumulated dividends and return of capital. 
  
  ### Voting rights
  
  (3) Where voting rights are attached to any series of a class of shares, the shares of every other series of that class shall have the same voting rights. 
  
  ### Restriction on series
  
  (4) No rights, privileges, restrictions or conditions attached to a series of shares authorized under this section confer on the series a priority in respect of dividends or return of capital over any other series of shares of the same class that are then outstanding. 
  
  ### Material to Superintendent
  
  (5) If the directors exercise their authority under paragraph (1)(b), the directors shall, before the issue of shares of the series, send to the Superintendent particulars of the series of shares and a copy of the by-law that granted the authority to the directors. 
  
  ### One share, one vote
  
  746 Where voting rights are attached to a share of an insurance holding company, the voting rights may confer only one vote in respect of that share. 
  
  ### Shares non-assessable
  
  747 Shares issued by an insurance holding company are non-assessable and the shareholders are not liable to the insurance holding company or to its creditors in respect thereof. 
  
  ### Consideration for share
  
  748 (1) No share of any class of shares of an insurance holding company shall be issued until it is fully paid for in money or, with the approval of the Superintendent, in property. 
  
  ### Other currencies
  
  (2) When issuing shares, an insurance holding company may provide that any aspect of the shares relating to money or involving the payment of or the liability to pay money be in a currency other than the currency of Canada. 
  
  ### Stated capital account
  
  749 (1) An insurance holding company shall maintain a separate stated capital account for each class and series of shares it issues. 
  
  ### Addition to stated capital account
  
  (2) An insurance holding company shall record in the appropriate stated capital account the full amount of any consideration it receives for any shares it issues. 
  
  ### Exception
  
  (3) Despite subsection (2), an insurance holding company may, subject to subsection (4), record in the stated capital account maintained for the shares of a class or series any part of the consideration it receives in an exchange if it issues shares 
  (a) in exchange for 
  (i) property of a person who immediately before the exchange did not deal with the insurance holding company at arm’s length within the meaning of that expression in the Income Tax Act,  
  (ii) shares of or another interest in a body corporate that immediately before the exchange or because of it did not deal with the insurance holding company at arm’s length within the meaning of that expression in the Income Tax Act, or  
  (iii) property of a person who immediately before the exchange dealt with the insurance holding company at arm’s length within the meaning of that expression in the Income Tax Act if the person, the insurance holding company and all of the holders of shares in the class or series of shares so issued consent to the exchange;  
  (b) under an agreement referred to in subsection 858(1); or 
  (c) to shareholders of an amalgamating body corporate who receive the shares in addition to or instead of securities of the amalgamated insurance holding company. 
  
  ### Limit on addition to a stated capital account
  
  (4) On the issuance of a share, an insurance holding company shall not add to the stated capital account in respect of the share an amount greater than the amount of the consideration it receives for the share. 
  
  ### Constraint on addition to a stated capital account
  
  (5) Where an insurance holding company that has issued any outstanding shares of more than one class or series proposes to add to a stated capital account that it maintains in respect of a class or series of shares an amount that was not received by the insurance holding company as consideration for the issue of shares, the addition must be approved by special resolution unless all the issued and outstanding shares are of not more than two classes of convertible shares referred to in subsection 759(4). 
  
  ### Stated capital of continued insurance holding company
  
  750 (1) Where a body corporate is continued as an insurance holding company under this Part, the insurance holding company shall record in the stated capital account maintained for each class and series of shares then outstanding an amount that is equal to the aggregate of 
  (a) the aggregate amount paid up on the shares of each class and series of shares immediately before the body corporate was so continued, and 
  (b) the amount of the contributed surplus of the insurance holding company that is attributable to those shares. 
  
  ### Contributed surplus entry
  
  (2) The amount of any contributed surplus recorded in the stated capital account pursuant to paragraph (1)(b) shall be deducted from the contributed surplus account of the insurance holding company. 
  
  ### Shares issued before continuance
  
  (3) Any amount unpaid in respect of a share issued by a body corporate before it was continued as an insurance holding company under this Part and paid after it was so continued shall be recorded in the stated capital account maintained by the insurance holding company for the shares of that class or series. 
  
  ### Pre-emptive right
  
  751 (1) Where the by-laws of an insurance holding company so provide, no shares of any class shall be issued unless the shares have first been offered to the shareholders holding shares of that class, and those shareholders have a pre-emptive right to acquire the offered shares in proportion to their holdings of the shares of that class, at such price and on such terms as those shares are to be offered to others. 
  
  ### Exception
  
  (2) Despite the existence of a pre-emptive right, a shareholder of an insurance holding company has no pre-emptive right in respect of shares of a class to be issued 
  (a) for a consideration other than money; 
  (b) as a share dividend; or 
  (c) pursuant to the exercise of conversion privileges, options or rights previously granted by the insurance holding company. 
  
  ### Exception
  
  (3) Despite the existence of a pre-emptive right, a shareholder of an insurance holding company has no pre-emptive right in respect of shares to be issued 
  (a) where the issue of shares to the shareholder is prohibited by this Part; or 
  (b) where, to the knowledge of the directors of the insurance holding company, the offer of shares to a shareholder whose recorded address is in a country other than Canada ought not to be made unless the appropriate authority in that country is provided with information in addition to that submitted to the shareholders at the last annual meeting. 
  
  ### Conversion privileges
  
  752 (1) An insurance holding company may issue conversion privileges, options or rights to acquire securities of the insurance holding company, and shall set out the conditions thereof 
  (a) in the documents that evidence the conversion privileges, options or rights; or 
  (b) in the securities to which the conversion privileges, options or rights are attached. 
  
  ### Transferable rights
  
  (2) Conversion privileges, options and rights to acquire securities of an insurance holding company may be made transferable or non-transferable, and options and rights to acquire such securities may be made separable or inseparable from any securities to which they are attached. 
  
  ### Reserved shares
  
  (3) Where an insurance holding company has granted privileges to convert any securities issued by the insurance holding company into shares, or into shares of another class or series, or has issued or granted options or rights to acquire shares, if the by-laws limit the number of authorized shares, the insurance holding company shall reserve and continue to reserve sufficient authorized shares to meet the exercise of such conversion privileges, options and rights. 
  
  ### Holding of own shares
  
  753 Except as provided in sections 754 to 756, or unless permitted by the regulations, an insurance holding company shall not 
  (a) hold shares of the insurance holding company or of any body corporate that controls the insurance holding company; 
  (b) hold any ownership interests of any unincorporated entity that controls the insurance holding company; 
  (c) permit any of its subsidiaries to hold any shares of the insurance holding company or of any body corporate that controls the insurance holding company; or 
  (d) permit any of its subsidiaries to hold any ownership interests of any unincorporated entity that controls the insurance holding company. 
  
  ### Purchase and redemption of shares
  
  754 (1) Subject to subsection (2) and to its by-laws, an insurance holding company may, with the consent of the Superintendent, purchase, for the purpose of cancellation, any shares issued by it, or redeem any redeemable shares issued by it at prices not exceeding the redemption price thereof calculated according to a formula stated in its by-laws or the conditions attaching to the shares. 
  
  ### Restrictions on purchase and redemption
  
  (2) An insurance holding company shall not make any payment to purchase or redeem any shares issued by it if there are reasonable grounds for believing that it is, or the payment would cause it to be, in contravention of subsection 992(1), any regulation made under subsection 992(2) or any order made under subsection 992(3). 
  
  ### Donated shares
  
  (3) An insurance holding company may accept from any shareholder a share of the insurance holding company surrendered to it as a gift, but may not extinguish or reduce a liability in respect of an amount unpaid on any such share except in accordance with section 757. 
  
  ### Holding as personal representative
  
  755 (1) An insurance holding company may permit its subsidiaries to hold, in the capacity of a personal representative, shares of the insurance holding company or of any body corporate that controls the insurance holding company or ownership interests in any unincorporated entity that controls the insurance holding company, but only if the subsidiary does not have a beneficial interest in the shares or ownership interests. 
  
  ### Security interest
  
  (2) An insurance holding company may permit its subsidiaries to hold, by way of a security interest, shares of the insurance holding company or of any body corporate that controls the insurance holding company or any ownership interests of any entity that controls the insurance holding company if the security interest is nominal or immaterial when measured by criteria established by the insurance holding company that have been approved in writing by the Superintendent. 
  
  ### Exception — conditions before acquisition
  
  755.1 (1) An insurance holding company may permit any of its subsidiaries to acquire shares of the insurance holding company through the issuance of those shares by the insurance holding company to the subsidiary if the conditions prescribed for the purposes of this subsection are met before the subsidiary acquires the shares. 
  
  ### Conditions after acquisition
  
  (2) After a subsidiary has acquired shares under the purported authority of subsection (1), the conditions prescribed for the purposes of this subsection must be met. 
  
  ### Non-compliance with conditions
  
  (3) If an insurance holding company permits any of its subsidiaries to acquire shares of the insurance holding company under the purported authority of subsection (1) and one or more of the conditions prescribed for the purposes of subsections (1) and (2) were not met, are not met or cease to be met, as the case may be, then, despite section 702 and subsection 749(2), the insurance holding company must comply with the prescribed requirements. 
  
  ### Cancellation of shares
  
  756 (1) Subject to subsection (2), where an insurance holding company purchases shares of the insurance holding company or fractions thereof or redeems or otherwise acquires shares of the insurance holding company, the insurance holding company shall cancel those shares. 
  
  ### Requirement to sell
  
  (2) If a subsidiary of an insurance holding company, through the realization of security, acquires any shares of the insurance holding company or of any body corporate that controls the insurance holding company or any ownership interests in an unincorporated entity that controls the insurance holding company, the insurance holding company shall cause its subsidiary to, within six months after the day of the realization, sell or otherwise dispose of the shares or ownership interests. 
  
  ### Reduction of capital
  
  757 (1) The stated capital of an insurance holding company may be reduced by special resolution. 
  
  ### Limitation
  
  (2) An insurance holding company shall not reduce its stated capital by special resolution if there are reasonable grounds for believing that the insurance holding company is, or the reduction would cause the insurance holding company to be, in contravention of subsection 992(1), any regulation made under subsection 992(2) or any order made under subsection 992(3). 
  
  ### Contents of special resolution
  
  (3) A special resolution to reduce the stated capital of an insurance holding company shall specify the stated capital account or accounts from which the reduction of stated capital effected by the special resolution will be deducted. 
  
  ### Approval by Superintendent
  
  (4) A special resolution to reduce the stated capital of an insurance holding company has no effect until it is approved in writing by the Superintendent. 
  
  ### Exception
  
  (4.1) Subsection (4) does not apply if 
  (a) the reduction in the stated capital is made solely as a result of changes made to the accounting principles referred to in subsection 331(4); and 
  (b) there is to be no return of capital to shareholders as a result of the reduction. 
  
  ### Conditions for approval
  
  (5) No approval to reduce the stated capital of an insurance holding company may be given by the Superintendent unless application therefor is made within three months after the time of the passing of the special resolution and a copy of the special resolution, together with a notice of intention to apply for approval, has been published in the Canada Gazette.  
  
  ### Statements to be submitted
  
  (6) In addition to evidence of the passing of a special resolution to reduce the stated capital of an insurance holding company and of the publication thereof, statements showing 
  (a) the number of the insurance holding company’s shares issued and outstanding, 
  (b) the results of the voting by class of shares of the insurance holding company, 
  (c) the insurance holding company’s assets and liabilities, and 
  (d) the reason why the insurance holding company seeks the reduction of capital shall be submitted to the Superintendent at the time of the application for approval of the special resolution. 
  
  ### Recovery by action
  
  758 (1) Where any money or property was paid or distributed to a shareholder or other person as a consequence of a reduction of capital made contrary to section 757, a creditor of the insurance holding company may apply to a court for an order compelling the shareholder or other person to pay the money or deliver the property to the insurance holding company. 
  
  ### Shares held by personal representative
  
  (2) No person holding shares in the capacity of a personal representative and registered on the records of the insurance holding company as a shareholder and therein described as the personal representative of a named person is personally liable under subsection (1), but the named person is subject to all the liabilities imposed by that subsection. 
  
  ### Limitation
  
  (3) An action to enforce a liability imposed by subsection (1) may not be commenced more than two years after the date of the act complained of. 
  
  ### Remedy preserved
  
  (4) This section does not affect any liability that arises under section 841. 
  
  ### Adjustment of stated capital account
  
  759 (1) On a purchase, redemption or other acquisition by an insurance holding company of shares or fractions thereof issued by it, the insurance holding company shall deduct from the stated capital account maintained for the class or series of shares so purchased, redeemed or otherwise acquired an amount equal to the result obtained by multiplying the stated capital in respect of the shares of that class or series by the number of shares of that class or series so purchased, redeemed or otherwise acquired and dividing by the number of shares of that class or series outstanding immediately before the purchase, redemption or other acquisition. 
  
  ### Adjustment of stated capital account
  
  (2) An insurance holding company shall adjust its stated capital account or accounts in accordance with any special resolution referred to in section 757. 
  
  ### Shares converted to another class
  
  (3) On a conversion of outstanding shares of an insurance holding company into shares of another class or series, or on a change of outstanding shares of the insurance holding company into shares of another class or series, the insurance holding company shall 
  (a) deduct from the stated capital account maintained for the class or series of shares converted or changed an amount equal to the result obtained by multiplying the stated capital of the shares of that class or series by the number of shares of that class or series converted or changed, and dividing by the number of outstanding shares of that class or series immediately before the conversion or change; and 
  (b) record the result obtained under paragraph (a) and any additional consideration received pursuant to the conversion or change in the stated capital account maintained or to be maintained for the class or series of shares into which the shares have been converted or changed. 
  
  ### Stated capital of convertible shares
  
  (4) For the purposes of subsection (3) and subject to the insurance holding company’s by-laws, where an insurance holding company issues two classes of shares and there is attached to each class a right to convert a share of one class into a share of the other class and a share is so converted, the amount of stated capital attributable to a share in either class is the aggregate of the stated capital of both classes divided by the number of outstanding shares of both classes immediately before the conversion. 
  
  ### Conversion or change of shares
  
  (5) Shares issued by an insurance holding company and converted into shares of another class or series, or changed under subsection 851(1) into shares of another class or series, become issued shares of the class or series of shares into which the shares have been converted or changed. 
  
  ### Addition to stated capital account
  
  760 On a conversion of any debt obligation of an insurance holding company into shares of a class or series of shares, the insurance holding company shall 
  (a) deduct from the liabilities of the insurance holding company the nominal value of the debt obligation being converted; and 
  (b) record the result obtained under paragraph (a) and any additional consideration received for the conversion in the stated capital account maintained or to be maintained for the class or series of shares into which the debt obligation has been converted. 
  
  ### Declaration of dividend
  
  761 (1) The directors of an insurance holding company may declare and an insurance holding company may pay a dividend by issuing fully paid shares of the insurance holding company or options or rights to acquire fully paid shares of the insurance holding company and, subject to subsection (4), the directors of an insurance holding company may declare and an insurance holding company may pay a dividend in money or property, and, where a dividend is to be paid in money, the dividend may be paid in a currency other than the currency of Canada. 
  
  ### Notice to Superintendent
  
  (2) The directors of an insurance holding company shall notify the Superintendent of the declaration of a dividend at least 15 days before the day fixed for its payment. 
  
  ### Share dividend
  
  (3) If shares of an insurance holding company are issued in payment of a dividend, the insurance holding company shall record in the stated capital account maintained or to be maintained for the shares of the class or series issued in payment of the dividend the declared amount of the dividend stated as an amount of money. 
  
  ### When dividend not to be declared
  
  (4) The directors of an insurance holding company shall not declare and an insurance holding company shall not pay a dividend if there are reasonable grounds for believing that the insurance holding company is, or the payment would cause the insurance holding company to be, in contravention of subsection 992(1), any regulation made under subsection 992(2) or any order made under subsection 992(3). 
  
  ## Subordinated Indebtedness 
  
  ### Restriction on subordinated indebtedness
  
  762 (1) An insurance holding company shall not issue subordinated indebtedness unless the subordinated indebtedness is fully paid for in money or, with the approval of the Superintendent, in property. 
  
  ### References to subordinated indebtedness
  
  (2) A person shall not in any prospectus, advertisement, correspondence or literature relating to any subordinated indebtedness issued or to be issued by an insurance holding company refer to the subordinated indebtedness otherwise than as subordinated indebtedness. 
  
  ### Other currencies
  
  (3) When issuing subordinated indebtedness, an insurance holding company may provide that any aspect of the subordinated indebtedness relating to money or involving the payment of or the liability to pay money in relation thereto be in a currency other than that of Canada including, without restricting the generality of the foregoing, the payment of any interest thereon. 
  
  ## Security Certificates and Transfers 
  
  ### Sections 85 to 139 apply
  
  763 Sections 85 to 139 apply in respect of insurance holding companies, subject to the following: 
  (a) references to “company” in those sections are to be read as references to “insurance holding company”; 
  (b) references to “this Act” in those sections are to be read as references to “this Part”; 
  (c) references to “Part VII” in those sections are to be read as references to “Division 7 of Part XVII”; 
  (d) references to “this Part” in those sections are to be read as references to “this Division”; 
  (e) paragraph 92(1)(a) is to be read without reference to the words “other than section 427”; 
  (f) the reference to “sections 142 to 145 and section 149” in subsection 97(1) is to be read as a reference to “sections 766 to 769 and 772”; and 
  (g) the reference to “section 75 or 81” in subsection 101(3) is to be read as a reference to “section 754 or 759”. 
  
  # DIVISION 6 
  
  ## Corporate Governance 
  
  # SUBDIVISION 1 
  
  ## Shareholders 
  
  ## Place of Meetings 
  
  ### Place of meetings
  
  764 (1) Meetings of shareholders of an insurance holding company shall be held at the place within Canada provided for in the by-laws of the insurance holding company or, in the absence of any such provision, at the place within Canada that the directors determine. 
  
  ### Participation by electronic means
  
  (2) Unless the by-laws provide otherwise, any person who is entitled to attend a meeting of shareholders may participate in the meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting if the insurance holding company makes one available. A person who is participating in a meeting by one of those means is deemed for the purposes of this Part to be present at the meeting. 
  
  ### Regulations
  
  (3) The Governor in Council may make regulations respecting the manner of and conditions for participating in a meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting. 
  
  ## Calling Meetings 
  
  ### Calling meetings
  
  765 (1) The directors of an insurance holding company 
  (a) shall, after the meeting called under subsection 740(1), call the first annual meeting of shareholders of the insurance holding company, which meeting must be held not later than six months after the end of the first financial year of the insurance holding company; 
  (b) shall subsequently call an annual meeting of shareholders, which meeting must be held not later than six months after the end of each financial year; and 
  (c) may at any time call a special meeting of shareholders. 
  
  ### Order to delay calling annual meeting
  
  (2) Despite subsection (1), the insurance holding company may apply to the court for an order extending the time for calling an annual meeting. 
  
  ### Obligation to notify Superintendent
  
  (3) The insurance holding company shall give notice of the application to the Superintendent before any hearing concerning the application and shall provide the Superintendent with a copy of any order that is issued. 
  
  ### Superintendent’s right to appear
  
  (4) The Superintendent is entitled to appear and be heard in person or by counsel at any hearing concerning the application. 
  
  ## Record Dates 
  
  ### Authority to fix record date
  
  766 (1) The directors may in advance fix a record date, that is within the prescribed period, for the determination of shareholders for any purpose, including for a determination of which shareholders are entitled to 
  (a) receive payment of a dividend; 
  (b) participate in a liquidation distribution; 
  (c) receive notice of a meeting of shareholders; or 
  (d) vote at a meeting of shareholders. 
  
  ### Determination of record date
  
  (2) If no record date is fixed, 
  (a) the record date for the determination of shareholders who are entitled to receive notice of a meeting of shareholders is 
  (i) at the close of business on the day immediately preceding the day on which the notice is given, or 
  (ii) if no notice is given, the day on which the meeting is held; and 
  (b) the record date for the determination of shareholders for any other purpose, other than to establish a shareholder’s right to vote, is at the close of business on the day on which the directors pass a resolution in respect of that purpose. 
  
  ### Notice of record date
  
  (3) If a record date is fixed and unless notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the securities register at the close of business on the day on which the directors fix the record date, notice of the record date shall be given within the prescribed period by 
  (a) advertisement in a newspaper in general circulation in the place where the insurance holding company’s head office is situated and in each place in Canada where the insurance holding company has a transfer agent or where a transfer of its shares may be recorded; and 
  (b) written notice to each stock exchange in Canada on which the insurance holding company’s shares are listed for trading. 
  
  ## Notices of Meetings 
  
  ### Notice of meeting
  
  767 (1) Notice of the time and place of a meeting of shareholders of an insurance holding company shall be sent within the prescribed period to 
  (a) each shareholder entitled to vote at the meeting; 
  (b) each director; 
  (c) the auditor of the insurance holding company; and 
  (d) the Superintendent. 
  
  ### Exception
  
  (1.1) In the case of an insurance holding company that is not a distributing insurance holding company, notice may be sent within any shorter period specified in its by-laws. 
  
  ### Number of eligible votes
  
  (2) An insurance holding company in respect of which subsection 927(4) applies shall set out in the notice of a meeting the number of eligible votes, as defined under subsection 793(1), that may be cast at the meeting as of the record date for determining the shareholders entitled to receive the notice of meeting, or, if there are to be separate votes of shareholders at the meeting, the number of eligible votes, as defined in that subsection, in respect of each separate vote to be held at the meeting. 
  
  ### Waiver of notice
  
  (3) An insurance holding company is not required under subsection (1) to send to a person notice of a meeting if the person waives notice of the meeting. That waiver may be in any manner. 
  
  ### Attendance constitutes waiver
  
  (4) A person who attends a meeting of shareholders is deemed to have waived notice of the meeting, except where the person attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called. 
  
  ### Publication in newspaper
  
  (5) In addition to the notice required under subsection (1), where any class of shares of an insurance holding company is publicly traded on a recognized stock exchange in Canada, notice of the time and place of the meeting of shareholders shall be published once a week for at least four consecutive weeks before the date of the meeting in a newspaper in the place where the head office of the insurance holding company is situated and in each place in Canada where the insurance holding company has a transfer agent or where a transfer of the insurance holding company’s shares may be recorded. 
  
  ### Notice not required
  
  (6) Notice of a meeting of shareholders is not required to be sent to shareholders who are not registered on the records of the insurance holding company or the insurance holding company’s transfer agent on the record date fixed under paragraph 766(1)(c) or determined under paragraph 766(2)(a). 
  
  ### Effect of default
  
  (7) Failure to receive a notice of a meeting of shareholders does not deprive a shareholder of the right to vote at the meeting. 
  
  ### Notice of adjourned meeting
  
  768 (1) If a meeting of shareholders is adjourned for less than thirty days, it is not necessary, unless the by-laws otherwise provide, to give notice of the adjourned meeting, other than by announcement at the earliest meeting that is adjourned. 
  
  ### Notice after longer adjournment
  
  (2) If a meeting of shareholders is adjourned by one or more adjournments for a total of thirty days or more, notice of the continuation of the meeting shall be given as for an original meeting but, unless the meeting is adjourned by one or more adjournments for a total of more than ninety days, subsection 788(1) does not apply. 
  
  ### Special business
  
  769 (1) All matters dealt with at a special meeting of shareholders or at an annual meeting of shareholders are deemed to be special business, except that special business does not include consideration of 
  (a) the financial statements; 
  (b) the auditor’s report; 
  (c) the election of directors; or 
  (d) the remuneration of directors and reappointment of the incumbent auditor. 
  
  ### Notice of special business
  
  (2) Notice of a meeting of shareholders at which special business is to be transacted must 
  (a) state the nature of the special business in sufficient detail to permit a shareholder to form a reasoned judgment thereon; and 
  (b) contain the text of any special resolution to be submitted to the meeting. 
  
  ## Shareholder Proposals 
  
  ### Proposals
  
  770 (1) Subject to subsections (1.1) and (1.2), a registered holder or a beneficial owner of shares that may be voted at an annual meeting of shareholders may 
  (a) submit to the insurance holding company notice of any matter that they propose to raise at the meeting (in this section and section 771 referred to as a “proposal”); and 
  (b) discuss at the meeting any matter in respect of which they would have been entitled to submit a proposal. 
  
  ### Eligibility to submit proposal
  
  (1.1) To be eligible to submit a proposal a person shall 
  (a) for at least the prescribed period be the registered holder or beneficial owner of at least the prescribed number of the insurance holding company’s outstanding shares; or 
  (b) have the support of persons who, in the aggregate and including or not including the person who submits the proposal, have for at least the prescribed period been the registered holders or beneficial owners of at least the prescribed number of the insurance holding company’s outstanding shares. 
  
  ### Information to be provided
  
  (1.2) A proposal is to be accompanied by the following information: 
  (a) the name and address of the person submitting the proposal and the names and addresses of their supporters, if any; and 
  (b) the number of shares held or owned by the person and their supporters and the date that the shares were acquired. 
  
  ### Information not part of proposal
  
  (1.3) The information provided under subsection (1.2) does not form part of a proposal or of the supporting statement referred to in subsection (3) and is not to be included for the purposes of the prescribed maximum number of words referred to in subsection (3). 
  
  ### Proof may be required
  
  (1.4) If the insurance holding company requests within the prescribed period that a person provide proof that they are eligible to submit a proposal, the person shall within the prescribed period provide proof that they meet the requirements of subsection (1.1). 
  
  ### Circulation of proposal
  
  (2) An insurance holding company shall attach any proposal of a shareholder submitted for consideration at a meeting of shareholders to the notice of the meeting. 
  
  ### Supporting statement
  
  (3) At the request of the person who submits a proposal, the insurance holding company shall attach to the notice of the meeting the person’s statement in support of the proposal and their name and address. The statement and proposal together are not to exceed the prescribed maximum number of words. 
  
  ### Nomination of directors
  
  (4) A proposal may include nominations for the election of directors if it is signed by one or more registered holders or beneficial owners of shares representing in the aggregate not less than 5% of the shares of the insurance holding company or 5% of the shares of a class of its shares entitled to vote at the meeting at which the proposal is to be presented. 
  
  ### Exemption
  
  (5) An insurance holding company is not required to comply with subsections (2) and (3) if 
  (a) the proposal is not submitted to the insurance holding company at least the prescribed number of days before the anniversary date of the notice of meeting that was sent to shareholders in respect of the previous annual meeting of shareholders; 
  (b) it clearly appears that the primary purpose of the proposal is to enforce a personal claim or redress a personal griev­ance against the insurance holding company or its directors, officers or security holders; 
  (b.1) it clearly appears that the proposal does not relate in a significant way to the business or affairs of the insurance holding company; 
  (c) the person submitting the proposal failed within the prescribed period before the insurance holding company receives their proposal to present, in person or by proxy, at a meeting of shareholders a proposal that at their request had been attached to the notice of the meeting; 
  (d) substantially the same proposal was set out in or attached to a dissident’s proxy circular or a notice of a meeting relating to, and presented to shareholders at, a meeting of shareholders held within the prescribed period before the receipt of the proposal and did not receive the prescribed minimum amount of support at the meeting; or 
  (e) the rights conferred by subsections (1) to (4) are being abused to secure publicity. 
  
  ### Insurance holding company may refuse to include proposal
  
  (5.1) If a person who submits a proposal fails to continue to hold or own shares in accordance with paragraph (1.1)(a) or, as the case may be, does not continue to have the support of persons who are in the aggregate the registered holders or beneficial owners of the prescribed number of shares in accordance with paragraph (1.1)(b) until the end of the meeting, the insurance holding company is not required to attach any proposal submitted by that person to a notice of a meeting for any meeting held within the prescribed period after the day of the meeting. 
  
  ### Immunity for proposal and statement
  
  (6) No insurance holding company or person acting on behalf of an insurance holding company incurs any liability by reason only of circulating a proposal or statement in compliance with subsections (2) and (3). 
  
  ### Notice of refusal
  
  771 (1) If an insurance holding company refuses to attach a proposal to a notice of a meeting, it shall in writing notify the person submitting the proposal of its intention not to attach the proposal and of the reasons for the refusal. It shall notify the person within the prescribed period after either the day on which it receives the proposal or, if it has requested proof under subsection 770(1.4), the day on which it receives the proof. 
  
  ### Application to court
  
  (2) On the application of a person submitting a proposal who claims to be aggrieved by an insurance holding company’s refusal under subsection (1), a court may restrain the holding of the meeting at which the proposal is sought to be presented and make any further order that it thinks fit. 
  
  ### Appeal to court
  
  (3) An insurance holding company or any person claiming to be aggrieved by a proposal may apply to a court for an order permitting the insurance holding company not to attach the proposal to the notice of the meeting, and the court, if it is satisfied that subsection 770(5) applies, may make such order as it thinks fit. 
  
  ### Notice to Superintendent
  
  (4) An applicant under subsection (2) or (3) shall give the Superintendent written notice of the application and the Superintendent may appear and be heard at the hearing of the application in person or by counsel. 
  
  ## Shareholder List 
  
  ### List of shareholders entitled to notice
  
  772 (1) An insurance holding company shall prepare an alphabetical list of shareholders entitled to receive notice of a meeting, showing the number of shares held by each shareholder 
  (a) if a record date is fixed under paragraph 766(1)(c), no later than 10 days after that date; and 
  (b) if no record date is fixed, on the record date determined under paragraph 766(2)(a). 
  
  ### Voting list
  
  (2) The insurance holding company shall prepare an alphabetical list of shareholders entitled to vote as of the record date showing the number of shares held by each shareholder 
  (a) if a record date is fixed under paragraph 766(1)(d), no later than 10 days after that date; and 
  (b) if no record date is fixed under paragraph 766(1)(d), no later than 10 days after a record date is fixed under paragraph 766(1)(c) or no later than the record date determined under paragraph 766(2)(a), as the case may be. 
  
  ### Entitlement to vote
  
  (3) Subject to section 793, a shareholder whose name appears on a list prepared under subsection (2) is entitled to vote the shares shown opposite their name. 
  
  ### Examination of list
  
  (4) A shareholder may examine the list of shareholders 
  (a) during usual business hours at the head office of the insurance holding company or at the place where its central securities register is maintained; and 
  (b) at the meeting of shareholders for which the list was prepared. 
  
  ## Quorum 
  
  ### Shareholders
  
  773 (1) Unless the by-laws otherwise provide, a quorum of shareholders is present at a meeting of shareholders if the holders of a majority of the shares who are entitled to vote at the meeting are present in person or represented by proxyholders. 
  
  ### Quorum at opening
  
  (2) If a quorum is present at the opening of a meeting of shareholders, the shareholders present may, unless the by-laws otherwise provide, proceed with the business of the meeting, notwithstanding that a quorum is not present throughout the meeting. 
  
  ### No quorum at opening
  
  (3) If a quorum is not present at the opening of a meeting of shareholders, the shareholders present may adjourn the meeting to a fixed time and place but may not transact any other business. 
  
  ### One shareholder meeting
  
  774 If an insurance holding company has only one shareholder, or only one holder of any class or series of shares, the shareholder present in person or represented by a proxyholder constitutes a meeting of shareholders or a meeting of shareholders of that class or series. 
  
  ## Voting 
  
  ### One share — one vote
  
  775 Subject to section 793, if a share of an insurance holding company entitles the holder of the share to vote at a meeting of shareholders, that share entitles the shareholder to one vote at the meeting. 
  
  ### Representative shareholder
  
  776 (1) If an entity is a shareholder of an insurance holding company, the insurance holding company shall recognize any natural person authorized by a resolution of the directors or governing body or similar authority of the entity to represent it at meetings of shareholders of the insurance holding company. 
  
  ### Powers of representative
  
  (2) A natural person authorized under subsection (1) to represent an entity may exercise on behalf of the entity all the powers the entity could exercise if the entity were a natural person who was a shareholder. 
  
  ### Joint shareholders
  
  777 Unless the by-laws otherwise provide, if two or more persons hold shares jointly, one of those holders present at a meeting of shareholders may in the absence of the others vote the shares, but if two or more of those persons who are present in person or represented by proxyholder vote, they shall vote as one on the shares jointly held by them. 
  
  ### Voting by hands or ballot
  
  778 (1) Unless the by-laws otherwise provide, voting at a meeting of shareholders shall take place by show of hands except when a ballot is demanded by a shareholder or proxyholder entitled to vote at the meeting. 
  
  ### Ballot
  
  (2) A shareholder or proxyholder may demand a ballot either before or after any vote by show of hands. 
  
  ### Electronic voting
  
  (3) Despite subsection (1) and unless the by-laws provide otherwise, any vote referred to in that subsection may be held entirely by means of a telephonic, electronic or other communication facility if the insurance holding company makes one available. 
  
  ### Voting while participating electronically
  
  (4) Unless the by-laws provide otherwise, any person who is participating in a meeting of shareholders under subsection 764(2) and entitled to vote at that meeting may vote by means of the telephonic, electronic or other communication facility that the insurance holding company has made available for that purpose. 
  
  ### Regulations
  
  (5) The Governor in Council may make regulations respecting the manner of and conditions for voting at a meeting of shareholders by means of a telephonic, electronic or other communication facility. 
  
  ## Resolution in lieu of Meeting 
  
  ### Resolution in lieu of meeting
  
  779 (1) Except where a written statement is submitted by a director under section 809 or by an auditor under subsection 900(1), 
  (a) a resolution in writing signed by all the shareholders entitled to vote on that resolution at a meeting of shareholders is as valid as if it had been passed at a meeting of the shareholders; and 
  (b) a resolution in writing dealing with all matters required by this Part to be dealt with at a meeting of shareholders, and signed by all the shareholders entitled to vote at that meeting, satisfies all the requirements of this Part relating to meetings of shareholders. 
  
  ### Filing resolution
  
  (2) A copy of every resolution referred to in subsection (1) shall be kept with the minutes of the meetings of shareholders. 
  
  ### Evidence
  
  (3) Unless a ballot is demanded, an entry in the minutes of a meeting that the chairperson declared a resolution to be carried or defeated is in the absence of evidence to the contrary proof of that fact without proof of the number or proportion of votes recorded in favour of or against the resolution. 
  
  ## Requisitioned Meetings 
  
  ### Requisitioned meeting
  
  780 (1) Shareholders who together hold not less than 5 per cent of the issued and outstanding shares of an insurance holding company that carry the right to vote at a meeting sought to be held may requisition the directors to call a meeting of shareholders for the purposes stated in the requisition. 
  
  ### Form
  
  (2) A requisition referred to in subsection (1) 
  (a) must state the business to be transacted at the meeting and must be sent to each director and to the head office of the insurance holding company; and 
  (b) may consist of several documents of like form, each signed by one or more shareholders. 
  
  ### Directors calling meeting
  
  (3) On receipt of a requisition referred to in subsection (1), the directors shall call a meeting of shareholders to transact the business stated in the requisition, unless 
  (a) a record date has been fixed under paragraph 766(1)(c) and notice of it has been given under subsection 766(3); 
  (b) the directors have called a meeting of shareholders and have given notice thereof under section 767; or 
  (c) the business of the meeting as stated in the requisition includes matters described in paragraphs 770(5)(b) to (e). 
  
  ### Shareholders’ power
  
  (4) If the directors do not call a meeting within twenty-one days after receiving a requisition referred to in subsection (1), any shareholder who signed the requisition may call the meeting. 
  
  ### Procedure
  
  (5) A meeting called under this section shall be called as nearly as possible in the manner in which meetings are to be called pursuant to the by-laws and this Part. 
  
  ### Reimbursement
  
  (6) Unless the shareholders otherwise resolve at a meeting called under subsection (4), the insurance holding company shall reimburse the shareholders for any expenses reasonably incurred by them in requisitioning, calling and holding the meeting. 
  
  ## Powers of the Court 
  
  ### Court may order meeting to be called
  
  781 (1) A court may, on the application of a director, a shareholder who is entitled to vote at a meeting of shareholders or the Superintendent, order a meeting to be called, held or conducted in the manner that the court directs if 
  (a) it is impracticable to call the meeting within the time or in the manner in which it is to be called; 
  (b) it is impracticable to conduct the meeting in the manner required by this Part or the by-laws; or 
  (c) the court thinks that the meeting ought to be called, held or conducted within the time or in the manner that it directs for any other reason. 
  (2)  [Repealed, 2005, c. 54, s. 321]  
  
  ### Varying quorum
  
  (3) Without restricting the generality of subsection (1), a court may order that the quorum required by the by-laws or this Part be varied or dispensed with at a meeting called, held and conducted pursuant to this section. 
  
  ### Valid meeting
  
  (4) A meeting called, held and conducted pursuant to this section is for all purposes a meeting of shareholders of the insurance holding company duly called, held and conducted. 
  
  ### Court review of election
  
  782 (1) An insurance holding company or a shareholder or director of an insurance holding company may apply to a court to resolve any dispute in respect of the election or appointment of a director or an auditor of the insurance holding company. 
  
  ### Powers of court
  
  (2) On an application under subsection (1), a court may make any order it thinks fit including, without limiting the generality of the foregoing, 
  (a) an order restraining a director or auditor whose election or appointment is challenged from acting pending determination of the dispute; 
  (b) an order declaring the result of the disputed election or appointment; 
  (c) an order requiring a new election or appointment, and including in the order directions for the management of the business and affairs of the insurance holding company until a new election is held or the new appointment is made; and 
  (d) an order determining the voting rights of shareholders and persons claiming to own shares. 
  
  ### Notice to Superintendent
  
  783 (1) A person who makes an application under subsection 781(1) or 782(1) shall give notice of the application to the Superintendent before the hearing and shall deliver a copy of the order of the court, if any, to the Superintendent. 
  
  ### Superintendent representation
  
  (2) The Superintendent may appear and be heard in person or by counsel at the hearing of an application referred to in subsection (1). 
  
  ## Pooling Agreements 
  
  ### Pooling agreement
  
  784 A written agreement between two or more shareholders may provide that in exercising voting rights the shares held by them will be voted as provided in the agreement. 
  
  # SUBDIVISION 2 
  
  ## Proxies and Restrictions on Voting 
  
  ## Proxies 
  
  ### Definitions
  
  785 The following definitions apply in this Subdivision.  
  *intermediary* means a person who holds a security on behalf of another person who is not the registered holder of the security, and includes  
  (a) a securities broker or dealer required to be registered to trade or deal in securities under the laws of any jurisdiction; 
  (b) a securities depositary; 
  (c) a financial institution; 
  (d) in respect of a clearing agency, a securities dealer, trust company, association within the meaning of section 2 of the Cooperative Credit Associations Act, bank or other person, including another clearing agency, on whose behalf the clearing agency or its nominee holds securities of an issuer;  
  (e) a trustee or administrator of a self-administered retirement savings plan, retirement income fund or education savings plan or another similar self-administered savings or investment plan that is registered under the Income Tax Act ;  
  (f) a nominee of a person referred to in any of paragraphs (a) to (e); and 
  (g) a person who performs functions similar to those performed by a person referred to in any of paragraphs (a) to (e) and holds a security registered in their name, or in the name of their nominee, on behalf of another person who is not the registered holder of the security. ( intermédiaire)   
  *registrant* [Repealed, 2005, c. 54, s. 322]   
  *solicit* or 
  *solicitation* includes  
  (a) a request for a proxy, whether or not accompanied by or included in a form of proxy, 
  (b) a request to execute or not to execute a form of proxy or to revoke a proxy, 
  (c) the sending of a form of proxy or other communication to a shareholder under circumstances reasonably calculated to result in the procurement, withholding or revocation of a proxy, and 
  (d) the sending of a form of proxy to a shareholder under section 788, but does not include 
  (e) the sending of a form of proxy in response to an unsolicited request made by or on behalf of a shareholder, 
  (f) the performance of administrative acts or professional services on behalf of a person soliciting a proxy, 
  (g) the sending by a registrant of the documents referred to in section 791, or 
  (h) a solicitation by a person in respect of shares of which that person is the beneficial owner. ( sollicitation)   
  *solicitation by or on behalf of the management of an insurance holding company* means a solicitation by any person pursuant to a resolution or instruction of, or with the acquiescence of, the directors or a committee of the directors of the insurance holding company. (sollicitation effectuée par la direction d’une société de portefeuille d’assurances ou pour son compte)  
  
  ### Appointing proxyholder
  
  786 (1) A shareholder who is entitled to vote at a meeting of shareholders may, by executing a form of proxy, appoint a proxyholder or one or more alternate proxyholders, who are not required to be shareholders, to attend and act at the meeting in the manner and to the extent authorized by the proxy and with the authority conferred by the proxy. 
  
  ### Execution of proxy
  
  (2) A form of proxy shall be executed by a shareholder or by a shareholder’s attorney authorized in writing to do so. 
  
  ### Limit on authority
  
  (3) No appointment of a proxyholder provides authority for the proxyholder to act in respect of the appointment of an auditor or the election of a director unless a nominee proposed in good faith for the appointment or election is named in the form of proxy, a management proxy circular, a dissident’s proxy circular or a proposal under subsection 770(1). 
  
  ### Required information
  
  (4) A form of proxy must indicate, in bold-face type, that the shareholder by whom or on whose behalf it is executed may appoint a proxyholder, other than a person designated in the form of proxy, to attend and act on the shareholder’s behalf at a meeting to which the proxy relates, and must contain instructions as to the manner in which the shareholder may do so. 
  
  ### Validity of proxy
  
  (5) A proxy is valid only at the meeting in respect of which it is given or at a continuation of the meeting after an adjournment. 
  
  ### Revocation of proxy
  
  (6) A shareholder may revoke a proxy 
  (a) by depositing an instrument in writing executed by the shareholder or by the shareholder’s attorney authorized in writing to do so 
  (i) at the head office of the insurance holding company at any time up to and including the last business day before the day of a meeting, or a continuation of a meeting after an adjournment, at which the proxy is to be used, or 
  (ii) with the chairperson of the meeting on the day of the meeting or a continuation of the meeting after an adjournment; or 
  (b) in any other manner permitted by law. 
  
  ### Deposit of proxies
  
  787 (1) The directors may specify, in a notice calling a meeting of shareholders or a continuation of a meeting of shareholders after an adjournment, a time before which executed forms of proxy to be used at the meeting or the continued meeting must be deposited with the insurance holding company or its transfer agent. 
  
  ### Time for deposit of proxies
  
  (2) The time specified for the deposit of forms of proxy may not precede the meeting or the continued meeting by more than forty-eight hours, excluding Saturdays and holidays. 
  
  ### Mandatory solicitation
  
  788 (1) Subject to subsections (2) and 768(2), the management of an insurance holding company shall, concurrently with sending notice of a meeting of shareholders, send a form of proxy that is in accordance with the regulations to each shareholder entitled to receive notice of the meeting under section 767. 
  
  ### Exception
  
  (2) The management of an insurance holding company is not required to send a form of proxy under subsection (1) if the insurance holding company 
  (a) is not a distributing insurance holding company; and 
  (b) has 50 or fewer shareholders who are entitled to vote at a meeting, two or more joint holders of a share being counted as one shareholder. 
  
  ### Soliciting proxies
  
  789 (1) A person shall not solicit proxies unless a proxy circular that is in accordance with the regulations is sent to the auditor of the insurance holding company, to each shareholder whose proxy is solicited and, in the case set out in paragraph (b), to the bank as follows: 
  (a) in the case of solicitation by or on behalf of the management of an insurance holding company, a management proxy circular, either as an appendix to or as a separate document accompanying the notice of the meeting; and 
  (b) in the case of any other solicitation, a dissident’s proxy circular stating the purposes of the solicitation. 
  
  ### Exception — limited solicitation
  
  (1.1) Despite subsection (1), a person may solicit proxies, other than by or on behalf of the management of the insurance holding company, without sending a dissident’s proxy circular, if the total number of shareholders whose proxies are solicited is 15 or fewer, with two or more joint holders being counted as one shareholder. 
  
  ### Exception — solicitation by public broadcast
  
  (1.2) Despite subsection (1), a person may solicit proxies, other than by or on behalf of the management of the insurance holding company, without sending a dissident’s proxy circular if the solicitation is, in the prescribed circumstances, conveyed by public broadcast, speech or publication. 
  
  ### Copy to Superintendent
  
  (2) A person who sends a management proxy circular or dissident’s proxy circular shall concurrently send to the Superintendent a copy of it together with the form of proxy, any other documents for use in connection with the meeting and, in the case of a management proxy circular, a copy of the notice of meeting. 
  
  ### Exemption by Superintendent
  
  (3) On the application of an interested person, the Superintendent may, on any terms that the Superintendent thinks fit, exempt the person from any of the requirements of subsection (1) and section 788, and the exemption may be given retroactive effect. 
  
  ### Reporting exemptions
  
  (4) The Superintendent shall publish in a publication generally available to the public, a notice of a decision made by the Superintendent granting an exemption under subsection (3). 
  
  ### Attendance at meeting
  
  790 (1) A person who solicits a proxy and is appointed proxyholder shall attend in person or cause an alternate proxyholder to attend every meeting in respect of which the proxy is valid, and the proxyholder or alternate proxyholder shall comply with the directions of the shareholder who executed the form of proxy. 
  
  ### Rights of proxyholder
  
  (2) A proxyholder or an alternate proxyholder has the same rights as the appointing shareholder to speak at a meeting of shareholders in respect of any matter, to vote by way of ballot at the meeting and, except where a proxyholder or an alternate proxyholder has conflicting instructions from more than one shareholder, to vote at the meeting in respect of any matter by way of a show of hands. 
  
  ### Vote by show of hands
  
  (3) Despite subsections (1) and (2) and unless a shareholder or proxyholder demands a ballot, if the chairperson of a meeting of shareholders declares to the meeting that, if a ballot were conducted, the total number of votes attached to shares represented at the meeting by proxy required to be voted against what, to the knowledge of the chairperson, would be the decision of the meeting on a matter or group of matters is less than 5% of all the votes that might be cast by shareholders in person or by proxy, 
  (a) the chairperson may conduct the vote in respect of that matter or group of matters by way of a show of hands; and 
  (b) a proxyholder or alternate proxyholder may vote in respect of that matter or group of matters by way of a show of hands. 
  
  ### Duty of intermediary
  
  791 (1) Shares of an insurance holding company that are registered in the name of an intermediary or an intermediary’s nominee and not beneficially owned by the intermediary may not be voted unless the intermediary sends to the beneficial owner 
  (a) a copy of the notice of the meeting, annual statement, management proxy circular and dissident’s proxy circular and any other documents, other than the form of proxy, that were sent to shareholders by or on behalf of any person for use in connection with the meeting; and 
  (b) a written request for voting instructions except if the intermediary has already received written voting instructions from the beneficial owner. 
  
  ### When documents to be sent
  
  (2) The intermediary shall send the documents referred to in subsection (1) without delay after they receive the documents referred to in paragraph (1)(a). 
  
  ### Restriction on voting
  
  (3) An intermediary or a proxyholder appointed by them may not vote shares that the intermediary does not beneficially own and that are registered in the name of the intermediary or their nominee unless the intermediary or proxyholder, as the case may be, receives written voting instructions from the beneficial owner. 
  
  ### Copies
  
  (4) A person by or on behalf of whom a solicitation is made shall on request and without delay provide the intermediary, at the person’s expense, with the necessary number of copies of the documents referred to in paragraph (1)(a). 
  
  ### Instructions to intermediary
  
  (5) The intermediary shall vote or appoint a proxyholder to vote any shares referred to in subsection (1) in accordance with any written voting instructions received from the beneficial owner. 
  
  ### Beneficial owner as proxyholder
  
  (6) If a beneficial owner so requests and provides an intermediary with the appropriate documentation, the intermediary shall appoint the beneficial owner or a nominee of the beneficial owner as proxyholder. 
  
  ### Effect of intermediary’s failure to comply
  
  (7) The failure of an intermediary to comply with any of subsections (1) to (6) does not render void any meeting of shareholders or any action taken at the meeting. 
  
  ### Intermediary may not vote
  
  (8) Nothing in this Subdivision gives an intermediary the right to vote shares that they are otherwise prohibited from voting. 
  
  ### Regulations
  
  791.1 The Governor in Council may make regulations 
  (a) respecting the powers that may be granted by a shareholder in a form of proxy; 
  (b) respecting proxy circulars and forms of proxy, including the form and content of those documents; and 
  (c) respecting the conditions under which an insurance holding company is exempt from any of the requirements of sections 786 to 791. 
  
  ### Restraining order
  
  792 (1) If a form of proxy, management proxy circular or dissident’s proxy circular contains an untrue statement of a material fact or omits to state a material fact that is required to be contained in it or that is necessary to make a statement contained in it not misleading in light of the circumstances in which the statement is made, an interested person or the Superintendent may apply to a court and the court may make any order it thinks fit including 
  (a) an order restraining the solicitation or the holding of the meeting, or restraining any person from implementing or acting on a resolution passed at the meeting, to which the form of proxy, management proxy circular or dissident’s proxy circular relates; 
  (b) an order requiring correction of any form of proxy or proxy circular and a further solicitation; and 
  (c) an order adjourning the meeting. 
  
  ### Notice of application
  
  (2) Where a person other than the Superintendent is an applicant under subsection (1), the applicant shall give to the Superintendent notice of the application and the Superintendent is entitled to appear and to be heard in person or by counsel. 
  
  ## Restrictions on Voting 
  
  ### Meaning of 
  *eligible votes* 
  
  793 (1) In this section, 
  *eligible votes* means the total number of votes that may be cast by or on behalf of shareholders on a vote of shareholders or a vote of holders of a class or series of shares, as the case may be, in respect of any particular matter, calculated without regard to subsection (2).  
  
  ### Restriction
  
  (2) At a meeting of shareholders of an insurance holding company in respect of which subsection 927(4) applies, no person and no entity controlled by any person may, in respect of any vote of shareholders or holders of any class or series of shares of the company, cast votes in respect of any shares beneficially owned by the person or the entity that are, in aggregate, more than 20 per cent of the eligible votes that may be cast in respect of that vote. 
  
  ### Proxyholders
  
  (3) No person who is a proxyholder for a person or for an entity controlled by a person may cast votes to which the proxy relates that the person or entity may not cast by reason of subsection (2). 
  
  ### Exception
  
  (4) Subsections (2) and (3) do not apply in respect of a vote held under section 852. 
  
  ### Validity of vote
  
  (5) A vote in respect of a particular matter is not invalid merely because a person voted contrary to subsection (2) or (3). 
  
  ### Disposition of shareholdings
  
  (6) If, with respect to any insurance holding company, a person contravenes subsection (2) or (3), the Minister may, by order, direct the shareholder of the shares to which the contravention relates or any person controlled by that shareholder to dispose of any number of shares of the insurance holding company beneficially owned by any of those persons that the Minister specifies in the order, within the time specified in the order and in the proportion, if any, as between the shareholder and the persons controlled by that shareholder that is specified in the order. 
  
  ### Restriction on voting rights
  
  (7) If the Minister makes an order under subsection (6), the person to whom the order relates may not, in person or by proxy, exercise any voting rights that are attached to shares of the company beneficially owned by the person. 
  
  ### Subsection (7) ceases to apply
  
  (8) Subsection (7) shall cease to apply in respect of a person when the shares to which the order relates have been disposed of. 
  
  ### Reliance on number in notice
  
  (9) For the purpose of this section, a person is entitled to rely on the number of eligible votes set out in a notice of a meeting under subsection 767(2). 
  
  ### Designation of persons
  
  (10) For the purpose of this section, the Minister may, with respect to a particular insurance holding company, designate two or more persons who are parties to an agreement, commitment or understanding referred to in section 9 to be a single person. 
  
  # SUBDIVISION 3 
  
  ## Directors and Officers 
  
  ## Duties 
  
  ### Duty to manage
  
  794 (1) Subject to this Act, the directors of an insurance holding company shall manage or supervise the management of the business and affairs of the insurance holding company. 
  
  ### Specific duties
  
  (2) Without limiting the generality of subsection (1), the directors of an insurance holding company shall 
  (a) establish an audit committee to perform the duties referred to in subsections 829(3) and (4); 
  (b) establish procedures to resolve conflicts of interest, including techniques for the identification of potential conflict situations and for restricting the use of confidential information; 
  (c) designate a committee of the board of directors to monitor the procedures referred to in paragraph (b); and 
  (d) establish investment and lending policies, standards and procedures in accordance with section 968. 
  
  ### Exception
  
  (3) Paragraph (2)(a) does not apply to the directors of an insurance holding company if 
  (a) all the voting shares of the insurance holding company are beneficially owned by a Canadian financial institution described by any of paragraphs (a) to (d) of the definition 
  *financial institution* in subsection 2(1); and  
  (b) the audit committee of the Canadian financial institution referred to in paragraph (a) performs for and on behalf of the insurance holding company all the functions that would otherwise be required to be performed by the audit committee of the insurance holding company under this Part. 
  
  ### Duty of care
  
  795 (1) Every director and officer of an insurance holding company in exercising any of the powers of a director or an officer and discharging any of the duties of a director or an officer shall 
  (a) act honestly and in good faith with a view to the best interests of the insurance holding company; and 
  (b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. 
  
  ### Duty to comply
  
  (2) Every director, officer and employee of an insurance holding company shall comply with this Act, the regulations, the insurance holding company’s incorporating instrument and the by-laws of the insurance holding company. 
  
  ### No exculpation
  
  (3) No provision in any contract, in any resolution or in the by-laws of an insurance holding company relieves any director, officer or employee of the insurance holding company from the duty to act in accordance with this Act and the regulations or relieves a director, officer or employee from liability for a breach thereof. 
  
  ## Qualification and Number — Directors 
  
  ### Minimum number of directors
  
  796 (1) An insurance holding company shall have at least seven directors. 
  
  ### Residency requirement
  
  (2) At least one half of the directors of an insurance holding company that is a subsidiary of a foreign institution and a majority of the directors of any other insurance holding company must be, at the time of each director’s election or appointment, resident Canadians. 
  
  ### Disqualified persons
  
  797 The following persons are disqualified from being directors of an insurance holding company: 
  (a) a person who is less than eighteen years of age; 
  (b) a person who is of unsound mind and has been so found by a court in Canada or elsewhere; 
  (c) a person who has the status of a bankrupt; 
  (d) a person who is not a natural person; 
  (e) a person who is prohibited by subsection 793(7) or section 945 or 955 from exercising voting rights attached to shares of the insurance holding company; 
  (f) a person who is an officer, director or full-time employee of an entity that is prohibited by subsection 793(7) or section 945 or 955 from exercising voting rights attached to shares of the insurance holding company; 
  (f.1) a person who is an officer, director, employee or agent of — or any other person acting on behalf of — an eligible agent within the meaning of section 406.1; 
  (g)  [Repealed, 2013, c. 40, s. 165]  
  (h) a minister of Her Majesty in right of Canada or in right of a province; and 
  (i) a person who is an agent or employee of the government of a foreign country or any political subdivision thereof. 
  
  ### No requirement to hold shares
  
  798 A director of an insurance holding company is not required to hold shares of the insurance holding company. 
  
  ### Limit on directors
  
  799 No more than 15 per cent of the directors of an insurance holding company may, at each director’s election or appointment, be employees of the insurance holding company or a subsidiary of the insurance holding company, except that up to four persons who are employees of the insurance holding company or a subsidiary of the insurance holding company may be directors of the insurance holding company if those directors constitute not more than one half of the directors of the insurance holding company. 
  
  ## Election and Tenure — Directors 
  
  ### Number of directors
  
  800 (1) Subject to subsection 796(1) and sections 803 and 851, the directors of an insurance holding company shall, by by-law, determine the number of directors or the minimum and maximum number of directors, but no by-law that decreases the number of directors shortens the term of an incumbent director. 
  
  ### Election at annual meeting
  
  (2) A by-law made pursuant to subsection (1) that provides for a minimum and maximum number of directors may provide that the number of directors to be elected at any annual meeting of the shareholders be such number as is fixed by the directors prior to the annual meeting. 
  
  ### Election or appointment as director
  
  800.1 The election or appointment of a person as a director is subject to the following: 
  (a) the person was present at the meeting when the election or appointment took place and did not refuse to hold office as a director; or 
  (b) the person was not present at the meeting when the election or appointment took place but 
  (i) consented in writing to hold office as a director before the election or appointment or within 10 days after it, or 
  (ii) acted as a director after the election or appointment. 
  
  ### Term of directors
  
  801 (1) Except where this Part or the by-laws of an insurance holding company provide for cumulative voting, the insurance holding company may, by by-law, provide that the directors be elected for terms of one, two or three years. 
  
  ### Term of one, two or three years
  
  (2) A director elected for a term of one, two or three years holds office until the close of the first, second or third annual meeting of shareholders, as the case may be, following the election of the director. 
  
  ### No stated term
  
  (3) A director who is not elected for an expressly stated term of office ceases to hold office at the close of the next annual meeting of shareholders following the election of the director. 
  
  ### Tenure of office
  
  (4) It is not necessary that all directors elected at a meeting of shareholders hold office for the same term. 
  
  ### Tenure of office
  
  (5) If a by-law of an insurance holding company provides that the directors be elected for a term of two or three years, it may also provide that the term of office of each director be for the whole of that term, or that, as nearly as may be, one half of the directors retire each year if the term is two years, and that one third of the directors retire each year if the term is three years. 
  
  ### Composition requirements
  
  (6) Where a director of an insurance holding company is elected or appointed for a term of more than one year, the insurance holding company shall comply with subsection 796(2) and section 799 at each annual meeting of shareholders during the director’s term of office as if that director were elected or appointed on that date. 
  
  ### Determining election of directors
  
  802 (1) Except where this Part or the by-laws of an insurance holding company provide for cumulative voting, the persons, to the number authorized to be elected, who receive the greatest number of votes at an election of directors of an insurance holding company shall be the directors thereof. 
  
  ### Equal number of votes
  
  (2) If, at any election of directors referred to in subsection (1), two or more persons receive an equal number of votes and there are not sufficient vacancies remaining to enable all the persons receiving an equal number of votes to be elected, the directors who receive a greater number of votes or the majority of them shall, in order to complete the full number of directors, determine which of the persons so receiving an equal number of votes are to be elected. 
  
  ### Cumulative voting
  
  803 (1) Where this Part or the by-laws provide for cumulative voting, 
  (a) there shall be a stated number determined by by-law, and not a minimum and maximum number, of directors; 
  (b) each shareholder entitled to vote at an election of directors to be elected by cumulative voting has the right to cast a number of votes equal to the number of votes attached to the shares held by the shareholder multiplied by the number of directors to be elected by cumulative voting, and the shareholder may cast all such votes in favour of one candidate or distribute them among the candidates in any manner; 
  (c) a separate vote shall be taken with respect to each candidate nominated for a position that is to be filled by cumulative voting unless a resolution is passed unanimously permitting two or more persons to be elected by a single vote; 
  (d) if a shareholder has voted for more than one candidate without specifying the distribution of the votes among the candidates, the shareholder is deemed to have distributed the votes equally among the candidates for whom the shareholder voted; 
  (e) if the number of candidates nominated exceeds the number of positions to be filled, the candidates who receive the least number of votes shall be eliminated until the number of candidates remaining equals the number of positions to be filled; 
  (f) each director elected by cumulative voting ceases to hold office at the close of the next annual meeting of shareholders following the director’s election; 
  (g) a director may be removed from office only if the number of votes cast in favour of a motion to remove the director is greater than the product of the number of directors required by the by-laws and the number of votes cast against the motion; and 
  (h) the number of directors required by the by-laws may be decreased only if the number of votes cast in favour of a motion to decrease the number of directors is greater than the product of the number of directors required by the by-laws and the number of votes cast against the motion. 
  
  ### Mandatory cumulative voting
  
  (2) Where the aggregate of the voting shares beneficially owned by a person and any entities controlled by the person carries more than 10 per cent of the voting rights attached to all the outstanding voting shares of an insurance holding company, the directors shall be elected by cumulative voting. 
  
  ### Exception
  
  (3) Subsection (2) does not apply if all the voting shares of the insurance holding company that are outstanding are beneficially owned by 
  (a) one person; 
  (b) one person and one or more entities controlled by that person; or 
  (c) one or more entities controlled by the same person. 
  
  ### Exception
  
  (4) Subsection (2) does not apply to an insurance holding company in respect of which subsection 927(4) applies. 
  
  ### Transitional election
  
  (5) Where this Part or the by-laws of an insurance holding company provide for cumulative voting, the shareholders of the insurance holding company shall 
  (a) at the first annual meeting of shareholders held not earlier than ninety days following the date that cumulative voting is required under subsection (2) or provided for in the by-laws, and 
  (b) at each succeeding annual meeting, elect the stated number of directors to hold office until the close of the next annual meeting of shareholders following their election. 
  
  ### Class or series of shares
  
  (6) Nothing in this Part precludes the holders of any class or series of shares of an insurance holding company from having an exclusive right to elect one or more directors. 
  
  ### Re-election of directors
  
  804 A director who has completed a term of office is, if otherwise qualified, eligible for re-election. 
  
  ## Incomplete Elections and Director Vacancies 
  
  ### Void election or appointment
  
  805 (1) If, immediately after the time of any purported election or appointment of directors, the board of directors would fail to comply with subsection 796(2) or section 799, the purported election or appointment of all persons purported to be elected or appointed at that time is void unless the directors, within forty-five days after the discovery of the non-compliance, develop a plan, approved by the Superintendent, to rectify the non-compliance. 
  
  ### Failure to elect minimum
  
  (2) If, at the close of a meeting of shareholders of an insurance holding company, the shareholders have failed to elect the number or minimum number of directors required by this Part or the by-laws of an insurance holding company, the purported election of directors at the meeting 
  (a) is valid if the directors purported to be elected and those incumbent directors, if any, whose terms did not expire at the close of the meeting, together constitute a quorum; or 
  (b) is void if the directors purported to be elected and those incumbent directors, if any, whose terms did not expire at the close of the meeting, together do not constitute a quorum. 
  
  ### Directors where elections incomplete or void
  
  806 (1) Despite subsections 801(2) and (3) and paragraphs 803(1)(f) and 807(1)(a), where subsection 805(1) or (2) applies at the close of any meeting of shareholders of an insurance holding company, the board of directors shall, until their successors are elected or appointed, consist solely of 
  (a) where paragraph 805(2)(a) applies, the directors referred to in that paragraph; or 
  (b) where subsection 805(1) or paragraph 805(2)(b) applies, those persons who were the incumbent directors immediately before the meeting. 
  
  ### Where there is no approved rectification plan
  
  (2) Despite subsections 801(2) and (3) and paragraphs 803(1)(f) and 807(1)(a), where a plan to rectify the non-compliance referred to in subsection 805(1) has not been approved by the Superintendent by the end of the forty-five day period referred to in that subsection, the board of directors shall, until their successors are elected or appointed, consist solely of the persons who were the incumbent directors immediately before the meeting at which the purported election or appointment referred to in that subsection occurred. 
  
  ### Directors to call meeting
  
  (3) Where subsection (1) or (2) applies, the board of directors referred to in that subsection shall without delay call a special meeting of shareholders to fill the vacancies, where paragraph 805(2)(a) applies, or elect a new board of directors, where subsection 805(1) or paragraph 805(2)(b) applies. 
  
  ### Shareholder may call meeting
  
  (4) Where the directors fail to call a special meeting required by subsection (3), the meeting may be called by any shareholder. 
  
  ### Ceasing to hold office
  
  807 (1) A director ceases to hold office 
  (a) at the close of the annual meeting at which the director’s term of office expires; 
  (b) when the director dies or resigns; 
  (c) when the director becomes disqualified under section 797 or ineligible to hold office pursuant to subsection 837(2); 
  (d) when the director is removed under section 808; or 
  (e) when the director is removed from office under section 1006 or 1007. 
  
  ### Date of resignation
  
  (2) The resignation of a director of an insurance holding company becomes effective at the time a written resignation is sent to the insurance holding company by the director or at the time specified in the resignation, whichever is later. 
  
  ### Removal of director
  
  808 (1) Subject to paragraph 803(1)(g) and this section, the shareholders of an insurance holding company may by resolution at a special meeting remove any director or all the directors from office. 
  
  ### Removal of director
  
  (2) If the holders of any class or series of shares of an insurance holding company have the exclusive right to elect one or more directors, a director so elected may be removed only by a resolution at a meeting of the shareholders of that class or series. 
  
  ### Vacancy by removal
  
  (3) Subject to paragraphs 803(1)(b) to (e), a vacancy created by the removal of a director may be filled at the meeting of the shareholders at which the director is removed or, if not so filled, may be filled under section 812 or 813. 
  
  ### Statement of director
  
  809 (1) A director who 
  (a) resigns, 
  (b) receives a notice or otherwise learns of a meeting of shareholders called for the purpose of removing the director from office, or 
  (c) receives a notice or otherwise learns of a meeting of directors or shareholders at which another person is to be appointed or elected to fill the office of director, whether because of the director’s resignation or removal or because the director’s term of office has expired or is about to expire, is entitled to submit to the insurance holding company a written statement giving the reasons for the resignation or the reasons why the director opposes any proposed action or resolution. 
  
  ### Statement to Superintendent
  
  (2) Where a director resigns as a result of a disagreement with the other directors or the officers of an insurance holding company, the director shall submit to the insurance holding company and the Superintendent a written statement setting out the nature of the disagreement. 
  
  ### Circulation of statement
  
  810 (1) An insurance holding company shall forthwith on receipt of a director’s statement referred to in subsection 809(1) relating to a matter referred to in paragraph 809(1)(b) or (c), or a director’s statement referred to in subsection 809(2), send a copy thereof to each shareholder entitled to receive a notice of meetings and to the Superintendent, unless the statement is attached to a notice of a meeting. 
  
  ### Immunity for statement
  
  (2) No insurance holding company or person acting on its behalf incurs any liability by reason only of circulating a director’s statement in compliance with subsection (1). 
  
  ### Shareholders filling vacancy
  
  811 The by-laws of an insurance holding company may provide that a vacancy among the directors is to be filled only by vote of 
  (a) the shareholders; or 
  (b) the holders of any class or series of shares having an exclusive right to elect one or more directors if the vacancy occurs among the directors elected by the holders of that class or series. 
  
  ### Directors filling vacancy
  
  812 (1) Despite section 819 but subject to subsection (2) and sections 811 and 813, a quorum of directors may fill a vacancy among the directors except a vacancy resulting from a change in the by-laws by which the number or the minimum or maximum number of directors is increased or from a failure to elect the number or minimum number of directors provided for in the by-laws. 
  
  ### Where composition fails
  
  (2) Despite sections 811 and 819, where by reason of a vacancy the number of directors or the composition of the board of directors fails to meet any of the requirements of section 796 or 799, the directors who, in the absence of any by-law, would be empowered to fill that vacancy shall do so forthwith. 
  
  ### Class vacancy
  
  813 Despite section 819 but subject to section 811, where the holders of any class or series of shares of an insurance holding company have an exclusive right to elect one or more directors and a vacancy occurs among those directors, 
  (a) the remaining directors elected by the holders of that class or series of shares may fill the vacancy except one resulting from an increase in the number or the minimum or maximum number of directors for that class or series or from a failure to elect the number or minimum number of directors provided for in the by-laws for that class or series; 
  (b) if there are no such remaining directors and, by reason of the vacancy, the number of directors or the composition of the board of directors fails to meet any of the requirements of section 796 or 799, the other directors may fill that vacancy; and 
  (c) if there are no such remaining directors and paragraph (b) does not apply, any holder of shares of that class or series may call a meeting of the holders thereof for the purpose of filling the vacancy. 
  
  ### Unexpired term
  
  814 Unless the by-laws otherwise provide, a director elected or appointed to fill a vacancy holds office for the unexpired term of the director’s predecessor in office. 
  
  ### Additional directors
  
  815 (1) The directors may appoint one or more additional directors if the by-laws of the insurance holding company allow them to do so and the by-laws determine the minimum and maximum numbers of directors. 
  
  ### Term of office
  
  (2) A director appointed under subsection (1) holds office for a term expiring not later than the close of the next annual meeting of shareholders of the insurance holding company. 
  
  ### Limit on number appointed
  
  (3) The total number of directors appointed under subsection (1) may not exceed one third of the number of directors elected at the previous annual meeting of shareholders of the insurance holding company. 
  
  ## Meetings of the Board 
  
  ### Meetings required
  
  816 (1) The directors shall meet at least four times during each financial year. 
  
  ### Place for meetings
  
  (2) The directors may meet at any place unless the by-laws provide otherwise. 
  
  ### Notice for meetings
  
  (3) The notice for the meetings must be given as required by the by-laws. 
  
  ### Notice of meeting
  
  817 (1) A notice of a meeting of directors shall specify each matter referred to in section 832 that is to be dealt with at the meeting but, unless the by-laws otherwise provide, need not otherwise specify the purpose of or the business to be transacted at the meeting. 
  
  ### Waiver of notice
  
  (2) A director may in any manner waive notice of a meeting of directors and the attendance of a director at a meeting of directors is a waiver of notice of that meeting except where the director attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called. 
  
  ### Adjourned meeting
  
  (3) Notice of an adjourned meeting of directors is not required to be given if the time and place of the adjourned meeting was announced at the original meeting. 
  
  ### Quorum
  
  818 (1) Subject to section 819, the number of directors referred to in subsection (2) constitutes a quorum at any meeting of directors or a committee of directors and, notwithstanding any vacancy among the directors, a quorum of directors may exercise all the powers of the directors. 
  
  ### Quorum
  
  (2) The number of directors constituting a quorum at any meeting of directors or a committee of directors shall be 
  (a) a majority of the minimum number of directors required by this Part for the board of directors or a committee of directors; or 
  (b) such greater number of directors than the number calculated pursuant to paragraph (a) as may be established by the by-laws of the insurance holding company. 
  
  ### Director continues to be present
  
  (3) A director who is present at a meeting of directors or of a committee of directors but is not, in accordance with subsection 837(1), present at any particular time during the meeting is considered to be present for the purposes of this section. 
  
  ### Resident Canadian majority
  
  819 (1) The directors of an insurance holding company shall not transact business at a meeting of directors unless 
  (a) in the case of an insurance holding company that is the subsidiary of a foreign institution, at least one half of the directors present are resident Canadians; and 
  (b) in the case of any other insurance holding company, a majority of the directors present are resident Canadians. 
  
  ### Exception
  
  (2) Despite subsection (1), the directors of an insurance holding company may transact business at a meeting of directors without the required proportion of directors who are resident Canadians if 
  (a) a director who is a resident Canadian unable to be present approves, in writing or by telephonic, electronic or other communications facilities, the business transacted at the meeting; and 
  (b) there would have been present the required proportion of directors who are resident Canadians had that director been present at the meeting. 
  
  ### Electronic meeting
  
  820 (1) Subject to the by-laws of an insurance holding company, a meeting of directors or of a committee of directors may be held by means of such telephonic, electronic or other communications facilities as permit all persons participating in the meeting to communicate adequately with each other during the meeting. 
  
  ### Deemed present
  
  (2) A director participating in a meeting by any means referred to in subsection (1) is deemed for the purposes of this Part to be present at that meeting. 
  
  ### Resolution outside board meeting
  
  821 (1) A resolution in writing signed by all the directors entitled to vote on that resolution at a meeting of directors is as valid as if it had been passed at a meeting of directors. 
  
  ### Filing directors’ resolution
  
  (2) A copy of the resolution referred to in subsection (1) shall be kept with the minutes of the proceedings of the directors. 
  
  ### Resolution outside committee meeting
  
  (3) A resolution in writing signed by all the directors entitled to vote on that resolution at a meeting of a committee of directors, other than a resolution of the audit committee in carrying out its duties under subsection 829(3), is as valid as if it had been passed at a meeting of that committee. 
  
  ### Filing committee resolution
  
  (4) A copy of the resolution referred to in subsection (3) shall be kept with the minutes of the proceedings of that committee. 
  
  ### Evidence
  
  (5) Unless a ballot is demanded, an entry in the minutes of a meeting that the chairperson declared a resolution to be carried or defeated is in the absence of evidence to the contrary proof of that fact without proof of the number or proportion of votes recorded in favour of or against the resolution. 
  
  ### Dissent of director
  
  822 (1) A director of an insurance holding company who is present at a meeting of directors or a committee of directors is deemed to have consented to any resolution passed or action taken at that meeting unless 
  (a) the director requests that the director’s dissent be entered or the director’s dissent is entered in the minutes of the meeting; 
  (b) the director sends a written dissent to the secretary of the meeting before the meeting is adjourned; or 
  (c) the director sends the director’s dissent by registered mail or delivers it to the head office of the insurance holding company immediately after the meeting is adjourned. 
  
  ### Loss of right to dissent
  
  (2) A director of an insurance holding company who votes for or consents to a resolution is not entitled to dissent under subsection (1). 
  
  ### Dissent of absent director
  
  (3) A director of an insurance holding company who is not present at a meeting at which a resolution is passed or action taken is deemed to have consented thereto unless, within seven days after the director becomes aware of the resolution, the director 
  (a) causes the director’s dissent to be placed with the minutes of the meeting; or 
  (b) sends the director’s dissent by registered mail or delivers it to the head office of the insurance holding company. 
  
  ### Record of attendance
  
  823 (1) An insurance holding company shall keep a record of the attendance at each meeting of directors and each committee meeting of directors. 
  
  ### Statement to shareholders
  
  (2) An insurance holding company shall attach to the notice of each annual meeting it sends to its shareholders a statement showing, in respect of the financial year immediately preceding the meeting, the total number of directors’ meetings and directors’ committee meetings held during the financial year and the number of those meetings attended by each director. 
  
  ### Meeting required by Superintendent
  
  824 (1) Where in the opinion of the Superintendent it is necessary, the Superintendent may, by notice in writing, require an insurance holding company to hold a meeting of directors of the insurance holding company to consider the matters set out in the notice. 
  
  ### Attendance of Superintendent
  
  (2) The Superintendent may attend and be heard at a meeting referred to in subsection (1). 
  
  ## By-laws 
  
  ### By-laws
  
  825 (1) Unless this Part otherwise provides, the directors of an insurance holding company may by resolution make, amend or repeal any by-law that regulates the business or affairs of the insurance holding company. 
  
  ### Shareholder approval
  
  (2) The directors shall submit a by-law, or an amendment to or a repeal of a by-law, that is made under subsection (1) to the shareholders at the next meeting of shareholders, and the shareholders may, by resolution, confirm or amend the by-law, amendment or repeal. 
  
  ### Effective date of by-law
  
  (3) Unless this Part otherwise provides, a by-law, or an amendment to or a repeal of a by-law, is effective from the date of the resolution of the directors under subsection (1) until it is confirmed, confirmed as amended or rejected by the shareholders under subsection (2) or until it ceases to be effective under subsection (4) and, where the by-law is confirmed, or confirmed as amended, it continues in effect in the form in which it was so confirmed. 
  
  ### Effect where no shareholder approval
  
  (4) If a by-law, or an amendment to or a repeal of a by-law, is rejected by the shareholders, or is not submitted to the shareholders by the directors as required under subsection (2), the by-law, amendment or repeal ceases to be effective from the date of its rejection or the date of the next meeting of shareholders, as the case may be, and no subsequent resolution of the directors to make, amend or repeal a by-law having substantially the same purpose or effect is effective until it is confirmed, or confirmed as amended, by the shareholders. 
  
  ### Shareholder proposal of by-law
  
  826 A shareholder entitled to vote at an annual meeting of shareholders may, in accordance with sections 770 and 771, make a proposal to make, amend or repeal a by-law. 
  
  ### Deemed by-laws
  
  827 (1) Any matter provided for in the incorporating instrument of a body corporate continued as an insurance holding company at the time of continuance that, under this Part, would be provided for in the by-laws of an insurance holding company is deemed to be provided for in the by-laws of the insurance holding company. 
  
  ### By-law prevails
  
  (2) If a by-law of the insurance holding company made in accordance with sections 825 and 826 amends or repeals any matter referred to in subsection (1), the by-law prevails. 
  
  ## Committees of the Board 
  
  ### Committees
  
  828 The directors of an insurance holding company may appoint from their number, in addition to the committees referred to in subsection 794(2), such other committees as they deem necessary and, subject to section 832, delegate to those committees such powers of the directors, and assign to those committees such duties, as the directors consider appropriate. 
  
  ### Audit committee
  
  829 (1) The audit committee of an insurance holding company shall consist of at least three directors. 
  
  ### Membership
  
  (2) None of the members of the audit committee may be officers or employees of the insurance holding company or of any of its subsidiaries. 
  
  ### Duties of audit committee
  
  (3) The audit committee of an insurance holding company shall 
  (a) review the annual statement of the insurance holding company before the annual statement is approved by the directors; 
  (b) review such returns of the insurance holding company as the Superintendent may specify; 
  (c) require the management of the insurance holding company to implement and maintain appropriate internal control procedures; 
  (d) review, evaluate and approve those procedures; 
  (e) review such investments and transactions that could adversely affect the well-being of the insurance holding company as the auditor or any officer of the insurance holding company may bring to the attention of the committee; 
  (f) meet with the auditor to discuss the annual statement and the returns and transactions referred to in this subsection; and 
  (g) meet with the chief internal auditor of the insurance holding company, or the officer or employee of the insurance holding company acting in a similar capacity, and with management of the insurance holding company, to discuss the effectiveness of the internal control procedures established for the insurance holding company. 
  
  ### Report
  
  (4) In the case of the annual statement and returns of an insurance holding company that under this Part must be approved by the directors of the insurance holding company, the audit committee of the insurance holding company shall report thereon to the directors before the approval is given. 
  
  ### Required meeting of directors
  
  (5) The audit committee of an insurance holding company may call a meeting of the directors of the insurance holding company to consider any matter of concern to the committee. 
  
  ## Directors and Officers — Authority 
  
  ### Chief executive officer
  
  830 The directors of an insurance holding company shall appoint from their number a chief executive officer who must be ordinarily resident in Canada and, subject to section 832, may delegate to that officer any of the powers of the directors. 
  
  ### Appointment of officers
  
  831 (1) The directors of an insurance holding company may, subject to the by-laws, designate the offices of the insurance holding company, appoint officers thereto, specify the duties of those officers and delegate to them powers, subject to section 832, to manage the business and affairs of the insurance holding company. 
  
  ### Directors as officers
  
  (2) Subject to section 799, a director of an insurance holding company may be appointed to any office of the insurance holding company. 
  
  ### Two or more offices
  
  (3) Two or more offices of an insurance holding company may be held by the same person. 
  
  ### Limits on power to delegate
  
  832 The directors of an insurance holding company may not delegate any of the following powers, namely, the power to 
  (a) submit to the shareholders a question or matter requiring the approval of the shareholders; 
  (b) fill a vacancy among the directors, on a committee of directors or in the office of auditor, or appoint additional directors; 
  (c) issue or cause to be issued securities, including an issue of shares of a series that is authorized in accordance with section 745, except in accordance with any authorization made by the directors; 
  (d) declare a dividend; 
  (e) authorize the redemption or other acquisition by the insurance holding company pursuant to section 754 of shares issued by the insurance holding company; 
  (f) authorize the payment of a commission on a share issue; 
  (g) approve a management proxy circular; 
  (h) except as provided in this Part, approve the annual statement of the insurance holding company and any other financial statements issued by the insurance holding company; or 
  (i) adopt, amend or repeal by-laws. 
  
  ### Remuneration of directors, officers and employees
  
  833 (1) Subject to this section and the by-laws, the directors of an insurance holding company may fix the remuneration of the directors, officers and employees of the insurance holding company. 
  
  ### By-law required
  
  (2) No remuneration shall be paid to a director as director until a by-law fixing the aggregate of all amounts that may be paid to all directors in respect of directors’ remuneration during a fixed period of time has been confirmed by special resolution. 
  
  ### Validity of acts
  
  834 (1) An act of a director or an officer of an insurance holding company is valid notwithstanding a defect in the director’s qualification or an irregularity in the director’s election or in the appointment of the director or officer. 
  
  ### Validity of acts
  
  (2) An act of the board of directors of an insurance holding company is valid notwithstanding a defect in the composition of the board or an irregularity in the election of the board or in the appointment of a member of the board. 
  
  ### Right to attend meetings
  
  835 A director of an insurance holding company is entitled to attend and to be heard at every meeting of shareholders. 
  
  ## Conflicts of Interest 
  
  ### Disclosure of interest
  
  836 (1) A director or officer of an insurance holding company shall disclose to the insurance holding company, in writing or by requesting to have it entered in the minutes of a meeting of directors or a meeting of a committee of directors, the nature and extent of any interest they have in a material contract or material transaction with the insurance holding company, whether entered into or proposed, if they 
  (a) are a party to the contract or transaction; 
  (b) are a director or officer of a party to the contract or transaction or a person acting in a similar capacity; or 
  (c) have a material interest in a party to the contract or transaction. 
  
  ### Time of disclosure — director
  
  (2) The disclosure shall be made in the case of a director 
  (a) at the meeting of directors, or of a committee of directors, at which the proposed contract or transaction is first considered; 
  (b) if at the time of the meeting referred to in paragraph (a) the director was not interested in the proposed contract or transaction, at the first one after they become interested in it; 
  (c) if the director becomes interested after a contract or transaction is entered into, at the first one after they become interested; or 
  (d) if a person who is interested in a contract or transaction becomes a director, at the first one after they become a director. 
  
  ### Time of disclosure — officer
  
  (3) The disclosure required by subsection (1) shall be made in the case of an officer who is not a director 
  (a) immediately after they become aware that the contract, transaction, proposed contract or proposed transaction is to be considered or has been considered at a meeting of directors or of a committee of directors; 
  (b) if they become interested after the contract or transaction is entered into, immediately after they become interested; or 
  (c) if a person who is interested in a contract or transaction becomes an officer, immediately after they become an officer. 
  
  ### Time of disclosure — contract not requiring approval
  
  (4) If the material contract or material transaction, whether entered into or proposed, is one that in the ordinary course of the insurance holding company’s business would not require approval by the directors or shareholders, the director or officer shall disclose to the insurance holding company, in writing or by requesting to have it entered in the minutes of a meeting of directors or of a committee of directors, the nature and extent of their interest immediately after they become aware of the contract or transaction. 
  
  ### Director to abstain
  
  837 (1) A director who is required to make a disclosure under subsection 836(1) shall not be present at any meeting of directors, or of a committee of directors, while the contract or transaction is being considered or vote on any resolution to approve it unless the contract or transaction 
  (a) relates primarily to their remuneration as a director, officer, employee or agent of the insurance holding company, an entity controlled by the insurance holding company or an entity in which the insurance holding company has a substantial investment; 
  (b) is for indemnity under section 846 or insurance under section 847; or 
  (c) is with an affiliate of the insurance holding company. 
  
  ### Ineligibility
  
  (2) A director who knowingly contravenes subsection (1) ceases to hold office as director and is not eligible, for a period of five years after the date on which the contravention occurred, for election or appointment as a director of any insurance holding company, any bank holding company or any financial institution that is incorporated or formed by or under an Act of Parliament. 
  
  ### Validity of acts
  
  (3) An act of the board of directors of an insurance holding company or of a committee of the board of directors is not invalid because a person acting as a director had ceased under subsection (2) to hold office as a director. 
  
  ### General notice
  
  838 (1) For the purposes of subsection 836(1), a general notice to the directors declaring that a director or officer is to be regarded as interested for any of the following reasons in a contract or transaction entered into with a party, is a sufficient declaration of interest in relation to any contract or transaction with that party: 
  (a) the director or officer is a director or officer of a party referred to in paragraph 836(1)(b) or (c) or a person acting in a similar capacity; 
  (b) the director or officer has a material interest in the party; or 
  (c) there has been a material change in the nature of the director’s or officer’s interest in the party. 
  
  ### Access to disclosures
  
  (2) The shareholders of the insurance holding company may examine the portions of any minutes of meetings of directors or committees of directors that contain disclosures under subsection 836(1), or the portions of any other documents that contain those disclosures, during the usual business hours of the insurance holding company. 
  
  ### Avoidance standards
  
  839 (1) A contract or transaction for which disclosure is required under subsection 836(1) is not invalid and a director or officer is not accountable to the insurance holding company or its shareholders for any profit realized from it by reason only of the director’s or officer’s interest in the contract or transaction or the fact that the director was present or was counted to determine whether a quorum existed at the meeting of directors, or of a committee of directors, that considered it if 
  (a) the director or officer disclosed their interest in accordance with section 836 and subsection 838(1); 
  (b) the directors approved the contract or transaction; and 
  (c) the contract or transaction was reasonable and fair to the insurance holding company at the time that it was approved. 
  
  ### Confirmation by shareholders
  
  (2) Even if the conditions set out in subsection (1) are not met, a director or officer acting honestly and in good faith is not accountable to the insurance holding company or its shareholders for any profit realized from a contract or transaction for which disclosure was required and the contract or transaction is not invalid by reason only of the director’s or officer’s interest in it if 
  (a) the contract or transaction is approved or confirmed by special resolution at a meeting of shareholders; 
  (b) disclosure of the interest was made to the shareholders in a manner sufficient to indicate its nature before the contract or transaction was approved or confirmed; and 
  (c) the contract or transaction was reasonable and fair to the insurance holding company at the time that it was approved or confirmed. 
  
  ### Court may set aside or require accounting
  
  840 If a director or officer of an insurance holding company fails to comply with any of sections 836 to 839, a court, on application of the insurance holding company or any of its shareholders, may set aside the contract or transaction on any terms that the court thinks fit and may require the director or officer to account to the insurance holding company for any profit or gain realized on it. 
  
  ## Liability, Exculpation and Indemnification 
  
  ### Director liability
  
  841 (1) Directors of an insurance holding company who vote for or consent to a resolution of the directors authorizing the issue of a share contrary to subsection 748(1) or the issue of subordinated indebtedness contrary to section 762 for a consideration other than money are jointly and severally, or solidarily, liable to the insurance holding company to make good any amount by which the consideration received is less than the fair equivalent of the money that the insurance holding company would have received if the share or subordinated indebtedness had been issued for money on the date of the resolution. 
  
  ### Further liability
  
  (2) Directors of an insurance holding company who vote for or consent to a resolution of the directors authorizing any of the following are jointly and severally, or solidarily, liable to restore to the insurance holding company any amounts so distributed or paid and not otherwise recovered by the insurance holding company and any amounts in relation to any loss suffered by the insurance holding company: 
  (a) a redemption or purchase of shares contrary to section 754; 
  (b) a reduction of capital contrary to section 757; 
  (c) a payment of a dividend contrary to section 761; or 
  (d) a payment of an indemnity contrary to section 846. 
  
  ### Contribution
  
  842 (1) A director who has satisfied a judgment in relation to the director’s liability under section 841 is entitled to contribution from the other directors who voted for or consented to the unlawful act on which the judgment was founded. 
  
  ### Recovery
  
  (2) A director who is liable under section 841 is entitled to apply to a court for an order compelling a shareholder or other person to pay or deliver to the director any money or property that was paid or distributed to the shareholder or other person contrary to section 754, 757, 761 or 846. 
  
  ### Court order
  
  (3) Where an application is made to a court under subsection (2), the court may, where it is satisfied that it is equitable to do so, 
  (a) order a shareholder or other person to pay or deliver to a director any money or property that was paid or distributed to the shareholder or other person contrary to section 754, 757, 761 or 846; 
  (b) order an insurance holding company to return or issue shares to a person from whom the insurance holding company has purchased, redeemed or otherwise acquired shares; or 
  (c) make any further order it thinks fit. 
  
  ### Limitation
  
  843 An action to enforce a liability imposed by section 841 may not be commenced after two years from the date of the resolution authorizing the action complained of. 
  
  ### Directors liable for wages
  
  844 (1) Subject to subsections (2) and (3), the directors of an insurance holding company are jointly and severally, or solidarily, liable to each employee of the insurance holding company for all debts not exceeding six months wages payable to the employee for services performed for the insurance holding company while they are directors. 
  
  ### Conditions precedent
  
  (2) A director is not liable under subsection (1) unless 
  (a) the insurance holding company has been sued for the debt within six months after it has become due and execution has been returned unsatisfied in whole or in part; 
  (b) the insurance holding company has commenced liquidation and dissolution proceedings or has been dissolved and a claim for the debt has been proven within six months after the earlier of the date of commencement of the liquidation and dissolution proceedings and the date of dissolution; or 
  (c) the insurance holding company has made an assignment or a bankruptcy order has been made against it under the Bankruptcy and Insolvency Act and a claim for the debt has been proven within six months after the date of the assignment or bankruptcy order.  
  
  ### Limitations
  
  (3) A director is not liable under subsection (1) unless the director is sued for a debt referred to in that subsection while a director or within two years after the director has ceased to be a director. 
  
  ### Amount due after execution
  
  (4) Where execution referred to in paragraph (2)(a) has issued, the amount recoverable from a director is the amount remaining unsatisfied after execution. 
  
  ### Subrogation of director
  
  (5) Where a director of an insurance holding company pays a debt referred to in subsection (1) that is proven in liquidation and dissolution or bankruptcy proceedings, the director is entitled to any preference that the employee would have been entitled to and, where a judgment has been obtained, the director is entitled to an assignment of the judgment. 
  
  ### Contribution entitlement
  
  (6) A director of an insurance holding company who has satisfied a claim under this section is entitled to a contribution from the other directors of the insurance holding company who are liable for the claim. 
  
  ### Defence — due diligence
  
  845 (1) A director, officer or employee of an insurance holding company is not liable under section 841 or 844 and has fulfilled their duty under subsection 795(2) if they exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on 
  (a) financial statements of the insurance holding company that were represented to them by an officer of the insurance holding company or in a written report of the auditor of the insurance holding company fairly to reflect the financial condition of the insurance holding company; or 
  (b) a report of a person whose profession lends credibility to a statement made by them. 
  
  ### Defence — good faith
  
  (2) A director or officer of an insurance holding company has fulfilled their duty under subsection 795(1) if they relied in good faith on 
  (a) financial statements of the insurance holding company that were represented to them by an officer of the insurance holding company or in a written report of the auditor of the insurance holding company fairly to reflect the financial condition of the insurance holding company; or 
  (b) a report of a person whose profession lends credibility to a statement made by them. 
  
  ### Indemnification
  
  846 (1) An insurance holding company may indemnify a director or officer of the insurance holding company, a former director or officer of the insurance holding company or another person who acts or acted, at the insurance holding company’s request, as a director or officer of or in a similar capacity for another entity against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by them in respect of any civil, criminal, administrative, investigative or other proceeding in which they are involved because of that association with the insurance holding company or other entity. 
  
  ### Advances
  
  (2) An insurance holding company may advance amounts to the director, officer or other person for the costs, charges and expenses of a proceeding referred to in subsection (1). They shall repay the amounts if they do not fulfil the conditions set out in subsection (3). 
  
  ### No indemnification
  
  (3) An insurance holding company may not indemnify a person under subsection (1) unless 
  (a) the person acted honestly and in good faith with a view to the best interests of, as the case may be, the insurance holding company, or the other entity for which they acted at the insurance holding company’s request as a director or officer or in a similar capacity; and 
  (b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the person had reasonable grounds for believing that their conduct was lawful. 
  
  ### Indemnification — derivative actions
  
  (4) An insurance holding company may with the approval of a court indemnify a person referred to in subsection (1) or advance amounts to them under subsection (2) — in respect of an action by or on behalf of the insurance holding company or other entity to procure a judgment in its favour to which the person is made a party because of the association referred to in subsection (1) with the insurance holding company or other entity — against all costs, charges and expenses reasonably incurred by them in connection with that action if they fulfil the conditions set out in subsection (3). 
  
  ### Right to indemnity
  
  (5) Despite subsection (1), a person referred to in that subsection is entitled to be indemnified by the insurance holding company in respect of all costs, charges and expenses reasonably incurred by them in connection with the defence of any civil, criminal, administrative, investigative or other proceeding to which the person is subject because of the association referred to in subsection (1) with the insurance holding company or other entity described in that subsection if the person 
  (a) was not judged by the court or other competent authority to have committed any fault or omitted to do anything that they ought to have done; and 
  (b) fulfils the conditions set out in subsection (3). 
  
  ### Heirs and personal representatives
  
  (6) An insurance holding company may, to the extent referred to in subsections (1) to (5) in respect of the person, indemnify the heirs or personal representatives of any person whom the insurance holding company may indemnify under those subsections. 
  
  ### Directors’ and officers’ insurance
  
  847 An insurance holding company may purchase and maintain insurance for the benefit of any person referred to in section 846 against any liability incurred by the person 
  (a) in the capacity of a director or an officer of the insurance holding company, except where the liability relates to a failure to act honestly and in good faith with a view to the best interests of the insurance holding company; or 
  (b) in the capacity of a director or officer of another entity or while acting in a similar capacity for another entity, if they act or acted in that capacity at the insurance holding company’s request, except if the liability relates to a failure to act honestly and in good faith with a view to the best interests of the entity. 
  
  ### Application to court for indemnification
  
  848 (1) An insurance holding company or a person referred to in section 846 may apply to a court for an order approving an indemnity under that section and the court may so order and make any further order it thinks fit. 
  
  ### Notice to Superintendent
  
  (2) An applicant under subsection (1) shall give the Superintendent written notice of the application and the Superintendent is entitled to appear and to be heard at the hearing of the application in person or by counsel. 
  
  ### Other notice
  
  (3) On an application under subsection (1), the court may order notice to be given to any interested person and that person is entitled to appear and to be heard in person or by counsel at the hearing of the application. 
  
  # SUBDIVISION 4 
  
  ## Fundamental Changes 
  
  ## Amendments — Letters Patent 
  
  ### Incorporating instrument
  
  849 On the application of an insurance holding company duly authorized by special resolution, the Minister may approve a proposal to add, change or remove any provision that is permitted by this Part to be set out in the incorporating instrument of the insurance holding company. 
  
  ### Letters patent to amend
  
  850 (1) On receipt of an application referred to in section 849, the Minister may issue letters patent to effect the proposal. 
  
  ### Effect of letters patent
  
  (2) Letters patent issued pursuant to subsection (1) become effective on the day stated in the letters patent. 
  
  ## Amendments — By-laws 
  
  ### By-laws
  
  851 (1) The directors of an insurance holding company may make, amend or repeal any by-laws, in the manner set out in subsections (2) and (3) and sections 852 to 856, to 
  (a) change the maximum number, if any, of shares of any class that the insurance holding company is authorized to issue; 
  (b) create new classes of shares; 
  (c) change the designation of any or all of the insurance holding company’s shares, and add, change or remove any rights, privileges, restrictions and conditions, including rights to accrued dividends, in respect of any or all of the insurance holding company’s shares, whether issued or unissued; 
  (d) change the shares of any class or series, whether issued or unissued, into a different number of shares of the same class or series or into the same or a different number of shares of other classes or series; 
  (e) divide a class of shares, whether issued or unissued, into series and fix the maximum number of shares, if any, in each series and the rights, privileges, restrictions and conditions attached thereto; 
  (f) authorize the directors to divide any class of unissued shares into series and fix the maximum number of shares, if any, in each series and the rights, privileges, restrictions and conditions attached thereto; 
  (g) authorize the directors to change the rights, privileges, restrictions and conditions attached to unissued shares of any series; 
  (h) revoke, diminish or enlarge any authority conferred under paragraphs (f) and (g); 
  (i) increase or decrease the number of directors, subject to subsection 796(1) and section 803; 
  (j) change the name of the insurance holding company; or 
  (k) change the place in Canada where the head office of the insurance holding company is to be situated. 
  
  ### Shareholder approval
  
  (2) The directors shall submit a by-law, or an amendment to or a repeal of a by-law, that is made under subsection (1) to the shareholders entitled to vote, and the shareholders may, by special resolution, confirm, amend or reject the by-law, amendment or repeal. 
  
  ### Effective date of by-law
  
  (3) A by-law, or an amendment to or a repeal of a by-law, made under subsection (1) is not effective until it is confirmed or confirmed as amended by the shareholders under subsection (2) and, in the case of by-laws referred to in paragraph (1)(j), approved by the Superintendent in writing. 
  
  ### Class vote
  
  852 (1) The holders of shares of a class or, subject to subsection (2), of a series are, unless the by-laws otherwise provide in the case of an amendment to the by-laws referred to in paragraph (a), (b) or (e), entitled to vote separately as a class or series on a proposal to amend the by-laws to 
  (a) increase or decrease any maximum number of authorized shares of that class, or increase any maximum number of authorized shares of a class having rights or privileges equal or superior to the shares of that class; 
  (b) effect an exchange, reclassification or cancellation of all or part of the shares of that class; 
  (c) add, change or remove the rights, privileges, restrictions or conditions attached to the shares of that class and, without limiting the generality of the foregoing, 
  (i) remove or change prejudicially rights to accrued dividends or rights to cumulative dividends, 
  (ii) add, remove or change prejudicially redemption rights, 
  (iii) reduce or remove a dividend preference or a liquidation preference, or 
  (iv) add, remove or change prejudicially conversion privileges, options, voting, transfer or pre-emptive rights, or rights to acquire securities of the insurance holding company, or sinking fund provisions; 
  (d) increase the rights or privileges of any class of shares having rights or privileges equal or superior to the shares of that class; 
  (e) create a new class of shares equal or superior to the shares of that class; 
  (f) make any class of shares having rights or privileges inferior to the shares of that class equal or superior to the shares of that class; or 
  (g) effect an exchange or create a right of exchange of all or part of the shares of another class into the shares of that class. 
  
  ### Right limited
  
  (2) The holders of a series of shares of a class are entitled to vote separately as a series under subsection (1) if that series is affected by an addition or amendment to the by-laws in a manner different from other shares of the same class. 
  
  ### Right to vote
  
  (3) Subsections (1) and (2) apply whether or not the shares of a class otherwise carry the right to vote. 
  
  ### Separate resolutions
  
  853 A proposed addition or amendment to the by-laws referred to in subsection 852(1) is adopted when the holders of the shares of each class or series entitled to vote separately thereon as a class or series have approved the addition or amendment by a special resolution. 
  
  ### Revoking resolution
  
  854 Where a special resolution referred to in subsection 851(2) so states, the directors may, without further approval of the shareholders, revoke the special resolution. 
  
  ### Proposal to amend
  
  855 (1) Subject to subsection (2), a director or a shareholder who is entitled to vote at an annual meeting of shareholders of an insurance holding company may, in accordance with sections 770 and 771, make a proposal to make an application referred to in section 849 or to make, amend or repeal the by-laws referred to in subsection 851(1) of the insurance holding company. 
  
  ### Notice of amendment
  
  (2) Notice of a meeting of shareholders at which a proposal to amend the incorporating instrument or to make, amend or repeal the by-laws of an insurance holding company to effect any of the changes referred to in subsection 851(1) is to be considered must set out the proposal. 
  
  ### Rights preserved
  
  856 No amendment to the incorporating instrument or by-laws of an insurance holding company affects an existing cause of action or claim or liability to prosecution in favour of or against the insurance holding company or its directors or officers, or any civil, criminal or administrative action or proceeding to which the insurance holding company or any of its directors or officers are a party. 
  
  ## Amalgamation 
  
  ### Application to amalgamate
  
  857 On the joint application of two or more bodies corporate incorporated by or under an Act of Parliament, including a company or an insurance holding company but not including a mutual company or a federal credit union, the Minister may issue letters patent amalgamating and continuing the applicants as one insurance holding company. 
  
  ### Amalgamation agreement
  
  858 (1) Each applicant proposing to amalgamate shall enter into an amalgamation agreement. 
  
  ### Contents of agreement
  
  (2) Every amalgamation agreement shall set out the terms and means of effecting the amalgamation and, in particular, 
  (a) the name of the amalgamated insurance holding company and the province in which its head office is to be situated; 
  (b) the name and place of ordinary residence of each proposed director of the amalgamated insurance holding company; 
  (c) the manner in which any shares of each applicant are to be converted into shares or other securities of the amalgamated insurance holding company; 
  (d) if any shares of an applicant are not to be converted into shares or other securities of the amalgamated insurance holding company, the amount of money or securities that the holders of those shares are to receive in addition to or in lieu of shares or other securities of the amalgamated insurance holding company; 
  (e) the manner of payment of money in lieu of the issue of fractional shares of the amalgamated insurance holding company or of any other body corporate that are to be issued in the amalgamation; 
  (f) the proposed by-laws of the amalgamated insurance holding company; 
  (g) details of any other matter necessary to perfect the amalgamation and to provide for the subsequent management and operation of the amalgamated insurance holding company; and 
  (h) the proposed effective date of the amalgamation. 
  
  ### Cross ownership of shares
  
  (3) If shares of one of the applicants are held by or on behalf of another of the applicants, other than shares held in the capacity of a personal representative or by way of security, the amalgamation agreement must provide for the cancellation of those shares when the amalgamation becomes effective without any repayment of capital in respect thereof, and no provision shall be made in the agreement for the conversion of those shares into shares of the amalgamated insurance holding company. 
  
  ### Approval of agreement by Superintendent
  
  859 An amalgamation agreement must be submitted to the Superintendent for approval and any approval of the agreement under subsection 860(4) by the shareholders of an applicant is invalid unless, before the date of the approval, the Superintendent has approved the agreement in writing. 
  
  ### Approval by shareholders
  
  860 (1) The directors of each applicant shall submit an amalgamation agreement for approval to a meeting of the shareholders of the body corporate of which they are directors and to the holders of each class or series of shares. 
  
  ### Right to vote
  
  (2) Each share of an applicant carries the right to vote in respect of an amalgamation agreement whether or not it otherwise carries the right to vote. 
  
  ### Separate vote for class or series
  
  (3) The holders of shares of a class or series of shares of each applicant are entitled to vote separately as a class or series in respect of an amalgamation agreement if the agreement contains a provision that, if it were contained in a proposed amendment to the by-laws or incorporating instrument of the applicant, would entitle those holders to vote separately as a class or series. 
  
  ### Special resolution
  
  (4) Subject to subsection (3), an amalgamation agreement is approved when it has been approved by special resolution by the shareholders of each applicant body corporate. 
  
  ### Termination
  
  (5) An amalgamation agreement may provide that, at any time before the issue of letters patent of amalgamation, the agreement may be terminated by the directors of an applicant even though the agreement has been approved by the shareholders of all or any of the applicant bodies corporate. 
  
  ### Vertical short-form amalgamation
  
  861 (1) An insurance holding company may, without complying with sections 858 to 860, amalgamate with one or more bodies corporate that 
  (a) are incorporated by or under an Act of Parliament, and 
  (b) are wholly-owned subsidiaries of the insurance holding company if 
  (c) the amalgamation is approved by a resolution of the directors of the insurance holding company and of each amalgamating subsidiary, and 
  (d) the resolutions provide that 
  (i) the shares of each amalgamating subsidiary will be cancelled without any repayment of capital in respect thereof, 
  (ii) the letters patent of amalgamation and the by-laws of the amalgamated insurance holding company will be the same as the incorporating instrument and the by-laws of the amalgamating insurance holding company that is the holding body corporate, and 
  (iii) no securities will be issued by the amalgamated insurance holding company in connection with the amalgamation. 
  
  ### Horizontal short-form amalgamation
  
  (2) Two or more bodies corporate that 
  (a) are incorporated by or under an Act of Parliament, and 
  (b) are wholly-owned subsidiaries of the same holding body corporate may amalgamate and continue as one insurance holding company without complying with sections 858 to 860 if 
  (c) at least one of the applicants is an insurance holding company, 
  (d) the amalgamation is approved by a resolution of the directors of each of the applicants, and 
  (e) the resolutions provide that 
  (i) the shares of all applicants, except those of one of the applicants that is an insurance holding company, will be cancelled without any repayment of capital in respect thereof, 
  (ii) the letters patent of amalgamation and the by-laws of the amalgamated insurance holding company will be the same as the incorporating instrument and the by-laws of the amalgamating insurance holding company whose shares are not cancelled, and 
  (iii) the stated capital of the amalgamating insurance holding companies and bodies corporate whose shares are cancelled will be added to the stated capital of the amalgamating insurance holding company whose shares are not cancelled. 
  
  ### Joint application to Minister
  
  862 (1) Subject to subsection (2), unless an amalgamation agreement is terminated in accordance with subsection 860(5), the applicants shall, within three months after the approval of the agreement in accordance with subsection 860(4) or the approval of the directors in accordance with subsection 861(1) or (2), jointly apply to the Minister for letters patent of amalgamation continuing the applicants as one insurance holding company. 
  
  ### Conditions precedent to application
  
  (2) No application for the issue of letters patent under subsection (1) may be made unless 
  (a) notice of intention to make such an application has been published at least once a week for a period of four consecutive weeks in the Canada Gazette and in a newspaper in general circulation at or near the place where the head office of each applicant is situated; and  
  (b) the application is supported by satisfactory evidence that the applicants have complied with the requirements of this Part relating to amalgamations. 
  
  ### Application of sections 709 to 711
  
  (3) Where two or more bodies corporate, none of which is an insurance holding company, apply for letters patent under subsection (1), sections 709 to 711 apply in respect of the application with such modifications as the circumstances require. 
  
  ### Matters for consideration
  
  (4) Before issuing letters patent of amalgamation continuing the applicants as one insurance holding company, the Minister shall take into account all matters that the Minister considers relevant to the application, including 
  (a) the sources of continuing financial support for any company that will be a subsidiary of the amalgamated insurance holding company; 
  (b) the soundness and feasibility of the plans of the applicants for the future conduct and development of the business of any company that will be a subsidiary of the amalgamated insurance holding company; 
  (c) the business record and experience of the applicants; 
  (d) the reputation of the applicants for being operated in a manner that is consistent with the standards of good character and integrity; 
  (e) whether the amalgamated insurance holding company will be operated responsibly by persons with the competence and experience suitable for involvement in the operation of a financial institution; 
  (f) the impact of any integration of the operations and businesses of the applicants on the conduct of those operations and businesses; 
  (g) if the insurance holding company is an insurance holding company in respect of which subsection 927(5) applies or an insurance holding company in respect of which subsection 927(6) applied at any time, the opinion of the Superintendent regarding the extent to which the proposed corporate structure of the amalgamated insurance holding company and its affiliates may affect the supervision and regulation of any company that will be its subsidiary, having regard to 
  (i) the nature and extent of the proposed financial services activities to be carried out by the affiliates of the amalgamated insurance holding company, and 
  (ii) the nature and degree of supervision and regulation applying to the proposed financial services activities to be carried out by the affiliates of the amalgamated insurance holding company; and 
  (h) the best interests of the financial system in Canada. 
  
  ### Restriction
  
  (5) The Minister may not, before January 1, 2002, issue letters patent under section 863 amalgamating a converted company in respect of which subsection 407(4) or (11) applies, a company to which subsection 407(5) or (12) applies or an insurance holding company to which subsection 407(6) or (13) applies with any other body corporate. 
  
  ### Restriction
  
  (6) If one of the applicants for letters patent of amalgamation is a converted company in respect of which subsection 407(4) applies, or a company to which subsection 407(5) applies or an insurance holding company to which subsection 407(6) applies, the Minister may not issue the letters patent of amalgamation unless the amalgamated insurance holding company is widely held. 
  
  ### Deeming
  
  (7) If one of the applicants for letters patent of amalgamation is a converted company in respect of which subsection 407(4) applies, a company to which subsection 407(5) applies or an insurance holding company to which subsection 407(6) applies and the letters patent of amalgamation are issued, the amalgamated insurance holding company is deemed to be an insurance holding company in respect of which subsection 927(4) applies. 
  
  ### Issue of letters patent
  
  863 (1) Where an application has been made to the Minister in accordance with section 862, the Minister may issue letters patent of amalgamation continuing the applicants as one insurance holding company. 
  
  ### Letters patent
  
  (2) Where letters patent are issued pursuant to this section, section 713 applies with such modifications as the circumstances require in respect of the issue of the letters patent. 
  
  ### Publication of notice
  
  (3) The Superintendent shall cause to be published in the Canada Gazette notice of the issuance of letters patent pursuant to subsection (1).  
  
  ### Court enforcement
  
  864 (1) If an insurance holding company, or any director, officer, employee or agent of an insurance holding company, is contravening or has failed to comply with any term or condition made in respect of the issuance of letters patent of amalgamation, the Minister may, in addition to any other action that may be taken under this Act, apply to a court for an order directing the insurance holding company, or the director, officer, employee or agent to comply with the term or condition, cease the contravention or do any thing that is required to be done, and on the application the court may so order and make any other order it thinks fit. 
  
  ### Appeal
  
  (2) An appeal from an order of a court under this section lies in the same manner as, and to the same court to which, an appeal may be taken from any other order of the court. 
  
  ### Effect of letters patent
  
  865 (1) On the day provided for in the letters patent issued under section 863, 
  (a) the amalgamation of the applicants and their continuance as one insurance holding company become effective; 
  (b) the property of each applicant continues to be the property of the amalgamated insurance holding company; 
  (c) the amalgamated insurance holding company continues to be liable for the obligations of each applicant; 
  (d) any existing cause of action, claim or liability to prosecution is unaffected; 
  (e) any civil, criminal or administrative action or proceeding pending by or against an applicant may be continued to be prosecuted by or against the amalgamated insurance holding company; 
  (f) any conviction against, or ruling, order or judgment in favour of or against, an applicant may be enforced by or against the amalgamated insurance holding company; 
  (g) if any director or officer of an applicant continues as a director or officer of the amalgamated insurance holding company, any disclosure by that director or officer of a material interest in any contract made to the applicant shall be deemed to be disclosure to the amalgamated insurance holding company; and 
  (h) the letters patent of amalgamation are the incorporating instrument of the amalgamated insurance holding company. 
  
  ### Minutes
  
  (2) Any deemed disclosure under paragraph (1)(g) shall be recorded in the minutes of the first meeting of directors of the amalgamated insurance holding company. 
  
  ### Transitional
  
  866 (1) Despite any other provision of this Act or the regulations, the Minister may, by order, on the recommendation of the Superintendent, grant to an insurance holding company in respect of which letters patent were issued under subsection 863(1) permission to 
  (a) engage in a business activity specified in the order that the insurance holding company would not otherwise be permitted by this Act to engage in and that one or more of the amalgamating bodies corporate was engaging in at the time application for the letters patent was made; 
  (b) continue to have issued and outstanding debt obligations the issue of which is not authorized by this Act if the debt obligations were outstanding at the time the application for the letters patent was made; 
  (c) hold assets that the insurance holding company would not otherwise be permitted by this Act to hold, if the assets were held by one or more of the amalgamating bodies corporate at the time the application for the letters patent was made; 
  (d) acquire and hold assets that the insurance holding company would not otherwise be permitted by this Act to acquire or hold, if one or more of the amalgamating bodies corporate were obliged, at the time the application for the letters patent was made, to acquire those assets; and 
  (e) maintain outside Canada any records or registers required by this Act to be maintained in Canada. 
  
  ### Duration of exceptions
  
  (2) The permission granted under subsection (1) shall be expressed to be granted for a period specified in the order not exceeding 
  (a) with respect to any matter described in paragraph (1)(a), thirty days after the date of issue of the letters patent or, where the activity is conducted pursuant to an agreement existing on the date of issue of the letters patent, the expiration of the agreement; 
  (b) with respect to any matter described in paragraph (1)(b), ten years; and 
  (c) with respect to any matter described in any of paragraphs (1)(c) to (e), two years. 
  
  ### Renewal
  
  (3) Subject to subsection (4), the Minister, on the recommendation of the Superintendent, may by order renew a permission granted by order under subsection (1) with respect to any matter described in any of paragraphs (1)(b) to (d) for any further period or periods that the Minister considers necessary. 
  
  ### Limitation
  
  (4) The Minister shall not grant to an insurance holding company any permission 
  (a) with respect to matters described in paragraph (1)(b), that purports to be effective more than ten years after the effective date of the letters patent of amalgamation issued to effect the amalgamation, unless the Minister is satisfied on the basis of evidence on oath provided by an officer of the insurance holding company that the insurance holding company will not be able at law to redeem at the end of the ten years the outstanding debt obligations to which the permission relates; and 
  (b) with respect to matters described in paragraphs (1)(c) and (d), that purports to be effective more than ten years after the effective date of the letters patent of amalgamation issued to effect the amalgamation. 
  
  ## Transfer of Business 
  
  ### Shareholder approval
  
  867 (1) A sale, lease or exchange of all or substantially all the property of an insurance holding company requires the approval of the shareholders in accordance with subsections (2) to (7). 
  
  ### Notice of meeting
  
  (2) A notice of a meeting of shareholders complying with sections 767 and 769 shall be sent in accordance with those sections to each shareholder and shall include or be accompanied by a copy or summary of the agreement of sale, lease or exchange. 
  
  ### Shareholder approval
  
  (3) At the meeting referred to in the notice, the shareholders may authorize the sale, lease or exchange and may fix or authorize the directors to fix any of the sale’s, lease’s or exchange’s terms and conditions. 
  
  ### Right to vote
  
  (4) Each share of the insurance holding company carries the right to vote in respect of the proposal whether or not the share otherwise carries the right to vote. 
  
  ### Class vote
  
  (5) The holders of shares of a class or series of shares of the insurance holding company are entitled to vote separately as a class or series in respect of the proposal if the shares of the class or series are affected by the proposed transaction in a manner different from the shares of another class or series. 
  
  ### Special resolution
  
  (6) For the purpose of subsection (1), the proposal is not approved unless the holders of the shares of each class or series of shares entitled to vote separately on the proposal have approved the proposal by special resolution. 
  
  ### Abandoning transaction
  
  (7) Where a special resolution under subsection (6) approving a proposed transaction so states, the directors of an insurance holding company may, subject to the rights of third parties, abandon the transaction without further approval of the shareholders. 
  
  # SUBDIVISION 5 
  
  ## Head Office and Corporate Records 
  
  ### Head office
  
  868 (1) An insurance holding company shall at all times have a head office in the province specified in its incorporating instrument or by-laws. 
  
  ### Change of head office
  
  (2) The directors of an insurance holding company may change the address of the head office within the province specified in the incorporating instrument or by-laws. 
  
  ### Notice of change of address
  
  (3) An insurance holding company shall send to the Superintendent, within fifteen days after any change of address of its head office, a notice of the change of address. 
  
  ### Insurance holding company records
  
  869 (1) An insurance holding company shall prepare and maintain records containing 
  (a) its incorporating instrument and by-laws and all amendments to them; 
  (b) minutes of meetings and resolutions of shareholders; 
  (c) the information referred to in paragraphs 994(1)(a) and (c) to (g) contained in all returns provided to the Superintendent under section 994; and 
  (d) particulars of exceptions granted under section 725 or 866 that are from time to time applicable to the insurance holding company. 
  
  ### Additional records
  
  (2) In addition to the records described in subsection (1), an insurance holding company shall prepare and maintain adequate 
  (a) corporate accounting records; and 
  (b) records containing minutes of meetings and resolutions of the directors and any committee thereof. 
  
  ### Continued insurance holding companies
  
  (3) For the purposes of paragraph (1)(b) and subsection (2), 
  (a) in the case of a body corporate continued as an insurance holding company under this Part, 
  *records* includes similar records required by law to be maintained by the body corporate before it was so continued; and  
  (b) in the case of a body corporate amalgamated and continued as an insurance holding company under this Part, 
  *records* includes similar records required by law to be maintained by the body corporate before it was so amalgamated.  
  
  ### Place of records
  
  870 (1) The records described in section 869 shall be kept at the head office of the insurance holding company or at such other place in Canada as the directors think fit. 
  
  ### Exception
  
  (1.1) Subject to subsection 876(1.1), subsection (1) does not apply to an insurance holding company that is a subsidiary of a regulated foreign entity. 
  
  ### Notice of place of records
  
  (2) Where any of the records described in section 869 are not kept at the head office of an insurance holding company, the insurance holding company shall notify the Superintendent of the place where the records are kept. 
  
  ### Inspection
  
  (3) The records described in section 869 shall at all reasonable times be open to inspection by the directors. 
  
  ### Access to insurance holding company records
  
  (4) Shareholders and creditors of an insurance holding company and their personal representatives may examine the records referred to in subsection 869(1) during the usual business hours of the insurance holding company and may take extracts from them free of charge or have copies of them made on payment of a reasonable fee. If the insurance holding company is a distributing insurance holding company, any other person may on payment of a reasonable fee examine those records during the usual business hours of the insurance holding company and take extracts from them or have copies of them made. 
  
  ### Copies of by-laws for shareholders
  
  (5) Every shareholder of an insurance holding company is entitled, on request made not more often than once in each calendar year, to receive free of charge one copy of the by-laws of the insurance holding company. 
  
  ### Electronic access
  
  (6) An insurance holding company may make the information contained in records referred to in subsection 869(1) available to persons by any system of mechanical or electronic data processing or any other information storage device that is capable of reproducing the records in intelligible written form within a reasonable time. 
  
  ### Shareholder lists
  
  871 (1) A person who is entitled to a basic list of shareholders of an insurance holding company (in this section referred to as the “applicant”) may request the insurance holding company to furnish the applicant with a basic list within ten days after receipt by the insurance holding company of the affidavit referred to in subsection (2) and, on payment of a reasonable fee by the applicant, the insurance holding company shall comply with the request. 
  
  ### Affidavit and contents
  
  (2) A request under subsection (1) must be accompanied by an affidavit containing 
  (a) the name and address of the applicant, 
  (b) the name and address for service of the entity, if the applicant is an entity, and 
  (c) an undertaking that the basic list and any supplemental lists obtained pursuant to subsections (5) and (6) will not be used except as permitted under section 873, and, if the applicant is an entity, the affidavit shall be made by a director or an officer of the entity, or any person acting in a similar capacity. 
  
  ### Entitlement to list
  
  (3) A shareholder or creditor of an insurance holding company or their personal representative — or if the insurance holding company is a distributing insurance holding company, any person — is entitled to a basic list of shareholders of the insurance holding company. 
  
  ### Basic list of shareholders
  
  (4) A basic list of shareholders of an insurance holding company consists of a list of shareholders that is made up to a date not more than ten days before the receipt of the affidavit referred to in subsection (2) and that sets out 
  (a) the names of the shareholders of the insurance holding company; 
  (b) the number of shares owned by each shareholder; and 
  (c) the address of each shareholder as shown in the records of the insurance holding company. 
  
  ### Supplemental lists
  
  (5) A person requiring an insurance holding company to supply a basic list of shareholders may, if the person states in the accompanying affidavit that supplemental lists are required, request the insurance holding company or its agent, on payment of a reasonable fee, to provide supplemental lists of shareholders setting out any changes from the basic list in the names and addresses of the shareholders and the number of shares owned by each shareholder for each business day following the date to which the basic list is made up. 
  
  ### When supplemental lists to be furnished
  
  (6) An insurance holding company or its agent shall provide a supplemental list of shareholders required under subsection (5) 
  (a) within ten days following the date the basic list is provided, where the information relates to changes that took place prior to that date; and 
  (b) within ten days following the day to which the supplemental list relates, where the information relates to changes that took place on or after the date the basic list was provided. 
  
  ### Option holders
  
  872 A person requiring an insurance holding company to supply a basic list or a supplemental list of shareholders may also require the insurance holding company to include in that list the name and address of any known holder of an option or right to acquire shares of the insurance holding company. 
  
  ### Use of shareholder list
  
  873 A list of shareholders obtained under section 871 shall not be used by any person except in connection with 
  (a) an effort to influence the voting of shareholders of the insurance holding company; 
  (b) an offer to acquire shares of the insurance holding company; or 
  (c) any other matter relating to the affairs of the insurance holding company. 
  
  ### Form of records
  
  874 (1) A register or other record required or authorized by this Part to be prepared and maintained by an insurance holding company 
  (a) may be in a bound or loose-leaf form or in a photographic film form; or 
  (b) may be entered or recorded by any system of mechanical or electronic data processing or any other information storage device that is capable of reproducing any required information in intelligible written form within a reasonable time. 
  
  ### Conversion of records
  
  (2) Registers and records maintained in one form may be converted to any other form. 
  
  ### Destruction of converted records
  
  (3) Despite section 877, an insurance holding company may destroy any register or other record referred to in subsection (1) at any time after the register or other record has been converted to another form. 
  
  ### Protection of records
  
  875 An insurance holding company and its agents shall take reasonable precautions to 
  (a) prevent loss or destruction of, 
  (b) prevent falsification of entries in, 
  (c) facilitate detection and correction of inaccuracies in, and 
  (d) ensure that unauthorized persons do not have access to or use of information in, the registers and records required or authorized by this Part to be prepared and maintained. 
  
  ### Requirement to maintain copies and process information in Canada
  
  876 (1) If the Superintendent is of the opinion that it is incompatible with the fulfilment of the Superintendent’s responsibilities under this Act for an insurance holding company to maintain, in another country, copies of records referred to in section 869 or of its central securities register or for an insurance holding company to process, in another country, information or data relating to the preparation and maintenance of those records or of its central securities register — or if the Superintendent is advised by the Minister that, in the opinion of the Minister, it is not in the national interest for an insurance holding company to do any of those activities in another country — the Superintendent shall direct the insurance holding company to not maintain those copies, or to not process the information or data, as the case may be, in that other country or to maintain those copies or to process the information or data only in Canada. 
  
  ### Direction — immediate, direct, complete and ongoing access
  
  (1.1) Where an insurance holding company referred to in subsection 870(1.1) or 274(3) maintains records referred to in section 869 or the central securities register at a place outside Canada, the Superintendent may, in the case referred to in paragraph (a), and shall, in the case referred to in paragraph (b), by order, direct the insurance holding company to maintain a copy of those records or register at any place in Canada as the directors think fit 
  (a) if the Superintendent is of the opinion that he or she does not have immediate, direct, complete and ongoing access to those records or register; or 
  (b) if the Superintendent is advised by the Minister that the Minister is of the opinion that it is not in the national interest for the insurance holding company not to maintain a copy of those records or register at any place in Canada. 
  
  ### Insurance holding company
  
  (2) An insurance holding company shall without delay comply with any order issued under subsection (1) or (1.1). 
  
  ### Retention of records
  
  877 An insurance holding company shall retain 
  (a) the records of the insurance holding company referred to in subsection 869(1); 
  (b) any record of the insurance holding company referred to in paragraph 869(2)(a) or (b); and 
  (c) the central securities register referred to in subsection 271(1). 
  
  ### Regulations
  
  878 The Governor in Council may make regulations respecting the records, papers and documents to be retained by an insurance holding company, including the length of time those records, papers and documents are to be retained, and what constitutes immediate, direct, complete and ongoing access, for the purpose of paragraph 876(1.1)(a). 
  
  # SUBDIVISION 6 
  
  ## Securities Registers 
  
  ### Sections 271 to 277 apply
  
  879 Sections 271 to 277 apply in respect of insurance holding companies, subject to the following: 
  (a) references to “company” in those sections are to be read as references to “insurance holding company”; and 
  (b) the reference to “subsection 268(1.1)” in subsection 274(3) is to be read as a reference to “subsection 876(1.1)”; 
  (c) the reference to “subsection 73(1)” in section 277 is to be read as a reference to “subsection 752(1)”. 
  
  # SUBDIVISION 7 
  
  ## Corporate Name and Seal 
  
  ### Publication of name
  
  880 An insurance holding company shall set out its name in legible characters in all contracts, negotiable instruments and other documents evidencing rights or obligations with respect to other parties that are issued or made by or on behalf of the insurance holding company. 
  
  ### Corporate seal
  
  881 (1) An insurance holding company may adopt a corporate seal and change one that it adopted. 
  
  ### Validity of unsealed documents
  
  (2) A document executed on behalf of an insurance holding company is not invalid merely because a corporate seal is not affixed to it. 
  
  # SUBDIVISION 8 
  
  ## Insiders 
  
  ### Sections 288 to 295 apply
  
  882 Sections 288 to 295 apply in respect of insurance holding companies, subject to the following: 
  (a) references to “company” in those sections are to be read as references to “insurance holding company”; 
  (b) references to “this Act” in those sections are to be read as references to “this Part”; and 
  (c) references to “this Division” in those sections are to be read as references to “this Subdivision”. 
  
  # SUBDIVISION 9 
  
  ## Prospectus 
  
  ### Ss. 296 and 297 apply
  
  883 Sections 296 and 297 apply in respect of insurance holding companies except that references to “company” are to be read as references to “insurance holding company”. 
  
  # SUBDIVISION 9.1 
  
  ## Going-private Transactions and Squeeze-out Transactions 
  
  ### Ss. 298 to 300 apply
  
  883.1 Sections 298 to 300 apply in respect of insurance holding companies subject to the following: 
  (a) references to “company” are to be read as references to “insurance holding company”; 
  (b) references to “this Act” are to be read as references to “this Part”; 
  (c) references to “the policyholders entitled to vote and the shareholders” in subsections 300(2) and (4) to (6) are to be read as references to “the shareholders”; 
  (d) the reference to “section 242” in paragraph 300(10)(c) is to be read as a reference to “section 854”; and 
  (e) the reference to “a regulation referred to in subsection 515(1) or (2) or 516(1) or (2) or of an order made under subsection 515(3) or 516(4)” in subsection 300(25) is to be read as a reference to “a regulation referred to in subsection 992(1) or (2) or of an order made under subsection 992(3)”. 
  
  # SUBDIVISION 10 
  
  ## Compulsory Acquisitions 
  
  ### Ss. 307 to 316.1 apply
  
  884 Sections 307 to 316.1 apply in respect of insurance holding companies, subject to the following: 
  (a) references to “company” in those sections are to be read as references to “insurance holding company”; and 
  (b) references to “this Division” in those sections are to be read as references to “this Subdivision”. 
  
  # SUBDIVISION 11 
  
  ## Trust Indentures 
  
  ### Sections 317 to 329 apply
  
  885 Sections 317 to 329 apply in respect of insurance holding companies, subject to the following: 
  (a) references to “company” in those sections are to be read as references to “insurance holding company”; 
  (b) references to “this Act” in those sections are to be read as references to “this Part”; 
  (c) references to “this Division” in those sections are to be read as references to “this Subdivision”; and 
  (d) references to “subordinated indebtedness” in those sections are to be read as references to “subordinated indebtedness” as defined in subsection 700(1). 
  
  # SUBDIVISION 12 
  
  ## Financial Statements 
  
  ### Financial year
  
  886 (1) The financial year of an insurance holding company ends, at the election of the insurance holding company in its by-laws, on the expiration of the thirty-first day of October or the thirty-first day of December in each year. 
  
  ### First financial year
  
  (2) If, in any year, an insurance holding company comes into existence after the first day of July, its first financial year ends, at its election in its by-laws, on the expiration of the thirty-first day of October or the thirty-first day of December in the next calendar year. 
  
  ### Annual financial statement
  
  887 (1) The directors of an insurance holding company shall place before the shareholders at every annual meeting 
  (a) a comparative annual financial statement relating separately to 
  (i) the financial year immediately preceding the meeting, and 
  (ii) the financial year, if any, immediately preceding the financial year referred to in subparagraph (i); 
  (b) the report of the auditor of the insurance holding company; and 
  (c) any further information respecting the financial position of the insurance holding company and the results of its operations required by the by-laws of the insurance holding company to be placed before the shareholders at the annual meeting. 
  
  ### Annual statement — contents
  
  (2) With respect to each of the financial years to which it relates, the annual statement of an insurance holding company must contain the prescribed statements and any information that is in the opinion of the directors necessary to present fairly, in accordance with the accounting principles referred to in subsection (4), the financial position of the insurance holding company as at the end of the financial year to which it relates and the results of the operations and changes in the financial position of the insurance holding company for that financial year. 
  
  ### Additional information
  
  (3) An insurance holding company shall include with its annual statement 
  (a) a list of the subsidiaries of the insurance holding company, other than subsidiaries that are not required to be listed by the regulations and subsidiaries acquired pursuant to section 975 or pursuant to a realization of security in accordance with section 976 and which the insurance holding company would not otherwise be permitted to hold, showing, with respect to each subsidiary, 
  (i) its name and the address of its head or principal office, 
  (ii) the book value of the aggregate of any shares of the subsidiary beneficially owned by the insurance holding company and by other subsidiaries of the insurance holding company, and 
  (iii) the percentage of the voting rights attached to all the outstanding voting shares of the subsidiary that is carried by the aggregate of any voting shares of the subsidiary beneficially owned by the insurance holding company and by other subsidiaries of the insurance holding company; and 
  (b) such other information as may be prescribed in such form as may be prescribed. 
  
  ### Accounting principles
  
  (4) The financial statements referred to in subsection (1), paragraph (3)(a) and subsection 889(1) shall, except as otherwise specified by the Superintendent, be prepared in accordance with generally accepted accounting principles, the primary source of which is the Handbook of the Chartered Professional Accountants of Canada. A reference in any provision of this Act to the accounting principles referred to in this subsection shall be construed as a reference to those generally accepted accounting principles with any specifications so made. 
  
  ### Actuarial practices
  
  (5) The valuation of the amount, if any, shown in the balance sheet that is included in the annual statement of an insurance holding company in respect of the actuarial and other policy liabilities of the insurance holding company shall be in accordance with generally accepted actuarial practice with such changes as may be determined by the Superintendent and any additional directions that may be made by the Superintendent. 
  
  ### Regulations
  
  (6) The Governor in Council may make regulations respecting subsidiaries that are not required to be listed for the purposes of paragraph (3)(a). 
  
  ### Annual statement — approval
  
  888 (1) The directors of an insurance holding company shall approve the annual statement and their approval shall be evidenced by the signature or a printed or otherwise mechanically reproduced facsimile of the signature of 
  (a) the chief executive officer or, in the event of that officer’s absence or inability to act, any other officer of the insurance holding company authorized by the directors to sign in the stead of the chief executive officer; and 
  (b) one director, if the signature required by paragraph (a) is that of a director, or two directors if the signature required by that paragraph is that of an officer who is not a director. 
  
  ### Condition precedent to publication
  
  (2) An insurance holding company shall not publish copies of an annual statement unless it is approved and signed in accordance with subsection (1). 
  
  ### Statements — subsidiaries
  
  889 (1) An insurance holding company shall keep at its head office a copy of the current financial statements of each subsidiary of the insurance holding company. 
  
  ### Examination
  
  (2) Subject to this section, the shareholders of an insurance holding company and their personal representatives may, on request therefor, examine the statements referred to in subsection (1) during the usual business hours of the insurance holding company and may take extracts therefrom free of charge. 
  
  ### Barring examination
  
  (3) An insurance holding company may refuse to permit an examination under subsection (2) by any person. 
  
  ### Application for order
  
  (4) Within fifteen days after a refusal under subsection (3), the insurance holding company shall apply to a court for an order barring the right of the person concerned to make an examination under subsection (2) and the court shall either order the insurance holding company to permit the examination or, if it is satisfied that the examination would be detrimental to the insurance holding company or to any other body corporate the financial statements of which would be subject to examination, bar the right and make any further order it thinks fit. 
  
  ### Notice to Superintendent
  
  (5) An insurance holding company shall give the Superintendent and the person seeking to examine the statements referred to in subsection (1) notice of an application to a court under subsection (4), and the Superintendent and the person may appear and be heard in person or by counsel at the hearing of the application. 
  
  ### Annual statement — distribution
  
  890 (1) An insurance holding company shall, no later than 21 days before the date of each annual meeting or before the signing of a resolution under paragraph 779(1)(b) in lieu of the annual meeting, send to each shareholder a copy of the documents referred to in subsections 887(1) and (3) unless that time period is waived by the shareholder. 
  
  ### Exception
  
  (2) An insurance holding company is not required to comply with subsection (1) with respect to shareholders who have informed the insurance holding company, in writing, that they do not wish to receive the annual statement. 
  
  ### Effect of default
  
  (3) Where an insurance holding company is required to comply with subsection (1) and the insurance holding company does not comply with that subsection, the annual meeting at which the annual statement is to be considered shall be adjourned until that subsection has been complied with. 
  
  ### Copy to Superintendent
  
  891 (1) Subject to subsection (2), an insurance holding company shall send to the Superintendent a copy of the documents referred to in subsections 887(1) and (3) not later than twenty-one days before the date of each annual meeting of shareholders of the insurance holding company. 
  
  ### Later filing
  
  (2) If an insurance holding company’s shareholders sign a resolution under paragraph 779(1)(b) in lieu of an annual meeting, the insurance holding company shall send a copy of the documents referred to in subsections 887(1) and (3) to the Superintendent not later than thirty days after the signing of the resolution. 
  
  # SUBDIVISION 13 
  
  ## Auditors 
  
  ## Interpretation 
  
  ### Definitions
  
  892 The following definitions apply in this Subdivision.  
  *firm of accountants* means a partnership, the members of which are accountants engaged in the practice of accounting, or a body corporate that is incorporated by or under an Act of the legislature of a province and engaged in the practice of accounting. (cabinet de comptables)   
  *member*, in relation to a firm of accountants, means  
  (a) an accountant who is a partner in a partnership, the members of which are accountants engaged in the practice of accounting; or 
  (b) an accountant who is an employee of a firm of accountants. ( membre)  
  
  ## Appointment 
  
  ### Appointment of auditor
  
  893 (1) The shareholders of an insurance holding company shall, by ordinary resolution at the first meeting of shareholders and at each succeeding annual meeting, appoint a firm of accountants to be the auditor of the insurance holding company until the close of the next annual meeting. 
  
  ### Remuneration of auditor
  
  (2) The remuneration of the auditor may be fixed by ordinary resolution of the shareholders but, if not so fixed, shall be fixed by the directors. 
  
  ## Qualifications 
  
  ### Qualification of auditor
  
  894 (1) A firm of accountants is qualified to be an auditor of an insurance holding company if 
  (a) two or more members of the firm are accountants who 
  (i) are members in good standing of an institute or association of accountants incorporated by or under an Act of the legislature of a province, 
  (ii) have at least five years experience at a senior level in performing audits of a financial institution, 
  (iii) are ordinarily resident in Canada, and 
  (iv) are independent of the insurance holding company; and 
  (b) the member of the firm who is jointly designated by the firm and the insurance holding company to conduct the audit of the insurance holding company on behalf of the firm is qualified in accordance with paragraph (a). 
  
  ### Independence
  
  (2) For the purposes of subsection (1), 
  (a) independence is a question of fact; and 
  (b) a member of a firm of accountants is deemed not to be independent of an insurance holding company if that member, a business partner of that member or the firm of accountants 
  (i) is a business partner, director, officer or employee of the insurance holding company or of any affiliate of the insurance holding company or is a business partner of any director, officer or employee of the insurance holding company or of any affiliate of the insurance holding company, 
  (ii) beneficially owns or controls, directly or indirectly, a material interest in the shares of the insurance holding company or of any affiliate of the insurance holding company, or 
  (iii) has been a liquidator, trustee in bankruptcy, receiver or receiver and manager of any affiliate of the insurance holding company within the two years immediately preceding the person’s proposed appointment as auditor of the insurance holding company, other than an affiliate that is a subsidiary of the insurance holding company acquired pursuant to section 975 or through a realization of a security pursuant to section 976. 
  
  ### Business partners
  
  (2.1) For the purposes of subsection (2), a business partner of a member of a firm of accountants includes 
  (a) another member of the firm; and 
  (b) a shareholder of the firm or of a business partner of the member. 
  
  ### Notice of designation
  
  (3) Within fifteen days after the appointment of a firm of accountants as auditor of an insurance holding company, the insurance holding company and the firm of accountants shall jointly designate a member of the firm who meets the qualifications described in subsection (1) to conduct the audit of the insurance holding company on behalf of the firm and the insurance holding company shall forthwith notify the Superintendent in writing of the designation. 
  
  ### New designation
  
  (4) Where for any reason a member of a firm of accountants designated pursuant to subsection (3) ceases to conduct the audit of the insurance holding company, the insurance holding company and the firm of accountants may jointly designate another member of the same firm of accountants who meets the qualifications described in subsection (1) to conduct the audit of the insurance holding company and the insurance holding company shall forthwith notify the Superintendent in writing of the designation. 
  
  ### Deemed vacancy
  
  (5) In any case where subsection (4) applies and a designation is not made pursuant to that subsection within thirty days after the designated member ceases to conduct the audit of the insurance holding company, there shall be deemed to be a vacancy in the office of auditor of the insurance holding company. 
  
  ### Duty to resign
  
  895 (1) An auditor that ceases to be qualified under section 894 shall resign without delay after any member of the firm of accountants becomes aware that the firm has ceased to be so qualified. 
  
  ### Disqualification order
  
  (2) Any interested person may apply to a court for an order declaring that an auditor of an insurance holding company has ceased to be qualified under section 894 and declaring the office of auditor to be vacant. 
  
  ## Vacancies 
  
  ### Revocation of appointment
  
  896 (1) The shareholders of an insurance holding company may, by ordinary resolution at a special meeting, revoke the appointment of an auditor. 
  
  ### Revocation of appointment
  
  (2) The Superintendent may at any time revoke the appointment of an auditor made under subsection (3) or 893(1) or section 898 by notice in writing signed by the Superintendent and sent by registered mail to the auditor and to the insurance holding company addressed to the usual place of business of the auditor and the insurance holding company. 
  
  ### Filling vacancy
  
  (3) A vacancy created by the revocation of the appointment of an auditor under subsection (1) may be filled at the meeting at which the appointment was revoked and, if not so filled, shall be filled by the directors under section 898. 
  
  ### Ceasing to hold office
  
  897 (1) An auditor of an insurance holding company ceases to hold office when 
  (a) the auditor resigns; or 
  (b) the appointment of the auditor is revoked by the shareholders or the Superintendent. 
  
  ### Effective date of resignation
  
  (2) The resignation of an auditor becomes effective at the time a written resignation is sent to the insurance holding company or at the time specified in the resignation, whichever is later. 
  
  ### Filling vacancy
  
  898 (1) Subject to subsection 896(3), where a vacancy occurs in the office of auditor of an insurance holding company, the directors shall forthwith fill the vacancy, and the auditor so appointed holds office for the unexpired term of office of the predecessor of that auditor. 
  
  ### Where Superintendent may fill vacancy
  
  (2) Where the directors fail to fill a vacancy in accordance with subsection (1), the Superintendent may fill the vacancy and the auditor so appointed holds office for the unexpired term of office of the predecessor of that auditor. 
  
  ### Designation of member of firm
  
  (3) Where the Superintendent has, pursuant to subsection (2), appointed a firm of accountants to fill a vacancy, the Superintendent shall designate the member of the firm who is to conduct the audit of the insurance holding company on behalf of the firm. 
  
  ### Right to attend meetings
  
  899 (1) The auditor of an insurance holding company is entitled to receive notice of every meeting of shareholders and, at the expense of the insurance holding company, to attend and be heard at those meetings on matters relating to the duties of the auditor. 
  
  ### Duty to attend meeting
  
  (2) If a director or a shareholder of an insurance holding company, whether or not the shareholder is entitled to vote at the meeting, gives written notice, not less than ten days before a meeting of shareholders, to an auditor or former auditor of the insurance holding company that the director or shareholder wishes the auditor’s attendance at the meeting, the auditor or former auditor shall attend the meeting at the expense of the insurance holding company and answer questions relating to the auditor’s or former auditor’s duties as auditor. 
  
  ### Notice to insurance holding company
  
  (3) A director or shareholder who gives notice under subsection (2) shall send concurrently a copy of the notice to the insurance holding company and the insurance holding company shall forthwith send a copy thereof to the Superintendent. 
  
  ### Superintendent may attend
  
  (4) The Superintendent may attend and be heard at any meeting referred to in subsection (2). 
  
  ### Statement of auditor
  
  900 (1) An auditor of an insurance holding company who 
  (a) resigns, 
  (b) receives a notice or otherwise learns of a meeting of shareholders called for the purpose of revoking the appointment of the auditor, or 
  (c) receives a notice or otherwise learns of a meeting of directors or shareholders at which another person is to be appointed in the auditor’s stead, whether because of the auditor’s resignation or revocation of appointment or because the auditor’s term of office has expired or is about to expire, shall submit to the insurance holding company and the Superintendent a written statement giving the reasons for the resignation or the reasons why the auditor opposes any proposed action. 
  
  ### Other statements
  
  (1.1) In the case of a proposed replacement of an auditor whether because of removal or the expiry of their term, the insurance holding company shall make a statement of the reasons for the proposed replacement and the proposed replacement auditor may make a statement in which they comment on those reasons. 
  
  ### Statements to be sent
  
  (2) The insurance holding company shall send a copy of the statements referred to in subsections (1) and (1.1) without delay to every shareholder entitled to vote at the annual meeting of shareholders and to the Superintendent. 
  
  ### Duty of replacement auditor
  
  901 (1) If an auditor of an insurance holding company has resigned or the appointment of an auditor has been revoked, no firm shall accept an appointment or consent to be appointed as auditor of the insurance holding company until the firm has requested and received from the other auditor a written statement of the circumstances and reasons why the other auditor resigned or why, in the other auditor’s opinion, the other auditor’s appointment was revoked. 
  
  ### Exception
  
  (2) Despite subsection (1), a firm may accept an appointment or consent to be appointed as auditor of an insurance holding company if, within fifteen days after a request under that subsection is made, no reply from the other auditor is received. 
  
  ### Effect of non-compliance
  
  (3) Unless subsection (2) applies, an appointment as auditor of an insurance holding company is void if subsection (1) has not been complied with. 
  
  ## Examinations and Reports 
  
  ### Auditor’s examination
  
  902 (1) The auditor of an insurance holding company shall make such examination as the auditor considers necessary to enable the auditor to report on the annual statement and on other financial statements required by this Part to be placed before the shareholders, except such annual statements or parts thereof as relate to the period referred to in subparagraph 887(1)(a)(ii). 
  
  ### Auditing standards
  
  (2) The auditor’s examination referred to in subsection (1) shall, except as otherwise specified by the Superintendent, be conducted in accordance with generally accepted auditing standards, the primary source of which is the Handbook of the Chartered Professional Accountants of Canada. 
  
  ### Right to information
  
  903 (1) On the request of the auditor of an insurance holding company, the present or former directors, officers, employees or representatives of the insurance holding company shall, to the extent that they are reasonably able to do so, 
  (a) permit access to such records, assets and security held by the insurance holding company or any entity in which the insurance holding company has a substantial investment, and 
  (b) provide such information and explanations as are, in the opinion of the auditor, necessary to enable the auditor to perform the duties of auditor of the insurance holding company. 
  
  ### Directors to provide information
  
  (2) On the request of the auditor of an insurance holding company, the directors of the insurance holding company shall, to the extent that they are reasonably able to do so, 
  (a) obtain from the present or former directors, officers, employees and representatives of any entity in which the insurance holding company has a substantial investment the information and explanations that such persons are reasonably able to provide and that are, in the opinion of the auditor, necessary to enable the auditor to perform the duties of auditor of the insurance holding company; and 
  (b) provide the auditor with the information and explanations so obtained. 
  
  ### No civil liability
  
  (3) A person who in good faith makes an oral or written communication under subsection (1) or (2) shall not be liable in any civil action arising from having made the communication. 
  
  ### Auditor’s report and extended examination
  
  904 (1) The Superintendent may, in writing, require that the auditor of an insurance holding company report to the Superintendent on the extent of the auditor’s procedures in the examination of the annual statement and may, in writing, require that the auditor enlarge or extend the scope of that examination or direct that any other particular procedure be performed in any particular case, and the auditor shall comply with any such requirement of the Superintendent and report to the Superintendent thereon. 
  
  ### Special examination
  
  (2) The Superintendent may, in writing, require that the auditor of an insurance holding company make a particular examination to determine whether any procedures adopted by the insurance holding company may be prejudicial to the interests of depositors, policyholders or creditors of any federal financial institution that is affiliated with the insurance holding company, or any other examination as, in the Superintendent’s opinion, the public interest may require, and report to the Superintendent thereon. 
  
  ### Special examination
  
  (3) The Superintendent may direct that a special audit of an insurance holding company be made if, in the opinion of the Superintendent, it is so required and may appoint for that purpose a firm of accountants qualified under subsection 894(1) to be an auditor of the insurance holding company. 
  
  ### Expenses payable by insurance holding company
  
  (4) The expenses entailed by any examination or audit referred to in any of subsections (1) to (3) are payable by the insurance holding company on being approved in writing by the Superintendent. 
  
  ### Auditor’s report
  
  905 (1) The auditor shall, not less than twenty-one days before the date of the annual meeting of the shareholders of the insurance holding company, make a report in writing to them on the annual statement. 
  
  ### Audit for shareholders
  
  (2) In each report required under subsection (1), the auditor shall state whether, in the auditor’s opinion, the annual statement presents fairly, in accordance with the accounting principles referred to in subsection 887(4), the financial position of the insurance holding company as at the end of the financial year to which it relates and the results of the operations and changes in the financial position of the insurance holding company for that financial year. 
  
  ### Auditor’s remarks
  
  (3) In each report referred to in subsection (2), the auditor shall include such remarks as the auditor considers necessary when 
  (a) the examination has not been made in accordance with the auditing standards referred to in subsection 902(2); 
  (b) the annual statement has not been prepared on a basis consistent with that of the preceding financial year; or 
  (c) the annual statement does not present fairly, in accordance with the accounting principles referred to in subsection 887(4), the financial position of the insurance holding company as at the end of the financial year to which it relates or the results of the operations or changes in the financial position of the insurance holding company for that financial year. 
  
  ### Report on directors’ statement
  
  906 (1) The auditor of an insurance holding company shall, if required by the shareholders, audit and report to them on any financial statement submitted to them by the directors, and the report shall state whether, in the auditor’s opinion, the financial statement presents fairly the information required by the shareholders. 
  
  ### Sending report
  
  (2) A report of the auditor made under subsection (1) shall be attached to the financial statement to which it relates and a copy of the statement and report shall be sent by the directors to every shareholder and to the Superintendent. 
  
  ### Auditor of subsidiaries
  
  907 (1) An insurance holding company shall take all necessary steps to ensure that 
  (a) its auditor is the auditor of each of its subsidiaries; and 
  (b) in the case of a subsidiary with more than one auditor, the auditor of the insurance holding company is one of the subsidiary’s auditors. 
  
  ### Subsidiary outside Canada
  
  (2) Subsection (1) applies in the case of a subsidiary that carries on its operations in a country other than Canada unless the laws of that country do not permit the appointment of the auditor of the insurance holding company as the auditor of that subsidiary. 
  
  ### Exception
  
  (3) Subsection (1) does not apply in respect of any particular subsidiary where the insurance holding company, after having consulted its auditor, is of the opinion that the total assets of the subsidiary are not a material part of the total assets of the insurance holding company. 
  
  ### Auditor’s attendance
  
  908 (1) The auditor of an insurance holding company is entitled to receive notice of every meeting of the audit committee of the insurance holding company and, at the expense of the insurance holding company, to attend and be heard at that meeting. 
  
  ### Attendance
  
  (2) If so requested by a member of the audit committee, the auditor shall attend every meeting of the audit committee held during the member’s term of office. 
  
  ### Calling meeting
  
  909 (1) The auditor of an insurance holding company or a member of the audit committee may call a meeting of the audit committee. 
  
  ### Right to interview
  
  (2) The chief internal auditor of an insurance holding company or any officer or employee of the insurance holding company acting in a similar capacity shall, at the request of the auditor of the insurance holding company and on receipt of reasonable notice, meet with the auditor. 
  
  ### Notice of errors
  
  910 (1) A director or an officer of an insurance holding company shall forthwith notify the audit committee and the auditor of the insurance holding company of any error or misstatement of which the director or officer becomes aware in an annual statement or other financial statement on which the auditor or any former auditor has reported. 
  
  ### Error noted by auditor
  
  (2) If the auditor or a former auditor of an insurance holding company is notified or becomes aware of an error or misstatement in an annual statement or other financial statement on which the auditor reported and in the auditor’s opinion the error or misstatement is material, the auditor or former auditor shall inform each director of the insurance holding company accordingly. 
  
  ### Duty of directors
  
  (3) Where under subsection (2) the auditor or a former auditor of an insurance holding company informs the directors of an error or misstatement in an annual statement or other financial statement, the directors shall 
  (a) prepare and issue a revised annual statement or financial statement; or 
  (b) otherwise inform the shareholders and the Superintendent of the error or misstatement. 
  
  ## Qualified Privilege 
  
  ### Qualified privilege for statements
  
  911 Any oral or written statement or report made under this Part by the auditor or a former auditor of an insurance holding company has qualified privilege. 
  
  # SUBDIVISION 14 
  
  ## Remedial Actions 
  
  ### Derivative action
  
  912 (1) Subject to subsection (2), a complainant or the Superintendent may apply to a court for leave to bring an action under this Part in the name and on behalf of an insurance holding company or any of its subsidiaries, or to intervene in an action under this Part to which the insurance holding company or a subsidiary of the insurance holding company is a party, for the purpose of prosecuting, defending or discontinuing the action on behalf of the insurance holding company or the subsidiary. 
  
  ### Conditions precedent
  
  (2) No action may be brought and no intervention in an action may be made under subsection (1) by a complainant unless the court is satisfied that 
  (a) the complainant has, not less than 14 days before bringing the application or as otherwise ordered by the court, given notice to the directors of the insurance holding company or the insurance holding company’s subsidiary of the complainant’s intention to apply to the court under subsection (1) if the directors of the insurance holding company or the insurance holding company’s subsidiary do not bring, diligently prosecute or defend or discontinue the action; 
  (b) the complainant is acting in good faith; and 
  (c) it appears to be in the interests of the insurance holding company or the subsidiary that the action be brought, prosecuted, defended or discontinued. 
  
  ### Notice to Superintendent
  
  (3) A complainant under subsection (1) 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. 
  
  ### Powers of court
  
  913 (1) In connection with an action brought or intervened in under subsection 912(1), the court may at any time make any order it thinks fit including, without limiting the generality of the foregoing, 
  (a) an order authorizing the Superintendent, the complainant or any other person to control the conduct of the action; 
  (b) an order giving directions for the conduct of the action; 
  (c) an order directing that any amount adjudged payable by a defendant in the action be paid, in whole or in part, directly to former and present security holders of the insurance holding company who are entitled to participate in its profits or of the subsidiary instead of to the insurance holding company or to the subsidiary; and 
  (d) an order requiring the insurance holding company or the subsidiary to pay reasonable legal fees incurred by the Superintendent or the complainant in connection with the action. 
  
  ### Jurisdiction
  
  (2) Despite subsection (1), the court may not make any order in relation to any matter that would, under this Part, require the approval of the Minister or the Superintendent. 
  
  ### Status of shareholder approval
  
  914 (1) An application made or an action brought or intervened in under this Subdivision need not be stayed or dismissed by reason only that it is shown that an alleged breach of a right or duty owed to the insurance holding company or its subsidiary has been or might be approved by the shareholders of the insurance holding company or subsidiary or both, but evidence of approval by the shareholders may be taken into account by the court in making an order under section 913. 
  
  ### Court approval to discontinue
  
  (2) An application made or an action brought or intervened in under this Subdivision shall not be stayed, discontinued, settled or dismissed for want of prosecution without the approval of the court given on such terms as the court thinks fit and, if the court determines that the interests of any complainant might be substantially affected by any stay, discontinuance, settlement or dismissal, the court may order any party to the application or action to give notice to the complainant. 
  
  ### No security for costs
  
  915 (1) A complainant is not required to give security for costs in any application made or any action brought or intervened in under subsection 912(1) or section 916. 
  
  ### Interim costs
  
  (2) In an application made or an action brought or intervened in under this Subdivision, the court may at any time order the insurance holding company or its subsidiary to pay to the complainant interim costs, including legal fees and disbursements, but the complainant may be held accountable by the court for those interim costs on final disposition of the application or action. 
  
  ### Application to rectify records
  
  916 (1) If the name of a person is alleged to be or to have been wrongly entered or retained in, or wrongly deleted or omitted from, the securities register or any other record of an insurance holding company, the insurance holding company, a security holder of the insurance holding company or any aggrieved person may apply to a court for an order that the securities register or record be rectified. 
  
  ### Notice to Superintendent
  
  (2) An applicant under this section 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. 
  
  ### Powers of court
  
  (3) In connection with an application under this section, the court may make any order it thinks fit including, without limiting the generality of the foregoing, 
  (a) an order requiring the securities register or other record of the insurance holding company to be rectified; 
  (b) an order restraining an insurance holding company from calling or holding a meeting of shareholders or paying a dividend to shareholders before the rectification; 
  (c) an order determining the right of a party to the proceedings to have the party’s name entered or retained in, or deleted or omitted from, the securities register or records of the insurance holding company, whether the issue arises between two or more security holders or alleged security holders, or between the insurance holding company and any security holder or alleged security holder; and 
  (d) an order compensating a party who has incurred a loss. 
  
  # SUBDIVISION 15 
  
  ## Liquidation and Dissolution 
  
  ## Interpretation 
  
  ### Definition of 
  *court* 
  
  917 In this Subdivision, 
  *court* means a court having jurisdiction in the place where the insurance holding company has its head office.  
  
  ## Application 
  
  ### Application of Subdivision
  
  918 (1) This Subdivision does not apply to an insurance holding company that is an insolvent person or a bankrupt as those terms are defined in subsection 2(1) of the Bankruptcy and Insolvency Act.  
  
  ### Staying proceedings on insolvency
  
  (2) Any proceedings taken under this Subdivision to dissolve or to liquidate and dissolve an insurance holding company shall be stayed if the insurance holding company is at any time found in a proceeding under the Bankruptcy and Insolvency Act to be an insolvent person as defined in subsection 2(1) of that Act.  
  
  ###  Winding-up and Restructuring Act does not apply 
  
  (3) The Winding-up and Restructuring Act does not apply to an insurance holding company.  
  
  ### Returns to Superintendent
  
  919 A liquidator appointed under this Subdivision to wind up the business of an insurance holding company shall provide the Superintendent with such information relating to the business and affairs of the insurance holding company in such form as the Superintendent requires. 
  
  ## Simple Liquidation 
  
  ### No property and no liabilities
  
  920 (1) An insurance holding company that has no property and no liabilities may, if authorized by a special resolution of the shareholders or, if there are no shareholders, by a resolution of all the directors, apply to the Minister for letters patent dissolving the insurance holding company. 
  
  ### 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 insurance holding company. 
  
  ### Effect of letters patent
  
  (3) An insurance holding company in respect of which letters patent are issued under subsection (2) ceases to exist on the day stated in the letters patent. 
  
  ### Proposing liquidation
  
  921 (1) The voluntary liquidation and dissolution of an insurance holding company, other than an insurance holding company referred to in subsection 920(1), 
  (a) may be proposed by its directors; or 
  (b) may be initiated by way of a proposal made by a shareholder who is entitled to vote at an annual meeting of shareholders in accordance with sections 770 and 771. 
  
  ### Terms must be set out
  
  (2) A notice of any meeting of shareholders at which the voluntary liquidation and dissolution of an insurance holding company is to be proposed shall set out the terms of the proposal. 
  
  ### Shareholders’ resolution
  
  922 Where the voluntary liquidation and dissolution of an insurance holding company is proposed, the insurance holding company may apply to the Minister for letters patent dissolving the insurance holding company if authorized by a special resolution of the shareholders or, where the insurance holding company has issued more than one class of shares, by special resolution of each class of shareholders whether or not those shareholders are otherwise entitled to vote. 
  
  ### Approval of Minister required
  
  923 (1) No action directed toward the voluntary liquidation and dissolution of an insurance holding company shall be taken by an insurance holding company, other than as provided in sections 921 and 922, until an application made by the insurance holding company pursuant to section 922 has been approved by the Minister. 
  
  ### Conditional approval
  
  (2) Where the Minister is satisfied on the basis of an application made under section 922 that the circumstances warrant the voluntary liquidation and dissolution of an insurance holding company, the Minister may, by order, approve the application. 
  
  ### Effect of approval
  
  (3) Where the Minister has approved an application made pursuant to section 922 with respect to an insurance holding company, the insurance holding company shall not carry on business except to the extent necessary to complete its voluntary liquidation. 
  
  ### Liquidation process
  
  (4) Where the Minister has approved an application made pursuant to section 922 with respect to an insurance holding company, the insurance holding company shall 
  (a) cause notice of the approval to be sent to each known claimant against and creditor of the insurance holding company; 
  (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 insurance holding 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 shareholders, 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 shareholders according to their respective rights. 
  
  ### Dissolution instrument
  
  924 (1) Unless a court has made an order in accordance with subsection 385(1), the Minister may, if satisfied that the insurance holding company has complied with subsection 923(4) and that all the circumstances so warrant, issue letters patent dissolving the insurance holding company. 
  
  ### Insurance holding company dissolved
  
  (2) An insurance holding company 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 
  
  ### Sections 385 to 406 apply
  
  925 Sections 385 to 406 apply in respect of insurance holding companies, subject to the following: 
  (a) references to “company” in those sections are to be read as references to “insurance holding company”; 
  (b) references to “this Part” in those sections are to be read as references to “this Division”; 
  (c) references to “this Division” in those sections are to be read as references to “this Subdivision”; 
  (d) those sections are to be read without reference to “policyholder”; 
  (e) the reference to “subsection 331(1)” in paragraph 391(1)(i) is to be read as a reference to “subsection 887(1)”; and 
  (f) the reference to “section 668” in subsection 400(2) is to be read as a reference to “section 994”. 
  
  # DIVISION 7 
  
  ## Ownership 
  
  ### Sections 406.1 and 406.2 apply
  
  926 Sections 406.1 and 406.2 apply in respect of insurance holding companies, except that references to “company” in section 406.2 are to be read as references to “insurance holding company”. 
  
  ### Constraining acquisition
  
  927 (1) No person, or entity controlled by a person, shall, without the approval of the Minister, purchase or otherwise acquire any share of an insurance holding company or purchase or otherwise acquire control of any entity that holds any share of an insurance holding company if 
  (a) the acquisition would cause the person to have a significant interest in any class of shares of the insurance holding company; or 
  (b) where the person has a significant interest in a class of shares of the insurance holding company, the acquisition would increase the significant interest of the person in that class of shares. 
  
  ### Amalgamation, etc., constitutes acquisition
  
  (2) If the entity that would result from an amalgamation, a merger or a reorganization would have a significant interest in a class of shares of an insurance holding company, the entity is deemed to be acquiring a significant interest in that class of shares of the insurance holding company through an acquisition for which the approval of the Minister is required under subsection (1). 
  
  ### Exemption
  
  (3) On application by an insurance holding company, other than an insurance holding company in respect of which subsection (4) or (6) applies, the Superintendent may exempt from the application of subsection (1) and section 934 any class of non-voting shares of the insurance holding company if the aggregate book value of the shares of the class is not more than 30 per cent of the aggregate book value of all the outstanding shares of the insurance holding company. 
  
  ### Limitations on share holdings
  
  (4) Despite subsection (1), no person may be a major shareholder of an insurance holding company to which subsection 407(6) applies. 
  
  ### Exception
  
  (5) Subsection (4) no longer applies in respect of any particular insurance holding company if the Minister makes an order under subsection 407(8) determining that subsection 407(4) no longer applies in respect of a converted company controlled by the insurance holding company. 
  
  ### Limitations on share holdings
  
  (6) Despite subsection (1), until a day that is two years after December 31, 1999, no person may have a significant interest in any class of shares of an insurance holding company to which subsection 407(13) applies. 
  
  ### Major shareholder
  
  928 (1) If an insurance holding company in respect of which subsection 927(4) applies controls a life company and a person becomes a major shareholder of the life company or of any entity that also controls the life company, the insurance holding company must to do all things necessary to ensure that, on the day that is one year after the person became a major shareholder of the life company or entity that controls the life company, 
  (a) the insurance holding company no longer controls the life company; or 
  (b) the life company or the entity that controls the life company does not have any major shareholder other than the insurance holding company or any entity that the insurance holding company controls. 
  
  ### Exemption
  
  (2) Subsection (1) does not apply in respect of a life company with equity of less than two hundred and fifty million dollars, or any other amount that may be prescribed. 
  
  ### Extension
  
  (3) If general market conditions so warrant and the Minister is satisfied that the insurance holding company has used its best efforts to be in compliance with subsection (1) on the required day, the Minister may specify a later day as the day from and after which it must comply with that subsection. 
  
  ### Major shareholder
  
  928.1 (1) Despite subsection 928(1), if an insurance holding company in respect of which subsection 927(4) applies controls a life company in respect of which subsection 928(1) does not apply by reason of subsection 928(2) and the equity of the life company reaches two hundred and fifty million dollars or more or any other amount that is prescribed and on the day the equity of the life company reaches two hundred and fifty million dollars or more, or the prescribed amount, as the case may be, a person is a major shareholder of the life company or of any entity that also controls the life company, the insurance holding company must do all things necessary to ensure that, on the day that is three years after that day, 
  (a) the insurance holding company no longer controls the life company; or 
  (b) the life company or the entity that controls the life company does not have any major shareholder other than the insurance holding company or any entity that the insurance holding company controls. 
  
  ### Extension
  
  (2) If general market conditions so warrant and the Minister is satisfied that the insurance holding company has used its best efforts to be in compliance with subsection (1) on the required day, the Minister may specify a later day as the day from and after which it must comply with that subsection. 
  
  ### Significant interest
  
  929 (1) If an insurance holding company in respect of which subsection 927(6) applies controls a life company and a person acquires a significant interest in any class of shares of the life company or of any entity that also controls the life company, the insurance holding company must to do all things necessary to ensure that, on the day that is one year after the person acquired the significant interest in the class of shares of the life company or entity that controls the life company, 
  (a) the insurance holding company no longer controls the life company; or 
  (b) no person has a significant interest in any class of shares of the life company or the entity that controls the life company, other than the insurance holding company or any entity that the insurance holding company controls. 
  
  ### Exemption
  
  (2) Subsection (1) does not apply in respect of a life company with equity of less than two hundred and fifty million dollars, or any other amount that may be prescribed. 
  
  ### Extension
  
  (3) If general market conditions so warrant and the Minister is satisfied that the insurance holding company has used its best efforts to be in compliance with subsection (1) on the required day, the Minister may specify a later day as the day from and after which it must comply with that subsection. 
  
  ### Prohibition against significant interest
  
  930 No person who has a significant interest in any class of shares of a widely held insurance holding company in respect of which subsection 927(4) applies may have a significant interest in any class of shares of a subsidiary of the insurance holding company that is a life company or an insurance holding company. 
  
  ### Prohibition against significant interest
  
  931 No person who has a significant interest in any class of shares of an insurance holding company may have a significant interest in any class of shares of 
  (a) a widely held converted company in respect of which subsection 407(4) applies that controls the insurance holding company; 
  (b) a widely held company to which subsection 407(5) applies that controls the insurance holding company; or 
  (c) a widely held insurance holding company in respect of which subsection 407(6) applies that controls the insurance holding company. 
  
  ### No acquisition of control without approval
  
  932 (1) No person shall acquire control, within the meaning of paragraph 3(1)(d), of an insurance holding company without the approval of the Minister. 
  
  ### Amalgamation, etc., constitutes acquisition
  
  (2) If the entity that would result from an amalgamation, a merger or a reorganization would control, within the meaning of paragraph 3(1)(d), an insurance holding company, the entity is deemed to be acquiring control, within the meaning of that paragraph, of the insurance holding company through an acquisition for which the approval of the Minister is required under subsection (1). 
  
  ### Prohibition against control
  
  933 Despite section 932, no person shall control, within the meaning of paragraph 3(1)(d), an insurance holding company in respect of which subsection 927(4) or (6) applies. 
  
  ### Constraining registration
  
  934 No insurance holding company shall, unless the acquisition of the share has been approved by the Minister, record in its securities register a transfer or issue of any share of the insurance holding company to any person or to any entity controlled by a person if 
  (a) the transfer or issue of the share would cause the person to have a significant interest in any class of shares of the insurance holding company; or 
  (b) where the person has a significant interest in a class of shares of the insurance holding company, the transfer or issue of the share would increase the significant interest of the person in that class of shares of the insurance holding company. 
  
  ### Exception — small holdings
  
  935 Despite section 934, if, as a result of a transfer or issue of shares of a class of shares of an insurance holding company to a person, other than an eligible agent, the total number of shares of that class registered in the securities register of the insurance holding company in the name of that person would not exceed 5,000 and would not exceed 0.1% of the outstanding shares of that class, the insurance holding company is entitled to assume that no person is acquiring or increasing a significant interest in that class of shares of the insurance holding company as a result of that issue or transfer of shares. 
  
  ### Where approval not required
  
  936 (1) Despite subsections 927(1) and (2) and section 934, the approval of the Minister is not required in respect of an insurance holding company, other than an insurance holding company in respect of which subsection 927(4) applies, if a person with a significant interest in a class of shares of the insurance holding company or an entity controlled by a person with a significant interest in a class of shares of the insurance holding company purchases or otherwise acquires shares of that class, or acquires control of any entity that holds any share of that class, and the number of shares of that class purchased or otherwise acquired, or the acquisition of control of the entity, as the case may be, would not increase the significant interest of the person in that class of shares of the insurance holding company to a percentage that is greater than the percentage referred to in subsection (2) or (3), whichever is applicable. 
  
  ### Percentage
  
  (2) Subject to subsection (3), for the purposes of subsection (1), the percentage is 5 percentage points in excess of the significant interest of the person in that class of shares of the insurance holding company on the day of the most recent purchase or acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares of the insurance holding company, or of control of an entity that held shares of that class of shares of the insurance holding company, for which approval was given by the Minister. 
  
  ### When approval not required
  
  (3) If a person has a significant interest in a class of shares of an insurance holding company and the person’s percentage of that class has decreased after the date of the most recent purchase or other acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares of the insurance holding company, or of control of an entity that held shares of that class of shares of the insurance holding company, for which approval was given by the Minister, the percentage for the purposes of subsection (1) is the percentage that is the lesser of 
  (a) 5 percentage points in excess of the significant interest of the person in that class of shares of the insurance holding company on the day of the most recent purchase or other acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares of the insurance holding company, or of control of an entity that held shares of that class of shares of the insurance holding company, for which approval was given by the Minister, and 
  (b) 10 percentage points in excess of the lowest significant interest of the person in that class of shares of the insurance holding company at any time after the day of the most recent purchase or other acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares of the insurance holding company, or of control of an entity that held shares of that class of shares of the insurance holding company, for which approval was given by the Minister. 
  
  ### Exception — eligible agent
  
  (3.1) If the person referred to in subsection (1) is an eligible agent or an entity controlled by an eligible agent, then the Minister may reduce the percentage referred to in subsection (2) or (3). 
  
  ### Exception
  
  (4) Subsection (1) does not apply if the purchase or other acquisition of shares or the acquisition of control referred to in that subsection would 
  (a) result in the acquisition of control of the insurance holding company by the person referred to in that subsection; 
  (b) where the person controls the insurance holding company but the voting rights attached to the aggregate of any voting shares of the insurance holding company beneficially owned by the person and by entities controlled by the person do not exceed 50 per cent of the voting rights attached to all of the outstanding voting shares of the insurance holding company, cause the voting rights attached to that aggregate to exceed 50 per cent of the voting rights attached to all of the outstanding voting shares of the insurance holding company; 
  (c) result in the acquisition of a significant interest in a class of shares of the insurance holding company by an entity controlled by the person and the acquisition of that investment is not exempted by the regulations; or 
  (d) result in an increase in a significant interest in a class of shares of the insurance holding company by an entity controlled by the person by a percentage that is greater than the percentage referred to in subsection (2) or (3), whichever is applicable, and the increase is not exempted by the regulations. 
  
  ### Regulations
  
  (5) The Governor in Council may make regulations 
  (a) exempting from the application of paragraph (4)(c) the acquisition of a significant interest in a class of shares of the insurance holding company by an entity controlled by the person; and 
  (b) exempting from the application of paragraph (4)(d) an increase in a significant interest in a class of shares of the insurance holding company by an entity controlled by the person by a percentage that is greater than the percentage referred to in subsection (2) or (3), whichever applies. 
  
  ### When approval not required
  
  937 (1) Despite subsections 927(1) and (2) and section 934, the approval of the Minister is not required if 
  (a) the Superintendent has, by order, directed the insurance holding company to increase its capital and shares of the insurance holding company are issued and acquired in accordance with the terms and conditions, if any, that may be specified in the order; or 
  (b) a person, other than an eligible agent, who controls, within the meaning of paragraph 3(1)(a), the insurance holding company acquires additional shares of the insurance holding company. 
  
  ### Exception
  
  (2) Paragraph (1)(a) does not apply in respect of an insurance holding company in respect of which subsection 927(4) or (6) applies. 
  
  ### Pre-approval
  
  (3) For the purposes of subsections 927(1) and (2) and section 934, the Minister may approve 
  (a) the purchase or other acquisition of such number or percentage of shares of an insurance holding company as may be required in a particular transaction or series of transactions; or 
  (b) the purchase or other acquisition of up to a specified number or percentage of shares of an insurance holding company within a specified period. 
  
  ### Public holding requirement
  
  938 (1) Every insurance holding company shall, from and after the day determined under this section in respect of that insurance holding company, have, and continue to have, voting shares that carry at least 35 per cent of the voting rights attached to all of the outstanding voting shares of the insurance holding company and that are 
  (a) shares of one or more classes of shares that are listed and posted for trading on a recognized stock exchange in Canada; and 
  (b) shares none of which is beneficially owned by a person who is a major shareholder of the insurance holding company in respect of the voting shares of the insurance holding company or by any entity that is controlled by a person who is a major shareholder of the insurance holding company in respect of such shares. 
  
  ### Determination of day
  
  (2) If the insurance holding company has equity of two billion dollars or more on the day it comes into existence, the day referred to in subsection (1) is the day that is three years after that day and, in the case of any other insurance holding company, the day referred to in subsection (1) is the day that is three years after the day of the first annual meeting of the shareholders of the insurance holding company held after the equity of the insurance holding company first reaches two billion dollars. 
  
  ### Extension
  
  (3) If general market conditions so warrant and the Minister is satisfied that an insurance holding company has used its best efforts to be in compliance with this section on the day determined under subsection (2), the Minister may specify a later day as the day from and after which the insurance holding company must comply with subsection (1). 
  
  ### Limit on assets
  
  939 (1) Unless an exemption order with respect to the insurance holding company is granted under section 941, if an insurance holding company fails to comply with section 938 in any month, the Minister may, by order, require the insurance holding company not to have, until it complies with that section, average total assets in any three month period ending on the last day of a subsequent month exceeding the insurance holding company’s average total assets in the three month period ending on the last day of the month immediately preceding the month specified in the order. 
  
  ### Average total assets
  
  (2) For the purposes of subsection (1), the average total assets of an insurance holding company in a three month period shall be computed by adding the total assets of the insurance holding company as calculated for the month end of each of the three months in the period and by dividing the sum by three. 
  
  ### Increase of capital
  
  940 Where the Superintendent has, by order, directed an insurance holding company to increase its capital and shares of the insurance holding company are issued and acquired in accordance with such terms and conditions as may be specified in the order, section 938 shall not apply in respect of the insurance holding company until such time as the Superintendent may, by order, specify. 
  
  ### Exemption by Minister
  
  941 (1) On application by an insurance holding company and subject to any terms and conditions that the Minister considers appropriate, the Minister may by order exempt the insurance holding company from the requirements of section 938 if the Minister considers it appropriate to do so. 
  
  ### Compliance with s. 938
  
  (2) The insurance holding company shall comply with section 938 as of the day on which the exemption order expires. 
  
  ### Limit on assets
  
  (3) If an insurance holding company fails to comply with section 938 on the day referred to in subsection (2), it shall not, until it complies with that section, have average total assets in any three month period ending on the last day of a subsequent month exceeding its average total assets in the three month period ending on the last day of the month immediately preceding the day referred to in subsection (2) or on any later day that the Minister may specify by order. 
  
  ### Application of s. 939(2)
  
  (4) Subsection 939(2) applies for the purposes of subsection (3). 
  
  ### Exception
  
  942 (1) If an insurance holding company fails to comply with section 938 as the result of any of the following, section 939 does not apply in respect of that insurance holding company until the expiration of six months after the day the insurance holding company failed to comply with section 938: 
  (a) a distribution to the public of voting shares of the insurance holding company; 
  (b) a redemption or purchase of voting shares of the insurance holding company; 
  (c) the exercise of any option to acquire voting shares of the insurance holding company; or 
  (d) the conversion of any convertible securities into voting shares of the insurance holding company. 
  
  ### Shares acquiring voting rights
  
  (2) If as the result of an event that has occurred and is continuing, shares of an insurance holding company acquire voting rights in such number as to cause the insurance holding company to no longer be in compliance with section 938, section 939 does not apply in respect of that insurance holding company until the expiration of six months after the day the insurance holding company ceased to be in compliance with section 938 or such later day as the Minister may, by order, specify. 
  (3) and (4)  [Repealed, 2005, c. 54, s. 360]  
  
  ### Acquisition of control permitted
  
  943 (1) Subject to subsection (2) and sections 934 and 944, section 938 does not apply in respect of an insurance holding company if a person acquires control of an insurance holding company with equity of two billion dollars or more through the purchase or other acquisition of all or any number of the shares of the insurance holding company by the person or by any entity controlled by the person. 
  
  ### Undertaking required
  
  (2) Subsection (1) applies only if the person provides the Minister with an undertaking satisfactory to the Minister to do all things necessary so that, within three years after the acquisition, or any other period that the Minister may specify, the insurance holding company has voting shares that carry at least 35 per cent of the voting rights attached to all of the outstanding voting shares of the insurance holding company and that are 
  (a) shares of one or more classes of shares that are listed and posted for trading on a recognized stock exchange in Canada; and 
  (b) shares none of which is beneficially owned by a person who is a major shareholder of the insurance holding company in respect of the voting shares of the insurance holding company or by any entity that is controlled by a person who is a major shareholder of the insurance holding company in respect of such shares. 
  
  ### Application of section 938
  
  944 At the expiration of the period for compliance with an undertaking referred to in subsection 943(2), section 938 applies in respect of the insurance holding company. 
  
  ### Restriction on voting rights
  
  945 (1) If, with respect to any insurance holding company, a particular person contravenes subsection 927(1), (4) or (6) or section 930, 931, 932 or 933 or fails to comply with an undertaking referred to in subsection 943(2) or with any term or condition imposed under section 948, no person, and no entity controlled by the particular person, shall, in person or by proxy, exercise any voting rights 
  (a) that are attached to shares of the insurance holding company beneficially owned by the particular person or any entity controlled by the particular person; or 
  (b) that are subject to an agreement entered into by the particular person, or any entity controlled by the particular person, pertaining to the exercise of the voting rights. 
  
  ### Subsection (1) ceases to apply
  
  (2) Subsection (1) ceases to apply in respect of a person when, as the case may be, 
  (a) the shares to which the contravention relates have been disposed of; 
  (b) the person ceases to control the insurance holding company within the meaning of paragraph 3(1)(d); 
  (c) if the person failed to comply with an undertaking referred to in subsection 943(2), the insurance holding company complies with section 938; or 
  (d) if the person failed to comply with a term or condition imposed under section 948, the person complies with the term or condition. 
  
  ### Saving
  
  (3) Despite subsection (1), if a person contravenes subsection 927(4) by reason only that, as a result of an event that has occurred and is continuing and is not within the control of the person, shares of the insurance holding company beneficially owned by the person or by any entity controlled by the person acquire voting rights in such number so as to cause the person to be a major shareholder of the insurance holding company, the Minister may, after a consideration of the circumstances, permit the person and any entity controlled by the person to exercise voting rights, in person or by proxy, in respect of any class of voting shares of the insurance holding company beneficially owned by them that do not in aggregate exceed 20 per cent of the voting rights attached to that class of voting shares. 
  
  ### Application for approval
  
  946 (1) An application for an approval of the Minister required under this Division must be filed with the Superintendent and contain the information, material and evidence that the Superintendent may require. 
  
  ### Applicant
  
  (2) If, with respect to any particular transaction, this Division applies to more than one person, any one of those persons may make the application to the Minister for approval on behalf of all of those persons. 
  
  ### Matters for consideration
  
  947 (1) Subject to subsection (2), if an application for an approval under section 927 is made, the Minister, in determining whether or not to approve the transaction, shall take into account all matters that the Minister considers relevant to the application, including 
  (a) the nature and sufficiency of the financial resources of the applicant or applicants as a source of continuing financial support for any company that is a subsidiary of the insurance holding company; 
  (b) the soundness and feasibility of the plans of the applicant or applicants for the future conduct and development of the business of any company that is a subsidiary of the insurance holding company; 
  (c) the business record and experience of the applicant or applicants; 
  (d) the character and integrity of the applicant or applicants or, if the applicant or any of the applicants is a body corporate, its reputation for being operated in a manner that is consistent with the standards of good character and integrity; 
  (e) whether the insurance holding company will be operated responsibly by persons with the competence and experience suitable for involvement in the operation of a financial institution; 
  (f) the impact of any integration of the businesses and operations of the applicant or applicants with those of the insurance holding company and its affiliates on the conduct of those businesses and operations; and 
  (g) the best interests of the financial system in Canada. 
  
  ### Exception
  
  (2) Except for an application by an eligible agent for an approval under section 927, and subject to section 933, the Minister shall take into account only paragraph (1)(d) if the application is in respect of a transaction that would result in the applicant or applicants holding 
  (a) more than 10 per cent but no more than 20 per cent of any class of the outstanding voting shares of an insurance holding company in respect of which subsection 927(4) applies; or 
  (b) more than 10 per cent but no more than 30 per cent of any class of the outstanding non-voting shares of such an insurance holding company. 
  
  ### National treatment
  
  (3) Where a transaction in respect of which subsection 927(1) or (2) applies would cause an insurance holding company to become a subsidiary of a foreign institution that is engaged in the insurance business, that does not have any other insurance holding company as its subsidiary and that is a non-WTO Member foreign institution, the Minister shall not approve the transaction unless the Minister is satisfied that treatment as favourable for insurance holding companies to which this Act applies exists or will be provided in the jurisdiction in which the foreign institution principally carries on business, either directly or through a subsidiary. 
  
  ### Part XII of the Bank Act 
  
  (4) Nothing in subsection (1) or (3) affects the operation of Part XII of the Bank Act.  
  
  ### Terms and conditions
  
  948 The Minister may impose any terms and conditions in respect of an approval given under this Division that the Minister considers necessary to ensure compliance with any provision of this Act. 
  
  ### Certifying receipt of application
  
  949 (1) If, in the opinion of the Superintendent, an application filed under this Division contains all the required information, the Superintendent shall without delay refer the application to the Minister and send a receipt to the applicant certifying the date on which the completed application was received by the Superintendent. 
  
  ### Incomplete application
  
  (2) If, in the opinion of the Superintendent, an application filed under this Division is incomplete, the Superintendent shall send a notice to the applicant specifying the information required by the Superintendent to complete the application. 
  
  ### Notice of decision to applicant
  
  950 (1) Subject to subsections (2) and (3) and 951(1), the Minister shall, within a period of thirty days after the certified date referred to in subsection 949(1), send to the applicant 
  (a) a notice approving the transaction to which the application relates; or 
  (b) where the Minister is not satisfied that the transaction to which the application relates should be approved, a notice to that effect, advising the applicant of the right to make representations to the Minister in respect of the matter. 
  
  ### Notice of decision
  
  (2) Subject to subsections (4) and 951(2), the notice referred to in paragraph (1)(a) or (b) shall be sent by the Minister within a period of 45 days after the certified date referred to in subsection 949(1) in the following cases: 
  (a) the application involves the acquisition of control of an insurance holding company; 
  (b) the application is made by an eligible agent or an entity controlled by an eligible agent; or 
  (c) an application is made for the approval referred to in subsection 954(3). 
  
  ### Extension of period for notice
  
  (3) Where the Minister is unable to complete the consideration of an application within the period referred to in subsection (1), the Minister shall, 
  (a) within that period, send a notice to that effect to the applicant; and 
  (b) within a further period of thirty days after the date of the sending of the notice referred to in paragraph (a) or within such other further period as may be agreed on by the applicant and the Minister, send a notice referred to in paragraph (1)(a) or (b) to the applicant. 
  
  ### Extension of period for notice
  
  (4) Where the Minister considers it appropriate to do so, the Minister may extend the period referred to in subsection (2) for one or more periods of forty-five days. 
  
  ### Reasonable opportunity to make representations
  
  951 (1) Where, after receipt of the notice referred to in paragraph 950(1)(b), the applicant advises the Minister that the applicant wishes to make representations, the Minister shall provide the applicant with a reasonable opportunity within a period of thirty days after the date of the notice, or within such further period as may be agreed on by the applicant and the Minister, to make representations in respect of the matter. 
  
  ### Reasonable opportunity to make representations
  
  (2) If, after receipt of the notice sent in accordance with subsection 950(2) that the Minister is not satisfied that the transaction to which the application relates should be approved, the applicant advises the Minister that the applicant wishes to make representations, the Minister shall provide the applicant with a reasonable opportunity within a period of 45 days after the date of the notice, or within any further period that may be agreed on by the applicant and the Minister, to make representations in respect of the matter. 
  
  ### Notice of decision
  
  952 (1) Within a period of thirty days after the expiration of the period for making representations referred to in subsection 951(1), the Minister shall, in the light of any such representations and having regard to the matters to be taken into account, send a notice to the applicant indicating whether or not the Minister approves the transaction to which the application relates. 
  
  ### Notice of decision
  
  (2) Within a period of forty-five days after the expiration of the period for making representations referred to in subsection 951(2), the Minister shall, in the light of any such representations and having regard to the matters to be taken into account, send a notice to the applicant indicating whether or not the Minister approves the transaction to which the application relates. 
  
  ### Deemed approval
  
  953 Where the Minister does not send a notice under subsection 950(1) or (3) or 952(1) within the period provided for in those subsections, the Minister is deemed to have approved the transaction to which the application relates. 
  
  ### Constraining registration — Crown and foreign governments
  
  954 (1) No insurance holding company shall record in its securities register a transfer or issue of any share of the insurance holding company to 
  (a) Her Majesty in right of Canada or of a province or any agent or agency of Her Majesty in either of those rights; or 
  (b) the government of a foreign country or any political subdivision thereof, or any agent or agency thereof. 
  
  ### Exception
  
  (2) Despite subsection (1), an insurance holding company may record in its securities register a transfer or issue of any share of the insurance holding company to a foreign institution that is controlled by the government of a foreign country or any political subdivision of a foreign country, or by any agent or agency of a foreign government, if the share that is transferred or issued is beneficially owned by the foreign institution or by an entity controlled by the foreign institution. 
  
  ### Exception
  
  (3) Despite subsection (1), an insurance holding company may, with the Minister’s approval, record in its securities register the issue of any share of the insurance holding company to an eligible agent. 
  
  ### Application made jointly
  
  (4) The application for the approval referred to in subsection (3) must be made jointly by the insurance holding company and the eligible agent. 
  
  ### Matters for consideration
  
  (5) The Minister, in determining whether to grant the approval referred to in subsection (3), shall take into account all matters that he or she considers relevant, including those set out in paragraphs 947(1)(a) to (g). 
  
  ### Consequence of revocation of approval
  
  (6) If an approval referred to in subsection (3) is revoked, the insurance holding company shall delete any entry in its securities register in respect of the recording of the issuance of shares to the eligible agent. 
  
  ### Disposition of shareholdings
  
  (7) If an insurance holding company or an eligible agent fails to comply with any undertaking or term or condition in relation to an approval referred to in subsection (3), or if an eligible agent ceases to be an eligible agent, the Minister may, if the Minister considers it to be in the public interest to do so, by order, direct the eligible agent or former eligible agent and any person controlled by the eligible agent or former eligible agent to dispose of any number of shares of the insurance holding company beneficially owned by the eligible agent or former eligible agent or the persons controlled by the eligible agent or former eligible agent that the Minister specifies in the order, within the time specified in the order and in the proportion, if any, as between the eligible agent or former eligible agent and the persons controlled by the eligible agent or former eligible agent that is specified in the order. 
  
  ### Representations
  
  (8) No direction shall be made under subsection (7) unless the Minister has provided each person to whom the direction relates and the insurance holding company concerned with a reasonable opportunity to make representations in respect of the subject-matter of the direction. 
  
  ### Appeal
  
  (9) Any person with respect to whom a direction has been made under subsection (7) may, within 30 days after the date of the direction, appeal the matter in accordance with section 1020. 
  
  ### Suspension of voting rights held by governments
  
  955 (1) Notwithstanding section 775, where any voting shares of an insurance holding company are beneficially owned by 
  (a) Her Majesty in right of Canada or of a province or any agency of Her Majesty in either of those rights, or 
  (b) the government of a foreign country or any political subdivision thereof, or any agency thereof, no person shall, in person or by proxy, exercise the voting rights attached to those shares. 
  
  ### Exception
  
  (2) Subsection (1) does not apply to a foreign institution that is controlled by the government of a foreign country or any political subdivision of a foreign country, or by any agent or agency of a foreign government, if the shares referred to in subsection (1) are beneficially owned by the foreign institution or by an entity controlled by the foreign institution. 
  
  ### Exception — eligible agent
  
  (3) Subsection (1) does not apply in respect of the exercise of voting rights attached to any share referred to in subsection 954(3). 
  
  ### Consequence of suspension of approval
  
  (4) If an approval referred to in subsection 954(3) is suspended, the eligible agent shall not exercise, in person or by proxy, any voting rights attached to any share of the insurance holding company that is beneficially owned by the eligible agent. 
  
  ### Disposition of shareholdings
  
  956 (1) If, with respect to any insurance holding company, a person contravenes subsection 927(1), (4) or (6) or section 930, 931, 932 or 933 or fails to comply with an undertaking referred to in subsection 943(2) or with any term or condition imposed under section 948, the Minister may, if the Minister considers it in the public interest to do so, by order, direct that person and any person controlled by that person to dispose of such number of shares of the insurance holding company beneficially owned by any of those persons as the Minister specifies in the order, within such time as the Minister specifies therein and in such proportion, if any, as between the person and the persons controlled by that person as is specified in the order. 
  
  ### Representations
  
  (2) No direction shall be made under subsection (1) unless the Minister has provided each person to whom the direction relates and the insurance holding company concerned with a reasonable opportunity to make representations in respect of the subject-matter of the direction. 
  
  ### Appeal
  
  (3) Any person with respect to whom a direction has been made under subsection (1) may, within thirty days after the date of the direction, appeal the matter in accordance with section 1020. 
  
  ### Application to court
  
  957 (1) If a person fails to comply with a direction made under subsection 954(7) or 956(1), an application on behalf of the Minister may be made to a court for an order to enforce the direction. 
  
  ### Court order
  
  (2) A court may, on an application under subsection (1), make such order as the circumstances require to give effect to the terms of the direction and may, without limiting the generality of the foregoing, require the insurance holding company concerned to sell the shares that are the subject-matter of the direction. 
  
  ### Appeal
  
  (3) An appeal from an order of a court under this section lies in the same manner as, and to the same court to which, an appeal may be taken from any other order of the court. 
  
  ### Interest of securities underwriter
  
  958 This Division does not apply to a securities underwriter in respect of shares of a body corporate or ownership interests in an unincorporated entity that are acquired by the underwriter in the course of a distribution to the public of those shares or ownership interests and that are held by the underwriter for a period of not more than six months. 
  
  ### Arrangements to effect compliance
  
  959 (1) The directors of an insurance holding company may make such arrangements as they deem necessary to carry out the intent of this Division and, in particular, but without limiting the generality of the foregoing, may 
  (a) require any person in whose name a share of the insurance holding company is held to submit a declaration setting out 
  (i) the beneficial ownership of the share, and 
  (ii) such other information as the directors deem relevant for the purposes of this Division; 
  (b) require any person who wishes to have a transfer of a share registered in the name of, or to have a share issued to, that person to submit a declaration referred to in paragraph (a) as though the person were the holder of that share; and 
  (c) determine the circumstances in which a declaration referred to in paragraph (a) is to be required, the form of the declaration and the times at which it is to be submitted. 
  
  ### Order of Superintendent
  
  (2) The Superintendent may, by order, direct an insurance holding company to obtain from any person in whose name a share of the insurance holding company is held a declaration setting out the name of every entity controlled by that person and containing information concerning 
  (a) the ownership or beneficial ownership of the share; and 
  (b) such other related matters as are specified by the Superintendent. 
  
  ### Compliance required
  
  (3) As soon as possible after receipt by an insurance holding company of a direction under subsection (2), 
  (a) the insurance holding company shall comply with the direction; and 
  (b) every person who is requested by the insurance holding company to provide a declaration containing information referred to in subsection (1) or (2) shall comply with the request. 
  
  ### Outstanding declaration: effect
  
  (4) Where, pursuant to this section, a declaration is required to be submitted by a shareholder or other person in respect of the issue or transfer of any share, an insurance holding company may refuse to issue the share or register the transfer unless the required declaration is submitted. 
  
  ### Reliance on information
  
  960 An insurance holding company and any person who is a director or an officer, employee or agent of the insurance holding company may rely on any information contained in a declaration required by the directors pursuant to section 959 or on any information otherwise acquired in respect of any matter that might be the subject of such a declaration, and no action lies against the insurance holding company or any such person for anything done or omitted to be done in good faith in reliance on any such information. 
  
  ### Exemption regulations
  
  961 The Governor in Council may, by regulation, exempt from any of the provisions of this Division any transaction or any class of transactions involving the transfer of shares on the death of the beneficial owner thereof, or any arrangement made in contemplation of the death of the beneficial owner, to one or more members of the beneficial owner’s family, or to one or more trustees on their behalf. 
  
  ###  Competition Act 
  
  962 Nothing in, or done under the authority of, this Act affects the operation of the Competition Act.  
  
  # DIVISION 8 
  
  ## Business and Powers 
  
  ### Main business
  
  963 (1) Subject to this Part, an insurance holding company shall not engage in or carry on any business other than 
  (a) acquiring, holding and administering investments that are permitted by this Part; 
  (b) providing management, advisory, financing, accounting, information processing or other prescribed services to entities in which it has a substantial investment; and 
  (c) any other prescribed business. 
  
  ### Regulations
  
  (2) The Governor in Council may make regulations prescribing businesses or services for the purposes of subsection (1). 
  
  ### Restriction on partnerships
  
  964 (1) Except with the approval of the Superintendent, an insurance holding company shall not be a general partner in a limited partnership or a partner in a general partnership. 
  
  ### Meaning of 
  *general partnership* 
  
  (2) For the purposes of subsection (1), 
  *general partnership* means any partnership other than a limited partnership.  
  
  ### Restriction on guarantees
  
  965 (1) An insurance holding company shall not guarantee on behalf of any person the payment or repayment of any sum of money. 
  
  ### Exception
  
  (2) Subsection (1) does not apply if 
  (a) the person on whose behalf the insurance holding company has undertaken to guarantee the payment or repayment is a subsidiary of the insurance holding company; and 
  (b) the subsidiary has an unqualified obligation to reimburse the insurance holding company for the full amount of the payment or repayment to be guaranteed. 
  
  ### Regulations
  
  (3) The Governor in Council may make regulations imposing terms and conditions in respect of guarantees permitted by this section. 
  
  # DIVISION 9 
  
  ## Investments 
  
  ## Interpretation 
  
  ### Definitions
  
  966 (1) The definitions in subsection 490(1) apply in respect of insurance holding companies, subject to the following: 
  (a) the reference to “section 495” in the definition 
  *permitted entity* is to be read as a reference to “section 971”; and  
  (b) the reference to “company” in the definition 
  *permitted entity* is to be read as a reference to “insurance holding company”.  
  
  ### Members of an insurance holding company’s group
  
  (2) For the purpose of this Division, a member of an insurance holding company’s group is any of the following: 
  (a) an entity referred to in any of paragraphs 971(1)(a) to (f) that controls the insurance holding company; 
  (b) a subsidiary of the insurance holding company or of an entity referred to in any of paragraphs 971(1)(a) to (f) that controls the insurance holding company; 
  (c) an entity in which the insurance holding company, or an entity referred to in any of paragraphs 971(1)(a) to (f) that controls the insurance holding company, has a substantial investment; or 
  (d) a prescribed entity in relation to the insurance holding company. 
  
  ### Non-application of Division
  
  (3) This Division does not apply in respect of 
  (a) the holding of a security interest in real property, unless the security interest is prescribed under paragraph 984(a) to be an interest in real property; or 
  (b) the holding of a security interest in securities of an entity. 
  
  ## Investments 
  
  ### Investments
  
  967 Subject to this Division, an insurance holding company may invest its funds in the shares of or ownership interests in any entity or make any other investment that its directors consider necessary or advisable to manage the insurance holding company’s liquidity. 
  
  ## General Constraints on Investments 
  
  ### Investment standards
  
  968 The directors of an insurance holding company shall establish and the insurance holding company shall adhere to investment and lending policies, standards and procedures that a reasonable and prudent person would apply to avoid undue risk of loss and obtain a reasonable return. 
  
  ### Limit — business growth fund
  
  968.1 (1) The aggregate value of all ownership interests in the business growth fund and the entities that the business growth fund controls that an insurance holding company and its subsidiaries hold must not exceed $200,000,000. 
  
  ### Application
  
  (2) For the purposes of subsection (1), the value of an ownership interest is determined by the amount paid for it at the time of its issuance. 
  
  ### Restriction on control and substantial investments
  
  969 (1) Subject to subsections (2) to (3.4), no insurance holding company shall acquire control of, or hold, acquire or increase a substantial investment in, any entity other than a permitted entity. 
  
  ### Exception: indirect investments
  
  (2) An insurance holding company may acquire control of, or acquire or increase a substantial investment in, an entity other than a permitted entity by way of 
  (a) an acquisition of control of an entity referred to in any of paragraphs 971(1)(a) to (j), a specialized financing entity or a prescribed entity that controls or has a substantial investment in the entity; or 
  (b) an acquisition of shares or ownership interests in the entity by 
  (i) an entity referred to in any of paragraphs 971(1)(a) to (j), a specialized financing entity or a prescribed entity that is controlled by the insurance holding company, or 
  (ii) an entity controlled by an entity referred to in any of paragraphs 971(1)(a) to (j), a specialized financing entity or a prescribed entity that is controlled by the insurance holding company. 
  
  ### Exception: temporary investments, realizations and loan workouts
  
  (3) An insurance holding company may acquire control of, or acquire or increase a substantial investment in, an entity by way of 
  (a) a temporary investment permitted by section 974; 
  (b) an acquisition of shares of a body corporate or of ownership interests in an unincorporated entity permitted by section 975; or 
  (c) a realization of security permitted by section 976. 
  
  ### Business growth fund
  
  (3.1) Subject to section 968.1 and subsections (3.2) to (3.4), an insurance holding company may hold, acquire or increase a substantial investment in the business growth fund or any entity that the business growth fund controls. 
  
  ### For greater certainty
  
  (3.2) For greater certainty, an insurance holding company is prohibited from acquiring control of the business growth fund or any entity that the business growth fund controls. 
  
  ### Prohibition — entity
  
  (3.3) An insurance holding company is prohibited from holding or acquiring a substantial investment in the business growth fund or any entity that the business growth fund controls if the business growth fund or any entity that the business growth fund controls holds or acquires shares of, or other ownership interests in, any of the following entities, or in any entity that controls any of the following entities: 
  (a) an entity referred to in any of paragraphs 971(1)(a) to (j); 
  (b) an entity that is primarily engaged in the leasing of motor vehicles in Canada for the purpose of extending credit to a customer or financing a customer’s acquisition of a motor vehicle; 
  (c) an entity that is primarily engaged in providing temporary possession of personal property, including motor vehicles, to customers in Canada for a purpose other than to finance the customer’s acquisition of the property; 
  (d) an entity that acts as an insurance broker or agent in Canada; or 
  (e) an entity that is engaged in any prescribed activity. 
  
  ### Prohibition — capital and loans
  
  (3.4) An insurance holding company is prohibited from holding or acquiring a substantial investment in the business growth fund or any entity that the business growth fund controls if the business growth fund or any entity that the business growth fund controls holds shares of, or other ownership interests in, an entity or holds a loan made to an entity and, in respect of that entity and its affiliates, the aggregate value of the following exceeds $100,000,000: 
  (a) all ownership interests that are held by the insurance holding company, the insurance holding company’s subsidiaries, the business growth fund or the entities that the business growth fund controls, the value of those ownership interests as determined by the amount paid for them at the time each was first acquired by any of those entities; and 
  (b) the outstanding principal of all loans held by the business growth fund or the entities that the business growth fund controls. 
  
  ### Exception: uncontrolled event
  
  (4) An insurance holding company is deemed not to contravene subsection (1) if the insurance holding company acquires control of, or acquires or increases a substantial investment in, an entity solely as the result of an event not within the control of the insurance holding company. 
  
  ### Non-application of subsection (2)
  
  (4.1) No insurance holding company shall, under subsection (2), acquire control of, or acquire or increase a substantial investment in, an entity referred to in paragraph 971(1)(j). 
  
  ### Holding
  
  (4.2) If an insurance holding company holds a substantial investment in an entity referred to in paragraph 971(1)(j) that it acquired or increased under subsection (2) before the coming into force of subsection (4.1), the insurance holding company may continue to hold that substantial investment. 
  
  ### Application of other provision
  
  (5) Despite having acquired control of, or a substantial investment in, an entity under a particular provision of this Part, an insurance holding company may continue to control the entity or hold the substantial investment in the entity as though it had made the acquisition under another provision of this Part so long as the conditions of that other provision are met. 
  
  ### Timing of deemed acquisition
  
  (6) If an insurance holding company decides to exercise its right under subsection (5), the insurance holding company is deemed to be acquiring the control or the substantial investment under the other provision. 
  
  ### Regulations re limits
  
  970 The Governor in Council may make regulations 
  (a) respecting the determination of the amount or value of loans, investments and interests for the purposes of this Division; 
  (b) respecting the loans and investments, and the maximum aggregate amount of all loans and investments, that may be made or acquired by an insurance holding company and its prescribed subsidiaries to or in a person and any persons connected with that person; 
  (c) specifying the classes of persons who are connected with any person for the purposes of paragraph (b); and 
  (d) prescribing terms and conditions under which an insurance holding company may acquire control of, or acquire or increase a substantial investment in, a specialized financing entity. 
  
  ## Subsidiaries and Equity Investments 
  
  ### Permitted investments
  
  971 (1) Subject to subsections (4) to (6), an insurance holding company may acquire control of, or acquire or increase a substantial investment in, 
  (a) a company or a society; 
  (b) an insurance holding company; 
  (c) a bank; 
  (d) a bank holding company; 
  (e) a body corporate to which the Trust and Loan Companies Act applies;  
  (f) an association to which the Cooperative Credit Associations Act applies;  
  (g) a trust, loan or insurance corporation incorporated or formed by or under an Act of the legislature of a province; 
  (h) a cooperative credit society incorporated or formed, and regulated, by or under an Act of the legislature of a province; 
  (i) an entity that is incorporated or formed by or under an Act of Parliament or of the legislature of a province and that is primarily engaged in dealing in securities; or 
  (j) an entity that is incorporated or formed, and regulated, otherwise than by or under an Act of Parliament or of the legislature of a province and that is primarily engaged outside Canada in a business that, if carried on in Canada, would be the business of banking, the business of a cooperative credit society, the business of insurance, the business of providing fiduciary services or the business of dealing in securities. 
  
  ### Permitted investments
  
  (2) Subject to subsections (3) to (6), an insurance holding company may acquire control of, or acquire or increase a substantial investment in, an entity, other than an entity referred to in any of paragraphs (1)(a) to (j), whose business is limited to one or more of the following: 
  (a) engaging in any financial service activity or in any other activity that a life company is permitted to engage in under subsection 440(2) or section 441 or 442, other than paragraph 441(1)(h); 
  (b) acquiring or holding shares of, or ownership interests in, entities in which an insurance holding company is permitted under this Division to hold or acquire; 
  (c) engaging in the provision of any services exclusively to any or all of the following, so long as the entity is providing those services to the insurance holding company or any member of the insurance holding company’s group: 
  (i) the insurance holding company, 
  (ii) any member of the insurance holding company’s group, 
  (iii) any entity that is primarily engaged in the business of providing financial services, 
  (iv) any permitted entity in which an entity referred to in subparagraph (iii) has a substantial investment, or 
  (v) any prescribed person, if it is doing so under prescribed terms and conditions, if any are prescribed; 
  (d) engaging in any activity that a life company is permitted to engage in, other than an activity referred to in paragraph (a) or (e), that relates to 
  (i) the promotion, sale, delivery or distribution of a financial product or financial service that is provided by any member of the insurance holding company’s group, or 
  (ii) if a significant portion of the business of the entity involves an activity referred to in subparagraph (i), the promotion, sale, delivery or distribution of a financial product or financial service that is provided by any other entity that is primarily engaged in the business of providing financial services; 
  (e) engaging in the activities referred to in the definition closed-end fund, mutual fund distribution entity or mutual fund entity as defined in subsection 490(1); and  
  (f) engaging in prescribed activities, under prescribed terms and conditions, if any are prescribed. 
  
  ### Permitted infrastructure entities
  
  (2.1) Subject to subsection (3), an insurance holding company may — under any prescribed terms and conditions — acquire control of, or acquire or increase a substantial investment in, a permitted infrastructure entity. 
  
  ### Restriction
  
  (3) An insurance holding company may not acquire control of, or acquire or increase a substantial investment in, an entity whose business includes any activity referred to in any of paragraphs (2)(a) to (e), or in any regulation made under paragraph 2.2(b), if the entity engages in the business of accepting deposit liabilities or if the activities of the entity include 
  (a) activities that a company is not permitted to engage in under any of sections 466, 469 and 475; 
  (b) dealing in securities, except as may be permitted under paragraph (2)(e) or as may be permitted to a company under paragraph 440(2)(b); 
  (c) activities that a company is not permitted to engage in under any regulation made under section 489 if the entity engages in the activities of a finance entity or of any other entity as may be prescribed; 
  (d) acquiring control of or acquiring or holding a substantial investment in another entity unless 
  (i) in the case of an entity, other than a permitted infrastructure entity, that is controlled by the insurance holding company, a company would be permitted under Part IX to acquire a substantial investment in the other entity, 
  (ii) in the case of an entity, other than a permitted infrastructure entity, that is not controlled by the insurance holding company, a company would be permitted to acquire a substantial investment in the other entity under subsection 493(2), paragraph 493(3)(b) or (c) or subsection 493(4) or 495(1), (2) or (2.1), or 
  (iii) in the case of a permitted infrastructure entity, whether or not that entity is controlled by the insurance holding company, a company would be permitted to acquire a substantial investment in the other entity under subsection 495(2.1); or 
  (e) any prescribed activity. 
  
  ### Exception
  
  (3.1) Despite paragraph (3)(a), an insurance holding company may acquire control of, or acquire or increase a substantial investment in, any entity that acts as a trustee for a trust if the entity has been permitted under the laws of a province to act as a trustee for a trust and the following conditions are satisfied: 
  (a) the entity acts as a trustee only with respect to a closed-end fund or mutual fund entity; and 
  (b) if the entity engages in other business, that business is limited to engaging in one or more of the following: 
  (i) the activities of a mutual fund distribution entity, 
  (ii) any activity that a company is permitted to engage in under subsection 441(1.1), and 
  (iii) the provision of investment counselling services and portfolio management services. 
  
  ### Control
  
  (4) Subject to subsection (8) and the regulations, an insurance holding company may not acquire control of, or acquire or increase a substantial investment in, 
  (a) an entity referred to in any of paragraphs (1)(a) to (j), unless 
  (i) the insurance holding company controls, within the meaning of paragraph 3(1)(d), the entity, or would thereby acquire control, within the meaning of that paragraph, of the entity, or 
  (ii) the insurance holding company is permitted by regulations made under paragraph 977(a) to acquire or increase the substantial investment; 
  (b) an entity whose business includes one or more of the activities referred to in paragraph (2)(a) and that engages, as part of its business, in any financial intermediary activity that exposes the entity to material market or credit risk, including a finance entity, a factoring entity and a financial leasing entity, unless 
  (i) the insurance holding company controls, within the meaning of paragraph 3(1)(d), the entity, or would thereby acquire control, within the meaning of that paragraph, of the entity, or 
  (ii) the insurance holding company is permitted by regulations made under paragraph 977(a) to acquire or increase the substantial investment; or 
  (c) an entity whose business includes an activity referred to in paragraph (2)(b), including a specialized financing entity, unless 
  (i) the insurance holding company controls, within the meaning of paragraph 3(1)(d), the entity, or would thereby acquire control, within the meaning of that paragraph, of the entity, 
  (ii) the insurance holding company is permitted by regulations made under paragraph 977(a) to acquire or increase the substantial investment, or 
  (iii) subject to prescribed terms and conditions, if any are prescribed, the activities of the entity do not include the acquisition or holding of control of, or the acquisition or holding of shares or other ownership interests in, an entity referred to in paragraph (a) or (b) or an entity that is not a permitted entity. 
  
  ### Minister’s approval
  
  (5) Subject to the regulations, an insurance holding company may not, without the prior written approval of the Minister, 
  (a) acquire control of an entity referred to in paragraphs (1)(g) to (i) from a person who is not a member of the insurance holding company’s group; 
  (b) acquire control of an entity referred to in paragraph (1)(j) or (4)(b), other than an entity whose activities are limited to the activities of one or more of the following entities, if the control is acquired from an entity referred to in any of paragraphs (1)(a) to (f) that is not a member of the insurance holding company’s group: 
  (i) a factoring entity, or 
  (ii) a financial leasing entity; 
  (b.1) acquire control of an entity referred to in paragraph (1)(j) if the insurance holding company is an insurance holding company with equity of two billion dollars or more and is the value of the entity’s consolidated assets, as it would have been reported in the entity’s annual financial statements if those statements had been prepared immediately before the acquisition, is the aggregate of the values of the consolidated assets of all other entities referred to in paragraph (1)(j) that the insurance holding company has acquired control of within the preceding 12 months, as the value for each entity would have been reported in its annual financial statements if those statements had been prepared immediately before the acquisition of control of that entity, and is 10% of the value of the insurance holding company’s consolidated assets, as shown in the insurance holding company’s last annual statement that was prepared before its first acquisition of control of an entity referred to in paragraph (1)(j) within the preceding 12 months; 
  (c) acquire control of, or acquire or increase a substantial investment in, an entity whose business includes one or more of the activities referred to in paragraph (2)(d); 
  (d) acquire control of, or acquire or increase a substantial investment in, an entity that engages in Canada in an activity described in paragraph 441(1)(d); 
  (d.1) acquire control of, or acquire or increase a substantial investment in, an entity that engages in an activity described in paragraph 441(1)(d.1); or 
  (e) acquire control of, or acquire or increase a substantial investment in, an entity engaging in an activity prescribed for the purposes of paragraph (2)(f). 
  
  ### Matters for consideration
  
  (5.1) In addition to any matters or conditions provided for in this Act that are relevant to the granting of an approval, the Minister may, in considering whether to grant the approval under paragraph (5)(b.1), take into account all matters that he or she considers relevant in the circumstances, including 
  (a) the stability of the financial system in Canada; and 
  (b) the best interests of the financial system in Canada. 
  
  ### Superintendent’s approval
  
  (6) Subject to subsection (7) and the regulations, an insurance holding company may not acquire control of, or acquire or increase a substantial investment in, an entity referred to in any of paragraphs (1)(g) to (j) and (4)(b) and (c) unless the insurance holding company obtains the approval of the Superintendent. 
  
  ### Exception
  
  (7) Subsection (6) does not apply in respect of a particular transaction if 
  (a) the insurance holding company is acquiring control of an entity, other than a specialized financing entity, and the only reason for which the insurance holding company would, but for this subsection, require approval for the acquisition is that the entity carries on activities referred to in paragraph (2)(b); 
  (b) the insurance holding company is acquiring control of an entity whose activities are limited to the activities of a factoring entity or a financial leasing entity; 
  (b.1) the insurance holding company is acquiring control of, or acquiring or increasing a substantial investment in, an entity whose activities are limited to acquiring or holding shares of, or ownership interests in, permitted infrastructure entities; or 
  (c) the Minister has approved the transaction under subsection (5) or is deemed to have approved it under subsection 972(1); 
  (d) subject to subsection (7.1), the insurance holding company is acquiring control of an entity (referred to in this paragraph as the “target entity”) referred to in paragraph (4)(b) or (c) and is the aggregate of the values, as they would have been reported in the insurance holding company’s annual financial statements if those statements were prepared on the day of the acquisition of control of the target entity, of 
  (i) the target entity’s consolidated assets, 
  (ii) the assets of the insurance holding company and of any subsidiary of the insurance holding company that were acquired, at any time within the 12 months preceding the acquisition of control of the target entity, from any entity that, at that time, held any of the assets referred to in subparagraph (i), and 
  (iii) the consolidated assets of any entity referred to in paragraph (4)(b) or (c) the control of which is acquired by the insurance holding company at the same time as the acquisition of control of the target entity — or within the 12 months preceding the acquisition of control of the target entity if, at any time within those 12 months, that entity and the target entity were affiliates — excluding any assets referred to in subparagraph (i) or (ii) and the consolidated assets of an entity in respect of which no approval of the Superintendent is required under any of paragraphs (a) to (c), is the value of the insurance holding company’s consolidated assets, as shown in its last annual statement prepared before the acquisition of control of the target entity, and is 
  (i) 0.01, in the case of an insurance holding company with equity of 12 billion dollars or more, or 
  (ii) 0.02, in the case of any other insurance holding company; or 
  (e) the insurance holding company is acquiring or increasing a substantial investment in an entity (referred to in this paragraph as the “target entity”) without acquiring control of it, and is the aggregate of the values, as they would have been reported in the insurance holding company’s annual financial statements if those statements were prepared on the day of the acquisition or increase of the substantial investment in the target entity, of 
  (i) the shares of, or other ownership interests in, the target entity that the insurance holding company or a subsidiary of the insurance holding company is acquiring in the transaction that results in the acquisition or increase of a substantial investment in the target entity, and the shares of, or other ownership interests in, the target entity that are held by an entity the control of which the insurance holding company is acquiring in the transaction that results in the acquisition or increase of a substantial investment in the target entity, 
  (ii) the shares of, or other ownership interests in, the target entity that are held by the insurance holding company or a subsidiary of the insurance holding company and that were acquired by the insurance holding company or the subsidiary within the 12 months preceding the transaction referred to in subparagraph (i), and 
  (iii) the shares of, or other ownership interests in, the target entity that are held by a subsidiary of the insurance holding company the control of which was acquired by the insurance holding company within the 12 months preceding the transaction referred to in subparagraph (i), excluding any shares or other ownership interests referred to in subparagraph (ii), is the value of the insurance holding company’s consolidated assets, as shown in its last annual statement prepared before the transaction that results in the acquisition or increase of the substantial investment in the target entity, and is 
  (i) 0.005, in the case of an insurance holding company with equity of 12 billion dollars or more, or 
  (ii) 0.01, in the case of any other insurance holding company. 
  
  ### No exception for deemed acquisition
  
  (7.1) The exception in paragraph (7)(d) does not apply with respect to a deemed acquisition of control under subsection 969(6). 
  
  ### Control not required
  
  (8) An insurance holding company need not control an entity referred to in paragraph (1)(j), or an entity that is incorporated or formed otherwise than by or under an Act of Parliament or of the legislature of a province, if the laws or customary business practices of the country under the laws of which the entity was incorporated or formed do not permit the insurance holding company to control the entity. 
  
  ### Prohibition on giving up control in fact
  
  (9) An insurance holding company that, under subsection (4), controls an entity may not, without the prior written approval of the Minister, give up control, within the meaning of paragraph 3(1)(d), of the entity while it continues to control the entity. 
  
  ### Giving up control
  
  (10) An insurance holding company that, under subsection (4), controls an entity may, with the prior written approval of the Superintendent, give up control of the entity while keeping a substantial investment in the entity if 
  (a) the insurance holding company is permitted to do so by regulations made under paragraph 977(c); or 
  (b) the entity meets the conditions referred to in subparagraph (4)(c)(iii). 
  
  ### Subsections do not apply
  
  (11) If an insurance holding company controls, within the meaning of paragraph 3(1)(a), (b) or (c) an entity, subsections (5) and (6) do not apply in respect of any subsequent increases by the insurance holding company of its substantial investment in the entity so long as the insurance holding company continues to control the entity. 
  
  ### Approval for indirect investments
  
  972 (1) If an insurance holding company obtains the approval of the Minister under subsection 971(5) to acquire control of, or to acquire or increase a substantial investment in, an entity and, through that acquisition or increase, the insurance holding company indirectly acquires control of, or acquires or increases a substantial investment in, another entity that would require the approval of the Minister under subsection 971(5) or the Superintendent under subsection 971(6) and that indirect acquisition or increase is disclosed to the Minister in writing before the approval is obtained, the insurance holding company is deemed to have obtained the approval of the Minister or the Superintendent for that indirect acquisition or increase. 
  
  ### Approval for indirect investments
  
  (2) If an insurance holding company obtains the approval of the Superintendent under subsection 971(6) to acquire control of, or to acquire or increase a substantial investment in, an entity and, through that acquisition or increase the insurance holding company indirectly acquires control of, or acquires or increases a substantial investment in, another entity that would require the approval of the Superintendent under that subsection and that indirect acquisition or increase is disclosed to the Superintendent in writing before the approval is obtained, the insurance holding company is deemed to have obtained the approval of the Superintendent for that indirect acquisition or increase. 
  
  ### Undertakings
  
  973 (1) If an insurance holding company controls a permitted entity, other than an entity referred to in any of paragraphs 971(1)(a) to (f), the insurance holding company shall provide the Superintendent with any undertakings that the Superintendent may require regarding 
  (a) the activities of the entity; and 
  (b) access to information about the entity. 
  
  ### Undertakings
  
  (2) If an insurance holding company acquires control of an entity referred to in any of paragraphs 971(1)(g) to (j), the insurance holding company shall provide the Superintendent with any undertakings concerning the entity that the Superintendent may require. 
  
  ### Agreements with other jurisdictions
  
  (3) The Superintendent may enter into an agreement with the appropriate official or public body responsible for the supervision of any entity referred to in any of paragraphs 971(1)(g) to (j) in each province or in any other jurisdiction concerning any matters referred to in paragraphs (1)(a) and (b) or any other matter the Superintendent considers appropriate. 
  
  ### Access to records
  
  (4) Despite any other provision of this Division, an insurance holding company shall not control a permitted entity, other than an entity referred to in any of paragraphs 971(1)(a) to (f), unless, in the course of the acquisition of control or within a reasonable time after the control is acquired, the insurance holding company obtains from the permitted entity an undertaking to provide the Superintendent with reasonable access to the records of the permitted entity. 
  
  ## Exceptions and Exclusions 
  
  ### Temporary investments in entity
  
  974 (1) Subject to subsection (3), an insurance holding company may, by way of a temporary investment, acquire control of, or acquire or increase a substantial investment in, an entity but, within two years, or any other period that may be specified or approved by the Superintendent, after acquiring control or after acquiring or increasing the substantial investment, as the case may be, it shall do all things necessary to ensure that it no longer controls the entity or has a substantial investment in the entity. 
  
  ### Extension
  
  (2) The Superintendent may, in the case of any particular insurance holding company that makes an application under this subsection, extend the period of two years, or the other period specified or approved by the Superintendent, that is referred to in subsection (1) for any further period or periods, and on any terms and conditions, that the Superintendent considers necessary. 
  
  ### Temporary investment
  
  (3) If an insurance holding company, by way of temporary investment, acquires control of, or acquires or increases a substantial investment in, an entity for which the approval of the Minister would have been required under subsection 971(5) if the insurance holding company had acquired the control, or acquired or increased the substantial investment, under section 971, the insurance holding company must, within 90 days after acquiring control or after acquiring or increasing the substantial investment, 
  (a) apply to the Minister for approval to retain control of the entity or to continue to hold the substantial investment in the entity for a period specified by the Minister or for an indeterminate period on any terms and conditions that the Minister considers appropriate; or 
  (b) do all things necessary to ensure that, on the expiry of the 90 days, it no longer controls the entity or does not have a substantial investment in the entity. 
  
  ### Indeterminate extension
  
  (4) If an insurance holding company, by way of temporary investment, acquires control of, or acquires or increases a substantial investment in, an entity for which the approval of the Superintendent would have been required under subsection 971(6) if the insurance holding company had acquired the control, or acquired or increased the substantial investment, under section 971, the Superintendent may, on application, permit the insurance holding company to retain control of the entity or to continue to hold the substantial investment in the entity for an indeterminate period, on any terms and conditions that the Superintendent considers appropriate. 
  
  ### Loan workouts
  
  975 (1) Despite anything in this Division, if any subsidiary of an insurance holding company has made a loan to an entity and, under the terms of the agreement between the subsidiary and the entity with respect to the loan and any other documents governing the terms of the loan, a default has occurred, the insurance holding company may acquire, through the subsidiary, 
  (a) a substantial investment in the entity to which the loan was made; 
  (b) a substantial investment in any entity that is an affiliate of the entity; or 
  (c) a substantial investment in an entity that is primarily engaged in holding shares of, ownership interests in or assets acquired from the entity to which the loan was made or any of the affiliates of that entity. 
  
  ### Obligation of insurance holding company
  
  (2) If an insurance holding company acquires a substantial investment in an entity under subsection (1), the insurance holding company shall, within five years after acquiring the substantial investment, cause the subsidiary that made the loan to do all things necessary to ensure that the insurance holding company does not control the entity or have a substantial investment in the entity. 
  
  ### Extension
  
  (3) The Superintendent may, in the case of any particular insurance holding company that makes an application under this subsection, extend the period of five years referred to in subsection (2) for any further period or periods, and on any terms and conditions, that the Superintendent considers necessary. 
  
  ### Exception — entities controlled by foreign governments
  
  (4) Despite anything in this Division, if a subsidiary of an insurance holding company has made a loan to, or holds a debt obligation of, the government of a foreign country or an entity controlled by the government of a foreign country and, under the terms of the agreement between the subsidiary and that government or the entity, as the case may be, and any other documents governing the terms of the loan or debt obligation, a default has occurred, the insurance holding company may acquire, through the subsidiary, a substantial investment in that entity or in any other entity designated by that government if the acquisition is part of a debt restructuring program of that government. 
  
  ### Time for holding substantial investment
  
  (5) If an insurance holding company acquires a substantial investment in any entity under subsection (4), the insurance holding company may, on any terms and conditions that the Superintendent considers appropriate, continue to hold the substantial investment for an indeterminate period or for any other period that the Superintendent may specify. 
  
  ### Exception
  
  (6) If, under subsection (1), an insurance holding company acquires control of, or acquires or increases a substantial investment in, an entity that it would otherwise be permitted to acquire or increase under section 971, the insurance holding company may retain control of the entity or continue to hold the substantial investment for an indeterminate period, if the approval in writing of the Minister is obtained before the end of the period referred to in subsection (2), including any extension of it granted under subsection (3). 
  
  ### Realizations
  
  976 (1) Despite anything in this Part, an insurance holding company may acquire control of, or a substantial investment in, an entity if the control or the substantial investment is acquired through the realization of a security interest held by a subsidiary of the insurance holding company. 
  
  ### Disposition
  
  (2) Subject to subsection 756(2), if an insurance holding company acquires control of, or a substantial investment in, an entity by way of the realization of a security interest held by any of its subsidiaries, the insurance holding company shall, within five years after the day on which control or the substantial investment is acquired, cause the subsidiary to do all things necessary to ensure that the insurance holding company no longer controls the entity or has a substantial investment in the entity. 
  
  ### Extension
  
  (3) The Superintendent may, in the case of any particular insurance holding company that makes an application under this subsection, extend the period of five years referred to in subsection (2) for any further period or periods, and on any terms and conditions, that the Superintendent considers necessary. 
  
  ### Exception
  
  (4) If, under subsection (1), an insurance holding company acquires control of, or acquires or increases a substantial investment in, an entity that it would otherwise be permitted to acquire or increase under section 971, the insurance holding company may retain control of the entity or continue to hold the substantial investment for an indeterminate period if the approval in writing of the Minister is obtained before the end of the period referred to in subsection (2), including any extension of it granted under subsection (3). 
  
  ### Regulations restricting ownership
  
  977 The Governor in Council may make regulations 
  (a) for the purposes of subsection 971(4), permitting the acquisition of control or the acquisition or increase of substantial investments, or prescribing the circumstances under which that subsection does not apply or the insurance holding companies or other entities in respect of which that subsection does not apply, including prescribing insurance holding companies or other entities on the basis of the activities they engage in; 
  (b) for the purposes of subsection 971(5) or (6), permitting the acquisition of control or the acquisition or increase of substantial investments, or prescribing the circumstances under which either of those subsections does not apply or the insurance holding companies or other entities in respect of which either of those subsections does not apply, including prescribing insurance holding companies or other entities on the basis of the activities they engage in; 
  (c) for the purposes of subsection 971(10), permitting an insurance holding company to give up control of an entity; 
  (d) restricting the ownership by an insurance holding company of shares of a body corporate or of ownership interests in an unincorporated entity under sections 971 to 976 and imposing terms and conditions applicable to insurance holding companies that own such shares or interests; and 
  (e) for the purposes of subsection 971(2.1), establishing terms and conditions respecting the acquisition of control of, or the acquisition or increase of a substantial investment in, a permitted infrastructure entity by an insurance holding company. 
  
  ## Portfolio Limits 
  
  ### Exclusion from portfolio limits
  
  978 (1) Subject to subsection (3), the value of all loans, investments and interests acquired by an insurance holding company and any of its prescribed subsidiaries under section 975 or as a result of a realization of a security interest is not to be included in calculating the value of loans, investments and interests of the insurance holding company and its prescribed subsidiaries under sections 979 to 981 
  (a) for a period of twelve years following the day on which the interest was acquired, in the case of an interest in real property; and 
  (b) for a period of five years after the day on which the loan, investment or interest was acquired, in the case of a loan, investment or interest, other than an interest in real property. 
  
  ### Extension
  
  (2) The Superintendent may, in the case of any particular insurance holding company, extend any period referred to in subsection (1) for any further period or periods, and on any terms and conditions, that the Superintendent considers necessary. 
  
  ### Exception
  
  (3) Subsection (1) does not apply to an investment or interest described in that subsection if the investment or interest is defined by a regulation made under section 984 to be an interest in real property and 
  (a) the insurance holding company or the subsidiary acquired the investment or interest as a result of the realization of a security interest securing a loan that was defined by a regulation made under section 984 to be an interest in real property; or 
  (b) the insurance holding company or the subsidiary acquired the investment or interest under section 975 as a result of a default referred to in that section in respect of a loan that was defined by a regulation made under section 984 to be an interest in real property. 
  
  ## Commercial Lending 
  
  ### Insurance holding companies with regulatory capital of $25 million or less
  
  979 Subject to section 980, an insurance holding company that has twenty-five million dollars or less of regulatory capital shall not acquire control of a permitted entity that holds commercial loans and shall not permit its prescribed subsidiaries to make or acquire a commercial loan or acquire control of a permitted entity that holds commercial loans if the aggregate value of all commercial loans held by the prescribed subsidiaries of the insurance holding company exceeds, or the making or acquisition of the commercial loan or acquisition of control of the entity would cause the aggregate value of all commercial loans held by the prescribed subsidiaries of the insurance holding company to exceed, 5 per cent of the total assets of the insurance holding company. 
  
  ### Insurance holding companies with regulatory capital over $25 million
  
  980 An insurance holding company that has twenty-five million dollars or less of regulatory capital that is controlled by a financial institution that has the equivalent of more than twenty-five million dollars of regulatory capital or an insurance holding company that has more than twenty-five million dollars of regulatory capital may acquire control of a permitted entity that holds commercial loans or permit its prescribed subsidiaries to make or acquire commercial loans or acquire control of a permitted entity that holds commercial loans if the aggregate value of all commercial loans held by the prescribed subsidiaries of the insurance holding company would thereby exceed the limit set out in section 979 only with the prior approval in writing of the Superintendent and in accordance with any terms and conditions that the Superintendent may specify. 
  
  ## Real Property 
  
  ### Limit on total property interest
  
  981 An insurance holding company shall not, and shall not permit its prescribed subsidiaries to, purchase or otherwise acquire an interest in real property or make an improvement to any real property in which the insurance holding company or any of its prescribed subsidiaries has an interest if the aggregate value of all interests of the insurance holding company in real property exceeds, or the acquisition of the interest or the making of the improvement would cause that aggregate value to exceed, an amount determined in accordance with the regulations. 
  
  ## Equities 
  
  ### Limits on equity acquisitions
  
  982 An insurance holding company shall not, and shall not permit its prescribed subsidiaries to, 
  (a) purchase or otherwise acquire any participating shares of any body corporate or any ownership interests in any unincorporated entity, other than those of a permitted entity in which the insurance holding company has, or by virtue of the acquisition would have, a substantial investment, or 
  (b) acquire control of an entity that holds shares or ownership interests referred to in paragraph (a), if the aggregate value of 
  (c) all participating shares, excluding participating shares of permitted entities in which the insurance holding company has a substantial investment, and 
  (d) all ownership interests in unincorporated entities, other than ownership interests in permitted entities in which the insurance holding company has a substantial investment, beneficially owned by the insurance holding company and its prescribed subsidiaries exceeds, or the purchase or acquisition would cause that aggregate value to exceed, an amount determined in accordance with the regulations. 
  
  ## Aggregate Limit 
  
  ### Aggregate limit
  
  983 An insurance holding company shall not, and shall not permit its prescribed subsidiaries to, 
  (a) purchase or otherwise acquire 
  (i) participating shares of a body corporate, other than those of a permitted entity in which the insurance holding company has, or by virtue of the acquisition would have, a substantial investment, 
  (ii) ownership interests in an unincorporated entity, other than ownership interests in a permitted entity in which the insurance holding company has, or by virtue of the acquisition would have, a substantial investment, or 
  (iii) interests in real property, or 
  (b) make an improvement to real property in which the insurance holding company or any of its prescribed subsidiaries has an interest if the aggregate value of 
  (c) all participating shares and ownership interests referred to in subparagraphs (a)(i) and (ii) that are beneficially owned by the insurance holding company and its prescribed subsidiaries, and 
  (d) all interests of the insurance holding company in real property referred to in subparagraph (a)(iii) exceeds, or the acquisition or the making of the improvement would cause that aggregate value to exceed, an amount determined in accordance with the regulations. 
  
  ## Miscellaneous 
  
  ### Regulations
  
  984 For the purposes of this Division, the Governor in Council may make regulations 
  (a) defining the interests of an insurance holding company in real property; 
  (b) determining the method of valuing those interests; 
  (c) exempting classes of insurance holding companies from the application of sections 978 to 983; or 
  (d) respecting the determination of an amount for the purpose of each of sections 981, 982 and 983. 
  
  ### Divestment order
  
  985 (1) The Superintendent may, by order, direct an insurance holding company to dispose of, within any period that the Superintendent considers reasonable, any loan, investment or interest made or acquired in contravention of this Division. 
  
  ### Divestment order
  
  (2) If, in the opinion of the Superintendent, 
  (a) an investment by an insurance holding company or any entity it controls in shares of a body corporate or in ownership interests in an unincorporated entity enables the insurance holding company to control the body corporate or the unincorporated entity, or 
  (b) the insurance holding company or any entity it controls has entered into an arrangement whereby it or its nominee may veto any proposal put before 
  (i) the board of directors of a body corporate, or 
  (ii) a similar group or committee of an unincorporated entity, or whereby no proposal may be approved except with the consent of the insurance holding company, the entity it controls or the nominee, the Superintendent may, by order, require the insurance holding company, within any period that the Superintendent considers reasonable, to do all things necessary to ensure that the insurance holding company no longer controls the body corporate or unincorporated entity or has the ability to veto or otherwise defeat any proposal referred to in paragraph (b). 
  
  ### Divestment order
  
  (3) If 
  (a) an insurance holding company 
  (i) fails to provide or obtain within a reasonable time the undertakings referred to in subsection 973(1), (2) or (4), or 
  (ii) is in default of an undertaking referred to in subsection 973(1) or (2) and the default is not remedied within ninety days after the day of receipt by the insurance holding company of a notice from the Superintendent of the default, or 
  (b) a permitted entity referred to in subsection 973(4) is in default of an undertaking referred to in subsection 973(4) and the default is not remedied within ninety days after the day of receipt by the insurance holding company of a notice from the Superintendent of the default, the Superintendent may, by order, require the insurance holding company, within any period that the Superintendent considers reasonable, to do all things necessary to ensure that the insurance holding company no longer has a substantial investment in the entity to which the undertaking relates. 
  
  ### Exception
  
  (4) Subsection (2) does not apply in respect of an entity in which an insurance holding company has a substantial investment permitted by this Division. 
  
  ### Deemed temporary investment
  
  986 If an insurance holding company controls or has a substantial investment in an entity as permitted by this Division and the insurance holding company 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 971(5) or (6), the insurance holding company is deemed to have acquired, on the day the insurance holding company becomes aware of the change, a temporary investment in respect of which section 974 applies. 
  
  ### Asset transactions
  
  987 (1) An insurance holding company 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 is the value of the assets; is the total value of all assets that the insurance holding company and its subsidiaries acquired from or transferred to that person in the twelve months ending immediately before the acquisition or transfer; and is ten per cent of the total value of the assets of the insurance holding company, as shown in the last annual statement of the insurance holding company prepared before the acquisition or transfer. 
  
  ### 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. 
  
  ### 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) assets acquired or transferred under a transaction or series of transactions by a subsidiary of the insurance holding company with a financial institution as a result of the subsidiary’s participation in one or more syndicated loans with that financial institution. 
  
  ### Exception
  
  (3) The approval of the Superintendent is not required if 
  (a) the insurance holding company or its subsidiary acquires shares of, or ownership interests in, an entity for which the approval of the Minister under Division 7 or subsection 971(5) is required or the approval of the Superintendent under subsection 971(6) is required; or 
  (b) the transaction has been approved by the Minister under subsection 715(1) of this Act or subsection 678(1) of the Bank Act.  
  
  ### 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 insurance holding company 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 insurance holding company 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 insurance holding company if the annual statement had been prepared, in accordance with the accounting principles referred to in subsection 887(4), immediately before the transfer. 
  
  ### Total value of all assets
  
  (5) For the purposes of subsection (1), the total value of all assets that the insurance holding company 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 insurance holding company, the fair market value of the assets of the entity at the date of the acquisition. 
  
  ### Total value of all assets
  
  (6) For the purposes of subsection (1), the total value of all assets that the insurance holding company 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 insurance holding company 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 insurance holding company if the annual statement had been prepared, in accordance with the accounting principles referred to in subsection 887(4), immediately before the transfer of the asset. 
  
  ### Transitional
  
  988 Nothing in this Division requires 
  (a) the termination of a loan made before February 7, 2001; 
  (b) the termination of a loan made after that date as a result of a commitment made before that date; 
  (c) the disposal of an investment made before that date; or 
  (d) the disposal of an investment made after that date as a result of a commitment made before that date. But if the loan or investment would be precluded or limited by this Division, the amount of the loan or investment may not be increased after that date. 
  
  ### Saving
  
  989 A loan or investment referred to in section 988 is deemed not to be prohibited by the provisions of this Division. 
  
  ### Meaning of 
  *non-insurance entity* 
  
  990 (1) Subject to subsection (2), for the purpose of section 991, 
  *non-insurance entity* means a Canadian entity, other than a company, that is controlled by an insurance holding company or in which an insurance holding company has a substantial investment.  
  
  ### Exception
  
  (2) A Canadian entity is not a non-insurance entity by reason only that a subsidiary of an insurance holding company that is a company that controls, or has a substantial investment, in the Canadian entity. 
  
  ### Disclosure of status
  
  991 (1) A non-insurance entity that carries on as part of its business the provision of financial services shall not borrow money in Canada from the public without disclosing that the non-insurance entity is not regulated as a financial institution in Canada. 
  
  ### Manner of disclosure
  
  (2) The disclosure shall be 
  (a) in a prospectus, information circular or other offering document related to the borrowing or in a similar document related to the borrowing or, if there is no such document, in a statement delivered to the lender; or 
  (b) in any other manner that may be prescribed. 
  
  ### Exception for certain borrowings
  
  (3) Subsection (1) does not apply 
  (a) to a borrowing of a prescribed class or type or to a borrowing in prescribed circumstances or in a prescribed manner; or 
  (b) except as may be provided in any regulations, to a borrowing 
  (i) from a person in an amount of $150,000 or more, or 
  (ii) through the issue of instruments in denominations of $150,000 or more. 
  
  ### Exception
  
  (4) Subsection (1) does not apply if the non-insurance entity is 
  (a) an insurance holding company or a bank holding company; 
  (b) a bank; 
  (c) an entity that is controlled by a bank holding company or in which a bank holding company has a substantial investment; 
  (d) a trust, loan or insurance corporation incorporated under an Act of Parliament or of the legislature of a province; 
  (e) a financial institution that is described in paragraph (g) of the definition 
  *financial institution* in section 2;  
  (f) an entity referred to in paragraph 971(1)(f) or (h); or 
  (g) a prescribed entity. 
  
  # DIVISION 10 
  
  ## Adequacy of Capital and Liquidity 
  
  ### Adequacy of capital and liquidity
  
  992 (1) An insurance holding company shall, in relation to its business, maintain 
  (a) adequate capital, and 
  (b) adequate and appropriate forms of liquidity, and comply with any regulations in relation to capital and liquidity. 
  
  ### Regulations and guidelines
  
  (2) The Governor in Council may make regulations and the Superintendent may make guidelines respecting the maintenance by an insurance holding company of adequate capital and adequate and appropriate forms of liquidity. 
  
  ### Directives
  
  (3) Even if an insurance holding company is complying with regulations or guidelines made under subsection (2), the Superintendent may, by order, direct the insurance holding company 
  (a) to increase its capital; or 
  (b) to provide additional liquidity in such forms and amounts as the Superintendent may require. 
  
  ### Compliance
  
  (4) An insurance holding company shall comply with an order made under subsection (3) within the time specified by the Superintendent in the order. 
  
  # DIVISION 11 
  
  ## Regulation of Insurance Holding Companies 
  
  ## Supervision 
  
  ## Returns 
  
  ### Required information
  
  993 An insurance holding company shall provide the Superintendent with such information, at such times and in such form as the Superintendent may require. 
  
  ### Names of directors and auditors
  
  994 (1) An insurance holding company shall, within thirty days after each annual meeting of the insurance holding company, provide the Superintendent with a return showing 
  (a) the name, residence and citizenship of each director holding office immediately following the meeting; 
  (b) the mailing address of each director holding office immediately following the meeting; 
  (c) the bodies corporate of which each director referred to in paragraph (a) is an officer or director and the firms of which each director is a member; 
  (d) the names of the directors referred to in paragraph (a) who are officers or employees of the insurance holding company or any affiliate of the insurance holding company, and the positions they occupy; 
  (e) the name of each committee of the insurance holding company on which each director referred to in paragraph (a) serves; 
  (f) the date of expiration of the term of each director referred to in paragraph (a); and 
  (g) the name, address and date of appointment of the auditor of the insurance holding company. 
  
  ### Changes
  
  (2) Where 
  (a) any information relating to a director or auditor of an insurance holding company shown in the latest return made to the Superintendent under subsection (1), other than information referred to in paragraph (1)(c), becomes inaccurate or incomplete, 
  (b) a vacancy in the position of auditor of the insurance holding company occurs or is filled by another person, or 
  (c) a vacancy on the board of directors of the insurance holding company occurs or is filled, the insurance holding company shall forthwith provide the Superintendent with such information as is required to maintain the return in a complete and accurate form. 
  
  ### Copy of by-laws
  
  995 An insurance holding company shall send to the Superintendent within thirty days after the coming into effect of a by-law or an amendment to a by-law, a copy of the by-law or amendment. 
  
  ### Register for insurance holding company
  
  996 (1) The Superintendent shall, in respect of each insurance holding company, cause a register to be maintained containing a copy of 
  (a) the incorporating instrument of the insurance holding company; and 
  (b) the information referred to in paragraphs 994(1)(a) and (c) to (g) contained in the latest return provided to the Superintendent under section 994. 
  
  ### Form
  
  (2) The register may be maintained in 
  (a) a bound or loose-leaf form or in a photographic film form; or 
  (b) a system of mechanical or electronic data processing or any other information storage device that is capable of reproducing any required information in intelligible written form within a reasonable time. 
  
  ### Access
  
  (3) Persons are entitled to reasonable access to the register and may make copies of or take extracts from the information in it. 
  
  ### Evidence
  
  (4) A statement containing information in the register and purporting to be certified by the Superintendent is admissible in evidence in all courts as proof, in the absence of evidence to the contrary, of the facts stated in the statement without proof of the appointment or signature of the Superintendent. 
  
  ### Production of information and documents
  
  997 (1) The Superintendent may, by order, direct a person who controls an insurance holding company or any entity that is affiliated with an insurance holding company to provide the Superintendent with such information or documents that are specified in the order if the Superintendent believes that the production of the information or documents is necessary in order to 
  (a) determine whether the insurance holding company is complying with the provisions of this Act; 
  (b) ascertain the financial condition of the insurance holding company; or 
  (c) determine whether the insurance holding company has adequate policies and procedures to protect itself against threats to its integrity or security. 
  
  ### Time
  
  (2) Any person to whom a direction has been issued under subsection (1) shall provide the information or documents specified in the order within the time specified in the order and, where the order does not specify a time, the person shall provide the information or documents within a reasonable time. 
  
  ### Exemption
  
  (3) Subsection (1) does not apply in respect of an entity that controls an insurance holding company or is affiliated with an insurance holding company where that entity is a financial institution regulated 
  (a) by or under an Act of Parliament; or 
  (b) by or under an Act of the legislature of a province where the Superintendent has entered into an agreement with the appropriate official or public body responsible for the supervision of financial institutions in that province concerning the sharing of information on such financial institutions. 
  
  ### Confidential information
  
  998 (1) All information regarding the business or affairs of an insurance holding company, or regarding a person dealing with an insurance holding company, that is obtained by the Superintendent, or by any person acting under the direction of the Superintendent, as a result of the administration or enforcement of any Act of Parliament, and all information prepared from that information, is confidential and shall be treated accordingly. 
  
  ### Disclosure permitted
  
  (2) Nothing in subsection (1) prevents the Superintendent from disclosing any information 
  (a) to any government agency or body that regulates or supervises financial institutions, for purposes related to that regulation or supervision, 
  (b) to any other agency or body that regulates or supervises financial institutions, for purposes related to that regulation or supervision, 
  (c) to the Canada Deposit Insurance Corporation or any compensation association designated by order of the Minister pursuant to subsection 449(1), for purposes related to its operation, and 
  (d) to the Deputy Minister of Finance or any officer of the Department of Finance authorized in writing by the Deputy Minister of Finance or to the Governor of the Bank of Canada or any officer of the Bank of Canada authorized in writing by the Governor of the Bank of Canada, for the purposes of policy analysis related to the regulation of financial institutions, if the Superintendent is satisfied that the information will be treated as confidential by the agency, body or person to whom it is disclosed. 
  
  ### Regulations
  
  999 The Governor in Council may make regulations prohibiting, limiting or restricting the disclosure by insurance holding companies of prescribed supervisory information. 
  
  ### Evidentiary privilege
  
  999.1 (1) Prescribed supervisory information shall not be used as evidence in any civil proceedings and is privileged for that purpose. 
  
  ### No testimony or production
  
  (2) No person shall by an order of any court, tribunal or other body be required in any civil proceedings to give oral testimony or to produce any document relating to any prescribed supervisory information. 
  
  ### Exceptions to subsection (1)
  
  (3) Despite subsection (1), 
  (a) the Minister, the Superintendent or the Attorney General of Canada may, in accordance with the regulations, if any, use prescribed supervisory information as evidence in any proceedings; and 
  (b) an insurance holding company may, in accordance with the regulations, if any, use prescribed supervisory information as evidence in any proceedings in relation to the administration or enforcement of this Act or the Winding-up and Restructuring Act that are commenced by the insurance holding company, the Minister, the Superintendent or the Attorney General of Canada.  
  
  ### Exceptions to subsections (1) and (2)
  
  (4) Despite subsections (1) and (2) and section 39.1 of the Office of the Superintendent of Financial Institutions Act, a court, tribunal or other body may, by order, require the Minister, the Superintendent or an insurance holding company to give oral testimony or to produce any document relating to any prescribed supervisory information in any civil proceedings in relation to the administration or enforcement of this Act that are commenced by the Minister, the Superintendent, the Attorney General of Canada or the insurance holding company.  
  
  ### No waiver
  
  (5) The disclosure of any prescribed supervisory information, other than under subsection (3) or (4), does not constitute a waiver of the privilege referred to in subsection (1). 
  
  ### Regulations
  
  (6) The Governor in Council may, for the purposes of subsection (3), make regulations respecting the circumstances in which prescribed supervisory information may be used as evidence. 
  
  ### No waiver
  
  999.2 (1) For greater certainty, the disclosure by an insurance holding company — or by a person who controls an insurance holding company or by an entity that is affiliated with an insurance holding company — to the Superintendent of any information that is subject to a privilege under the law of evidence, solicitor-client privilege or the professional secrecy of advocates and notaries or to litigation privilege does not constitute a waiver of any of those privileges or that secrecy. 
  
  ### No disclosure
  
  (2) The Superintendent shall not disclose any information referred to in subsection (1) to any person whose powers, duties or functions include 
  (a) the investigation or prosecution of an offence under any Act of Parliament or of the legislature of a province; or 
  (b) the investigation of, or conduct of proceedings in respect of, a violation under an Act referred to in paragraph (a). 
  
  ## Examination of Insurance Holding Companies 
  
  ### Examination of insurance holding companies
  
  1000 (1) The Superintendent, from time to time, shall make or cause to be made any examination and inquiry into the business and affairs of any insurance holding company that the Superintendent considers to be necessary or expedient to determine whether the insurance holding company is complying with the provisions of this Act and to ascertain the financial condition of the insurance holding company or to determine whether the insurance holding company has adequate policies and procedures to protect itself against threats to its integrity or security. 
  
  ### Access to records of insurance holding company
  
  (2) The Superintendent or a person acting under the Superintendent’s direction 
  (a) has a right of access to any records, cash, assets and security held by or on behalf of an insurance holding company; and 
  (b) may require the directors, officers or auditor of an insurance holding company to provide information and explanations, to the extent that they are reasonably able to do so, in respect of the condition and affairs of the insurance holding company or any entity in which it has a substantial investment. 
  
  ### Power of Superintendent on inquiry
  
  1001 The Superintendent has all the powers of a person appointed as a commissioner under Part II of the Inquiries Act for the purpose of obtaining evidence under oath, and may delegate those powers to any person acting under the Superintendent’s direction.  
  
  ## Remedial Powers 
  
  ## Prudential Agreements 
  
  ### Prudential agreement
  
  1002 The Superintendent may enter into an agreement, called a “prudential agreement”, with an insurance holding company for the purposes of implementing any measure designed to protect the interests of depositors, policyholders and creditors of any federal financial institution affiliated with it or establishing adequate policies and procedures to protect the insurance holding company against threats to its integrity or security. 
  
  ## Directions of Compliance 
  
  ### Superintendent’s directions to insurance holding companies, etc.
  
  1003 (1) If, in the opinion of the Superintendent, an insurance holding company, one of its affiliates or any person with respect to an insurance holding company is committing, or is about to commit, an act or is pursuing, or is about to pursue, a course of conduct that may directly or indirectly be prejudicial to the interests of depositors, policyholders or creditors of a federal financial institution that is affiliated with the insurance holding company, the Superintendent may direct the insurance holding company to 
  (a) cease or refrain from committing the act or pursuing the course of conduct; 
  (b) cause the affiliate or person to cease or refrain from committing the act or pursuing the course of conduct, to the extent it is able to do so; 
  (c) perform any act that in the opinion of the Superintendent is necessary to remedy the situation or minimize the prejudice; or 
  (d) cause the affiliate or person to perform any act that in the opinion of the Superintendent is necessary to remedy the situation or minimize the prejudice, to the extent that the insurance holding company is able to do so. 
  
  ### Directions — policies and procedures
  
  (1.1) If, in the opinion of the Superintendent, an insurance holding company does not have adequate policies and procedures to protect itself against threats to its integrity or security, the Superintendent may direct the insurance holding company to take any measures that in the opinion of the Superintendent are necessary to remedy the situation. 
  
  ### Opportunity for representations
  
  (2) Subject to subsection (3), no direction shall be issued under subsection (1) or (1.1) unless the insurance holding company is provided with a reasonable opportunity to make representations in respect of the matter. 
  
  ### Temporary direction
  
  (3) If, in the opinion of the Superintendent, the length of time required for representations to be made might be prejudicial to the public interest, the Superintendent may make a temporary direction with respect to the matters referred to in paragraphs (1)(a) to (d) or subsection (1.1) having effect for a period of not more than 15 days. 
  
  ### Duration of temporary direction
  
  (4) A temporary direction continues to have effect after the expiration of the fifteen day period if no representations are made to the Superintendent within that period or, if representations have been made, the Superintendent notifies the insurance holding company that the Superintendent is not satisfied that there are sufficient grounds for revoking the direction. 
  
  ### Court enforcement
  
  1004 (1) If an insurance holding company is contravening or has failed to comply with a prudential agreement entered into under section 1002 or a direction of the Superintendent issued under subsection 1003(1), (1.1) or (3), or is contravening this Act, or has omitted to do any thing under this Act that it is required to do, the Superintendent may, in addition to any other action that may be taken under this Act, apply to a court for an order requiring the insurance holding company to comply with the direction, cease the contravention or do any thing that is required to be done, and on such application the court may so order and make any other order it thinks fit. 
  
  ### Appeal
  
  (2) An appeal from a decision of a court under subsection (1) lies in the same manner, and to the same court, as an appeal from any other order of the court. 
  
  ## Disqualification and Removal of Directors or Senior Officers 
  
  ### Meaning of 
  *senior officer* 
  
  1005 In sections 1006 and 1007, 
  *senior officer* means the chief executive officer, secretary, treasurer or controller of an insurance holding company or any other officer reporting directly to the insurance holding company’s board of directors or chief executive officer.  
  
  ### Application
  
  1006 (1) This section applies only in respect of an insurance holding company 
  (a) that has been notified by the Superintendent that this section applies to it where the insurance holding company is subject to measures designed to protect the interests of depositors, policyholders and creditors of any federal financial institution affiliated with it, which measures are contained in a prudential agreement entered into under section 1002 or an undertaking given by the insurance holding company to the Superintendent; or 
  (b) that is the subject of a direction made under section 1003, or an order made under subsection 992(3). 
  
  ### Information to be provided
  
  (2) An insurance holding company shall provide the Superintendent with the name of 
  (a) each person who has been nominated for election or appointment as a member of its board of directors, 
  (b) each person who has been selected by the insurance holding company for appointment as a senior officer, and 
  (c) each person who is newly elected as a director of the insurance holding company at a meeting of shareholders and who was not proposed for election by anyone involved in the management of the insurance holding company, together with such other information about the background, business record and experience of the person as the Superintendent may require. 
  
  ### When information to be provided
  
  (3) The information required by subsection (2) shall be provided to the Superintendent 
  (a) at least 30 days prior to the date or proposed date of the election or appointment or within such shorter period as the Superintendent may allow; or 
  (b) in the case of a person referred to in paragraph (2)(c), within 15 days after the date of the election of the person. 
  
  ### Disqualification or removal
  
  (4) If the Superintendent is of the opinion that, on the basis of the competence, business record, experience, conduct or character of a person, he or she is not suitable to hold that position, the Superintendent may, by order, 
  (a) in the case of a person referred to in paragraph (2)(a) or (b), disqualify the person from being elected or appointed as a director of an insurance holding company or from being appointed as a senior officer; or 
  (b) in the case of a person referred to in paragraph (2)(c), remove the person from office as a director of the insurance holding company. 
  
  ### Risk of prejudice
  
  (5) In forming an opinion under subsection (4), the Superintendent must consider whether the interests of the depositors, policyholders and creditors of any federal financial institution affiliated with the insurance holding company would likely be prejudiced if the person were to take office or continue to hold office, as the case may be. 
  
  ### Representations may be made
  
  (6) The Superintendent must in writing notify the person concerned and the insurance holding company of any action that the Superintendent proposes to take under subsection (4) and must afford them an opportunity within 15 days after the date of the notice, or within any longer period that the Superintendent allows, to make representations to the Superintendent in relation to the matter. 
  
  ### Prohibition
  
  (7) Where an order has been made under subsection (4) 
  (a) disqualifying a person from being elected or appointed to a position, the person shall not be, and the insurance holding company shall not permit the person to be, elected or appointed to the position; or 
  (b) removing a director from office, the person shall not continue to hold, and the insurance holding company shall not permit the person to continue to hold, office as a director. 
  
  ### Removal of directors or senior officers
  
  1007 (1) The Superintendent may, by order, remove a person from office as a director or senior officer of an insurance holding company if the Superintendent is of the opinion that the person is not suitable to hold that office 
  (a) on the basis of the competence, business record, experience, conduct or character of the person; or 
  (b) because the person has contravened or, by action or negligence, has contributed to the contravention of 
  (i) this Act or the regulations made under it, 
  (ii) a direction made under section 1003, 
  (iii) an order made under subsection 992(3), or 
  (iv) a prudential agreement entered into under section 1002 or an undertaking given by the insurance holding company to the Superintendent. 
  
  ### Risk of prejudice
  
  (2) In forming an opinion under subsection (1), the Superintendent must consider whether the interests of the depositors, policyholders and creditors of any federal financial institution affiliated with the insurance holding company have been or are likely to be prejudiced by the person’s holding office as a director or senior officer. 
  
  ### Representations may be made
  
  (3) The Superintendent must in writing notify the person concerned and the insurance holding company of any removal order that the Superintendent proposes to make under subsection (1) and must afford them an opportunity within 15 days after the date of the notice, or within any longer period that the Superintendent allows, to make representations to the Superintendent in relation to the matter. 
  
  ### Suspension
  
  (4) If the Superintendent is of the opinion that the public interest may be prejudiced by the director or senior officer continuing to exercise the powers or carry out the duties and functions of that office during the period for making representations, the Superintendent may make an order suspending the director or senior officer. The suspension may not extend beyond 10 days after the expiration of that period. 
  
  ### Notice of order
  
  (5) The Superintendent shall, without delay, notify the director or senior officer, as the case may be, and the insurance holding company of a removal order or suspension order. 
  
  ### Consequences of removal order
  
  (6) The director or senior officer, as the case may be, ceases to hold that office as of the date the removal order is made or any later date specified in the order. 
  
  ### Appeal
  
  (7) The director or senior officer, as the case may be, or the insurance holding company may, within 30 days after the date of receipt of notice of the removal order under subsection (5), or within any longer period that the Court allows, appeal the matter to the Federal Court. 
  
  ### Powers of Federal Court
  
  (8) The Federal Court, in the case of an appeal, may dismiss the appeal or set aside the removal order. 
  
  ### Order not stayed by appeal
  
  (9) A removal order is not stayed by an appeal. 
  
  # PART XVIII 
  
  ## Administration 
  
  ## Notices and Other Documents 
  
  ### Execution of documents
  
  1007.1 Any by-law, notice, resolution, requisition, statement or other document required or permitted to be executed or signed by more than one person for the purposes of this Act may be executed or signed in several documents of like form, each of which is executed or signed by one or more of the persons. The documents if duly executed or signed by all persons required or permitted to sign them are deemed to constitute one document for the purposes of this Act. 
  
  ### Notice to directors, etc.
  
  1008 (1) A notice or document required by this Act or the regulations, or by the incorporating instrument or by-laws of a company or society, to be sent to a shareholder, policyholder or director of a company, foreign company or provincial company or to a member or director of a society may be sent by prepaid mail addressed to, or may be delivered personally to, 
  (a) the shareholder at the shareholder’s latest address as shown in the records of the company, foreign company or provincial company or its transfer agent; 
  (b) the director at the director’s latest address as shown in the records of the company, society, foreign company or provincial company, or in the latest return made under section 549, 661 or 668; and 
  (c) the policyholder or the member at the policyholder’s or member’s latest address as shown in the records of the company, society, foreign company or provincial company. 
  
  ### Notice to directors, etc.
  
  (2) A notice or document required by this Act or the regulations, or by the incorporating instrument or by-laws of an insurance holding company to be sent to a shareholder or director of the insurance holding company may be sent by prepaid mail addressed to, or may be delivered personally to, 
  (a) the shareholder at the shareholder’s latest address as shown in the records of the insurance holding company or its transfer agent; and 
  (b) the director at the director’s latest address as shown in the records of the insurance holding company, or in the latest return made under section 994. 
  
  ### Presumption from return
  
  1009 A director named in the latest return sent by a company, a society, a provincial society or an insurance holding company to the Superintendent under section 549, 661, 668 or 994 is presumed for the purposes of this Act to be a director of the company, society, provincial company or insurance holding company referred to in the return. 
  
  ### Presumption of receipt
  
  1010 (1) A notice or document sent by mail in accordance with section 1008 to a shareholder, member, policyholder or director is deemed to be received by that person at the time it would be delivered in the ordinary course of mail unless there are reasonable grounds for believing that person did not receive the notice or document at that time or at all. 
  
  ### Undelivered notices
  
  (2) If a company, society, foreign company, provincial company or insurance holding company sends a notice or document to a shareholder, member or policyholder in accordance with section 1008 and it is returned on two consecutive occasions because the shareholder, member or policyholder cannot be found, the company, society, foreign company, provincial company or insurance holding company is not required to send any further notices or documents to them until it is informed in writing of their new address. 
  
  ### Service on companies, etc.
  
  1011 A notice or document required by this Act to be sent to or served on a company, a society, a foreign company, a provincial company or an insurance holding company may be sent by registered mail to the head office or chief agency, as the case may be, of the company, society, foreign company, provincial company or insurance holding company and, if so sent, is deemed to be received or served at the time it would be delivered in the ordinary course of mail unless there are reasonable grounds for believing that the company, society, foreign company, provincial company or insurance holding company did not receive the notice or document at that time or at all. 
  
  ### Certificate of companies, etc.
  
  1012 (1) A certificate issued on behalf of a company, a society or an insurance holding company stating any fact that is set out in the incorporating instrument, the by-laws, the minutes of the meetings of the directors, a committee of directors or the shareholders, policyholders or members, or in a contract to which the company, society or insurance holding company is a party, may be signed by a director or an officer of the company, society or insurance holding company. 
  
  ### Proof of certain cases
  
  (2) When introduced as evidence in any civil, criminal or administrative action or proceeding, the following are, in the absence of evidence to the contrary, proof of the facts so certified without proof of the signature or official character of the person appearing to have signed the certificate: 
  (a) a fact stated in a certificate referred to in subsection (1); 
  (b) a certified extract from a securities register of a company or of an insurance holding company; or 
  (c) a certified copy of, or an extract from, minutes of a meeting of shareholders, policyholders, members, directors or a committee of directors of a company, society or insurance holding company. 
  
  ### Entry in securities register
  
  1013 An entry in the securities register of, or on a security certificate issued by, a company or an insurance holding company is evidence that the person in whose name the security is registered is the owner of the securities described in the register or in the certificate. 
  
  ### Verification of documents or fact
  
  1014 (1) The Superintendent may require that a document or a fact stated in a document that is required by or under this Act to be sent to the Superintendent or to the Minister be verified in accordance with subsection (2). 
  
  ### Form of proof
  
  (2) A document or fact required by this Act or by the Superintendent to be verified may be verified by affidavit made under oath or by statutory declaration under the Canada Evidence Act before any commissioner for oaths or for taking affidavits.  
  
  ### Alternative means of publication
  
  1015 (1) Anything that is required by a provision of this Act to be published in the Canada Gazette or to be published in any other way may, instead of being published in that way, be published in any manner that may be prescribed for the purpose of that provision.  
  
  ### Alternative means of publishing summaries
  
  (2) Anything that is required by a provision of this Act to be summarized in a publication may instead be summarized and published in any manner that may be prescribed for the purpose of that provision. 
  
  ### Publication conditions
  
  (3) Any condition under a provision of this Act that something be published in the Canada Gazette or in any other way is satisfied if that thing is published instead in any manner that may be prescribed for the purpose of that provision.  
  
  ### Other consequences
  
  (4) If a provision of this Act provides for consequences to follow the publication of something in the Canada Gazette or in any other manner, the same consequences follow the publication of that thing in any other manner that may be prescribed for the purpose of that provision.  
  
  ## Approvals 
  
  ### Definition of 
  *approval* 
  
  1016 In sections 1016.1 to 1016.6, 
  *approval* includes any consent, designation, order, exemption, extension or other permission granted by the Minister or the Superintendent under this Act, and includes the issuance of letters patent.  
  
  ### Matters to take into account — Minister
  
  1016.1 (1) In addition to any matters or conditions provided for in this Act that are relevant to the granting of an approval, the Minister may, in considering whether to grant the approval, take into account all matters that he or she considers relevant in the circumstances, including 
  (a) national security; and 
  (b) Canada’s international relations and its international legal obligations. 
  
  ### Matters to take into account — Superintendent
  
  (2) In addition to any matters or conditions provided for in this Act that are relevant to the granting of an approval and to any prudential considerations that the Superintendent considers relevant in the circumstances, the Superintendent may, in considering whether to grant the approval, take into account 
  (a) national security; and 
  (b) Canada’s international relations and its international legal obligations. 
  
  ### Minister — terms, conditions and undertakings
  
  1016.2 (1) In addition to any other action that may be taken under this Act, the Minister may, in granting an approval, impose any terms and conditions or require any undertaking that the Minister considers appropriate, including any terms, conditions or undertakings specified by the Superintendent to maintain or improve the safety and soundness of any financial institution regulated under an Act of Parliament to which the approval relates or that might be affected by it or to ensure that such a financial institution has adequate policies and procedures to protect itself against threats to its integrity or security. 
  
  ### Commissioner — supervision of terms, conditions and undertakings
  
  (1.1) If the Minister specifies that the Commissioner is to supervise a company to determine if it is complying with any terms and conditions that are imposed, or undertakings that are required, by the Minister for the protection of the company’s customers, the Commissioner may take the same measures that the Commissioner could take if the terms and conditions or undertaking were a consumer provision. 
  
  ### Superintendent — terms, conditions and undertakings
  
  (2) In addition to any other action that may be taken under this Act, the Superintendent may, in granting an approval, impose any terms and conditions or require any undertaking that the Superintendent considers appropriate. 
  
  ### Revocation, suspension or amendment of approval — Minister
  
  1016.3 (1) The Minister may revoke, suspend or amend any approval granted by the Minister if he or she considers it appropriate to do so. In deciding whether to take any of those actions, the Minister may take into account all matters that he or she considers relevant in the circumstances, including 
  (a) national security; and 
  (b) Canada’s international relations and its international legal obligations. 
  
  ### Revocation, suspension or amendment of approval — Superintendent
  
  (2) The Superintendent may revoke, suspend or amend any approval granted by the Superintendent if he or she considers it appropriate to do so. In deciding whether to take any of those actions, the Superintendent may take into account any prudential considerations that he or she considers relevant in the circumstances and 
  (a) national security; and 
  (b) Canada’s international relations and its international legal obligations. 
  
  ### Representations
  
  (3) Before taking any action under subsection (1) or (2), the Minister or the Superintendent, as the case may be, shall give the person concerned a reasonable opportunity to make representations. 
  
  ### Temporary amendment or suspension
  
  (4) If, in the Minister’s opinion, the length of time required for representations to be made under subsection (3) might be prejudicial to the public interest, the Minister may temporarily suspend or amend any approval granted by the Minister. 
  
  ### Cessation of effect
  
  (5) A temporary suspension or amendment of an approval ceases to have effect on the earlier of 
  (a) the expiry of 30 days after the day on which it takes effect or of a shorter period that is specified by the Minister, and 
  (b) if the approval is revoked, suspended or amended under subsection (1), the day on which the revocation, suspension or amendment takes effect. 
  
  ### Confidential undertaking
  
  1016.31 (1) If, in the Minister’s opinion, the disclosure of information about an undertaking required under subsection 1016.2(1) or 1016.3(1) or (4), or information that could reveal the existence of the undertaking, could pose a threat to the integrity or security of the financial institution to which the undertaking relates or could be injurious to national security, the Minister may specify that the information is confidential and shall be treated accordingly. 
  
  ### Prohibition
  
  (2) Despite anything in this Act but subject to subsection (3), it is prohibited to disclose any confidential information referred to in subsection (1) except in accordance with any terms or conditions that the Minister may specify in the undertaking. 
  
  ### Notice — Committee and Review Agency
  
  (3) If the Minister specifies under subsection (1) that information referred to in that subsection is confidential for reasons related to national security, the Minister shall, within 30 days after the day on which the undertaking in question is required, notify 
  (a) the Committee, as defined in section 2 of the National Security and Intelligence Committee of Parliamentarians Act ; and  
  (b) the Review Agency, as defined in section 2 of the National Security and Intelligence Review Agency Act.  
  
  ### Effect of non-compliance on approval
  
  1016.4 (1) Unless otherwise expressly provided in this Act, a failure to comply with a term, condition or undertaking imposed or required under any provision of this Act does not invalidate the approval to which the term, condition or undertaking relates. 
  
  ### Non-compliance
  
  (2) In addition to any other action that may be taken under this Act, in the case of non-compliance by a person with a term, condition or undertaking imposed or required under any provision of this Act, the Minister or the Superintendent, as the case may be, may 
  (a) revoke, suspend or amend the approval to which the term, condition or undertaking relates; or 
  (b) apply to a court for an order directing the person to comply with the term, condition or undertaking, and on such an application the court may make the order and any other order that it thinks fit. 
  
  ### Representations
  
  (3) Before taking any action under subsection (2), the Minister or the Superintendent, as the case may be, shall give the person concerned a reasonable opportunity to make representations. 
  
  ### Revocation, suspension or amendment
  
  (4) At the request of the person concerned, the Minister or the Superintendent, as the case may be, may revoke, suspend or amend any terms or conditions imposed by him or her and may revoke or suspend an undertaking given to him or her or approve its amendment. 
  
  ### Multiple approval — other approvals
  
  1016.5 The Minister or the Superintendent may grant more than one approval, other than letters patent, in a single instrument if he or she considers it appropriate to do so, and if the Minister or Superintendent does so, he or she may specify different effective dates for each of the approvals. 
  
  ### Exemption in relation to notices of intention
  
  1016.6 The Superintendent may, on application, exempt an applicant or applicants from the provisions of this Act respecting the publication of a notice of intention in respect of applications for approvals and impose any terms and conditions respecting the publication of the notice of intention that he or she considers appropriate. 
  
  ## Exceptions to Generally Accepted Accounting Principles 
  
  ### Calculations — generally accepted accounting principles
  
  1016.61 (1) If, as a result of a change to the accounting principles referred to in subsections 331(4) and 887(4) — whether the change is made before or after this section comes into force — the Superintendent considers, given any prudential considerations that he or she considers relevant, that any amount, calculation or valuation under this Act or the regulations is not appropriate, the Superintendent may specify the amount that is to be used or the calculation or valuation that is to be performed instead. 
  
  ###  Canada Gazette 
  
  (2) The Superintendent shall cause a notice of the specification to be published in the Canada Gazette within 60 days after the day on which the specification has effect.  
  
  ### Five-year limit
  
  (3) The specification ceases to have effect on the day indicated in the notice, which may be no later than five years after the day on which the specification is made. 
  
  ## Orders to Exempt or Adapt 
  
  ### Order
  
  1016.7 (1) On the recommendation of the Minister, the Governor in Council may, by order, 
  (a) provide that any provision of this Act or the regulations shall not apply to a company, to Her Majesty in right of Canada or an agent or agency of Her Majesty or to any other person otherwise subject to the provision; and 
  (b) provide that any provision of this Act or the regulations applies to a company, to Her Majesty in right of Canada or Her Majesty’s agent or agency or to any other person subject to the provision only in the manner and to the extent provided for in the order, and adapt the provision for the purposes of that application. 
  
  ### Minister’s recommendation
  
  (2) The Minister may make a recommendation under subsection (1) only if the Minister 
  (a) is of the opinion that the order would relate to 
  (i) the acquisition, holding, sale or other disposition of, or other dealing with, shares of a company by, or the transfer or issue of shares of a company to, Her Majesty in right of Canada or Her Majesty’s agent or agency, or 
  (ii) the management of the business and affairs or the regulation and supervision of a company during the time that Her Majesty or Her Majesty’s agent or agency is acquiring, holding, selling or otherwise disposing of, or otherwise dealing with, shares of the company, or during the time that shares of the company are transferred or issued to Her Majesty or Her Majesty’s agent or agency; and 
  (b) is of the opinion — after considering measures other than an order under that subsection and after consulting with the Superintendent, the Governor of the Bank of Canada and the Chief Executive Officer of the Canada Deposit Insurance Corporation — that the order will promote the stability of the financial system in Canada. 
  
  ### Terms and conditions
  
  (3) On the recommendation of the Minister, the Governor in Council may, by order, impose any terms and conditions relating to the acquisition of shares of a company by, or transfer or issue of shares of a company to, Her Majesty in right of Canada or Her Majesty’s agent or agency. 
  
  ### Repeal of order under subsection (1)
  
  (4) The Minister may recommend the repeal of an order made under subsection (1) without regard to subsection (2). 
  
  ### Terms, conditions and undertakings
  
  (5) From the time that Her Majesty in right of Canada or an agent or agency of Her Majesty acquires shares of a company to the time that the shares are sold or otherwise disposed of, the Minister may, by order, impose any terms and conditions on — or require any undertaking from — the company that the Minister considers appropriate, including any terms and conditions or undertakings relating to 
  (a) the remuneration of the company’s senior officers, as defined in section 678.01, and directors; 
  (b) the appointment or removal of the company’s senior officers, as defined in section 678.01, and directors; 
  (c) the payment of dividends by the company; and 
  (d) the company’s lending policies and practices. 
  
  ### Acquisition
  
  (6) Despite Part X of the Financial Administration Act, the Minister or an agent or agency of Her Majesty in right of Canada may, on any terms and conditions imposed under subsection (3), acquire and hold shares of a company on behalf of or in trust for Her Majesty if, as a result of an order under subsection (1), the company may record in its securities register the transfer or issue of shares to Her Majesty or an agent or agency of Her Majesty.  
  
  ### Payment out of C.R.F.
  
  (7) On the requisition of the Minister, there may be paid out of the Consolidated Revenue Fund the amount that the Minister or an agent or agency of Her Majesty in right of Canada is required to pay for the acquisition of shares under subsection (6) and any costs and expenses incurred in connection with the acquisition, holding, sale or other disposition of, or other dealing with, the shares. 
  
  ### Registration of shares
  
  (8) Shares acquired under subsection (6) by the Minister or an agent or agency of Her Majesty in right of Canada shall be registered in the name of the Minister, agent or agency, as the case may be, in the company’s securities register if they are capable of being registered in it, and the shares shall be held by the Minister, agent or agency, as the case may be, on behalf of or in trust for Her Majesty. 
  
  ### Disposition by Minister
  
  (9) The Minister may, at any time, sell or otherwise dispose of shares acquired under subsection (6). The Surplus Crown Assets Act and section 61 of the Financial Administration Act do not apply to the sale or disposition.  
  
  ### Disposition by agent or agency
  
  (10) An agent or agency of Her Majesty in right of Canada — at the request of the Minister, which may be made at any time — shall sell or otherwise dispose of shares acquired under subsection (6). The Surplus Crown Assets Act and section 61 of the Financial Administration Act do not apply to the sale or disposition.  
  
  ### Consideration by Minister
  
  (11) If the Minister or an agent or agency of Her Majesty in right of Canada is holding shares of a company on behalf of or in trust for Her Majesty on the day that is two years after the day on which the shares were acquired, the Minister shall consider whether holding the shares continues to promote the stability of the financial system in Canada. 
  
  ### Mandatory disposition
  
  (12) If the Minister, under subsection (11), considers that holding shares acquired under subsection (6) no longer continues to promote the stability of the financial system in Canada, the Minister — or, at the request of the Minister, the agent or agency of Her Majesty in right of Canada — shall take the measures that the Minister considers practicable in the circumstances to sell or otherwise dispose of the shares. The Surplus Crown Assets Act and section 61 of the Financial Administration Act do not apply to the sale or disposition.  
  
  ### Not a Crown corporation
  
  (13) Even if the acquisition of a company’s shares under subsection (6) would otherwise cause the company to be a Crown corporation, as defined in subsection 83(1) of the Financial Administration Act, the company is not a Crown corporation for the purposes of that Act.  
  
  ###  Statutory Instruments Act 
  
  (14) The Statutory Instruments Act does not apply to an order made under this section.  
  
  ### Definition of 
  *shares* 
  
  (15) For the purposes of this section, 
  *shares* includes  
  (a) any conversion or exchange privilege, option or right to acquire shares; and 
  (b) in reference to a company, participating shares, as defined in section 83.01. 
  
  ### Insurance holding company
  
  (16) For the purposes of this section other than paragraph (15)(b), a reference to a “company” includes a reference to an “insurance holding company”, and the references to “section 678.01” in paragraphs (5)(a) and (b) are to be read, in relation to an insurance holding company, as references to “section 1005”. 
  
  ## Orders and Directives 
  
  ### Not statutory instruments
  
  1017 An instrument issued or made under this Act and directed to a single company, society, foreign company, provincial company, insurance holding company or person, other than an order referred to in section 532, is not a statutory instrument for the purposes of the Statutory Instruments Act.  
  
  ### Form
  
  1018 The Superintendent may, by order, establish the form of any application to be made to the Minister or the Superintendent under this Act. 
  
  ## Applications to Superintendent 
  
  ### Content of applications
  
  1019 (1) The following applications to the Superintendent must contain the information, material and evidence that the Superintendent may require: 
  (a) applications for approval under subsection 69(1), 76(2), 79(4), 84(1), 178(1), 238(3), 472(1), 495(8) or (12), 498(1) or (2) or 512(1), subparagraph 519(2)(b)(vi), section 522, subsection 523(2), 527(3) or (4) or 528.3(1), section 542.09 or subsection 544.1(2), 557(1) or (2), 569(1), 597(1), 748(1), 755(2), 757(4), 762(1), 805(1), 851(3), 964(1), 971(6) or (10), 974(1) or 987(1); 
  (b) applications for consent under subsection 75(1) or 754(1); 
  (c) applications for exemptions under subsection 164.04(3) or 789(3); and 
  (d) applications for extensions of time under subsection 498(3) or (5), 499(4), 500(4), 557(3) or (5), 558(4), 559(4), 974(2) or (4), 975(3) or 976(3). 
  
  ### Receipt
  
  (2) Without delay after receiving the application, the Superintendent shall send a receipt to the applicant certifying the date on which it was received. 
  
  ### Notice of decision to applicant
  
  (3) Subject to subsection (4), the Superintendent shall, within a period of thirty days after the receipt of the application, send to the applicant 
  (a) a notice approving the application, subject to any terms and conditions that the Superintendent considers appropriate; or 
  (b) if the Superintendent is not satisfied that the application should be approved, a notice to that effect. 
  
  ### Extension of period
  
  (4) If the Superintendent is unable to complete the consideration of the application within the period referred to in subsection (3), the Superintendent shall, within that period, send a notice to the applicant informing the applicant that the Superintendent has extended the period for a further period set out in the notice. 
  
  ### Deemed approval
  
  (5) If the applicant does not receive the notice required by subsection (3) or, where applicable, subsection (4), within the required period, the Superintendent is deemed to have approved the application and granted the approval, consent, exemption or extension to which the application relates, regardless of whether the approval, consent, extension or exemption is to be in writing or not. 
  
  ## Applications for Certain Approvals 
  
  ### Application for certain approvals
  
  1019.1 (1) An application for the prior written approval of the Minister in respect of any of the following provisions must be filed with the Superintendent and contain the information, material and evidence that the Superintendent may require: 
  (a) paragraphs 441(1)(d), (d.1) and (h); 
  (b) paragraphs 495(7)(b.1), (c), (d) and (d.1); 
  (c) paragraph 542(2)(a); 
  (d) subsection 554(5), in relation to an entity that is engaging in any activity referred to in section 441; and 
  (e) paragraphs 971(5)(b.1), (c), (d) and (d.1). 
  
  ### Certification of receipt of application
  
  (2) If, in the opinion of the Superintendent, the application contains all the required information, the Superintendent must refer it to the Minister, together with his or her analysis in relation to the application, and send a receipt to the applicant certifying the date on which the application was referred to the Minister. 
  
  ### Incomplete application
  
  (3) If, in the opinion of the Superintendent, the application is incomplete, the Superintendent must send a notice to the applicant specifying the information required by the Superintendent to complete it. 
  
  ### Notice of decision
  
  (4) Subject to subsection (5), the Minister must, within 30 days after the certified date referred to in subsection (2), send to the applicant 
  (a) a notice approving the application; or 
  (b) if the Minister is not satisfied that the application should be approved, a notice to that effect. 
  
  ### Extension of period
  
  (5) If the Minister is unable to complete the consideration of an application within the 30-day period, the Minister must, within that period, send a notice to the applicant informing the applicant that the Minister has extended the period for a further period set out in the notice. 
  
  ### Deemed approval
  
  (6) If the Minister does not send the notice referred to in subsection (4) or, where applicable, subsection (5), within the required period, the Minister is deemed to have approved the application. 
  
  ## Appeals 
  
  ### Appeal to Federal Court
  
  1020 (1) An appeal lies to the Federal Court from any direction of the Minister made under subsection 428(7), 432(1), 432.1(1), 954(7) or 956(1). 
  
  ### Powers
  
  (2) The Federal Court may, in an appeal under subsection (1), 
  (a) dismiss the appeal; 
  (b) set aside the direction or decision; or 
  (c) set aside the direction or decision and refer the matter back for redetermination. 
  
  ### Certificate
  
  (3) For the purposes of an appeal under subsection (1), the Minister shall, at the request of the company, society, foreign company, provincial company, insurance holding company or person making the appeal, provide the company, society, foreign company, provincial company, insurance holding company or person with a certificate in writing setting out the direction or decision appealed from and the reasons why the direction or decision was made. 
  
  ## Regulations 
  
  ### Power to make regulations
  
  1021 (1) The Governor in Council may make regulations 
  (a) prescribing anything that is required or authorized by this Act to be prescribed; 
  (b) prescribing the way in which anything that is required or authorized by this Act to be prescribed is to be determined; 
  (c) respecting, for any purpose of any provision of the Act, the determination of the equity of a company or an insurance holding company; 
  (d) defining words and expressions to be defined for the purposes of this Act; 
  (e) requiring the payment of a fee in respect of the filing, examining or issuing of any document or in respect of any action that the Superintendent is required or authorized to take under this Act, and fixing the amount of the fee or the manner of determining its amount; 
  (f) respecting the regulatory capital and total assets of a company, a society, a provincial company or an insurance holding company; 
  (g) respecting the standards of sound business and financial practices for companies, societies, provincial companies and foreign companies; 
  (h) respecting the retention, in Canada, of assets of a company, a society or an insurance holding company; 
  (i) respecting the value of assets of a company, a society or an insurance holding company to be held in Canada and the manner in which those assets are to be held; 
  (j) respecting the protection and maintenance of assets of a company, a society or an insurance holding company, including regulations respecting the bonding of directors, officers and employees of a company, a society or an insurance holding company; 
  (k) respecting the holding of shares and ownership interests for the purposes of section 74, 78 or 753; 
  (l) respecting information, in addition to the information required by section 670 or 996, to be maintained in the register referred to in that section; and 
  (m) generally for carrying out the purposes and provisions of this Act. 
  
  ### Incorporation by reference
  
  (2) The regulations may incorporate any material by reference regardless of its source and either as it exists on a particular date or as amended from time to time. 
  
  ### Incorporated material is not a regulation
  
  (3) Material does not become a regulation for the purposes of the Statutory Instruments Act because it is incorporated by reference.  
  
  ## Delegation 
  
  ### Delegation
  
  1022 The Minister may delegate any of the Minister’s powers, duties and functions under this Act to any Minister of State appointed under the Ministries and Ministers of State Act to assist the Minister.  
  
  # PART XIX 
  
  ## Sanctions 
  
  ### Offence
  
  1023 Every person who, without reasonable cause, contravenes any provision of this Act or the regulations is guilty of an offence. 
  
  ### False or misleading information
  
  1023.1 Every person who knowingly provides false or misleading information in relation to any matter under this Act or the regulations is guilty of an offence. 
  
  ### Undue preference to creditor
  
  1024 Every director, officer or employee of a company or a society who wilfully gives or concurs in giving to any creditor of the company or society any fraudulent, undue or unfair preference over other creditors, by giving security to the creditor, by changing the nature of the creditor’s claim or otherwise, is guilty of an offence. 
  
  ### Failure to provide information
  
  1025 Every person who, without reasonable cause, refuses or fails to comply with a requirement made under paragraph 674(3)(b) or 1000(3)(b) is guilty of an offence. 
  
  ### Use of name
  
  1026 Except to the extent permitted by the regulations, every person who uses the name of a company or of an insurance holding company in a prospectus, offering memorandum, takeover bid circular, advertisement for a transaction related to securities or in any other document in connection with a transaction related to securities is guilty of an offence. 
  
  ### Punishment
  
  1027 (1) Every person who is guilty of an offence under any of sections 1023 to 1026 is 
  (a) in the case of a natural person, liable 
  (i) on summary conviction, to a fine of not more than $100,000 or to imprisonment for a term of not more than twelve months, or to both, or 
  (ii) on conviction on indictment, to a fine of not more than $1,000,000 or to imprisonment for a term of not more than five years, or to both; and 
  (b) in the case of an entity, liable 
  (i) on summary conviction, to a fine of not more than $500,000, or 
  (ii) on conviction on indictment, to a fine of not more than $5,000,000. 
  
  ### Order to comply
  
  (2) If a person has been convicted of an offence under this Act, the court may, in addition to any punishment it may otherwise impose, order the person to comply with the provisions of this Act or the regulations in respect of which the person was convicted. 
  
  ### Additional fine
  
  (3) If a person has been convicted of an offence under this Act, the court may, if it is satisfied that as a result of the commission of the offence the convicted person acquired any monetary benefits or that monetary benefits accrued to the convicted person or their spouse, common-law partner or other dependant, order the convicted person to pay, despite the maximum amount of any fine that may otherwise be imposed under this Act, an additional fine in an amount equal to three times the court’s estimation of the amount of those monetary benefits. 
  
  ### Liability of officers, directors, etc.
  
  1028 If an entity commits an offence under this Act, any officer, director or agent of the entity who directed, authorized, assented to, acquiesced in or participated in the commission of the offence is a party to and guilty of the offence and liable on summary conviction or on conviction on indictment to the punishment provided under paragraph 1027(1)(a) for the offence, whether or not the entity has been prosecuted or convicted. 
  
  ### Limitation period
  
  1029 (1) Proceedings by way of summary conviction in respect of an offence under a provision of this Act may be commenced at any time within, but not later than, two years after the day on which the subject-matter of the proceedings became known, in the case of an offence under a consumer provision, to the Commissioner and, in any other case, to the Superintendent. 
  
  ### Certificate of Superintendent or Commissioner
  
  (2) A document appearing to have been issued by the Superintendent or Commissioner, as the case may be, certifying the day on which the subject-matter of any proceedings became known to the Superintendent or Commissioner is admissible in evidence without proof of the signature or official character of the person appearing to have signed it and is, in the absence of evidence to the contrary, proof of the matter asserted in it. 
  
  ### Effect of offence on contracts
  
  1030 Unless otherwise expressly provided in this Act, a contravention of any provision of this Act or the regulations does not invalidate any contract entered into in contravention of the provision. 
  
  ### Compliance or restraining order
  
  1031 (1) If a company, a society, a foreign company, a provincial company or an insurance holding company or any director, officer, employee or agent of one does not comply with any provision of this Act or the regulations other than a consumer provision, or, in the case of a company, a society or an insurance holding company, of the incorporating instrument or any by-law of the company, society or insurance holding company, the Superintendent, any complainant or any creditor of the company, society or insurance holding company may, in addition to any other right that person has, apply to a court for an order directing the company, society, foreign company, provincial company, insurance holding company, director, officer, employee or agent to comply with — or restraining the company, society, foreign company, provincial company, insurance holding company, director, officer, employee or agent from acting in breach of — the provision and, on the application, the court may so order and make any further order it thinks fit. 
  
  ### Compliance or restraining order — consumer provisions
  
  (2) If a company or a foreign company or any director, officer, employee or agent of one does not comply with any applicable consumer provision, the Commissioner or any complainant may, in addition to any other right that person has, apply to a court for an order directing the company, foreign company, director, officer, employee or agent to comply with — or restraining the company, foreign company, director, officer, employee or agent from acting in breach of — the consumer provision and, on the application, the court may so order and make any further order it thinks fit. 
  
  ### Appeal of final order
  
  1032 (1) An appeal lies to the court of appeal of a province from any final order made by a court of that province under this Act. 
  
  ### Appeal with leave
  
  (2) An appeal lies to the court of appeal of a province from any order, other than a final order made by a court of that province, only with leave of the court of appeal in accordance with the rules applicable to that court. 
  
  ### Recovery and application of fines
  
  1033 All fines payable under this Act are recoverable and enforceable, with costs, at the suit of Her Majesty in right of Canada, instituted by the Attorney General of Canada, and, when recovered, belong to Her Majesty in right of Canada.  — 1991, c. 47, s. 763 read as follows:  
  
  ### Coming into force
  
   * (1)  Subject to subsection (2), this Act or any Part thereof, other than subsections 702(4), 713(2), 715(2), 716(2), 719(3), 720(2), 721(2), 722(2), 723(2) and (4), 724(2), 725(2), 726(2), 727(2), 736(2), 742(2), 743(2) and (4), 745(2) and 746(2) and sections 753 to 760, shall come into force on a day or days to be fixed by order of the Governor in Council. 
  
  ### Idem
  
  (2) Subsections 268(1) and (2) shall come into force on the day that is six months after the coming into force of section 261. 
  * [Note: Act, except the provisions set out in section 763, in force June 1, 1992, see SI/92-91.]  
  
  # PART XX 
  
  ## Documents in Electronic or Other Form 
  
  ### Definitions
  
  1034 The following definitions apply in this Part.  
  *electronic document* means, except in section 1043, any form of representation of information or concepts that is fixed in any medium in or by electronic, optical or other similar means and that can be read or perceived by a person or by any means. (document électronique)   
  *information system* means a system used to generate, send, receive, store or otherwise process an electronic document. (système de traitement de l’information)  
  
  ### Application
  
  1035 This Part other than sections 1046 and 1047 does not apply in respect of any notice, document or other information that under this Act or the regulations is sent to or issued by the Minister, the Superintendent or the Commissioner or any prescribed notice, document or information. 
  
  ### Use not mandatory
  
  1036 Nothing in this Act or the regulations requires a person to create or provide an electronic document. 
  
  ### Consent and other requirements
  
  1037 (1) Despite anything in this Part, a requirement under this Act or the regulations to provide a notice, document or other information is not satisfied by providing an electronic document unless 
  (a) the addressee consents and designates an information system for the receipt of the electronic document; 
  (b) the electronic document is, unless otherwise prescribed, provided to the designated information system; and 
  (c) the prescribed requirements are complied with. 
  
  ### Consent and notice in electronic form
  
  (1.1) Despite subsection (1), the requirements referred to in paragraph (1)(c) may provide that the consent referred to in paragraph (1)(a) and any notice related to that consent may be provided in electronic form. 
  
  ### Regulations — revocation of consent
  
  (2) The Governor in Council may make regulations respecting the revocation of the consent referred to in paragraph (1)(a). 
  
  ### Creation or provision of information
  
  1038 A requirement under this Act or the regulations to create or provide a notice, document or other information is satisfied by creating or providing an electronic document if 
  (a) the incorporating instrument or by-laws of the company, insurance holding company, foreign company, society or provincial company, as the case may be, do not provide otherwise; and 
  (b) the prescribed requirements are complied with. 
  
  ### Creation of information in writing
  
  1039 A requirement under this Act or the regulations to create a notice, document or other information in writing is satisfied by creating an electronic document if in addition to the conditions set out in section 1038 
  (a) the information in the electronic document is accessible so as to be usable for subsequent reference; and 
  (b) the prescribed requirements are complied with. 
  
  ### Provision of information in writing
  
  1040 A requirement under this Act or the regulations to provide a notice, document or other information in writing is satisfied by providing an electronic document if in addition to the conditions set out in section 1038 
  (a) the information in the electronic document is accessible by the addressee and capable of being retained by them so as to be usable for subsequent reference; and 
  (b) the prescribed requirements are complied with. 
  
  ### Multiple copies
  
  1041 A requirement under this Act or the regulations to provide two or more copies of a document at the same time to one addressee is satisfied by providing one copy of the electronic document. 
  
  ### Registered mail
  
  1042 A requirement under this Act or the regulations to provide a document by registered mail is not satisfied by providing an electronic document except in the prescribed circumstances. 
  
  ### Statutory declarations and affidavits
  
  1043 (1) A statutory declaration or affidavit required under this Act or the regulations may be created or provided in an electronic document if 
  (a) the person who makes the statutory declaration or affidavit signs it with their secure electronic signature; 
  (b) the authorized person before whom the statutory declaration or affidavit is made signs it with their secure electronic signature; and 
  (c) the requirements of sections 1036 to 1042 are complied with. 
  
  ### Definitions
  
  (2) For the purposes of this section, 
  *electronic document* and 
  *secure electronic signature* have the same meaning as in subsection 31(1) of the Personal Information Protection and Electronic Documents Act.  
  
  ### References to “electronic document”
  
  (3) For the purpose of complying with paragraph (1)(c), references to 
  *electronic document* in sections 1036 to 1042 are to be read as references to “electronic document within the meaning of subsection 31(1) of the Personal Information Protection and Electronic Documents Act ”.  
  
  ### Signatures
  
  1044 A requirement under this Act or the regulations for a signature or for a document to be executed, except in respect of a statutory declaration or affidavit, is satisfied in respect of an electronic document if the prescribed requirements are complied with and the signature results from the application by the person of a technology or process that permits the following to be proved: 
  (a) the signature resulting from the use by the person of the technology or process is unique to the person; 
  (b) the technology or process is used by the person to incorporate their signature into, attach it to or associate it with the electronic document; and 
  (c) the technology or process can be used to identify the person using the technology or process. 
  
  ### Regulations — provision and receipt of documents
  
  1045 The Governor in Council may make regulations respecting the time and place at which and the circumstances under which an electronic document is considered to be provided or received. 
  
  ### Content and form of notices and documents
  
  1046 The Minister, Superintendent or Commissioner may establish the requirements for the content and fix the form, including electronic and other forms, of notices and documents sent to or issued by each of them under this Act or the regulations, including 
  (a) the notices and documents that may be sent in electronic or other form; 
  (b) the persons or classes of persons who may send notices and documents; 
  (c) their signature in electronic or other form or their execution, adoption or authorization in a manner that is to have the same effect for the purposes of this Act as their signature; 
  (d) the time and place at which and the circumstances under which electronic documents are considered to be sent or received; and 
  (e) any matter necessary for the purposes of the application of this section. 
  
  ### Exemption
  
  1047 In the prescribed circumstances, the Minister, the Superintendent or the Commissioner may, on any conditions that they consider appropriate, exempt from the application of any provision of this Act requiring a notice or document to be sent to them any notice or document, or class of notice or document, containing information similar to that contained in a notice or document required to be made public under any other Act of Parliament or any Act of the legislature of a province. 
  
  