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INSURANCE ACT

INSURANCE ACT

Chapter I‑3

Table of Contents

Interpretation

                1      Definitions

                2      Adjuster

                3      Affiliate

                4      Beneficial ownership

                5      Control

                6      Holding body corporate

                7      Ordinarily resident in Canada

                8      Significant interest

                9      Subsidiary

              10      Substantial investment

              11      Incorporated

Application

              13      Mutual benefit societies

              14      Benefits provided under authority of federal Act

              15      Benefit plans for medical care, accident and sickness benefits

           15.1      Employee benefit schemes for income replacement

              16      Regulations

Crown Immunity

           16.1      Crown immunity

Part 1
Licensing of Insurers and Reciprocal
Insurance Exchanges

                        Subpart 1
Licensing of Insurers

Insurers Duty to be Licensed

              17      Undertaking insurance and carrying on business

              18      Requirement for licence

Licensing Requirements

              19      Types of insurers

              20      Application requirements

              21      Names

              23      First licence of provincial company

              24      Ability to carry on class of insurance

              25      Base capital

              26      Compliance with market conduct laws

              27      Issuing licence

              28      Notice of licence

              29      Expiry

              30      Renewal of licence

              31      Duty on expiration of licence

              32      Terms and conditions

              33      Automobile insurance

Classes of Insurance

              34      Classes of insurance

              35      Restriction on classes of insurance

              36      Prohibited activities

              37      Scope of insurance

Attorney for Service

              39      Attorney for service

              40      Attorneys change of address

              41      Change in attorney

              42      No attorney for service

Reporting Requirements

              43      Annual financial statements

              44      Annual return

              45      Change in officials

              46      Report on business particulars

              47      Records to be filed

              48      Audit of records

              49      Other information — licensed insurers

              50      Additional information

Suspension, Cancellation and Other Actions
Affecting Insurers
Licences

              51      Federally authorized companies

              52      Extra‑provincial companies

              53      Cancellation on request

              54      Sanctions affecting licences

              55      Non‑payment of claims

              56      Effect of cancellation or suspension

              57      Provisional liquidator

              58      Remuneration of provisional liquidator

Municipal Licensing Fees

              59      Exemption from certain fees

Regulations

              60      Regulations

                        Subpart 2
Exceptions

Unsolicited Insurance

              61      Unsolicited insurance

Reinsurance

              62      Reinsurance

Special Brokers

              63      Insurance through special broker

              64      Certificate of authority

              65      Financial guarantee

              66      Application for special brokers licence

              67      Issuing certificates

              68      Terms and conditions

              69      Expiration

              70      Status of certificate of authority

              71      Reporting requirements

              72      Payments in respect of premiums

              73      Records

              74      Financial guarantee not in force

              75      Using different names

              76      Release of financial guarantee

Regulations

              77      Regulations

          Subpart 3
Licensing of Reciprocal Insurance Exchanges

              78      Definitions

              79      Licence required

              80      Exception

              81      Classes of insurance

              82      Automobile insurance

              83      Property insurance

              84      Application for licence

              85      Name of exchange

              86      Issuing licence

              87      Notice of licence

              88      Premium deposit

              89      Management of exchange

              90      Term of licence

              91      Annual return

              92      Signing contracts

              93      Court action

              94      Attorney for service

              95      Attorneys change of address

              96      Change in attorney for service

              97      No attorney for service

              98      Requirements for property insurance

              99      Amount of reserve

           99.1      Temporary exclusion from premium calculation

            100      Guarantee fund

            101      Deficiency

            102      Investments

            103      Contracts

            104      Reinsurance

            105      Suspension or cancellation of licence

         105.1      Information to Minister

            106      Regulations

Part 2
Provincial Companies

                        Subpart 1
Status and Powers of Provincial Companies

            107      Capacity of provincial company

            108      Constructive notice

            109      Authority of directors, officers and agents

            110      Main business

            111      Networking

            112      Life insurance

            113      Security interests

            114      Beneficial interests

            115      Debt obligations

            116      Guarantees

Segregated Funds

            117      Segregated funds restricted to life companies

            118      Where segregated funds required

            119      Creation and maintenance of segregated funds

            120      Transfers from segregated funds

            121      Claims against segregated funds

            122      Restriction of claims

Regulations

            123      Regulations

                        Subpart 2
Incorporation, Fundamental Changes
and Dissolution of Provincial Companies

            124      Alberta insurers

Division 1
Incorporation

            125      Application

            126      Factors to be considered

            127      Incorporation

            128      Contents of certificate of incorporation

            129      Notice of incorporation

            130      First directors

            131      Effective date of incorporation

Division 2
Organization and Commencement after Incorporation

            132      First directors meeting

            133      Calling shareholders meeting

            134      Term of first directors

            135      Carrying on of business

            136      Expenses charged to capital

            137      No payments until licensed

            138      Deposits and investments

            139      Time limit to acquire licence

            140      Allowed disbursements

Division 3
Continuance into Alberta

            141      Restriction on continuance

            142      Continuance from another jurisdiction

            143      Certificate of continuance

            144      Effect of certificate of continuance

            145      Notice of continuance

            146      Effects of continuance

Division 4
Continuance out of Alberta

            147      Continuance in another jurisdiction

            148      Requirements for other jurisdictions law

            149      Abandoning application

            150      Certificate of discontinuance

Division 5
Mutualization

            151      Conversion into mutual provincial company

            152      Regulations

            153      Payment

Division 6
Demutualization

            154      Conversion into provincial company with common shares

            155      Regulations

Division 7
Change of Name, Financial Year and Terms and Conditions

            156      Change of name and financial year

            157      Changing terms and conditions

            158      Proposal to amend

Division 8
Amalgamation

            159      Amalgamation

            160      Amalgamation agreement

            161      Ministers approval

            162      Regulations

            163      Policyholder and shareholder approval

            164      Joint application to Minister

            165      Certificate of amalgamation

            166      Effect of certificate

            167      Transitional

            168      Notice to other jurisdiction

Division 9
Provincial Company Amalgamating Under the
Laws of Another Jurisdiction

            169      Amalgamation agreement

            170      Notice of intention

            171      Participating policyholder and shareholder approval

            172      Abandoning voting agreement

            173      Application to Minister

            174      Certificate of discontinuance

Division 10
Transfer of Business and Fundamental Reinsurance

            175      Interpretation

            176      Notice of intention

            177      Participating policyholder and shareholder approval

            178      Abandoning agreement

            179      Application to Minister

            180      Federal and extra‑provincial companies

Division 11
Dissolution and Revival

            181      Application

            182      Insolvent provincial companies

            183      Returns to Minister

Simple Dissolution

            184      No property and no liabilities

            185      Property and liabilities

            186      Application

            187      Approval of Minister required

            188      Certificate of dissolution

Court Supervised Liquidation

            189      Court supervision — voluntary liquidation

            190      Court supervision — involuntary liquidation

            191      Application by provisional liquidator

            192      Effect of Court supervision

            193      Powers of Court

            194      Cessation of business and powers

            195      Vacancy in liquidators office

            196      Duties and powers of liquidator

            197      Reliance on statements

            198      Examination of others

            199      Costs of liquidation

            200      Final accounts

            201      Right to distribution of money

            202      Final order

            203      Certificate of dissolution

General

            204      Continuation of actions

            205      Limitations on liability

            206      Where creditor cannot be found

            207      Custody of records after dissolution

Revival

            208      Revival

Division 12
Dissolution and Revival of Mutual Provincial Companies

            209      Insolvent mutual provincial companies

            210      Regulations

Division 13
General

            211      Names

            212      Regulations

            213      Use of insurance in names

            214      Rights preserved

            215      Effective date of certificates

                        Subpart 3
Head Office, Records and Financial Statements

            216      Head office

            217      Records

            218      Access to records

            219      Standards of financial reporting

            220      Approval of annual financial statements

            221      Distribution of financial statements

            222      List of shareholders

            223      Use of list

            224      Dealing in lists

            225      Information to be given to Minister by provincial companies

            226      Records as evidence

            227      Certificate of company as evidence

            228      Notices to policyholders, shareholders, directors

                        Subpart 4
Capital Structure

            229      Definition

            230      Application of Business Corporations Act

Requirements for Shares

            231      Non‑par‑value shares

            232      Classes of shares

            233      Mutual provincial companies — shares

            234      Issue of shares

            235      Capital account

            236      Shares in series

            237      Shareholders pre‑emptive right

Changes to Shares

            238      Changing shares

            239      Class vote

            240      Proposal to amend

            241      Restriction on subordinated indebtedness

Other Matters

            242      Conversion privileges, options and rights

            243      Prohibited shareholdings

            244      Restrictions on acquisition of shares

            245      Acquisition of own shares

            246      Alternative acquisition of own shares

            247      Redemption of shares

            248      Donated and escrowed shares

            249      Reduction of share capital

            250      Adjustment of capital account

            251      Enforceability of contract to purchase shares

            252      Commission on sale of shares

            253      Payment of dividend

            254      Lien on share

            255      Restrictions on issue, transfer

            256      Interpretation

            257      Constraints on ownership

            258      Previous approval obtained

            259      Shares to underwriter

            260      Exception for small holdings

            261      Increasing large holdings

            262      Ministers approval

            263      Ministers right to information

            264      Exemption

            265      Bylaws re shareholder information

            266      Reliance on information

                        Subpart 5
Participating Policyholders and Shareholders

Division 1
Meetings and Voting

            267      Place of meetings

            268      Calling meetings

            269      Record date

            270      Notice of meeting

            271      Notice of adjourned meeting

            272      Special business

            273      Waiver of notice

            274      Policyholder and shareholder proposals

            275      Refusal of proposal

            276      Policyholder and shareholder lists

            277      Quorum

            278      One shareholder meeting

            279      Meeting by electronic means

            280      One share — one vote

            281      One participating policyholder — one vote

            282      Changing policyholders right to vote

            283      Proposal to amend

            284      Representative participating policyholder or shareholder

            285      Joint voting policyholders or shareholders

            286      Voting by hands or ballot

            287      Resolution instead of meeting

            288      Requisitioned meetings

            289      Meeting called by Court

            290      Disputed elections and appointments

            291      Notice to Minister

            292      Triennial solicitation of policyholders

Take‑over Bids — Compulsory Purchase

            293      Application of Business Corporations Act

Participating Policies and Dividends

            294      Participating Account

            295      Allocation of income

            296      Allocation of expenses

            297      Filing of allocation method

            298      Review of allocation method

            299      Regulations

            300      Declaration of policy dividend or bonus

Division 2
Proxies and Proxy Solicitation

            301      Definitions

            302      Appointing proxyholder

            303      Deposit of proxies

            304      Mandatory solicitation

            305      Soliciting proxies

            306      Attendance at meeting

            307      Duty of registrant

            308      Restraining order

                        Subpart 6
Directors and Officers

Duties

            309      Duty to manage

            310      Duty of care

Qualifications and Number of Directors

            311      Minimum number of directors

            312      Disqualified persons

            313      No requirement to hold shares or policies

            314      Affiliated directors

Election and Tenure of Directors

            315      Number of directors

            316      Changing number of directors

            317      Proposal to amend

            318      Term of directors

            319      Determining election of directors

            320      Cumulative voting

            321      Class or series of shares

            322      Re‑election of directors

Incomplete Elections and Director Vacancies

            323      Void election or appointment

            324      Ceasing to hold office

            325      Removal of director

            326      Statement of director

            327      Circulation of statement

            328      Shareholders or policyholders filling vacancy

            329      Directors filling vacancy

            330      Vacancy among shareholders or policyholders directors

            331      Class vacancy

            332      Unexpired term

Meetings of the Board

            333      Meeting of directors

            334      Notice of meeting

            335      Quorum

            336      Resident Canadian majority

            337      Electronic meeting

            338      Resolution instead of meeting

            339      Dissent of director

            340      Meeting required by Minister

Bylaws

            341      Bylaws

            342      Policyholder or shareholder proposal of bylaw

            343      Minister to receive bylaws

            344      Entitlement to copies of bylaws

Committees of the Board

            345      Committees

            346      Audit committee

            347      Conduct review committee

Authority of Directors and Officers

            348      Chief executive officer

            349      Appointment of officers

            350      Delegation

            351      Remuneration

            352      Validity of acts

            353      Right to attend meetings

Conflicts of Interest

            354      Disclosure of interest

            355      Voting

            356      Continuing disclosure

            357      Avoidance standards

            358      Application to Court

Liability and Indemnification

            359      Liability for incorporation expenses

            360      Liability for other matters

            361      Contribution

            362      Limitation

            363      Liability for wages

            364      Reliance on statement

            365      Indemnification of directors and officers

            366      Directors and officers insurance

            367      Application to Court for indemnification

                        Subpart 7
Insider Trading

            368      Interpretation

            369      Application

            370      Civil liability

                        Subpart 8
Auditors

            371      Definition

            372      Appointment of auditor

            373      Designated individual

            374      Qualifications of auditor

            375      Revocation of auditors appointment

            376      Declaration of vacancy by Court

            377      Ceasing to hold office

            378      Filling vacancy

            379      Statement of auditor

            380      Duty of replacement auditor

            381      Right to attend meetings

            382      Right to information

            383      Auditors report

            384      Requiring new financial statements

            385      Report on directors statement

            386      Report to officers

            387      Auditor of subsidiaries

            388      Calling meeting

            389      Notice of errors

            390      Auditors report and extended examination

            391      Protection from liability

                        Subpart 9
Actuaries

            392      Definition

            393      Notice of appointment

            394      Designated individual

            395      Qualifications of actuary

            396      Certain officers precluded

            397      Chief financial officer

            398      Revocation of actuarys appointment

            399      Declaration of vacancy by Court

            400      Ceasing to hold office

            401      Filling vacancy

            402      Statement of actuary

            403      Duty of replacement actuary

            404      Right to information

            405      Actuarys valuation

            406      Special valuation

            407      Actuarys report

            408      Report to directors

            409      Report on matters requiring rectification

            410      Actuarys procedures

            411      Protection from liability

            412      Regulations

                        Subpart 10
Adequacy of Assets, Capital and Liquidity

            414      Capital and liquidity

                        Subpart 11
Investments

            415      Definitions

            416      Prudent investment standards

            417      Policies and procedures

            418      Prohibited investments

            419      Restriction on residential mortgages

            420      Limitation on ownership of unincorporated body

            421      Limitation on shareholding

            422      Duty to provide information

            423      Divestment order

Portfolio Limits

            424      Exclusion from portfolio limits

            425      Lending limit — life companies

            426      Lending limit — property and casualty companies

            427      Limit on real property interest

            428      Limits on equity acquisitions

            429      Aggregate limit

            430      Assets transactions

            431      Retaining investments

            432      Regulations

                        Subpart 12
Transactions with Related Parties

            433      Interpretation

            434      Meaning of related party

            435      Designated related party

            436      Transactions contemplating related party status

            437      Prohibited transactions, guarantees and investments

            438      Exceptions to the prohibition

            439      Permitted transactions

            440      Transactions requiring directors approval

            441      Procedures for approvals by directors

            442      Disclosure

            443      Transactions requiring Ministerial approval

            444      Limits on permitted transactions

            445      Review and approval procedures

            446      Duty to report contraventions

            447      Reliance on information

            448      Onus of proof

         448.1      Personal information

            449      Applications to Court

            450      Regulations

Part 3
Insurance Agents and Adjusters

            451      Definitions

Insurance Agents

            452      Insurance agents certificate

            453      Exception

            454      Restricted insurance agents certificate

            455      Representation

            456      Designated representative for businesses

            457      Restricted certificate holders — designated individual

            458      Recommendations —life insurance

            459      Recommendations — property and casualty insurance

Adjusters

         459.1      Insurer’s liability for employee

            460      Adjusters certificate

            462      Representation

            463      Designated representative for businesses

            464      Recommendation

Certificates of Authority

            465      Financial guarantee

            466      Names

            467      Application for certificate

            468      Refusing certificates — general grounds

            469      Issuing certificates

            470      Terms and conditions

            471      Expiration

            472      Reinstating certificates

            473      Ceasing to be worker

            474      Changes in designated representative

            475      Cancellation of recommendation by insurer — businesses

            476      Cancellation of recommendation by designated representative

            477      Cancellation of recommendation by insurer — employees

            478      Financial guarantee not in force

            479      Notice of automatic suspension

            480      Sanctions affecting certificates

         480.1      Minister’s order

            481      Demand for information

            482      Appeal

         482.1      Evidentiary provisions

            483      Consequence of revocation

            484      Exemption from municipal licence fee

Duties and Prohibitions

            485      Screening procedures

            486      Knowledgeable personnel

            487      Information

            488      Insurance broker

            489      Advertising

            490      Disclosure of business name

            491      Representatives duty of disclosure

Notices

            492      Notices

Insurance Councils

            493      Insurance councils

            494      Delegated powers

            495      Bylaws of insurance councils

            496      Winding‑up of insurance councils

Regulations for Compensation Plan and Other Matters

            498      Regulations

Part 4
Market Conduct

            499      Dealing with unauthorized insurance agents

            500      Amount of premium

            501      Premium refunds

            502      Payments to agent

            503      Agent receiving premiums

            504      Agent trustee of premiums

            505      Additional fees

            506      Providing copies of policies

            507      Prohibiting use of certain forms

            508      Disclosure of name

            509      Unfair practices

            510      Dealing with unauthorized insurers

            511      Regulations

         511.1      Insurance as collateral security

         511.2      Life insurance policies

Part 5
Insurance Contracts

                        Subpart 1
General Insurance Provisions

            512      Definition

            513      Application of Subpart

            514      Contract made in Alberta

            515      Contract must be consistent with Act

            516      Terms, etc., of contract

            517      Contents of contract

            518      Policy in accordance with terms of application or proposal

            519      Dispute resolution

            520      Relief from forfeiture

            521      Waiver and estoppel

            522      Effect of delivery of policy

            523      Insurer to furnish forms

            524      When action may be brought

            525      Consolidation of actions

            526      Limitation of actions

            527      Application of Limitations Act

            528      Payment of insurance money

            529      Payment to payee domiciled or resident abroad

            530      Notice

            531      Furnishing of copy to insured

            532      Insurance against loss through negligence

            533      Claim for indemnity

            534      Execution against insured unsatisfied

            535      Assignment of premium refund

            536      Payment into Court by insurer

            537      Filing of copy of policy, etc., with Superintendent

            538      Title insurance

            539      Mortgagees and other payees

            540      Statutory conditions

            541      Recovery by innocent persons

            542      Premium notes — mutual insurance

            543      Limitation of liability clause

            544      Rateable contributions

            545      Special stipulations

            546      Subrogation of insurer to rights of recovery

            547      Electronic communications

            548      Regulations

         548.1      Home warranty insurance contracts

                        Subpart 2
Automobile Insurance

            549      Definitions

            550      Application of Subpart

Approval of Forms

            551      Approval of forms

Application and Policy

            552      Agents

            553      Application for insurance

            554      Misrepresentation, fraud or violation of condition

            555      Adverse contractual action

            556      Statutory conditions

            557      Conditions not part of policy

            558      Limitation of actions

Motor Vehicle Liability Policies

            559      Coverage of owners policy

            560      Coverage of non‑owner’s policy

            561      Effect  of lien on automobile

            562      Territorial limits

            563      Rights on unnamed insured

            564      Liability of insurer

            565      Liability arising from contamination

    566‑569      Exceptions to liability of insurer

            570      Reductions of automobile accident claim awards

            571      Limits of motor vehicle liability policy

            572      Crown’s Right of Recovery Act

            573      Accident insurance benefits

            574      Stipulation in motor vehicle liability policy

            575      Excess insurance

            576      Agreements re deductible amounts

            577      Coverage under motor vehicle liability and
nuclear energy hazard liability policies

            578      Determining which insurer is liable

            579      Rights of creditors

            580      Regulations re notice of legal representation

            581      Payment as release of claim

            582      Notice of action against insured to insurer

            583      Regulations re disclosure of policy limits

            584      Physical damage cover

            585      Adjustment of claim with insured

Limited Accident Insurances

            586      Uninsured motorist

            587      Medical expenses, etc.

            588      Accident insurance benefits

            589      Demand for particulars of insurance

            590      Recovery by unnamed insured

            591      Priority of payments

            592      Payment of insurance money into Court

            593      Limitation re commencement of action

            594      Demand on claimant for particulars

            595      Variations in policy

Other Insurance

            596      Proportioning liability of insurer

Minor Injuries

            597      Minor injury

Automobile Insurance Rate Board

            598      Definitions

            599      Rate Board established

            600      Powers and duties of Board

            601      Annual report

Premiums for Basic and Additional Coverage

            602      Premiums

            604      Procedures

            608      Regulations

            609      Application of Government approved industry plan

            611      Withdrawal from business

                        Subpart 3
Fraternal Societies

            613      Definitions

            614      Policy

            615      Group insurance policy

            616      Rules deliverable on demand

            617      Member’s liability

            618      Notice to members

                        Subpart 4
Hail Insurance

            619      Definitions

            620      Application of Subpart

            621      Crops insurable

            622      Insurable interest

            623      Application for contract

            624      Information to appear on face of policy

            625      Additional information required

            626      Dispute resolution

            627      Delivery of application to insurer

            628      Effective date of contract

            629      Incorrect amount of premium

            630      Refund of premium

            631      Policy in accordance with application

            632      Expiration of hail insurance policies

            633      Partial payment of loss clause

            634      Notice of cancellation or alteration

            635      Adjustment of loss

            636      Statutory conditions

                        Subpart 5
Life Insurance

            637      Definitions

            638      Application of Subpart 1

Application of Subpart

            639      Annuity deemed life insurance

    640, 641      Application of Subpart

Issuance and Contents of Policy

            642      Issuance of policy

            643      Particulars in policy

            644      Particulars in group policy

            645      Particulars in group certificate

Formation of Contract

            646      Lack of insurable interest

            647      Persons insurable

            648      Termination of contract by Court

            649      When contract takes effect

            650      Remittance for premium

            651      Payment of premium by beneficiary

            652      Disclosure of material facts

            653      Failure to disclose

            654      Non‑disclosure and misrepresentation by insurer

            655      Misstatement of age

            656      Misstatement of age in group insurance

            657      Suicide clause

            658      Reinstatement of contract

            659      Termination and replacement of group contract

Beneficiaries

            660      Designation of beneficiary

            661      Irrevocable designation

            662      Designation in will

            663      Trustee for beneficiary

            664      Predeceased or disclaiming beneficiary

            665      Enforcement of payment by beneficiary or trustee

            666      Insurance money not part of estate

Dealings with Contract

            667      Assignment of insurance

            668      Entitlement to dividends

            669      Third party policies

            670      Effect of assignment

            671      Enforcement of right re group life insurance

            672      Enforcement of right re creditor’s group insurance

            673      Capacity of minor

Proceedings Under Contract

            674      Proof of claim

            675      Payment of insurance money

            676      Action for payment

            677      Limitation of actions

            678      Persons to whom insurance money payable

            679      Declaration as to sufficiency of proof

            680      Declaration of presumption of death

            681      Court order re payment of insurance money

            682      Order stays pending action

            683      Order re furnishing of further evidence

            684      Order for payment into Court

            685      Simultaneous deaths

            686      Commutation of instalments of insurance money

            687      Insurer holding insurance money

            688      Court may order payment

            689      Fixing of costs

            690      Insurance money payable to minor

            691      Payment to representative

Miscellaneous Provisions

            692      Presumption against agency

            693      Information as to notices

            694      Regulations

                        Subpart 6
Accident and Sickness Insurance

            695      Definitions

            696      Application of Subpart 1

Application of Subpart

            697      Application of Subpart

            698      Application of Subpart to group insurance

Issuance and Contents of Policy

            699      Issuance of policy

            700      Particulars in policy

            701      Particulars in group policy

            702      Termination and replacement of group contract

            703      Particulars in group certificate

            704      Exceptions or reductions

            705      Statutory conditions

            706      Omission or variation of conditions

            707      Notice of statutory conditions

            708      Limitation of actions

            709      Declaration as to sufficiency of proof

            710      Declaration of presumption of death

            711      Court order re payment of insurance money

            712      Order stays pending action

            713      Order re furnishing of further evidence

            714      Termination for non‑payment

Formation of Contract

            715      Lack of insurable interest

            716      Persons insurable

            717      Termination of contract by Court

            718      Capacity of minor

            719      Disclosure of material facts

            720      Failure to disclose

            721      Reinstatement of contract

            722      Pre‑existing conditions

            723      Misstatement of age

Beneficiaries

            724      Designation of beneficiary

            725      Irrevocable designation

            726      Designation in will

            727      Trustee for beneficiary

            728      Predeceasing or disclaiming beneficiary

            729      Enforcement of payment by beneficiary or trustee

            730      Persons to whom insurance money payable

            731      Insurance money not part of estate

Dealings with Contract

            732      Assignment of insurance

            733      Entitlement to dividends

            734      Third party policies

            735      Enforcement of right re group insurance

            736      Enforcement of right re creditor’s group insurance

            737      Simultaneous deaths

            738      Order for payment into Court

            739      Insurance money payable to minor

            740      Payment to representative

            741      Payments not exceeding $10 000

Proceedings under Contract

            742      Payment of insurance money

            743      Action for payment

            744      Insurer giving information

            745      Undue prominence

            746      Relief from forfeiture or avoidance

            747      Disability benefits

            748      Presumption against agency

            749      Regulations

                        Subpart 7
Transitional

            750      Transitional matters

Part 6
Enforcement and Administration

                        Subpart 1
Enforcement

            754      Definition

Division 1
Determining Compliance and Examinations

            755      Exercising examiners powers

            756      Annual examinations

            757      Special examination

            758      Demand for information

            759      Entry into premises

            760      Court order

            761      Examiners report

            762      Protection from liability

Division 2
Appraisal of Assets

            763      Appraisal of assets

Division 3
Ministerial Orders

            764      Ministers order to comply

            765      Compliance undertakings

            766      Protecting property

            767      Order for compliance

Division 4
Taking Control of Assets

            768      Order for possession and control

            769      Powers of Minister — provincial companies

            770      Powers of Minister — extra‑provincial company

            771      Application to the Court

            772      Termination of possession and control

            773      Payment of expenses of proceeding

Division 5
Remedial Actions

            774      Definitions

            775      Derivative action

            776      Relief by Court from oppression or unfairness

            777      Notice of application

            778      Costs

            779      Stay, etc., of application or action

                        Subpart 2
Offences and Penalties

     780,781      Offences

            782      Statements of financial standing

            783      False or deceptive statements

            784      Trafficking in life insurance policies

            785      Liability of directors and officers

            786      General penalty

            787      Limitation on prosecution

            788      Order to comply and make restitution

            789      Administrative penalties

            790      Regulations

                        Subpart 3
Administration, Appeals and General Matters

Administration

            791      Delegation of powers

            792      Superintendent of Insurance

         792.1      Guidelines and interpretation bulletins

            793      Examiners

            794      Insurance Register

            795      Inspection and copies of Register

            796      Extension of time

            797      Approval and consent

            798      Orders, etc., binding on successors

            799      Publication by Minister

            800      Matters under oath

            801      Fees

         801.1      Regulations

            802      Penalty

            803      Forms

            804      Filing by electronic means

            805      Priority of Government claim

Appeals

            806      Review by review board

            807      Recording of evidence

            808      Consent to apply to Court directly

            809      Application to Court

            810      Stay

General

            811      Published notice as evidence

            812      Certificate evidence

            813      Copies of documents as evidence

            814      Photocopies of documents

            815      Court applications

            816      Confidentiality of information

         816.1      Privileged information

         816.2      Insurance compliance self‑evaluative audit

Compensation Associations

            817      Agreements with compensation associations

            818      Compensation association regulations

            819      Compensation associations

         819.1      General Insurance OmbudService

Regulations

            820      Regulations

Part 7
Financial Responsibility Cards

            821      Definitions

            822      Owners policy

            823      Non‑Alberta policy — licensed insurer

            824      Non‑Alberta policy — unlicensed insurer

            825      Fund maintained by corporation

            826      Regulations


Part 8
Transitional Provisions, Consequential Amendments, Repeals and Coming into Force

                        Subpart 1
Transitional Provisions

            827      Definitions

            828      Continuation of licensed special Act companies

            829      Continuation of unlicensed special Act companies

            830      Certificate of continuance

            831      Effect of certificate of continuance

            832      Effect of continuation

            833      Application of Part 2, Subpart 2, Division 2

            834      Bylaws

            835      Shares with nominal or par value

            836      Paid‑up capital

            837      Deemed consent — significant interest

            838      Voting by participating policyholder

            839      Appointment of directors and officers continued

            840      Directors remuneration

            841      Participating policies

            842      Bylaws

            843      Deemed bylaws

            844      Auditor

            845      Actuary

            846      Triennial solicitation of policyholders

            847      Continuation of licences and certificates

            848      Application of section 501

            849      Regulations

                        Subpart 2
Consequential Amendments

    850-870      Consequential amendments

                        Subpart 3
Repeals

            871      Repeal of Acts

            872      Repeal of Acts on Proclamation

            873      Repeal of section

                        Subpart 4
Coming into Force

            874      Coming into force

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Alberta, enacts as follows:

Interpretation

Definitions

1   In this Act,

                           (a)    “adjuster” has the meaning set out in section 2;

                           (b)    “affiliate” has the meaning set out in section 3;

                           (c)    “agency contract” means a contract between an insurance agent and an insurer in which the insurance agent agrees to act as an insurance agent in respect of insurance issued by the insurer, but does not include the arrangement that an insurance agent has with an insurer that is the service carrier for the Government approved industry plan under section 609;

                           (d)    “automobile” includes a trolley bus and a self‑propelled vehicle, and the trailers, accessories and equipment of automobiles, but does not include watercraft, aircraft or railway rolling stock that runs on rails;

                           (e)    “base capital” means base capital as defined in the regulations;

                            (f)    “beneficial ownership” has the meaning set out in section 4;

                           (g)    “body corporate” means any body corporate with or without share capital,  wherever or however formed;

                           (h)    “certificate of authority” means an insurance agent’s certificate of authority or an adjuster’s certificate of authority;

                            (i)    “chief agency” means,

                                  (i)    in respect of a provincial company, the head office of the company, and

                                (ii)    in respect of an insurer that is not a provincial company, the main office of the company in Alberta;

                         (i.1)    repealed 2002 cA‑4.5 s45;

                            (j)    “contract of insurance” includes any policy, certificate, interim receipt, renewal receipt or writing evidencing the contract, whether sealed or not, and a binding oral agreement;

                           (k)    “control” has the meaning set out in section 5;

                            (l)    “Court” means the Court of Queen’s Bench;

                          (m)    “debt obligation” means a bond, debenture, note or other evidence of indebtedness whether secured or unsecured;

                           (n)    “deposit‑taking institution” means

                                  (i)    Alberta Treasury Branches or a bank, credit union, loan corporation or trust corporation, or

                                (ii)    a member institution of the Canada Deposit Insurance Corporation or of any other deposit insurance or guarantee plan prescribed under section 1(1)(l) of the Loan and Trust Corporations Act;

                           (o)    “director” means an individual occupying the position of director of a body corporate regardless of the name given to the position, and “directors” refers to the directors of a body corporate as a body;

                           (p)    “electronic media” means electronic media as defined in the regulations;

                           (q)    “entity” means a body corporate, an unincorporated body, the Crown in right of Canada or in right of a province or territory, an agency of the Crown, a foreign government and any agency of a foreign government, but does not include an individual;

                            (r)    “examiner” means an examiner appointed under section 793;

                           (s)    “extra‑provincial company” means an insurer that is incorporated in a province or territory other than Alberta and that is authorized by that province or territory to carry on the business of insurance in that province or territory;

                        (s.1)    “extra‑provincial Crown insurer” means an insurer that

                                  (i)    is formed by or under the laws of another province or territory,

                                (ii)    has an exclusive right to perform an insurance activity in that province or territory, and

                               (iii)    is beneficially owned or controlled by Her Majesty in right of that province or territory;

                            (t)    “federally authorized company” means an insurer that is a company, society or foreign company as defined in the Insurance Companies Act (Canada) approved by order under that Act to carry on business or to insure risks in Canada;

                           (u)    “financial institution” means

                                  (i)    a bank,

                                (ii)    Alberta Treasury Branches,

                               (iii)    a loan corporation or trust corporation incorporated by or under an Act of Canada, a province or a territory,

                               (iv)    a credit union incorporated by or under an Act of Canada, a province or a territory,

                                 (v)    a federally authorized company, an extra‑provincial company or a licensed provincial company, and

                               (vi)    any other prescribed entity;

                           (v)    “fraternal society” means a body corporate that is a not for profit society, order or association formed for the purpose of making, with its members only, contracts of life, accident or sickness insurance in accordance with its constitution, bylaws and rules and this Act;

                          (w)    “head office”, in respect of an insurer, means the place where the chief executive officer of the insurer transacts business;

                           (x)    “holding body corporate” has the meaning set out in section 6;

                           (y)    “incorporator”, in respect of a provincial company, means a person who applies for the incorporation of the company;

                           (z)    “instrument of incorporation” means the certificate, special Act, charter, letters patent or other document incorporating, amalgamating or continuing a body corporate, and includes all amendments to it;

                         (aa)    “insurance” means the undertaking by one person to indemnify another person against loss or liability for loss in respect of certain risk or peril to which the object of the insurance might be exposed or to pay a sum of money or other thing of value on the happening of a certain event and, without limiting the generality of the foregoing, includes life insurance;

                         (bb)    “insurance agent” means a person who, for compensation,

                                  (i)    solicits insurance on behalf of an insurer, insured or potential insured,

                                (ii)    transmits an application for insurance from an insured or potential insured to an insurer,

                               (iii)    transmits a policy of insurance from an insurer to an insured,

                               (iv)    negotiates or offers to negotiate insurance on behalf of an insurer, insured or potential insured or the continuance or renewal of insurance on behalf of an insurer or insured, or

                                 (v)    enrolls individuals in prescribed contracts of group insurance,

                                    but does not include an insurer;

                         (cc)    “insurance agent’s certificate of authority” includes a restricted insurance agent’s certificate of authority;

                         (dd)    “insurance council” means an insurance council referred to in section 493;

                         (ee)    “insurance money” includes all insurance money, benefits, surplus, profits, dividends, bonuses and annuities payable by an insurer under a contract of insurance;

                          (ff)    “insurer” means any person that undertakes or effects, or agrees or offers for valuable consideration to undertake or effect, a contract of insurance, including the underwriters or syndicates of underwriters operating on the plan known as Lloyd’s, but does not include a person who exchanges with other persons reciprocal contracts of indemnity or inter‑insurance as part of a reciprocal insurance exchange;

                         (gg)    “licence” means a licence under this Act unless the provision in which the term is used specifies otherwise;

                         (hh)    “licensed provincial company” means a provincial company that holds a valid and subsisting licence or that holds an unexpired licence that has been suspended;

                           (ii)    “life company” means an insurer that is permitted to insure

                                  (i)    only those risks falling within the class of life insurance, or

                                (ii)    only those risks falling within the class of life insurance and accident and sickness insurance or another class of insurance specified in the regulations under section 35(2);

                           (jj)    “market conduct activities” means activities that are carried out in the course of or for the purpose of the marketing, sale or distribution to the public of, or the performance of, any contract of insurance or service that an insurer offers to the public;

                         (kk)    “Minister” means the Minister determined under section 16 of the Government Organization Act as the Minister responsible for this Act;

                           (ll)    “motor vehicle liability policy” means a policy or part of a policy evidencing a contract insuring

                                  (i)    the owner or driver of an automobile, or

                                (ii)    a person who is not the owner or driver of an automobile where the automobile is being used or operated by the person’s employee or agent or any other individual on the person’s behalf,

                                    against liability arising out of bodily injury to or the death of an individual or loss or damage to property caused by an automobile or the use or operation of an automobile;

                       (mm)    “mutual provincial company” means a provincial company that does not have common shares and that is formed for the purpose of issuing participating policies;

                         (nn)    “non‑owner’s policy” means a motor vehicle liability policy insuring a person solely in respect of the use or operation by the person or on the person’s behalf of an automobile that the person does not own;

                         (oo)    “officer” means

                                  (i)    in relation to a body corporate, a chief executive officer, president, vice‑president, secretary, controller, treasurer and any other individual designated as an officer of the body corporate by bylaw or by resolution of the directors of the body corporate, and

                                (ii)    in relation to any other entity, any individual designated as an officer of the entity by bylaw, by resolution of the members of the entity or otherwise;

                         (pp)    “owner’s policy” means a motor vehicle liability policy insuring a person in respect of the ownership, use or operation of an automobile owned by the person and within the description or definition of automobile in the policy and, if the contract so provides, in respect of the use or operation of any other automobile;

                         (qq)    “participating policy” means a policy issued by an insurer that entitles its holder to participate in the profits of the insurer;

                          (rr)    “participating policyholder” means the holder of a participating policy;

                          (ss)    “person” means an individual, entity or personal representative;

                           (tt)    “personal representative” means an executor, administrator, guardian, committee, trustee, assignee, receiver or liquidator;

                         (uu)    “policy” means an instrument evidencing a contract of insurance;

                         (vv)    “premium” means the single or periodical payment to be made for insurance, and includes dues, assessments and other consideration;

                       (ww)    “premium note” means an instrument given as consideration for insurance by which the maker of the instrument undertakes to pay the sum or sums that may be legally demanded by the insurer, the aggregate of those sums not to exceed an amount specified in the instrument;

                         (xx)    “professional advisor” means

                                  (i)    an auditor,

                                (ii)    an actuary,

                               (iii)    a lawyer, accountant, appraiser, architect or engineer, or

                               (iv)    any other person whose membership in a profession would tend to lend credibility to a statement made or opinion given by that person,

                                    and includes an individual who is a member of or who works in a professional capacity for a partnership, body corporate or other association of persons that is a professional advisor;

                         (yy)    “property” that is the subject of a contract of insurance includes

                                  (i)    profits, earnings and other pecuniary interests, and

                                (ii)    expenditure for rents, interest, taxes and other expenses and charges and expenditures in respect of inability to occupy the insured premises, but only to the extent provided for in the contract;

                         (zz)    “property and casualty company” means an insurer that is not a life company;

                       (aaa)    “provincial company” means an insurer incorporated under this Act;

                      (bbb)    “provincial life company” means a provincial company that is a life company;

                       (ccc)    “provincial property and casualty company” means a provincial company that is a property and casualty company;

                      (ddd)    “proxy” means a completed and executed form of proxy by means of which a participating policyholder or shareholder appoints a proxyholder to attend and act on behalf of the participating policyholder or shareholder at a meeting of participating policyholders or shareholders;

                       (eee)    “proxyholder” means the person appointed by proxy to attend and act on behalf of a participating policyholder or shareholder at a meeting of participating policyholders or shareholders;

                         (fff)    “reciprocal insurance exchange” means a group of subscribers exchanging reciprocal contracts of indemnity or inter‑insurance with each other through a principal attorney as defined in section 78(b);

                       (ggg)    “relative”, when used with respect to individuals, means related by blood, marriage or adoption or by virtue of an adult interdependent relationship;

                      (hhh)    “reporting issuer” means a reporting issuer within the meaning of that term in the Securities Act;

                         (iii)    “security” means

                                  (i)    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 deposit‑taking institution or any instrument evidencing such a deposit, and

                                (ii)    in relation to any other entity, any ownership interest in or debt obligation of the entity,

                                    but does not include a policy;

                         (jjj)    “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;

                      (kkk)    “significant interest” has the meaning set out in section 8;

                         (lll)    “special broker” means a person who, for compensation, negotiates or offers to negotiate insurance, or the continuance or renewal of insurance, with unlicensed insurers in respect of any matter or thing in Alberta;

                   (mmm)    “special resolution” means a resolution passed by a majority of not less than 2/3 of the votes cast by the participating policyholders or shareholders who voted in respect of that resolution or signed by all the participating policyholders or shareholders entitled to vote on that resolution;

                (mmm.1)    “spouse” means the spouse of a married person but does not, for the purposes of sections 256, 314 and 434, include a spouse who is living separate and apart from the person if the person and spouse have separated pursuant to a written separation agreement or if their support obligations and family property have been dealt with by a court order;

                      (nnn)    “subsidiary” has the meaning set out in section 9;

                      (ooo)    “subsisting” means, in respect of a licence or certificate of authority, that the licence or certificate has not expired and has not been cancelled;

                      (ppp)    “substantial investment” has the meaning set out in section 10;

                      (qqq)    “Superintendent” means the Superintendent of Insurance appointed under this Act;

                         (rrr)    “total assets” means total assets as defined in the regulations;

                        (sss)    “unincorporated body” means a trust, partnership, fund or other unincorporated association or organization;

                         (ttt)    “valid” means, in respect of a licence or certificate of authority, that the licence or certificate is not under suspension and has not been cancelled;

                      (uuu)    “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.

RSA 2000 cI‑3 s1;2002 cA‑4.5 s45;2005 c27 s2;
2008 c19 s2;2014 c8 s17

Adjuster

2(1)  For the purposes of this Act, “adjuster” means a person who, for compensation,

                           (a)    directly or indirectly solicits the right to negotiate the settlement of a loss under a contract of insurance on behalf of an insured or insurer or a reciprocal insurance exchange, or

                           (b)    negotiates the settlement of a loss under a contract of insurance on behalf of an insured or insurer or a reciprocal insurance exchange.

(2)  For the purposes of this Act, an adjuster does not include

                           (a)    a lawyer when practising law,

                           (b)    a trustee of property or an agent of an owner of or person having an insurable interest in property who negotiates a settlement of a loss under a contract of insurance in respect of the property,

                           (c)    an insurer, or

                           (d)    an employee of an insured who negotiates the settlement of a loss under a contract of insurance on behalf of the insured.

1999 cI‑5.1 s2

Affiliate

3(1)  An entity is affiliated with another entity if one of them is controlled by the other or both of them are controlled by the same person.

(2)  The affiliates of an entity are deemed to be affiliated with all other entities with which the entity is affiliated.

1999 cI‑5.1 s3

Beneficial ownership

4(1)  A security or other interest is beneficially owned by a person when it is held

                           (a)    directly by that person, or

                           (b)    through a personal representative or other intermediary

for the use or benefit of that person otherwise than as a security interest.

(2)  A person is deemed to own beneficially securities that are beneficially owned by an entity controlled by that person.

(3)  If a person owns securities in a corporation that itself owns securities in a body corporate, in determining the person’s beneficial ownership of securities in the body corporate for the purposes of subsection (2) no regard is to be taken of the securities of the body corporate that are owned by the corporation.

1999 cI‑5.1 s4

Control

5(1)  A person controls a body corporate if the person holds or beneficially owns securities of the body corporate to which are attached more than 50% of the votes that may be cast to elect directors of the body corporate and the votes attached to those securities are sufficient, if exercised, to elect a majority of the directors of the body corporate.

(2)  A person controls an unincorporated body if the person holds or beneficially owns more than 50% of the beneficial interest, however designated, into which the body is divided and the person is able to direct the affairs of the entity.

(3)  Despite subsections (1) and (2), a person controls an entity if the person has, in relation to the entity, any direct or indirect influence that, if exercised, would result in control in fact of the entity.

(4)  A holding body corporate is deemed to control any entity that is controlled or deemed to be controlled by a subsidiary of the holding body corporate.

(5)  An entity that controls another entity is deemed to control any entity that is controlled or deemed to be controlled by the other entity.

1999 cI‑5.1 s5

Holding body corporate

6   A body corporate is the holding body corporate of a body corporate that is its subsidiary.

1999 cI‑5.1 s6

Ordinarily resident in Canada

7   An individual is ordinarily resident in Canada if the individual is

                           (a)    a Canadian citizen ordinarily resident in Canada,

                           (b)    a Canadian citizen who does not live in Canada but is a member of a prescribed class of individuals, or

                           (c)    a permanent resident within the meaning of the Immigration and Refugee Protection Act (Canada) 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.

RSA 2000 cI‑3 s7;2008 c19 s3

Significant interest

8   A person has a significant interest in a class of shares of a body corporate where 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% of all of the outstanding shares of that class of shares of the body corporate.

1999 cI‑5.1 s8

Subsidiary

9   A body corporate is a subsidiary of another body corporate if

                           (a)    it is controlled by

                                  (i)    that other,

                                (ii)    that other and one or more bodies corporate each of which is controlled by that other, or

                               (iii)    2 or more bodies corporate each of which is controlled by that other,

                               or

                           (b)    it is a subsidiary of a body corporate that is that other’s subsidiary.

1999 cI‑5.1 s9

Substantial investment

10(1)  A person has a substantial investment in a body corporate when

                           (a)    the voting rights attached to the aggregate of any voting shares of the body corporate beneficially owned by the person exceed 10% 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 represents ownership of more than 25% of the shareholders’ equity of the body corporate.

(2)  A person has a substantial investment in an unincorporated body where the person beneficially owns more than 25% of all the ownership interests, however designated, into which the body is divided.

1999 cI‑5.1 s10

Incorporated

11(1)  When this Act or the regulations refer to a body corporate in relation to the jurisdiction in which it was incorporated or to the legislation under which it was incorporated, “incorporated” includes amalgamated and continued.

(2)  This section does not apply to Divisions 1 and 2 of Part 2, Subpart 2.

1999 cI‑5.1 s11

12   Repealed 2008 c19 s4.

Application

Mutual benefit societies

13(1)  In this section, “mutual benefit society” means a body corporate formed for the purpose of providing sick, disability or funeral benefits for its members.

(2)  This Act does not apply to a mutual benefit society if,

                           (a)    in the case of sick or disability benefits, the society provides benefits of $12 or less per week, and

                           (b)    in the case of funeral benefits, the society provides benefits of $400 or less in respect of one funeral.

1999 cI‑5.1 s13

Benefits provided under authority of federal Act

14   This Act does not apply to

                           (a)    a body corporate that has, by or under the authority of an Act of the Parliament of Canada, created a fund for paying a gratuity on the event of death, sickness, infirmity, casualty, accident or disability or on any change of physical or mental condition, or

                           (b)    a body corporate that has, by or under the authority of an Act of the Parliament of Canada, an insurance and provident society or association or an insurance or guarantee fund in connection with the body corporate.

1999 cI‑5.1 s14

Benefit plans for medical care, accident and sickness benefits

15(1)  This Act, except section 570, does not apply to a prescribed entity to the extent of its provision to participants of prescribed benefits relating to medical care, accident and sickness benefits.

(2)  For the purposes of this section and section 15.1, “participant” includes a beneficiary or dependant of a participant.

RSA 2000 cI‑3 s15;2003 c19 s30;2005 c27 s3;2008 c19 s5

Employee benefit schemes for income replacement

15.1(1)  In this section, “non‑accountable entities” means entities that are not accountable organizations within the meaning of section 10 of the Fiscal Planning and Transparency Act.

(2)  Subject to any regulations made under subsection (3), this Act, except section 570, does not apply to an entity to the extent of its provision to its participants of prescribed benefits whose subject‑matter is income replacement due to disability, sickness or disease, provided that no death benefit is payable.

(3)  The Lieutenant Governor in Council may make regulations

                           (a)    applying this Act to prescribed classes of non‑accountable entities in respect of their provision to their participants of benefits referred to in subsection (2), and

                           (b)    respecting such provision of those benefits by those classes, and in particular, in relation to each such class,

                                  (i)    the nature and sufficiency of its financial resources as a source of continuing financial support for the financial obligations implicit in providing the benefits,

                                (ii)    the availability of financial statements, prepared comparably to those referred to in section 219(1), to participants,

                               (iii)    the degree of segregation of any assets relating to the provision of the benefits, or offer of the benefits, to participants from the assets of the entity,

                               (iv)    the adequacy of any capital or reserves maintained by the entity to support the provision or offer of the benefits, and

                                 (v)    the extent to which matters referred to in this subsection are to be disclosed to participants, and the timing of any such disclosure.

(4)  Notwithstanding subsection (3)(b)(v), where a non‑accountable entity provides benefits referred to in subsection (2) that are not underwritten by an insurer, it shall disclose to its participants, prior to or at the time that the benefits are offered, that the benefits are not underwritten by an insurer and that the benefits would be payable from the net income, retained earnings or other financial resources of the non‑accountable entity.

2003 c19 s30;2005 c27 s4;2008 c19 s6;2013 cF‑14.5 s26;
2015 cF‑14.7 s19

Regulations

16   The Lieutenant Governor in Council may make regulations

                           (a)    defining base capital, electronic media and total assets for the purposes of this Act;

                           (b)    respecting any matter that is to be prescribed under sections 1 to 15.1;

                           (c)    establishing the classes and subclasses of insurance for the purposes of this Act;

                        (c.1)    defining, enlarging or restricting the meaning of any word or phrase used in this Act but not defined in this Act;

                           (d)    exempting from the application of this Act

                                  (i)    a specific contract of insurance,

                                (ii)    any type of contract of insurance that indemnifies a person who has an interest in a product against the product’s malfunction, failure or breakdown, or

                               (iii)    contracts of insurance issued by a specified person or class of persons who operate on a non‑profit basis;

                           (e)    respecting the terms and conditions that must be met to maintain an exemption under clause (d).

RSA 2000 cI‑3 s16;2003 c19 s31;2008 c19 s7

Crown Immunity

Crown immunity

16.1(1)  In this section,

                           (a)    “Crown” means the Crown in right of Alberta and includes a Minister of the Crown and agents and employees of the Crown;

                           (b)    “reform amendments” means the amendments made to this Act by the Insurance Amendment Act, 2003 (No. 2) and the Insurance Amendment Act, 2005, and any regulations, orders in council, ministerial orders or board orders made pursuant to or by virtue of those amendments.

(2)  No liability attaches to the Crown for any loss or damages that have arisen or may arise in respect of the reform amendments.

(3)  All existing and future causes of action in law or in equity against the Crown in respect of the reform amendments, including, without limitation, Alberta Court of Queen’s Bench action number 0403‑14323 and the claims made in that action, are extinguished without costs.

(4)  Nothing in this section acknowledges, admits, validates or recognizes a cause of action referred to in subsection (3).

2005 c27 s5

Part 1
Licensing of Insurers and Reciprocal Insurance Exchanges

Subpart 1
Licensing of Insurers

Insurers Duty to be Licensed

Undertaking insurance and carrying on business

17(1)  An insurer undertaking a contract of insurance that is made in Alberta, whether the contract is original or renewed, except the renewal from time to time of life insurance policies, is, for the purposes of this Act, undertaking insurance in Alberta.

(2)  An insurer is, for the purposes of this Act, carrying on business in Alberta if the insurer

                           (a)    undertakes or offers to undertake insurance in Alberta,

                           (b)    sets up or causes to be set up in Alberta any sign or inscription that contains the name of the insurer or that refers to insurance,

                           (c)    carries on market conduct activities in Alberta,

                           (d)    solicits or negotiates insurance in Alberta orally or in writing or by electronic media or any other medium of communication or by vending machines,

                           (e)    issues or delivers any policy of insurance or interim receipt in Alberta,

                            (f)    collects or receives or negotiates for or causes to be collected or received or negotiated for any premium for a contract of insurance in Alberta,

                           (g)    inspects any risk in Alberta,

                           (h)    adjusts any loss under a contract of insurance in Alberta,

                            (i)    prosecutes or maintains in Alberta any action or proceeding in respect of a contract of insurance, or

                            (j)    is listed in a telephone directory for any part of Alberta.

(3)  Any body corporate or unincorporated body that receives in Alberta contributions from its members out of which any gratuities or benefits are paid directly or indirectly on the death of any of its members is, for the purposes of this Act, an insurer carrying on business in Alberta.

1999 cI‑5.1 s17

Requirement for licence

18(1)  Except as provided for in this Act, no insurer may carry on business in Alberta unless the insurer holds a valid and subsisting licence.

(2)  Except as provided for in this Act, no insurer may insure a risk in Alberta unless the insurer holds a valid and subsisting licence for a class of insurance that covers that risk.

(3)  Except as provided for in this Act, no person may enter into or renew a contract of insurance to insure a risk in Alberta with an insurer unless

                           (a)    the insurer holds a valid and subsisting licence, and

                           (b)    the licence held by the insurer authorizes the insurer to undertake a class of insurance that covers the risk that is insured.

1999 cI‑5.1 s18

Licensing Requirements

Types of insurers

19(1)  Only the following insurers are eligible for a licence under this Part:

                           (a)    a provincial company;

                           (b)    an extra‑provincial company;

                        (b.1)    an extra‑provincial Crown insurer or an affiliate of an extra‑provincial Crown insurer;

                           (c)    a federally authorized company;

                           (d)    an insurer made up of underwriters or syndicates of underwriters operating on the plan known as Lloyd’s or any other plan approved by the Minister.

(2)  Despite subsection (1), a fraternal society is eligible for a licence under this Part only if

                           (a)    the fraternal society is a federally authorized company, or

                           (b)    the fraternal society is incorporated under the laws of a province other than Alberta.

RSA 2000 cI‑3 s19;2005 c27 s6;2009 c7 s6

Application requirements

20(1)  An application for a licence must

                           (a)    be filed with the Minister,

                           (b)    specify the classes of insurance that the applicant wishes to be authorized to undertake, and

                           (c)    contain the information, material and evidence required by the Minister.

(2)  An application for a licence must be accompanied with

                           (a)    a plan for the conduct and development of the business of the company,

                           (b)    in the case of an applicant other than a provincial company, a certified copy of its instrument of incorporation and bylaws,

                           (c)    if the applicant is a federally authorized company, a certified copy of the order under the Insurance Companies Act (Canada) approving the company to carry on business or to insure risks in Canada,

                           (d)    if the applicant is an extra‑provincial company, a certified copy of its authority to carry on business from the jurisdiction in which the company is incorporated and a certified copy of the latest audited financial statements of the company,

                           (e)    copies of all policy forms and forms of application for insurance proposed to be used by the applicant in Alberta,

                            (f)    the appointment of an individual as its attorney for service and the consent of the individual to act as the attorney for service, and

                           (g)    the address of its chief agency in Alberta.

(3)  After filing an application for a licence, the applicant must provide to the Minister any additional information, material and evidence the Minister considers necessary.

(4)  An application by a provincial company for its first licence after its incorporation under this Act must

                           (a)    set out the sums of money paid or to be paid by the company in connection with its incorporation and organization, and

                           (b)    contain evidence satisfactory to the Minister that the directors have performed their duties under section 309.

1999 cI‑5.1 s20

Names

21(1)  No insurer may be licensed with a name that does not meet the requirements of section 211(1) and the regulations under section 212.

(2)  Subject to this Act and the regulations, an insurer may be licensed with a name in an English form, a French form, an English form and a French form or a combined English and French form, and it may be legally designated in Alberta by any such name.

(3)  Where an insurer has a name that contravenes subsection (1), the Minister may license the insurer if it undertakes either to change its name to a name that does not contravene subsection (1) or to carry on business in Alberta under a name that does not contravene subsection (1).

(4)  Where, through inadvertence or otherwise, an insurer becomes licensed with a name that contravenes subsection (1), the Minister may order as a condition of being licensed that the insurer carry on business under a name specified in the order.

1999 cI‑5.1 s21

22   Repealed 2005 c27 s7.

First licence of provincial company

23   Before issuing the first licence to a provincial company, the Minister must be satisfied that

                           (a)    the meeting of shareholders referred to in section 133 has been held,

                           (b)    the expenses of incorporation or organization that have been paid or are to be paid by the company are reasonable,

                           (c)    the management, directors or persons who hold a significant interest in any class of shares of the company are fit as to character, and

                           (d)    the management and directors have the competence and experience suitable for involvement in the operation of a financial institution.

1999 cI‑5.1 s23

Ability to carry on class of insurance

24   Before issuing the first licence to an insurer, the Minister must be satisfied that the insurer has the capacity and power to carry on the classes of insurance that it has specified in its application.

1999 cI‑5.1 s24

Base capital

25(1)  Before issuing a licence to or renewing a licence of a provincial or extra‑provincial company or federally authorized company, the Minister must be satisfied that

                           (a)    the amount of the company’s base capital is at least,

                                  (i)    for life companies, $5 000 000 or any greater amount specified by the regulations, and

                                (ii)    for property and casualty companies, $3 000 000 or any greater amount specified by the regulations,

                               and

                           (b)    the company’s base capital is adequate, taking into account the nature of the business that it proposes to engage in, the expected volume of its business and any restrictions on its business.

(2)  If, at any time during a year, a provincial or extra‑provincial company or federally authorized company that is licensed ceases to have an adequate base capital as required under subsection (1)(a), the company must promptly

                           (a)    give written notice of that fact to the Superintendent, and

                           (b)    cease to undertake or to offer to undertake insurance in Alberta

until the Superintendent gives written notice to the company that the Superintendent is satisfied that the company’s base capital once again meets the requirements of subsection (1)(a).

RSA 2000 cI‑3 s25;2003 c40 s2;2013 c18 s2

Compliance with market conduct laws

26   The Minister may refuse to issue a licence to or renew a licence of an insurer if the Minister is satisfied that the insurer is not complying with the laws respecting market conduct activities of other jurisdictions in which it is licensed.

1999 cI‑5.1 s26

Issuing licence

27   An insurer that applies for a licence under this Subpart or to renew such a licence is entitled to the licence if the Minister is satisfied that

                           (a)    the requirements of this Act and the regulations relating to the licence have been met, and

                           (b)    the insurer is in compliance with this Act and the regulations.

1999 cI‑5.1 s27

Notice of licence

28(1)  The Minister must publish a notice of the licence of an insurer in The Alberta Gazette.

(2)  This section does not apply to a renewal of a licence.

1999 cI‑5.1 s28

Expiry

29   The term of a licence is the term determined under the regulations.

RSA 2000 cI‑3 s29;2013 c18 s3

Renewal of licence

30   An application for a renewal of a licence must

                           (a)    be filed with the Minister,

                           (b)    specify the classes of insurance that the applicant wishes to be authorized to undertake, and

                           (c)    contain the information, material and evidence required by the Minister.

1999 cI‑5.1 s30

Duty on expiration of licence

31(1)  An insurer must not allow its licence to expire unless

                           (a)    the insurer gives the Minister 30 days’ notice of its intention not to renew its licence, and

                           (b)    the insurer provides the Minister with a statutory declaration stating that

                                  (i)    the insurer has no unpaid claims in respect of the insurer’s contracts of insurance made in Alberta,

                                (ii)    all of the insurer’s contracts of insurance made in Alberta are discharged or expired or have been transferred or assigned to another licensed insurer, and

                               (iii)    the insurer has no outstanding fees or taxes payable to the Government.

(2)  When an insurer does not renew its licence, the Minister must publish a notice in The Alberta Gazette stating that the licence of the insurer has expired and setting out any information about the insurer or its business in Alberta that the Minister considers appropriate.

1999 cI‑5.1 s31

Terms and conditions

32(1)  The Minister may, when issuing or renewing a licence, or at any time during the term of a licence, impose on the licence any terms or conditions that are consistent with this Act that the Minister considers appropriate.

(2)  Before imposing terms or conditions under this section, the Minister must notify the insurer of the proposed terms or conditions and provide the insurer with an opportunity to make representations to the Minister.

RSA 2000 cI‑3 s32;2005 c27 s8

Automobile insurance

33   An insurer’s licence to undertake automobile insurance in Alberta is subject to the following conditions:

                           (a)    in any action in Alberta against the licensed insurer or its insured arising out of an automobile accident in Alberta, the insurer must appear and must not set up any defence to a claim under a contract made outside Alberta, including any defence as to the limit or limits of liability and prescribed accident benefits under the contract, that could not be set up if the contract were evidenced by a motor vehicle liability policy issued in Alberta;

                           (b)    in any action in another province or territory against the licensed insurer or its insured arising out of an automobile accident in that province or territory, the insurer must appear and must not set up any defence to a claim under a contract evidenced by a motor vehicle liability policy issued in Alberta, including any defence as to the limit or limits of liability and prescribed accident benefits under the contract, that could not be set up

                                  (i)    if the contract were evidenced by a motor vehicle liability policy issued in the other province or territory, or

                                (ii)    under a scheme of no fault insurance that has been established by statute in the other province or territory.

1999 cI‑5.1 s33

Classes of Insurance

Classes of insurance

34(1)  A licence issued by the Minister must set out the classes of insurance that the licensee is authorized to undertake.

(2)  If a question arises as to the class of insurance into which any specific contract of insurance or form of policy falls, the Minister may determine the question and that determination is final for the purposes of this Act.

1999 cI‑5.1 s34

Restriction on classes of insurance

35(1)  Subject to subsection (2), no licence may be issued that authorizes the licensee to undertake life insurance and any other class of insurance.

(2)  A licence may be issued that authorizes the licensee to undertake life insurance and

                           (a)    accident and sickness insurance, or

                           (b)    any other prescribed class of insurance in the prescribed circumstances.

1999 cI‑5.1 s35

Prohibited activities

36(1)  Except as permitted under this Act and the regulations, no licensed insurer may

                           (a)    carry on business as an information management corporation as defined in the regulations, except in relation to the main business of an insurer;

                           (b)    carry on business as a financial leasing corporation as defined in the regulations;

                           (c)    accept deposits;

                           (d)    carry on the business of offering services to the public as or accepting or executing the office of

                                  (i)    executor or administrator or trustee, or

                                (ii)    guardian or trustee of a minor’s estate or of the estate of a mentally incompetent person;

                           (e)    carry on any other activity that is prescribed for the purposes of this subsection.

(2)  Nothing in this section prevents a subsidiary of a insurer from engaging in the activities described in subsection (1).

1999 cI‑5.1 s36

Scope of insurance

37   An insurer licensed to undertake property insurance may, under a contract falling within Part 5, Subpart 1, insure an automobile against loss or damage.

RSA 2000 cI‑3 s37;2008 c19 s8

38   Repealed 2008 c19 s9.

Attorney for Service

Attorney for service

39(1)  Every insurer licensed under this Subpart must have an attorney for service who meets the requirements of subsection (2).

(2)  The attorney for service must be an individual who is resident in Alberta.

(3)  Service of any document in a legal action, suit or proceeding on an insurer may be effected by

                           (a)    delivering the document to its attorney according to the Minister’s records,

                           (b)    delivering the document to the address of its attorney according to the Minister’s records, or

                           (c)    sending the document by recorded mail to that address.

(4)  A document sent by recorded mail to the attorney’s address in accordance with subsection (3)(c) is deemed to be served 7 days from the date of mailing unless there are reasonable grounds for believing that the attorney did not receive the document at that time or at all.

(5)  Every licensed insurer must ensure that its attorney’s office is open during normal business hours.

RSA 2000 cI‑3 s39;2016 c23 s3

Attorneys change of address

40   An attorney for service who changes addresses must, before the change occurs, notify the Minister of the date of the change and the new address.

1999 cI‑5.1 s40

Change in attorney

41(1)  If the attorney for service of an insurer dies or resigns or if an insurer revokes the appointment of its attorney for service, the insurer must, as soon as is reasonably possible, provide the Minister with

                           (a)    the appointment of its new attorney for service, and

                           (b)    the consent of the individual to act as the attorney for service.

(2)  An attorney for service of an insurer who intends to resign must

                           (a)    give not less than 60 days’ notice to the insurer, and

                           (b)    send a copy of the notice to the Minister.

1999 cI‑5.1 s41

No attorney for service

42   If an insurer does not have an attorney for service, service on the insurer may be effected by serving the Superintendent.

1999 cI‑5.1 s42

Reporting Requirements

Annual financial statements

43(1)  Every insurer licensed under this Act must within 180 days after the end of the insurer’s financial year provide the Minister with a copy of the insurer’s audited financial statements for the financial year.

(2)  Every licensed provincial company that has a subsidiary must within 180 days after the end of the subsidiary’s financial year provide the Minister with a copy of the subsidiary’s audited financial statements for the financial year.

(3)  The Minister may, by written notice, require the holding body corporate of a licensed provincial company to provide the Minister with the holding body corporate’s annual audited financial statements and the annual audited financial statements in respect of any of the holding body corporate’s subsidiaries.

(4)  Every licensed insurer must provide, on written request without charge, one copy of the insurer’s latest audited financial statements to a person who is resident in Alberta and who is a policyholder.

1999 cI‑5.1 s43

Annual return

44(1)  Every licensed provincial company must file an annual return within the time period specified in subsection (2) that meets the requirements of subsections (3) and (4).

(2)  The annual return must be filed

                           (a)    in the case of a provincial company that is limited by the Minister to the reinsurance of risks, within 105 days after the end of the calendar year in respect of which the return is prepared, or

                           (b)    in the case of any other provincial company, within 60 days after the end of the calendar year in respect of which the return is prepared.

(3)  The annual return must

                           (a)    set out the provincial company’s name and the address of its head office, the names and residential addresses of its directors, the names of its officers  and auditor, the name and address of its attorney for service and, if the company’s records are held outside Alberta under section 217(4), the address at which those records are located,

                           (b)    set out the assets, liabilities, receipts and expenditures of the company for the calendar year and be audited in a manner that is satisfactory to the Minister,

                           (c)    set out particulars of the business done in Alberta during the calendar year,

                           (d)    be accompanied with the actuary’s valuation referred to in section 405,

                           (e)    set out any other information considered necessary by the Minister, and

                            (f)    be approved and signed by the president, vice‑president or managing director or other director appointed for the purpose by the board of directors and by the secretary or manager of the company.

(4)  The assets of a provincial company must be valued in accordance with the method established by the regulations under section 432(f).

RSA 2000 cI‑3 s44;2016 c18 s10

Change in officials

45   If the directors, officers or auditor of a provincial company change, or if the residential addresses of the directors change, the company must notify the Minister of the new names or addresses within 15 days of the change.

1999 cI‑5.1 s45

Report on business particulars

46(1)  Every insurer, other than a provincial company, licensed under this Act for all or part of a year (the “reporting year”) must submit to the Minister before the last day of February of the year following the reporting year a report that sets out the particulars of the insurer’s insurance business written in Alberta during the reporting year.

(2)  Instead of submitting the report referred to in subsection (1) to the Minister, the Minister may allow an insurer to submit the report to an official of a government in Canada who has an information sharing agreement with the Minister.

1999 cI‑5.1 s46

Records to be filed

47(1)  Every licensed insurer that carries on in Alberta the business of automobile insurance or any other class of insurance designated by the Minister must prepare and file with the Minister, or with a statistical agency designated by the Minister,

                           (a)    a record of its premiums and of its loss and expense costs in Alberta, and

                           (b)    a record of any other information required by the Minister,

in a manner and according to a system of classification that the Minister approves.

(2)  A statistical agency designated by the Minister must compile the data in the records filed under subsection (1) in a manner approved by the Minister and submit the compiled data to the Minister.

(3)  The reasonable remuneration and expenses of the statistical agency designated by the Minister are payable by the insurers whose data is compiled and, if there is a dispute with respect to the amount payable, the Minister’s decision is final.

(4)  An amount determined by the Minister under subsection (3) is a debt owing to the statistical agency by the insurer specified by the Minister and may be recovered from the insurer by the agency in an action for debt.

RSA 2000 cI‑3 s47;2008 c19 s10

Audit of records

48(1)  If at any time it appears to the Minister that an insurer is not keeping records in a manner that shows correctly the experience of the insurer in Alberta as required by section 46 or 47, the Minister may hire an accountant

                           (a)    to audit the books and records of the insurer, and

                           (b)    to give instructions that will enable the officers of the insurer to comply with those sections.

(2)  The reasonable remuneration and expenses of the accountant that are approved by the Minister for an audit of an insurer under subsection (1) must be paid by the insurer.

(3)  If the amount approved under subsection (2) is not paid by the insurer, the Minister may pay the amount and then recover it from the insurer in an action for debt.

1999 cI‑5.1 s48

Other information — licensed insurers

49   Every licensed insurer, other than a provincial company, must provide the Minister with

                           (a)    a copy of any change to its instrument of incorporation within 7 days of the making of the change;

                           (b)    notice of its being subject to an arrangement in a jurisdiction in which it is licensed other than Alberta that is in the nature of a compliance undertaking, and a copy of the compliance undertaking, within 7 days of the making of the arrangement.

RSA 2000 cI‑3 s49;2013 c18 s4

Additional information

50   A licensed insurer must provide to the Minister, within the time specified by the Minister,

                           (a)    any information that is required by the Minister to enable the Minister to respond to inquiries on the company’s market conduct activities;

                           (b)    any information that is required by the Minister for analytical or policy‑making purposes.

RSA 2000 cI‑3 s50;2008 c19 s11

Suspension, Cancellation and Other Actions
Affecting Insurers
Licences

Federally authorized companies

51(1)  In this section, “order” means an order under the Insurance Companies Act (Canada) that approves a federally authorized company to carry on business or to insure risks in Canada.

(2)  If the order of a federally authorized company is rescinded, the licence of the company under this Act is automatically cancelled.

(3)  The Minister must revive the licence of a federally authorized company that has been cancelled under this section if the company obtains a new order before the licence would have expired.

(4)  If the authority to insure a class of risks is deleted from the order of a federally authorized company, that class of insurance is automatically deleted from the licence of the company under this Act.

(5)  The Minister must restore the class of insurance to the licence of the federally authorized company referred to in subsection (4) if the class of insurance is restored to the company’s order before the licence has expired.

1999 cI‑5.1 s51

Extra-provincial companies

52(1)  If the licence of an extra‑provincial company is cancelled or suspended with or without conditions under the laws of the jurisdiction under which the company is incorporated, the Minister must,

                           (a)    if the jurisdiction cancelled the licence, cancel the licence held by the company under this Act, or

                           (b)    if the jurisdiction suspended the licence, suspend the licence on the same conditions.

(2)  If under the laws of the jurisdiction under which an extra‑provincial company is incorporated terms, conditions or restrictions are imposed on its licence to carry on business in that jurisdiction, the licence held by the company under this Act is automatically subject to the same terms, conditions or restrictions unless the Minister provides otherwise under subsection (3).

(3)  If the Minister suspends a licence under subsection (1) or if subsection (2) applies, the Minister may make any modifications to the terms, conditions or restrictions imposed under the laws of the other jurisdiction that the Minister considers necessary to take into account circumstances in Alberta.

(4)  If under the laws of the jurisdiction under which an extra‑provincial company is incorporated a class of insurance is deleted from its licence issued in that jurisdiction, the class of insurance is automatically deleted from the licence held by the company under this Act.

(5)  The Minister may revive the licence of an extra‑provincial company that has been cancelled under subsection (1), delete or vary terms or conditions imposed on the licence of an extra‑provincial company under subsection (2) or (3) or restore to the licence of an extra‑provincial company a class of insurance that is deleted under subsection (4) if the revival, deletion, variance or restoring occurs in the jurisdiction in which the extra‑provincial company is incorporated.

1999 cI‑5.1 s52

Cancellation on request

53(1)  The Minister may, on the request of a licensed insurer, cancel the insurer’s licence.

(2)  The Minister must not cancel the licence of an insurer under subsection (1) unless the Minister is satisfied that

                           (a)    the insurer has no unpaid claims in respect of the insurer’s contracts of insurance made in Alberta,

                           (b)    all of the insurer’s contracts of insurance made in Alberta are discharged or expired, or have been transferred or assigned to another licensed insurer, and

                           (c)    the insurer has no outstanding fees or taxes payable to the Government.

(3)  The Minister must publish a notice of the cancellation of a licence under this section in The Alberta Gazette.

1999 cI‑5.1 s53

Sanctions affecting licences

54(1)  Where

                           (a)    a licensed insurer or other person denies the Minister, the Superintendent or an examiner access to any information, records, documents or property that the Minister, Superintendent or examiner is authorized by this Act to have access to,

                           (b)    the holding body corporate of a licensed provincial company fails to forward to the Minister audited financial statements in accordance with a notice under section 43(3),

                           (c)    a licensed insurer or other person contravenes

                                  (i)    an order of the Minister,

                                (ii)    a decision of a review board under section 806, or

                               (iii)    an order of the Court under section 767 or 809,

                           (d)    a licensed insurer is convicted of an offence under section 511.1(7) or 605,

                           (e)    grounds exist for the possession and control of the assets of a provincial company by the Minister,

                            (f)    a provincial company is carrying on or soliciting business in any jurisdiction other than Alberta without first being authorized to do so under the laws of that jurisdiction,

                           (g)    a licensed insurer fails to comply with any term or condition to which its licence is subject,

                           (h)    a licensed insurer does not, for a period of 5 years or more, engage in the business of insurance,

                            (i)    a licensed insurer fails to comply with the provisions of Part 4, or

                            (j)    the amount of a licensed extra‑provincial company’s base capital at any time falls below the respective amount specified in or under section 25(a),

the Minister may cancel, suspend or refuse to renew the licence of the insurer, or may impose terms or conditions on its licence.

(2)   Where the Minister proposes to act under subsection (1), the Minister must give notice of that intention to the licensed insurer.

(3)  If, in the Minister’s opinion, the public interest may be prejudiced or adversely affected by any delay in acting under subsection (1), the Minister may, without notice, cancel or suspend the licence of the insurer or impose terms or conditions on its licence.

(4)  The Minister must forthwith give notice to the insurer of any action taken under subsection (3).

(5)  An insurer that receives a notice under subsection (2) or (4) and who wishes to have a hearing before the Minister must serve a written request for the hearing on the Minister within 15 days after receipt of the notice.

(6)  If an insurer requests a hearing in accordance with subsection (5) in respect of an action taken by the Minister under subsection (3), the Minister may, after giving the insurer an opportunity to be heard, confirm the action taken or modify or reverse the action taken.

(7)  If an insurer requests a hearing in accordance with subsection (5) in respect of the Minister’s proposed action under subsection (1), the Minister may, after giving the insurer an opportunity to be heard, take any of the proposed actions set out in the notice with or without modifications or decide not to take any of those actions.

(8)   The Minister must publish in The Alberta Gazette notice of every cancellation or suspension of a licence under this section.

RSA 2000 cI‑3 s54;2003 c19 s32;2008 c19 s12

Non‑payment of claims

55(1)   The Minister must cancel the licence of an insurer if the Minister is satisfied that

                           (a)    a judgment arising out of a contract of insurance made in Alberta has been issued against the insurer, and

                           (b)    the judgment has become final in the regular course of law, is enforceable in Alberta and has remained unpaid for 30 or more days after becoming final.

(2)   The Minister may revive a licence that has been cancelled under subsection (1) if the judgment against the insurer is paid within 6 months after the cancellation and the licence would not have expired.

1999 cI‑5.1 s55

Effect of cancellation or suspension

56(1)  When an insurer’s licence is cancelled under this Subpart, the insurer may carry on business in Alberta only to the extent that it is necessary for the winding‑up of its business in Alberta.

(2)  When an insurer’s licence is suspended under this Subpart, the insurer may carry on business in Alberta only in accordance with the terms and conditions of the suspension.

(3)  When a class of insurance has been deleted from an insurer’s licence under this Subpart, the insurer must cease to undertake or to offer to undertake that class of insurance in Alberta.

1999 cI‑5.1 s56

Provisional liquidator

57(1)  The Minister may appoint a provisional liquidator to be in charge of the affairs of a provincial company if

                           (a)    the company fails to renew its licence without complying with section 31,

                           (b)    the company’s application to renew its licence is refused, or

                           (c)    the company’s licence is cancelled in circumstances other than those set out in section 53.

(2)  Until a permanent liquidator is appointed by the Court, the provisional liquidator has all of the powers of the insurer, and none of the officers or directors of the provincial company may enter into a contract or incur any liability on behalf of the company without the approval of the provisional liquidator.

(3)  A provisional liquidator of a provincial company must apply to the Court under section 190 for an order winding up the company.

(4)  Despite subsection (3), a provisional liquidator of a provincial company may, with the approval of the Court, sell the business of the company as a going concern.

1999 cI‑5.1 s57

Remuneration of provisional liquidator

58(1)  The Minister is responsible for establishing the remuneration of a provisional liquidator.

(2)  The remuneration of a provisional liquidator of a provincial company and the provisional liquidator’s costs and expenses while acting as the provisional liquidator are payable by the company and are a first lien or charge on the assets of the company.

1999 cI‑5.1 s58

Municipal Licensing Fees

Exemption from certain fees

59   An insurer that holds a licence under this Act is exempt from the payment of any licence fee for the transaction of the business of insurance imposed by a municipality or Metis settlement.

1999 cI‑5.1 s59

Regulations

Regulations

60   The Lieutenant Governor in Council may make regulations

                           (a)    specifying an amount of base capital for life or property and casualty companies for the purposes of section 25(a);

                        (a.1)    respecting the term of licence for the purpose of section 29;

                           (b)    respecting any matter that is to be prescribed under this Subpart;

                           (c)    respecting the issuance of a licence to an extra‑provincial Crown insurer or an affiliate of an extra‑provincial Crown insurer including, without limitation, regulations suspending or modifying the application or operation of any one or more provisions of this Act in respect of the extra‑provincial Crown insurer or the affiliate, as the case may be.

RSA 2000 cI‑3 s60;2005 c27 s9;2013 c18 s5

Subpart 2
Exceptions

Unsolicited Insurance

Unsolicited insurance

61(1)  Despite section 18, an insurer that is not licensed may undertake insurance in Alberta with an insured if

                           (a)    the insurance is effected without any solicitation whatsoever on the part of that insurer, and

                           (b)    the insured, not later than 30 days after signing the contract of insurance or receiving any policy, interim receipt or insuring document issued by or on behalf of the insurer, whichever occurs first,

                                  (i)    notifies the Superintendent in writing under oath of the terms of the insurance, the insurer with whom the insurance is placed and the amount of premium paid or payable or premium notes given or to be given in connection with the insurance, and

                                (ii)    at the same time pays to the Minister a charge equal to 50% of the premium paid or payable or premium notes given or to be given in connection with the insurance.

(2)  If the charge referred to in subsection (1)(b)(ii) is not paid within 30 days from the time it becomes payable, a sum equal to 50% of the charge remaining unpaid becomes a penalty that forms a part of the charge and is recoverable with the charge.

(2.1)  Despite subsection (1)(b)(ii), the Minister may reduce the charge to an amount not less than 10% of the premium paid or payable or premium notes given or to be given in connection with the insurance if the Minister is satisfied that the insurance was not available through a licensed insurer.

(3)  Despite section 18, a person may enter into or renew a contract of insurance to insure a risk in Alberta with an unlicensed insurer if the requirements of subsection (1)(a) and (b) have been met.

(4)  This section does not apply to a contract of insurance that may be evidenced by a motor vehicle liability policy.

RSA 2000 cI‑3 s61;2005 c27 s19;2008 c19 s13

Reinsurance

Reinsurance

62(1)  In this section, “Alberta contract” means a contract of insurance made in Alberta, but does not include a contract of reinsurance.

(2)  Despite section 18, an insurer, other than a provincial company, that is not licensed may enter into a contract as the insurer that reinsures risks in respect of an Alberta contract if the insurance business in Alberta of the insurer is restricted to the reinsurance of risks.

(3)  Despite section 18, a licensed insurer that is the insurer under an Alberta contract may, subject to the regulations, enter into a contract of reinsurance in respect of the Alberta contract with an insurer referred to in subsection (2).

1999 cI‑5.1 s62

Special Brokers

Insurance through special broker

63(1)  Despite section 18, an insurer that is not licensed may undertake insurance in Alberta with an insured if

                           (a)    the insurance cannot be obtained from licensed insurers,

                           (b)    the insurance is effected through a person who holds a valid and subsisting special broker’s licence for that class of insurance,

                           (c)    before the insurance is undertaken the special broker obtains from the proposed insured a signed and dated document

                                  (i)    describing the nature and amount of the insurance required, and

                                (ii)    stating that the insurance cannot be obtained from licensed insurers and specifying the licensed insurers who refused the proposed insured’s application,

                               and

                           (d)    before the insurance is undertaken the special broker discloses in writing to the proposed insured that the insurance will be placed with an unlicensed insurer.

(2)  Despite section 18, a person may enter into or renew a contract of insurance to insure a risk in Alberta with an unlicensed insurer if, subject to subsection (2.1), the requirements of subsection (1)(a) to (d) have been met.

(2.1)  Subsection (1)(c) and (d) do not apply if

                           (a)    the special broker is an affiliate of the insurance agent that places the insurance, and

                           (b)    the insurance is placed outside Alberta.

(3)  This section does not apply to a contract of insurance that may be evidenced by a motor vehicle liability policy.

RSA 2000 cI‑3 s63;2008 c19 s14

Certificate of authority

64   No person may be issued a special broker’s licence for a class of insurance or have a special broker’s licence renewed for a class of insurance unless the person holds an insurance agent’s certificate of authority, other than a restricted insurance agent’s certificate of authority, for that class of insurance.

1999 cI‑5.1 s64

Financial guarantee

65   No person may be issued a special broker’s licence or have a special broker’s licence renewed unless the person maintains a financial guarantee in a form satisfactory to the Minister in the prescribed amount.

1999 cI‑5.1 s65

Application for special brokers licence

66(1)  An application for a special broker’s licence or to renew a special broker’s licence must

                           (a)    be filed with the Minister,

                           (b)    specify the classes of insurance in respect of which the applicant wishes to transact business,

                           (c)    contain the information, material and evidence required by the Minister, and

                           (d)    be accompanied with proof that the financial guarantee referred to in section 65 is being maintained.

(2)  After filing an application, the applicant must provide to the Minister any additional information, material and evidence the Minister considers necessary.

1999 cI‑5.1 s66

Issuing certificates

67   An applicant who applies for a special broker’s licence or a renewal of a special broker’s licence is entitled to the licence if the Minister is satisfied that the requirements of this Act and the regulations relating to the licence have been met.

1999 cI‑5.1 s67

Terms and conditions

68(1)  The Minister may issue a special broker’s licence subject to terms and conditions provided for in the regulations.

(2)  Every holder of a special broker’s licence must comply with the terms and conditions to which the licence is subject.

1999 cI‑5.1 s68

Expiration

69   A special broker’s licence expires on December 31 of the year in which it is issued or renewed.

1999 cI‑5.1 s69

Status of certificate of authority

70(1)  When a person’s insurance agent’s certificate of authority expires, the person’s special broker’s licence is automatically cancelled.

(2)  When a person’s insurance agent’s certificate of authority is suspended or cancelled, the person’s special broker’s licence is automatically suspended.

(3)  The Minister must reinstate a person’s special broker’s licence that has been suspended under subsection (1) or (2) for a class of insurance if

                           (a)    the person submits an application for reinstatement to the Minister,

                           (b)    before the special broker’s licence would have expired, the certificate of authority is reinstated or the person is issued an insurance agent’s certificate of authority for that class of insurance, and

                           (c)    the Minister is satisfied that the person is in compliance with the requirements of this Act and the regulations relating to special brokers.

1999 cI‑5.1 s70

Reporting requirements

71   A licensed special broker must within 10 days after the end of each month submit to the Minister a return containing the following information with respect to the insurance effected under section 63 by the broker during the month:

                           (a)    the names of the insured;

                           (b)    the nature of the insurance;

                           (c)    the names of the unlicensed insurers;

                           (d)    the amount of insurance placed with each unlicensed insurer and the rate and amount of premium paid to each unlicensed insurer.

1999 cI‑5.1 s71

Payments in respect of premiums

72(1)  In respect of all premiums on insurance effected by a licensed special broker, the special broker must pay to the Minister the taxes on premiums that would be payable if the premiums had been received by a licensed insurer, and the payment must accompany the monthly return provided for in section 71.

(2)  If the amount referred to in subsection (1) is not paid within 30 days from the time it becomes payable, a sum equal to 50% of the amount remaining unpaid becomes a penalty that forms a part of the amount referred to in subsection (1) and is recoverable with the amount.

RSA 2000 cI‑3 s72;2008 c19 s15

Records

73   A special broker must keep a separate account of insurance effected by the special broker.

1999 cI‑5.1 s73

Financial guarantee not in force

74(1)  If, during the term of a special broker’s licence, the financial guarantee referred to in section 65 maintained in respect of that licence is no longer in force, the special broker must immediately notify the Minister, in writing, that the guarantee is not in force.

(2)  If, during the term of a special broker’s licence, the financial guarantee referred to in section 65 maintained in respect of the licence is no longer in force, the licence is automatically suspended unless, while the guarantee is in force, the special broker satisfies the Minister that the special broker has obtained a new guarantee that meets the requirements of section 65.

(3)  The Minister must reinstate a special broker’s licence that has been suspended under subsection (2) if

                           (a)    the broker submits an application for reinstatement to the Minister,

                           (b)    the broker satisfies the Minister that the broker has obtained a new financial guarantee that meets the requirements of section 65 before the licence would have expired, and

                           (c)    the Minister is satisfied that the broker is in compliance with the requirements of this Act and the regulations relating to special brokers.

1999 cI‑5.1 s74

Using different names

75   No person may advertise or carry on business as a special broker in a name other than the name set out in the person’s special broker’s licence.

1999 cI‑5.1 s75

Release of financial guarantee

76    A special broker is entitled to a release or cancellation of the financial guarantee submitted by the special broker when the Minister is satisfied that all insurance effected under section 63 by the broker is no longer in force or has been reinsured.

1999 cI‑5.1 s76

Regulations

Regulations

77   The Lieutenant Governor in Council may make regulations

                           (a)    respecting the maximum proportion of risks that may be reinsured with unlicensed insurers for the purposes of section 62(3);

                           (b)    respecting the requirement, conditions, training and experience that must be met before a special broker’s licence is issued or renewed;

                           (c)    respecting terms and conditions that may be imposed on a special broker’s licence;

                           (d)    respecting any matter that is to be prescribed under this Subpart.

1999 cI‑5.1 s77

Subpart 3
Licensing of Reciprocal
Insurance Exchanges

Definitions

78   In this Subpart,

                           (a)    “approved securities” means

                                  (i)    in respect of a reciprocal insurance exchange that has its principal office in Alberta, investments that the exchange would be authorized to make if the exchange were a provincial company,

                                (ii)    in respect of a reciprocal insurance exchange that has its principal office in a province other than Alberta, investments that the exchange is authorized to make under the laws of that province, and

                               (iii)    in respect of a reciprocal insurance exchange that has its principal office outside Canada, investments that the exchange is authorized to make under Part XIII of the Insurance Companies Act (Canada);

                           (b)    “principal attorney” means a person authorized by subscribers under a power of attorney to sign reciprocal contracts on their behalf and to act on the subscribers’ behalf in respect of any matter specified in the power of attorney relating to those contracts;

                           (c)    “principal office” means the main office of the principal attorney;

                           (d)    “reciprocal contract” means a reciprocal contract of indemnity or inter‑insurance;

                           (e)    “subscribers” means persons exchanging reciprocal contracts with each other.

1999 cI‑5.1 s78

Licence required

79(1)  No person may exchange a reciprocal contract unless

                           (a)    the exchange is made by the person’s principal attorney,

                           (b)    the exchange is part of a reciprocal insurance exchange that is licensed under this Subpart, and

                           (c)    the reciprocal contract falls within a class of insurance that the reciprocal insurance exchange is authorized to undertake.

(2)  No person may act as principal attorney or on behalf of a principal attorney in the exchange of reciprocal contracts for persons who are resident in Alberta unless the exchange is part of a reciprocal insurance exchange that is licensed under this Subpart.

1999 cI‑5.1 s79

Exception

80(1)  Despite section 79, a person may, with respect to property located in Alberta, exchange a reciprocal contract that is a contract of property insurance and that is part of an unlicensed reciprocal insurance exchange if

                           (a)    the exchange of the contracts is done for protection only and not for profit,

                           (b)    the contracts are effected outside Alberta,

                           (c)    the exchange of contracts is effected without any solicitation by the unlicensed reciprocal insurance exchange, and

                           (d)    the person who owns the property, within 30 days after signing the contract,

                                  (i)    notifies the Superintendent in writing under oath of the terms of the contract, the persons with whom the insurance is placed and the amount of premium paid or payable or premium notes given or to be given or mutual liability assumed in connection with the insurance, and

                                (ii)    at the same time pays to the Minister a fee equal to 50% of the premium paid or payable or premium notes given or to be given or mutual liability assumed in connection with the insurance.

(2)  If the fee referred to in subsection (1)(d)(ii) is not paid within 30 days from the time when it becomes payable, a sum equal to 50% of the fee remaining unpaid becomes a penalty that forms a part of the fee and is recoverable with the fee.

RSA 2000 cI‑3 s80;2005 c27 s19;2008 c19 s16

Classes of insurance

81   Subject to section 82, a reciprocal insurance exchange may be licensed to undertake any class of insurance that a provincial company may be licensed to undertake except for the following classes:

                           (a)    life insurance;

                           (b)    accident and sickness insurance;

                           (c)    surety insurance.

                           (d)    repealed 2008 c19 s17.

RSA 2000 cI‑3 s81;2008 c19 s17

Automobile insurance

82(1)  No reciprocal insurance exchange may be licensed to undertake the type of automobile insurance that is evidenced by a motor vehicle liability policy, except the type of insurance provided in a standard excess automobile policy or standard non‑owned automobile policy.

(2)  The Minister may issue a licence to a reciprocal insurance exchange that authorizes the exchange to undertake automobile insurance, other than the type described in subsection (1), if the Minister is satisfied that

                           (a)    the exchange has signed reciprocal contracts or bona fide applications for such contracts for at least the prescribed number of automobiles, and

                           (b)    arrangements are in effect for the reinsurance of all liabilities in excess of the prescribed limits.

RSA 2000 cI‑3 s82;2005 c27 s10;2008 c19 s18

Property insurance

83   The Minister must not issue a licence to a reciprocal insurance exchange that authorizes the exchange to undertake property insurance unless the Minister is satisfied that the exchange has bona fide applications for reciprocal contracts for at least the prescribed number of separate property insurance risks in Alberta or elsewhere and for at least the prescribed aggregate amount.

RSA 2000 cI‑3 s83;2008 c19 s18

Application for licence

84(1)  Persons who wish to have a reciprocal insurance exchange licensed must submit the following to the Minister:

                           (a)    the name of the exchange;

                           (b)    the name and address of its principal attorney;

                           (c)    the classes of insurance that cover the reciprocal contracts to be exchanged;

                           (d)    a copy of the form of the contract, agreement or policy under or by which the reciprocal contracts are to be effected or exchanged;

                           (e)    a copy of the form of power of attorney under which the contracts are to be effected or exchanged;

                            (f)    the location of the office from which the contracts are to be issued;

                           (g)    if the exchange is required by section 94 to have an attorney for service, the appointment of an individual as its attorney for service and the consent of the individual to act as the attorney for service;

                           (h)    any other information required by the Minister.

(2)  Persons who wish to have a reciprocal insurance exchange’s licence renewed must submit the following to the Minister:

                           (a)    the name of the exchange;

                           (b)    the name of its principal attorney;

                           (c)    any other information required by the Minister.

1999 cI‑5.1 s84

Name of exchange

85   The Minister may refuse to issue a licence to a reciprocal insurance exchange if the name or designation under which contracts are issued is so similar to a name or designation of a licensed exchange or licensed insurer that confusion or deception is likely.

1999 cI‑5.1 s85

Issuing licence

86   Applicants who apply for a licence for a reciprocal insurance exchange or to renew such a licence are entitled to the licence if the Minister is satisfied that

                           (a)    the requirements of this Act and the regulations relating to the licence have been met, and

                           (b)    in the case of an existing reciprocal insurance exchange, the exchange is in compliance with the requirements of this Act and the regulations.

1999 cI‑5.1 s86

Notice of licence

87(1)  The Minister must publish a notice of the licence of a reciprocal insurance exchange in The Alberta Gazette.

(2)  This section does not apply to the renewal of a licence.

1999 cI‑5.1 s87

Premium deposit

88   Every reciprocal insurance exchange must require its subscribers to provide to its principal attorney, as a condition of membership in the exchange, a premium reasonably sufficient for the risk assumed by the exchange.

1999 cI‑5.1 s88

Management of exchange

89   The affairs of a reciprocal insurance exchange must be managed by an advisory board or committee of subscribers established in accordance with the power of attorney.

1999 cI‑5.1 s89

Term of licence

90   A licence issued under this Subpart expires on December 31 of the year in which it is issued or renewed.

1999 cI‑5.1 s90

Annual return

91(1)  Every licensed reciprocal insurance exchange must file an annual return for each calendar year within the time period specified in subsection (2) that meets the requirements of subsection (3).

(2)  The annual return for a calendar year must be filed by the last day of the following February.

(3)  The annual return must

                           (a)    set out the name of the reciprocal insurance exchange and the name and address of its principal attorney and of its attorney for service,

                           (b)    set out the financial information required by the Minister that is audited in a manner that is satisfactory to the Minister,

                           (c)    set out any other information considered necessary by the Minister, and

                           (d)    be signed by the principal attorney and at least 2 members of the advisory board or committee of subscribers of the reciprocal insurance exchange.

(4)  If, in the Minister’s opinion, an annual return prepared by a reciprocal insurance exchange for another jurisdiction meets the requirements of subsection (3), the exchange may file that return to satisfy the requirements of subsection (1).

1999 cI‑5.1 s91

Signing contracts

92   After a reciprocal insurance exchange is licensed under this Subpart, a principal attorney may sign a reciprocal contract on behalf of a subscriber if the attorney is authorized by a power of attorney from the subscriber.

1999 cI‑5.1 s92

Court action

93   Despite any condition or stipulation in a power of attorney or in a reciprocal contract, any action or proceeding in respect of any such contract may be maintained in any court of competent jurisdiction in Alberta.

1999 cI‑5.1 s93

Attorney for service

94(1)  Every reciprocal insurance exchange whose principal attorney is not located in Alberta must have an attorney for service who meets the requirements of subsection (2).

(2)  The attorney for service must be an individual who is resident in Alberta.

(3)  Service of any document in a legal action, suit or proceeding on a reciprocal insurance exchange may be effected by

                           (a)    delivering the document to its attorney according to the Minister’s records,

                           (b)    delivering the document to the address, according to the Minister’s records, of its attorney, or

                           (c)    sending the document by recorded mail to that address.

(4)  A document sent by recorded mail to the attorney’s address in accordance with subsection (3)(c) is deemed to be served 7 days from the date of mailing unless there are reasonable grounds for believing that the attorney did not receive the document at that time or at all.

(5)  Every reciprocal insurance exchange that is required to have an attorney for service must ensure that its attorney’s office is open during normal business hours.

RSA 2000 cI‑3 s94;2016 c23 s3

Attorneys change of address

95   An attorney for service who changes addresses must, before the change occurs, notify the Minister of the date of the change and the new address.

1999 cI‑5.1 s95

Change in attorney for service

96(1)  If the attorney for service of a reciprocal insurance exchange dies or resigns or if an exchange revokes the appointment of an attorney for service, the exchange must, as soon as is reasonably possible, provide the Minister with

                           (a)    the appointment of its new attorney for service, and

                           (b)    the consent of the individual to act as the attorney for service.

(2)  An attorney for service of a reciprocal insurance exchange who intends to resign must

                           (a)    give not less than 60 days’ notice to the exchange, and

                           (b)    send a copy of the notice to the Minister.

1999 cI‑5.1 s96

No attorney for service

97   If a reciprocal insurance exchange that is required to have an attorney for service does not have an attorney for service, service on the exchange may be effected by serving the Superintendent.

1999 cI‑5.1 s97

Requirements for property insurance

98(1)  A reciprocal insurance exchange that is authorized to undertake property insurance must ensure that no subscriber has assumed on any single property insurance risk an amount greater than 10% of the net worth of the subscriber.

(2)  The principal attorney of a reciprocal insurance exchange that is authorized to undertake property insurance must file, when requested by the Minister, a statement under oath

                           (a)    showing the maximum amount of indemnity on any single property insurance risk, and

                           (b)    stating that no subscriber has assumed on any single property insurance risk an amount greater than 10% of the net worth of the subscriber.

RSA 2000 cI‑3 s98;2008 c19 s19

Amount of reserve

99   Every reciprocal insurance exchange must maintain with the principal attorney as a reserve fund a sum in cash, approved securities or other prescribed assets equal to an amount calculated in accordance with the following formula:

(50% of (A‑B)) + (C‑D)

where

                             A    is the amount of premiums collected or credited to the accounts of subscribers on reciprocal contracts in force having one year or less to run;

                             B    is the amount paid to licensed insurers to reinsure the reciprocal contracts referred to in A;

                             C    is the amount of premiums collected or credited to the accounts of subscribers on reciprocal contracts in force that have more than one year to run less the amount of those premiums that is attributable to the expired portion of the contracts;

                             D    is the amount paid to licensed insurers to reinsure the reciprocal contacts referred to in C less the amount that is attributable to the expired portion of the reinsurance contracts.

RSA 2000 cI‑3 s99;2013 c18 s6

Temporary exclusion from premium calculation

99.1(1)  In this section, “premiums” means premiums collected or credited to the accounts of subscribers in respect of reciprocal contracts in force.

(2)  A reciprocal insurance exchange may provide for the assessment on its subscribers of a premium surcharge over and above the premiums required by section 88.

(3)  The premium surcharge may be assessed only during the year in which the reciprocal insurance exchange’s licence is initially issued and during the first full year of its renewal after its initial issue, except that the Minister may, on application by the exchange, extend the period of authorization of the surcharge for further one‑year periods until the 2nd anniversary of the end of that year in which the licence was initially issued.

(4)  The reciprocal insurance exchange may exclude the premium surcharges from “premiums” for the purpose of calculating the reserve fund requirements of section 99.

2003 c19 s33

Guarantee fund

100(1)  In addition to the reserve fund referred to in section 99, every reciprocal insurance exchange must maintain a guarantee fund in cash, approved securities or other prescribed assets in an amount calculated in accordance with the following formula:

(A – B – C – D) + E

where

                             A    is all liabilities associated with the operation of the exchange, including liabilities under reciprocal contracts undertaken by the exchange;

                             B    is any amount that is recoverable from licensed insurers that have reinsured reciprocal contracts referred to in the description of A;

                             C    is any amount that is recoverable from unlicensed reinsurers that have, with the prior approval of the Minister, reinsured reciprocal contracts referred to in the description of A;

                             D    is all unearned premiums;

                              E    is an amount set out in the regulations.

(2)  Cash, approved securities or other prescribed assets maintained in the reserve fund referred to in section 99 must not be included in the guarantee fund.

RSA 2000 cI‑3 s100;2013 c18 s7;2016 c23 s3

Deficiency

101(1)  If a reciprocal insurance exchange does not have the minimum amount required under sections 99 and 100, the subscribers or the principal attorney of the exchange must make up the deficiency forthwith.

(2)  If funds other than those that accrued from premiums of subscribers are supplied to make up a deficiency, the funds must, so long as a deficiency exists, be deposited and held for the benefit of subscribers under the terms and conditions specified by the Minister.

1999 cI‑5.1 s101

Investments

102(0.1)  Every reciprocal insurance exchange that has its principal office in Alberta must ensure that the funds of the exchange are invested in accordance with Part 2, Subpart 11 as if the exchange were a provincial company.

(1)  Every reciprocal insurance exchange that has its principal office in a province or territory other than Alberta must ensure that the funds of the exchange that are required by the laws of the province or territory in which the principal office is located to be invested

                           (a)    are invested in approved securities, and

                           (b)    are within the limits for investments established by the laws of that province or territory for reciprocal insurance exchanges.

(2)  Every reciprocal insurance exchange that has its principal office outside Canada must ensure that the funds of the exchange that are required by Part XIII of the Insurance Companies Act (Canada) to be invested

                           (a)    are invested in approved securities, and

                           (b)    are within the limits for investments established by Part XIII of the Insurance Companies Act (Canada).

RSA 2000 cI‑3 s102;2013 c18 s8

Contracts

103   No reciprocal insurance exchange may, without the approval of the Superintendent, undertake any liability on a reciprocal contract or on any other contract of insurance except on behalf of a subscriber.

RSA 2000 cI‑3 s103;2008 c19 s20

Reinsurance

104   No principal attorney or reciprocal insurance exchange may effect reinsurance of any risks undertaken by the exchange in any other reciprocal insurance exchange.

1999 cI‑5.1 s104

Suspension or cancellation of licence

105(1)  If a reciprocal insurance exchange or principal attorney fails or refuses to comply with or contravenes any provision of this Act or the regulations, the licence issued to the exchange may be suspended or cancelled by the Minister after notice and opportunity for a hearing before the Minister has been given to the exchange or its principal attorney.

(2)  A suspension or cancellation under subsection (1) does not affect the validity of any reciprocal contracts effected before the suspension or cancellation of the rights and obligations of subscribers under the contracts.

(3)  The principal attorney must give the subscribers notice of the suspension or cancellation and the Minister must publish notice of the suspension or cancellation in The Alberta Gazette.

1999 cI‑5.1 s105

Information to Minister

105.1   A licensed reciprocal insurance exchange must provide to the Minister, within the time specified by the Minister,

                           (a)    any information that is required by the Minister to enable the Minister to respond to inquiries on the exchange’s market conduct activities;

                           (b)    any information that is required by the Minister for analytical or policy‑making purposes.

2013 c18 s9

Regulations

106   The Lieutenant Governor in Council may make regulations

                           (a)    respecting the number of automobiles and limits for the purposes of section 82(2);

                           (b)    prescribing the amount for “C” for the purposes of section 100;

                           (c)    respecting any matter that is to be prescribed under this Subpart.

1999 cI‑5.1 s106

Part 2
Provincial Companies

Subpart 1
Status and Powers of
Provincial Companies

Capacity of provincial company

107(1)  Subject to this Act, the regulations, its bylaws and any term or condition in its instrument of incorporation or licence, a provincial company

                           (a)    has the capacity and the rights, powers and privileges of an individual, and

                           (b)    has the capacity to carry on its business, conduct its affairs and exercise its powers in any jurisdiction outside Alberta to the extent that the laws of that jurisdiction permit.

(2)  A provincial company must not

                           (a)    carry on business or exercise any right, power or privilege that it is prohibited from carrying on or exercising by this Act, the regulations, its bylaws or any term or condition in its instrument of incorporation or licence, or

                           (b)    exercise any of its rights, powers and privileges in a manner that contravenes this Act or the regulations.

1999 cI‑5.1 s107

Constructive notice

108   No person is affected by or is deemed to have notice or knowledge of the contents of a document concerning a provincial company by reason only that the document has been filed with the Minister or is available for inspection at an office of the company.

1999 cI‑5.1 s108

Authority of directors, officers and agents

109   A provincial company, a guarantor of an obligation of the company or a person claiming through the company must not assert against a person dealing with the company or dealing with any person who has acquired rights from the company

                           (a)    that the instrument of incorporation or bylaws have not been complied with,

                           (b)    that the persons named in the most recent notice of directors filed with the Minister under this Act are not the directors of the company,

                           (c)    that a person held out by the company as a director, an officer or an agent of the company

                                  (i)    has not been duly appointed, or

                                (ii)    has no authority to exercise a power or perform a duty that the director, officer or agent might reasonably be expected to exercise or perform,

                               or

                           (d)    that a document issued by any director, officer or agent of the company with actual or usual authority to issue the document is not valid or not genuine,

unless the person has, or by virtue of the person’s position with or relationship to the company ought to have, knowledge of those facts at the relevant time.

1999 cI‑5.1 s109

Main business

110(1)  Subject to this Act and the regulations, a provincial company must not engage in or carry on any business other than

                           (a)    the business of insurance, or

                           (b)    the business of providing financial services.

(2)  For the purposes of this Act, the business of insurance includes any activity that is reasonably ancillary to the business of insurance.

(3)  For the purposes of this Act, the business of providing financial services includes in respect of a provincial company

                           (a)    acting as a receiver, liquidator or sequestrator,

                           (b)    issuing payment, credit or charge cards and, in co‑operation with others including other financial institutions, operating a payment, credit or charge card plan,

                           (c)    providing real property brokerage services,

                           (d)    holding and otherwise dealing with real property,

                           (e)    providing information processing services 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,

                            (f)    promoting merchandise and services to the holders of any payment, credit or charge card issued by the company,

                           (g)    acting as a custodian of property,

                           (h)    acting as a trustee for a trust in respect of a prescribed class of transaction,

                            (i)    any of the activities referred to in section 111, and

                            (j)    with the consent of the Minister, any other activity that is reasonably ancillary to the business of providing financial services.

(4)  Subject to subsection (5), a provincial company must not carry on an activity that requires registration under the Securities Act.

(5)  A provincial company may carry on an activity that is regulated under the Securities Act if the Securities Act allows the company to carry on the activity without being registered under that Act.

1999 cI‑5.1 s110

Networking

111   A provincial company may

                           (a)    act as agent for any person in respect of the provision of any service that is provided by a financial institution or a body corporate in which the company is permitted to have a substantial investment,

                           (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 body corporate.

1999 cI‑5.1 s111

Life insurance

112   No provincial company may issue a contract of life insurance that does not appear to be self‑supporting on reasonable assumptions as to interest, mortality and expenses.

1999 cI‑5.1 s112

Security interests

113(1)  Subject to subsection (2), a provincial company must not create a security interest in any property of the company to secure an obligation of the company.

(2)  This section does not apply to the creation of a security interest

                           (a)    in relation to the reinsurance by the provincial company of risks insured by another insurer,

                           (b)    on prescribed classes of personal property or prescribed classes of transactions, or

                           (c)    on property having an aggregate value that is less than the prescribed amount.

1999 cI‑5.1 s113

Beneficial interests

114   A provincial company must not acquire any beneficial interest in property, other than by way of realization, that is subject to a security interest.

1999 cI‑5.1 s114

Debt obligations

115(1)  A provincial life company shall not, and shall not permit its prescribed subsidiaries to, enter into a debt obligation or issue any share, other than a common share, if as a result the aggregate of the total debt obligations and the market value of the prescribed shares of the company and its prescribed subsidiaries would exceed 20% of the total assets of the company and its prescribed subsidiaries.

(2)  A provincial property and casualty company shall not, and shall not permit its prescribed subsidiaries to, enter into a debt obligation or issue any share, other than a common share, if as a result the aggregate of the total debt obligations and the market value of the prescribed shares of the company and its prescribed subsidiaries would exceed 2% of the total assets of the company and its prescribed subsidiaries.

RSA 2000 cI‑3 s115;2008 c19 s21;2013 c18 s27

Guarantees

116(1)  A provincial company must not guarantee on behalf of any person other than itself 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 the fixed sum, 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.

(2)  Subsection (1) does not apply in respect of any indemnity referred to in section 365.

(3)  Subsection (1)(a) does not apply to a provincial life company where the person on whose behalf the provincial life company has undertaken to guarantee a payment or repayment is a subsidiary of the company and is primarily engaged in insuring risks that fall within a class of insurance that the company is authorized to insure.

1999 cI‑5.1 s116

Segregated Funds

Segregated funds restricted to life companies

117   A provincial property and casualty company must not

                           (a)    issue 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 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.

1999 cI‑5.1 s117

Where segregated funds required

118   A provincial life company that issues policies described in section 117 or accepts or retains amounts described in section 117 must, 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.

1999 cI‑5.1 s118

Creation and maintenance of segregated funds

119(1)  A provincial life company may transfer an amount to a separate account referred to in section 118(a) for the purpose of maintaining or establishing a segregated fund under section 118.

(2)  Subsection (1) is subject to the regulations and, in the case of a transfer from a participating account maintained pursuant to section 294, to the regulations under section 299.

1999 cI‑5.1 s119

Transfers from segregated funds

120   A provincial life company may, with the approval of the Minister, return the current value of an amount transferred pursuant to section 119 to the account from which the amount was transferred.

1999 cI‑5.1 s120

Claims against segregated funds

121   A claim against a segregated fund maintained pursuant to section 118 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.

1999 cI‑5.1 s121

Restriction of claims

122   The liability of a provincial life company under a policy or for an amount in respect of which a segregated fund is maintained pursuant to section 118

                           (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.

1999 cI‑5.1 s122

Regulations

Regulations

123   The Lieutenant Governor in Council may make regulations

                           (a)    respecting the business that a provincial company may engage in or carry on;

                           (b)    respecting the disclosure of

                                  (i)    the name of the principal for whom a provincial company is acting as agent pursuant to section 111, and

                                (ii)    whether any commission is being earned by a provincial company when acting as agent pursuant to section 111;

                           (c)    respecting the transfer of amounts in respect of a segregated fund for the purposes of section 119;

                           (d)    respecting any matter that is to be prescribed under this Subpart.

1999 cI‑5.1 s123

Subpart 2
Incorporation, Fundamental Changes and Dissolution of Provincial Companies

Alberta insurers

124(1)  No insurer may be incorporated, amalgamated or continued in Alberta unless it is incorporated, amalgamated or continued under this Act.

(2)  No fraternal society may be incorporated or continued under the laws of Alberta.

RSA 2000 cI‑3 s124;2009 c9 s6

Division 1
Incorporation

Application

125(1)  One or more persons who wish to incorporate a provincial company must submit an application to the Minister that contains the following:

                           (a)    the information, material and evidence specified by the Minister;

                           (b)    a plan for the future conduct and development of the business of the company;

                           (c)    its proposed financial year;

                           (d)    the location of the head office of the company in Alberta;

                           (e)    the names of the first directors of the company.

(2)  After filing an application for incorporation, the applicants must

                           (a)    provide to the Minister any additional information, material and evidence the Minister considers necessary, and

                           (b)    publish a notice of the application, containing any information that the Minister specifies, in The Alberta Gazette and in a newspaper having general circulation in the place where the head office of the provincial company is to be located.

(3)  Any person who objects to the proposed incorporation of a provincial company may, within 30 days after the date of publication of the notice in The Alberta Gazette under subsection (2), submit an objection in writing to the Minister.

(4)  On receipt of an objection under subsection (3), the Minister may direct that a public hearing into the objection be held.

(5)  The Minister may make rules governing the proceedings at public hearings held under subsection (4), and the Regulations Act does not apply to the rules.

(6)  On the completion of the hearing, the Minister must ensure that a report of the hearing is made available to the public.

1999 cI‑5.1 s125

Factors to be considered

126   Before recommending that a provincial company be incorporated, the Minister must 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 applicants as a source of continuing financial support for the company,

                           (b)    the soundness and feasibility of the plan for the future conduct and development of the business of the company,

                           (c)    the business record and experience of the applicants, and

                           (d)    whether the company will be operated by persons who are fit as to character or who have the competence and experience suitable for involvement in the operation of an insurer.

1999 cI‑5.1 s126

Incorporation

127   The Lieutenant Governor in Council may, on the application of one or more persons and on the recommendation of the Minister, incorporate a provincial company by issuing a certificate of incorporation.

1999 cI‑5.1 s127

Contents of certificate of incorporation

128(1)  The certificate of incorporation of a provincial company must set out the name of the company, its financial year and whether the company is a mutual provincial company.

(2)  The Lieutenant Governor in Council may set out in the certificate of incorporation of a provincial company any term or condition not contrary to this Act that the Lieutenant Governor in Council considers advisable to deal with the particular circumstances of the company.

1999 cI‑5.1 s128

Notice of incorporation

129   The Minister must publish a notice of the incorporation of a provincial company in The Alberta Gazette.

1999 cI‑5.1 s129

First directors

130   The first directors of a provincial company are the directors named in the application for incorporation.

1999 cI‑5.1 s130

Effective date of incorporation

131(1)  A provincial company comes into existence and is incorporated on the date set out in its certificate of incorporation.

(2)  A certificate of incorporation is conclusive proof for the purposes of this Act and for all other purposes

                           (a)    that the provisions of this Act in respect of incorporation and all requirements precedent and incidental to incorporation have been complied with, and

                           (b)    that the provincial company has been incorporated under this Act on the date set out in the certificate of incorporation.

1999 cI‑5.1 s131

Division 2
Organization and Commencement
after Incorporation

First directors meeting

132(1)  After a provincial company is incorporated, the directors of the company must hold a meeting.

(2)  At that meeting the directors may, subject to this Subpart,

                           (a)    make bylaws,

                           (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 first meeting of shareholders,

                            (f)    make banking arrangements, and

                           (g)    deal with any other matters necessary to organize the company.

(3)  An incorporator or a director of the provincial company may call the meeting referred to in subsection (1) by giving not less than 5 days’ notice to each director, stating the time and place of the meeting.

1999 cI‑5.1 s132

Calling shareholders meeting

133(1)  When the base capital of a provincial company reaches the amount required under section 25, the directors of the company must forthwith call a meeting of

                           (a)    the shareholders of the company, in the case of a company that is not a mutual provincial company, or

                           (b)    the incorporators of the company, in the case of a mutual provincial company.

(2)  The shareholders or incorporators of a provincial company must, by resolution at the meeting called pursuant to subsection (1),

                           (a)    approve, amend or reject any bylaw made by the directors of the company,

                           (b)    elect directors to hold office for a term expiring not later than the close of the first annual meeting of shareholders following the election or, in the case of a mutual provincial company, not later than the close of the first annual meeting of policyholders following the election, and

                           (c)    appoint an auditor to hold office until the close of the first annual meeting of shareholders or, in the case of a mutual provincial company, until the close of the first annual meeting of policyholders.

1999 cI‑5.1 s133

Term of first directors

134   A director named in the application for incorporation of a provincial company holds office until the election of directors at the meeting of shareholders or incorporators referred to in section 133(1).

1999 cI‑5.1 s134

Carrying on of business

135   Except as permitted in sections 136 and 137, a provincial company must not carry on any business until it is licensed under this Act.

1999 cI‑5.1 s135

Expenses charged to capital

136   A provincial company must pay all incorporation and organization expenses from the capital of the company or interest on the capital and the company must not charge directly or indirectly its policyholders for those expenses.

1999 cI‑5.1 s136

No payments until licensed

137   Until a provincial company is licensed under this Act, the company must not make any payment on account of incorporation or organization expenses except reasonable sums

                           (a)    for the payment of remuneration of not more than 2 officers,

                           (b)    for the payment of costs related to the issue of shares of the company, 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.

1999 cI‑5.1 s137

Deposits and investments

138   Until a provincial company is licensed under this Act, the company may

                           (a)    deposit its capital and interest on the capital only in a deposit‑taking institution, and

                           (b)    invest its capital and interest on the capital only in securities issued or guaranteed by the Government of Canada or any province or territory.

1999 cI‑5.1 s138

Time limit to acquire licence

139   If a provincial company does not become licensed within one year after it comes into existence or within any further period that the Minister may on application allow,

                           (a)    its directors must forthwith take all reasonable steps to ensure that the company is dissolved under Division 11, and

                           (b)    the company must not carry on any business or activity except for the sole purpose of dissolving the company.

1999 cI‑5.1 s139

Allowed disbursements

140(1)  If the directors of a provincial company are required under section 139 to take all reasonable steps to ensure that the company is dissolved, no part of the capital of the company or interest on the capital may be used for the payment of incorporation and organization expenses, other than remuneration and costs referred to in section 137, unless the payment has been approved by a special resolution.

(2)  If the amount of a payment approved by a special resolution for the payment of any incorporation and organization expenses is considered insufficient by the directors or if no special resolution for the payment of such expenses is passed, the directors may apply to the Court to settle and determine the amounts to be paid out of the capital of the company and interest on the capital before distribution of the balance to the shareholders or, where there are no shareholders, to the incorporators.

(3)  The directors must, at least 21 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 must contain a statement of the amounts that are proposed to be settled and determined by the Court.

(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 must, after the amounts of the payments have been approved by special resolution or settled and determined by the Court, fix the proportionate part of the amount of the payment chargeable to each shareholder or incorporator in the ratio of the amount paid in by each shareholder or incorporator to the aggregate of all the amounts paid in by all the shareholders or incorporators.

(5)  After the amounts referred to in this section have been paid, the directors must pay to the shareholders or incorporators the respective balances of the money paid in by them together with any interest earned on that money, less the amount chargeable to each shareholder or incorporator under subsection (4).

1999 cI‑5.1 s140

Division 3
Continuance into Alberta

Restriction on continuance

141   Despite anything in this Division, no insurer formed outside Canada may be continued as a provincial company under this Act.

1999 cI‑5.1 s141

Continuance from another jurisdiction

142   A federally authorized company or an extra‑provincial company may be continued as a provincial company if

                           (a)    the company submits an application to the Minister,

                           (b)    the continuance of the company is authorized under the Act under which the company is incorporated,

                           (c)    the applicant meets the requirements for incorporation under this Act,

                           (d)    the Minister has received evidence showing the proposed continuance has been approved in conformity with the laws of the jurisdiction in which the company was incorporated,

                           (e)    the Minister is satisfied that continuance as a provincial company will not adversely affect the policyholders, security holders or creditors of the company, and

                            (f)    the company intends to undertake the classes of insurance in Alberta that it was authorized to undertake in the jurisdiction in which it was incorporated.

1999 cI‑5.1 s142

Certificate of continuance

143(1)  The Lieutenant Governor in Council may, on the recommendation of the Minister, issue a certificate of continuance continuing a federally authorized company or an extra‑provincial company as a provincial company.

(2)  The certificate of continuance must set out the name of the company, its financial year and whether the company is a mutual provincial company.

(3)  The Lieutenant Governor in Council may set out in the certificate of continuance any term or condition that the Lieutenant Governor in Council considers advisable to deal with the particular circumstances of the company.

1999 cI‑5.1 s143

Effect of certificate of continuance

144(1)  On the date set out in the certificate of continuance continuing a federally authorized company or an extra‑provincial company as a provincial company,

                           (a)    the company becomes a provincial company as if it had been incorporated under Division 1, and

                           (b)    the certificate of continuance is the instrument of incorporation of the continued company.

(2)  A certificate of continuance is conclusive proof for the purposes of this Act and for all other purposes

                           (a)    that the provisions of this Act in respect of continuance and all requirements precedent and incidental to continuance have been complied with, and

                           (b)    that the provincial company has been continued under this Act on the date set out in the certificate of continuance.

1999 cI‑5.1 s144

Notice of continuance

145(1)  The Minister must publish a notice of the continuance of a federally authorized company or an extra‑provincial company in The Alberta Gazette.

(2)  When a federally authorized company or an extra‑provincial company is continued as a provincial company, the Minister must forthwith send a copy of the certificate of continuance to the appropriate official or public body in the jurisdiction in which the federally authorized company or extra‑provincial company was authorized to apply to be continued under this Division.

1999 cI‑5.1 s145

Effects of continuance

146   When a federally authorized company or an extra‑provincial company (referred to as the “body corporate”) is continued as a provincial company under this Division,

                           (a)    the property of the body corporate continues to be the property of the provincial company,

                           (b)    the provincial 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 provincial company,

                           (e)    a conviction against or ruling, order or judgment in favour of or against the body corporate may be enforced by or against the provincial company,

                            (f)    a person who, on the day the body corporate becomes a provincial company, was 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 the security, but any such right or privilege may be exercised only in accordance with this Act, and

                           (g)    the bylaws of the body corporate, except those bylaws that are in conflict with this Act, continue as the bylaws of the provincial company.

1999 cI‑5.1 s146

Division 4
Continuance out of Alberta

Continuance in another jurisdiction

147(1)  Subject to section 148, a provincial company may, if

                           (a)    the proposed continuance is approved by a special resolution of the participating policyholders and shareholders, and

                           (b)    the Minister approves the proposed continuance on being satisfied that the continuance will not adversely affect the policyholders, security holders or creditors of the company,

apply to the appropriate official or public body of another jurisdiction requesting that the company be continued in that other jurisdiction as if it had been incorporated under the laws of that other jurisdiction.

(2)  The directors of the provincial company must submit the proposed continuance to a meeting of the participating policyholders and shareholders for approval.

(3)  The directors must give notice of the meeting and particulars of the proposed continuance

                           (a)    in accordance with section 270, and

                           (b)    to the Minister at least 21 days before the meeting.

(4)  The provincial company must advise the Minister if the special resolution approving the continuance is passed.

1999 cI‑5.1 s147

Requirements for other jurisdictions law

148   A provincial company may be continued as a body corporate under the laws of another jurisdiction only if those laws provide in effect that, if the company is continued,

                           (a)    the property of the provincial company continues to be the property of the body corporate,

                           (b)    the body corporate continues to be liable for the obligations of the provincial company,

                           (c)    an existing cause of action, claim or liability to prosecution is unaffected by the continuance,

                           (d)    a civil, criminal or administrative action or proceeding pending by or against the provincial company may continue to be prosecuted by or against the body corporate, and

                           (e)    a conviction against or ruling, order or judgment in favour of or against the provincial company may be enforced by or against the body corporate.

1999 cI‑5.1 s148

Abandoning application

149   The directors of a provincial company may, if authorized by the participating policyholders and shareholders at the time of approving a proposed continuance under this Division, abandon the application for continuance without further approval of the participating policyholders or shareholders.

1999 cI‑5.1 s149

Certificate of discontinuance

150(1)  On receipt of notice satisfactory to the Minister that the provincial company has been continued under the laws of another jurisdiction, the Minister must file the notice and issue a certificate of discontinuance, and the continued company is no longer a provincial company.

(2)  The Minister must publish a notice of the certificate of discontinuance in The Alberta Gazette.

1999 cI‑5.1 s150

Division 5
Mutualization

Conversion into mutual provincial company

151(1)  On the application of a provincial company, the Minister may issue a certificate converting the provincial company into a mutual provincial company.

(2)  The Minister must not issue the certificate unless the requirements of the regulations have been met.

1999 cI‑5.1 s151

Regulations

152   The Lieutenant Governor in Council may make regulations respecting mutualization proposals and procedures and requirements that must be met before a provincial company may be converted into a mutual provincial company.

1999 cI‑5.1 s152

Payment

153   Despite anything in this Act, a provincial company may, with the approval of the Minister, 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 10 years after the date of its making or their issue, or

                           (b)    issuing shares that a mutual provincial company may issue.

1999 cI‑5.1 s153

Division 6
Demutualization

Conversion into provincial company with common shares

154(1)  On the application of a mutual provincial company, the Minister may issue a certificate converting the mutual provincial company into a provincial company with common shares.

(2)  The Minister must not issue the certificate unless the requirements of the regulations have been met.

(3)  On the day that the certificate becomes effective the policyholders of the company cease to have any rights with respect to the company as a mutual provincial company or any interest in the company as a mutual provincial company.

1999 cI‑5.1 s154

Regulations

155(1)  The Lieutenant Governor in Council may make regulations

                           (a)    respecting demutualization proposals and procedures and requirements that must be met before a mutual provincial company may be converted into a provincial company with common shares;

                           (b)    governing the ownership of shares issued by a mutual provincial company that has been converted into a provincial company with common shares.

(2)  A regulation made under this section may provide that the Minister may, by order, on such terms and conditions as the Minister considers appropriate, exempt a provincial company from prescribed requirements of that regulation.

(3)  The Minister may, on such terms and conditions as the Minister considers appropriate, exempt a mutual provincial company from any requirement of this Act or the regulations if

                           (a)    the company is applying 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.

1999 cI‑5.1 s155

Division 7
Change of Name, Financial Year and Terms and Conditions

Change of name and financial year

156(1)  On the application of a provincial company authorized by special resolution, the Minister may issue a certificate

                           (a)    changing the name of the company, or

                           (b)    changing the financial year of the company.

(2)  Before an application is made under subsection (1) to change the name of a provincial company, a notice of intention to make the application must be published by the applicant in The Alberta Gazette and in a newspaper in general circulation in the place where the head office of the company is located.

1999 cI‑5.1 s156

Changing terms and conditions

157   On the application of a provincial company authorized by special resolution, the Lieutenant Governor in Council may issue a certificate adding, changing or removing any term or condition that is set out in the company’s instrument of incorporation.

1999 cI‑5.1 s157

Proposal to amend

158(1)  Subject to subsection (2), a director or a participating policyholder or shareholder of a provincial company may, in accordance with sections 274 and 275, make a proposal to make an application referred to in section 156 or 157.

(2)  Notice of a meeting of participating policyholders or shareholders at which a proposal to amend the instrument of incorporation is to be considered must set out the proposal.

1999 cI‑5.1 s158

Division 8
Amalgamation

Amalgamation

159(1)  Two or more provincial companies may amalgamate under this Division to become one provincial company.

(2)  One or more provincial companies may amalgamate under this Division with one or more extra‑provincial or federally authorized companies that are licensed under this Act to become one provincial company.

(3)  Despite anything in this Division, no insurer formed outside Canada may be amalgamated under this Act.

1999 cI‑5.1 s159

Amalgamation agreement

160(1)  The companies proposing to amalgamate must enter into an amalgamation agreement.

(2)  An amalgamation agreement does not take effect until the Minister’s approval under section 161 and the participating policyholders’ and shareholders’ approval under section 163 have been obtained.

1999 cI‑5.1 s160

Ministers approval

161(1)  Before an amalgamation agreement is submitted for participating policyholders’ and shareholders’ approval under section 163, the agreement must be submitted to the Minister for approval, and any participating policyholders’ or shareholders’ approval under section 163 is invalid if it is obtained prior to the Minister’s approval.

(2)  An amalgamation agreement submitted to the Minister for approval must be accompanied with the report of an independent actuary on the agreement.

(3)  The Minister must not approve the amalgamation agreement unless the Minister is satisfied that

                           (a)    the agreement meets the requirements of the regulations,

                           (b)    the laws of the jurisdiction in respect of each company that is proposing to amalgamate permit the proposed amalgamation, and the proposed amalgamation has obtained the approvals required under the laws of those jurisdictions, and

                           (c)    the requirements of the regulations for amalgamation have been met.

1999 cI‑5.1 s161

Regulations

162   The Lieutenant Governor in Council may make regulations

                           (a)    respecting the requirements for amalgamation agreements;

                           (b)    respecting requirements that must be met before companies may be amalgamated under this Division.

1999 cI‑5.1 s162

Policyholder and shareholder approval

163(1)  In this section, “company” means a company that is proposing to amalgamate under this Division.

(2)  The directors of each company must submit an amalgamation agreement for  approval to a meeting of the participating policyholders and shareholders of the company of which they are directors and, subject to subsection (4), to the holders of each class or series of shares.

(3)  Each share of a company carries the right to vote in respect of an amalgamation whether or not it otherwise carries the right to vote.

(4)  The holders of shares of a class or series of shares of a company are entitled to vote separately as a class or series in respect of an amalgamation if the amalgamation agreement contains a provision that, if contained in a proposed amendment to the bylaws or instrument of incorporation of the company, would entitle those holders to vote separately as a class or series.

(5)  Participating policyholders are entitled to vote separately from shareholders in respect of an amalgamation agreement.

(6)  Subject to subsections (4) and (5), an amalgamation agreement is approved when the participating policyholders and shareholders of each company have approved the amalgamation by special resolution.

(7)  An amalgamation agreement may provide that, at any time before the issue of a certificate of amalgamation, the agreement may be terminated by the directors of a company even though the agreement has been approved by the participating policyholders or shareholders of all or any of the companies that are proposing to amalgamate.

1999 cI‑5.1 s163

Joint application to Minister

164(1)  Subject to subsection (2), unless an amalgamation agreement is terminated in accordance with section 163(7), companies that are proposing to amalgamate must, within 3 months after the Minister approves their amalgamation agreement, jointly apply to the Minister for a certificate of amalgamation continuing the companies as one provincial company.

(2)  No application for the issue of a certificate of amalgamation may be made unless

                           (a)    notice of intention to make such an application has been published in The Alberta Gazette and in a newspaper in general circulation in the place where the head office of each applicant is located, and

                           (b)    the application is supported by satisfactory evidence that the applicants have complied with the requirements of this Division and the regulations relating to amalgamation.

1999 cI‑5.1 s164

Certificate of amalgamation

165(1)  Where an application has been made to the Minister in accordance with section 164, the Lieutenant Governor in Council may issue a certificate of amalgamation continuing the applicants as one provincial company.

(2)   Section 128 applies with such modifications as the circumstances require when a certificate of amalgamation is issued pursuant to this section.

(3)  The Minister must publish notice of the issuance of the certificate of amalgamation in The Alberta Gazette.

1999 cI‑5.1 s165

Effect of certificate

166(1)  On the date set out in the certificate of amalgamation issued under section 165,

                           (a)    the amalgamation of the applicants and their continuance as one provincial company are effective;

                           (b)    the property of each applicant is the property of the amalgamated company;

                           (c)    the amalgamated company is 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 prosecuted by or against the amalgamated 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 company;

                           (g)    if any director or officer of an applicant continues as a director or officer of the amalgamated company, any disclosure of a material interest in any contract made to the applicant by that director or officer is deemed to be disclosure to the amalgamated company;

                           (h)    the certificate of amalgamation is the instrument of incorporation of the amalgamated company.

(2)  Any deemed disclosure under subsection (1)(g) must be recorded in the minutes of the first meeting of the directors of the amalgamated company.

1999 cI‑5.1 s166

Transitional

167(1)  Despite anything in this Act or the regulations, the Minister may grant to a company in respect of which a certificate of amalgamation has been issued under this Division permission

                           (a)    to engage in a business activity that a provincial company is not otherwise permitted by this Act to engage in and that one or more of the amalgamating companies was engaging in at the time the application for the certificate was made,

                           (b)    to 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 certificate was made,

                           (c)    to hold assets that a provincial company is not otherwise permitted by this Act to hold if the assets were held by one or more of the amalgamating companies at the time the application for the certificate was made,

                           (d)    to acquire and hold assets that a provincial company is not otherwise permitted by this Act to acquire or hold if one or more of the amalgamating companies was obliged, at the time the application for the certificate was made, to acquire those assets, and

                           (e)    to maintain outside Canada any records or registers required by this Act to be maintained in Canada and maintain and process, outside Canada, information and data relating to the preparation and maintenance of such records or registers.

(2)  The permission granted under subsection (1) must be expressed to be granted for a specific period not exceeding

                           (a)    with respect to any matter described in subsection (1)(a), 30 days after the date of issue of the certificate or, where the activity is conducted pursuant to an agreement existing on the date of issue of the certificate, the expiration of the agreement,

                           (b)    with respect to any matter described in subsection (1)(b), 10 years, and

                           (c)    with respect to any matter described in subsection (1)(c), (d) or (e), 2 years.

(3)  Subject to subsection (4), the Minister may renew a permission granted under subsection (1) with respect to any matter described in subsection (1)(b), (c) or (d) for such further period or periods as the Minister considers necessary.

(4)  The Minister must not grant to a provincial company any permission

                           (a)    with respect to matters described in subsection (1)(b) that purports to be effective more than 10 years after the amalgamation became effective unless the Minister is satisfied on the basis of evidence on oath provided by an officer of the company that the company will not be able at law at the end of the 10 years to redeem the outstanding debt obligations to which the permission relates, and

                           (b)    with respect to matters described in subsection (1)(c) and (d), that purports to be effective more than 10 years after the amalgamation became effective.

1999 cI‑5.1 s167

Notice to other jurisdiction

168   When a federally authorized company or an extra‑provincial company is amalgamated with a provincial company under this Division, the Minister must forthwith send a copy of the certificate of amalgamation to the appropriate official or public body in the jurisdiction in which the federally authorized company or extra‑provincial company was authorized to apply to be amalgamated under this Division.

1999 cI‑5.1 s168

Division 9
Provincial Company Amalgamating Under the Laws of Another Jurisdiction

Amalgamation agreement

169(1)  A provincial company proposing to amalgamate with one or more companies under the laws of another jurisdiction must enter into an amalgamation agreement with the other companies.

(2)  A provincial company must not proceed with an amalgamation referred to in subsection (1) unless the Minister approves the amalgamation agreement.

1999 cI‑5.1 s169

Notice of intention

170(1)  Before an amalgamation agreement referred to in section 169 is made, a notice of intention to make the agreement must be published

                           (a)    in The Alberta Gazette, and

                           (b)    in a newspaper in general circulation in the place where the head office of the provincial company is located,

stating the date on or after which the application will be made to the Minister to approve the agreement, that date being at least 30 days after the date of publication of the notice.

(2)  Where a provincial company publishes a notice referred to in subsection (1), the Minister may direct the company to provide its policyholders and shareholders with the information the Minister specifies.

(3)  Where a provincial company publishes a notice referred to in subsection (1), the company must make the proposed agreement to which the notice relates available for inspection by the policyholders and shareholders of the company at the head office of the company for a period of at least 30 days after the publication of the notice and provide a copy of the agreement to any policyholder or shareholder who sends a request in writing to the head office of the company.

(4)  Where the Minister is of the opinion that it is in the best interests of a group of policyholders affected by an agreement, the Minister may shorten the periods of 30 days referred to in subsections (1) and (3).

(5)  The Minister may designate a professional advisor to evaluate the agreement and the provincial company that is proposing to enter into the agreement must provide any assistance required by the professional advisor to enable the advisor to complete the evaluation.

(6)  The remuneration and expenses of the professional advisor for carrying out the evaluation under subsection (5) are payable by the provincial company on being approved by the Minister.

1999 cI‑5.1 s170

Participating policyholder and shareholder  approval

171(1)  A provincial company proposing to make an amalgamation agreement referred to in section 169 must submit the proposed agreement for approval at a meeting of the participating policyholders and shareholders and, subject to subsection (3), to the holders of each class or series of shares.

(2)  Each share of the provincial company carries the right to vote in respect of a proposed agreement whether or not the share otherwise carries the right to vote.

(3)  The holders of shares of a class or series of shares of a provincial company are entitled to vote separately as a class or series in respect of a proposed agreement submitted under subsection (1) if the effect of the agreement on the shares of the class or series is different from the effect on the shares of another class or series.

(4)  Participating policyholders are entitled to vote separately from shareholders in respect of an agreement.

(5)  For the purpose of subsection (1), and subject to subsections (3) and (4), an agreement is approved when the participating policyholders and shareholders have approved the agreement by special resolution.

1999 cI‑5.1 s171

Abandoning voting agreement

172   Where a special resolution approving an amalgamation agreement under section 171(5) so states, the directors of a provincial company may, subject to the rights of third parties, abandon the agreement without further approval of the participating policyholders and shareholders.

1999 cI‑5.1 s172

Application to Minister

173(1)  Unless an amalgamation agreement is abandoned in accordance with section 172, a provincial company referred to in section 171(1) must, within 3 months after the agreement has been approved in accordance with section 171(5), apply to the Minister for approval of the agreement.

(2)  An amalgamation agreement has no force or effect until it has been approved by the Minister.

1999 cI‑5.1 s173

Certificate of discontinuance

174(1)  On receipt of a notice satisfactory to the Minister that a provincial company has been amalgamated under the laws of another jurisdiction, the Minister must file the notice and issue a certificate of discontinuance, and the amalgamated company is no longer a provincial company.

(2)  The Minister must publish a notice of the certificate of discontinuance in The Alberta Gazette.

1999 cI‑5.1 s174

Division 10
Transfer of Business and
Fundamental Reinsurance

Interpretation

175(1)  In this Division, “Division 10 agreement” means an agreement in which an insurer

                           (a)    fundamentally reinsures any of its contracts of insurance,

                           (b)    fundamentally reinsures any of the contracts of insurance of any other insurer, or

                           (c)    sells all or substantially all of its assets.

(2)  In this Division, a contract of insurance is fundamentally reinsured if

                           (a)    the insurer under the contract transfers or assigns all rights and obligations under the contract to another insurer, or

                           (b)    the contract is replaced by novation and the insurer under the replacement contract is different from the insurer under the original contract.

1999 cI‑5.1 s175

Notice of intention

176(1)  Before a provincial company enters into a Division 10 agreement, the company must publish a notice of intention to enter into the agreement

                           (a)    in The Alberta Gazette, and

                           (b)    in a newspaper in general circulation in the place where the head office of the provincial company is located,

stating the date on or after which the application will be made to the Minister to approve the agreement, that date being at least 30 days after the date of publication of the notice.

(2)  Where a provincial company publishes a notice referred to in subsection (1), the Minister may direct the company to provide its policyholders and shareholders with the information the Minister specifies.

(3)  Where a provincial company publishes a notice referred to in subsection (1), the company must make the proposed agreement to which the notice relates available for inspection by the policyholders and shareholders of the company at the head office of the company for a period of at least 30 days after the publication of the notice and provide a copy of the agreement to any policyholder or shareholder who sends a request in writing to the head office of the company.

(4)  Where the Minister is of the opinion that it is in the best interests of a group of policyholders affected by an agreement, the Minister may shorten the periods of 30 days referred to in subsections (1) and (3).

(5)  The Minister may designate a professional advisor to evaluate the agreement, and the provincial company that is proposing to enter into the agreement must provide any assistance required by the professional advisor to enable the advisor to complete the evaluation.

(6)  The remuneration and expenses of the professional advisor for carrying out the evaluation under subsection (5) are payable by the provincial company on being approved by the Minister.

1999 cI‑5.1 s176

Participating policyholder and shareholder approval

177(1)  A provincial company proposing to make a Division 10 agreement must submit the proposed agreement for approval at a meeting of the participating policyholders and shareholders and, subject to subsection (3), to the holders of each class or series of shares.

(2)  Each share of the provincial company carries the right to vote in respect of a proposed agreement whether or not the share otherwise carries the right to vote.

(3)  The holders of shares of a class or series of shares of a provincial company are entitled to vote separately as a class or series in respect of a proposed agreement submitted under subsection (1) if the effect of the agreement on the shares of the class or series is different from the effect on the shares of another class or series.

(4)  Participating policyholders are entitled to vote separately from shareholders in respect of an agreement.

(5)  For the purpose of subsection (1), and subject to subsections (3) and (4), an agreement is approved when the participating policyholders and shareholders have approved the agreement by special resolution.

1999 cI‑5.1 s177

Abandoning agreement

178   Where a special resolution approving a Division 10 agreement under section 177(5) so states, the directors of a provincial company may, subject to the rights of third parties, abandon the agreement without further approval of the participating policyholders and shareholders.

1999 cI‑5.1 s178

Application to Minister

179(1)  Unless a Division 10 agreement is abandoned in accordance with section 178, a provincial company referred to in section 177(1) must, within 3 months after the agreement has been approved in accordance with section 177(5), apply to the Minister for approval of the agreement.

(2)  A Division 10 agreement in which a provincial company is a party has no force or effect until it has been approved by the Minister.

(3)  The Minister must not approve a Division 10 agreement if the reinsuring or purchase or sale of assets would cause any provincial company that would be a party to the agreement to be in contravention of the capital adequacy or liquidity requirements of Subpart 10.

1999 cI‑5.1 s179

Federal and extra-provincial companies

180(1)  A licensed federally authorized company or extra‑provincial company that enters into a Division 10 agreement to fundamentally reinsure any of its contracts of insurance that are made in Alberta with another licensed federally authorized company or extra‑provincial company must provide a copy of the agreement to the Minister.

(2)  A Division 10 agreement referred to in subsection (1) does not affect contracts of insurance that are made in Alberta until the Division 10 agreement has been provided to the Minister.

(3)  The Minister may require a licensed federal or extra‑provincial company that is fundamentally reinsuring contracts of insurance made in Alberta to notify, in a form and manner satisfactory to the Minister, the policyholders under those contracts of the fundamental reinsurance.

1999 cI‑5.1 s180

Division 11
Dissolution and Revival

Application

181  This Division does not apply to a mutual provincial company.

1999 cI‑5.1 s181

Insolvent provincial companies

182(1)  This Division does not apply to a provincial company that is insolvent within the meaning of that term in the Winding‑up and Restructuring Act (Canada).

(2)  Any proceedings taken under this Division to dissolve or to liquidate and dissolve a provincial company must be stayed if the company is at any time found to be insolvent within the meaning of that term in the Winding‑up and Restructuring Act (Canada).

1999 cI‑5.1 s182

Returns to Minister

183  A liquidator appointed under this Division to wind up the business of a provincial company must provide the Minister with the information relating to the business and affairs of the company in the form the Minister requires.

1999 cI‑5.1 s183

Simple Dissolution

No property and no liabilities

184(1)  A provincial 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 a certificate dissolving the company.

(2)  The Minister may require a provincial company that has applied for a certificate of dissolution to publish a notice of the application in The Alberta Gazette that contains any information that the Minister specifies.

(3)   Where the Minister has received an application under subsection (1) and is satisfied that all the circumstances so warrant, the Lieutenant Governor in Council may issue a certificate of dissolution that dissolves the provincial company.

(4)  A provincial company is dissolved and ceases to exist on the date stated in the certificate of dissolution.

1999 cI‑5.1 s184

Property and liabilities

185(1)  The voluntary liquidation and dissolution of a provincial company that has property or has property and liabilities

                           (a)    may be proposed by its directors, or

                           (b)    may be initiated in accordance with sections 274 and 275 by way of a proposal made by a shareholder who is entitled to vote at an annual meeting of shareholders.

(2)  A notice of any meeting of shareholders at which the voluntary liquidation and dissolution of a provincial company is to be proposed must set out the terms of the proposal.

1999 cI‑5.1 s185

Application

186   Where the voluntary liquidation and dissolution of a provincial company is proposed under section 185, the company may apply to the Minister for a certificate 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.

1999 cI‑5.1 s186

Approval of Minister required

187(1)  No action directed toward the voluntary liquidation and dissolution of a provincial company under section 185 may be taken by a company until an application made by the company in accordance with section 186 has been approved by the Minister.

(2)  The Minister may approve an application made pursuant to section 186 where the Minister is satisfied on the basis of the application that

                           (a)    the circumstances warrant the voluntary liquidation and dissolution of the provincial company, and

                           (b)    the company, in accordance with the provisions of Division 10,

                                  (i)    has transferred or will be transferring all or substantially all of its policies, or

                                (ii)    has reinsured or will be reinsuring itself against all or substantially all of the risks undertaken by it.

(3)   Where the Minister has approved an application under section 186 with respect to a provincial company, the company must not carry on business except to the extent necessary to complete its voluntary liquidation.

(4)  Where the Minister has approved an application under section 186 with respect to a provincial company, the company must

                           (a)    cause notice of the approval to be sent to each known claimant against and creditor of the company, except policyholders,

                           (b)    publish notice of the approval in The Alberta Gazette and in a newspaper having general circulation in the place where the head office of the company is located and take reasonable steps to give notice of the approval of the application in each province or territory in which the company transacted any business within the preceding 12 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,

                           (d)    transfer its remaining policies, or reinsure itself against the remaining risks undertaken by it, and

                           (e)    after giving the notice required under clauses (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.

1999 cI‑5.1 s187

Certificate of dissolution

188(1)  Unless the Court has made an order in accordance with section 189, 190 or 191, the Lieutenant Governor in Council may, if satisfied that the provincial company has complied with section 187(4) and that all the circumstances so warrant, issue a certificate of dissolution that dissolves the company.

(2)  A provincial company is dissolved and ceases to exist on the date stated in the certificate of dissolution.

1999 cI‑5.1 s188

Court Supervised Liquidation

Court supervision — voluntary liquidation

189(1)  The Minister or any interested person may, at any time during the voluntary liquidation of a provincial company, apply to the Court for an order directing that the company be wound up subject to the supervision of the Court in accordance with this section and sections 192 to 203, and on such application the Court may so order and make any further order it thinks fit.

(2)  An application under subsection (1) to the Court for supervision of a voluntary liquidation must state the reasons, verified by an affidavit of the applicant, why the Court should supervise the liquidation.

(3)  Where a person other than the Minister makes an application under subsection (1), the person must give the Minister notice of the application, and the Minister may appear and be heard in person or by counsel at the hearing of the application.

1999 cI‑5.1 s189

Court supervision — involuntary liquidation

190(1)  The Minister or any interested person may, for the reasons referred to in subsection (2), apply to the Court for an order directing that a provincial company be wound up subject to the supervision of the Court in accordance with this section and sections 192 to 203.

(2)  The Court may so order and make any further order it sees fit if the Court is satisfied that

                           (a)    the company has failed to exercise its corporate powers for any continuous period of 4 years,

                           (b)    the company has not commenced business or gone into actual operation within 4 years after it was incorporated,

                           (c)    the company has discontinued business for one year after it has undertaken insurance contracts within the meaning of this Act,

                           (d)    the company’s licence has been suspended for one year or more,

                           (e)    the company has contravened this Act or the regulations and it is in the public interest that the company be wound up, or

                            (f)    other sufficient cause has been shown.

1999 cI‑5.1 s190

Application by provisional  liquidator

191(1)  A provisional liquidator of a provincial company appointed under section 57(1) must apply to the Court for an order directing that the provincial company be wound up subject to the supervision of the Court in accordance with this section and sections 192 to 203 and for an order appointing a permanent liquidator.

(2)  The Court may so order and may make any further order it sees fit.

1999 cI‑5.1 s191

Effect of Court supervision

192(1)  When the Court makes an order under section 189, 190 or 191, the liquidation of the provincial company is subject to the supervision of the Court.

(2)  The supervision of the liquidation of a provincial company by the Court pursuant to an order made under section 189, 190 or 191 commences on the date the order is made.

1999 cI‑5.1 s192

Powers of Court

193(1)  In connection with the liquidation and dissolution of a provincial 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, policyholder or shareholder

                                  (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 Minister, 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 199, 200 and 202, 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, policyholders, shareholders and incorporators who cannot be found;

                           (n)    on the application of any director, officer, policyholder, shareholder, incorporator or creditor or the liquidator,

                                  (i)    an order staying the liquidation proceedings on the terms and conditions 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;

                           (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 a certificate dissolving the company.

(2)  The Court may appoint any person as liquidator including a director, an officer or a shareholder of the provincial company being liquidated or of any other provincial company.

1999 cI‑5.1 s193

Cessation of business and powers

194(1)  Where the Court makes an order for the liquidation of a provincial company,

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

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

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

1999 cI‑5.1 s194

Vacancy in liquidators office

195   Where an order for the liquidation of a provincial 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.

1999 cI‑5.1 s195

Duties and powers of liquidator

196(1)  A liquidator of a provincial company must

                           (a)    forthwith after being appointed give notice of the appointment to the Minister and to each claimant and creditor of the provincial company known to the liquidator,

                           (b)    forthwith after being appointed publish notice in The Alberta Gazette and once a week for two consecutive weeks in a newspaper in general circulation in the place where the head office of the provincial company is located, and take reasonable steps to give notice in each province where the company transacted business within the preceding 12 months, that

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

                                (ii)    any person possessing property of the company is required 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, is required to present written particulars of the claim to the liquidator not later than 60 days after the publication of the notice in The Alberta Gazette,

                           (c)    take the property of the provincial company into custody and control,

                           (d)    transfer the remaining policies of the provincial company, or reinsure the remaining risks undertaken by the company in accordance with Division 10,

                           (e)    open and maintain a trust account for the money of the provincial company received by the liquidator,

                            (f)    keep accounts of the money of the provincial company received and paid out by the liquidator,

                           (g)    maintain separate lists of each class of creditors, shareholders, policyholders and other persons having claims against the provincial company,

                           (h)    if at any time the liquidator determines that the provincial 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 Minister, at least once in every 12‑month period after the liquidator’s appointment or more often, as the Court requires, the annual return of the provincial company prepared in accordance with section 44 or prepared in a manner 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 provincial company among the shareholders, if any, or incorporators, according to their respective rights.

(2)  A liquidator may in respect of a liquidation of a provincial company

                           (a)    retain professional advisors,

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

                           (c)    carry on the business of the company as required for an orderly liquidation,

                           (d)    sell any property of the company by public auction or private sale,

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

                            (f)    with the prior approval of the Court, 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 the distribution of its property.

(3)  A liquidator must not purchase, directly or indirectly, any part of the property of the provincial company without the prior approval of the Court.

1999 cI‑5.1 s196

Reliance on statements

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

                           (a)    financial statements of the provincial company represented to the liquidator by an officer of the company, or in a written report of the auditor of the company, as reflecting the financial condition of the company fairly, or

                           (b)    an opinion, a report or a statement of a professional advisor retained by the liquidator.

1999 cI‑5.1 s197

Examination of others

198(1)  Where a liquidator has reason to believe that any property of the provincial 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 to be examined.

(2)  Where an examination conducted pursuant to subsection (1) discloses that a person has concealed, withheld or misappropriated any property of the provincial company, the Court may order that person to restore the property or pay compensation to the liquidator.

1999 cI‑5.1 s198

Costs of liquidation

199   A liquidator must pay the costs of liquidation out of the property of the provincial company and must pay or make adequate provision for all claims against the company.

1999 cI‑5.1 s199

Final accounts

200(1)  Within one year after the appointment of a liquidator and after paying or making adequate provision for all claims against the provincial company, the liquidator must 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.

(2)  If a liquidator fails to make the application required by subsection (1), a shareholder of the provincial 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.

(3)  A liquidator must give notice of the liquidator’s intention to make an application under subsection (1) to the Minister, to each inspector and referee appointed under section 193, to each shareholder of the provincial company or, if there are no shareholders, to each incorporator and to any person who provided a financial guarantee for the liquidation.

(4)  The liquidator must publish the notice required under subsection (3) in The Alberta Gazette and once a week for two consecutive weeks in one or more newspapers in general circulation in each province or territory in which the provincial company has transacted business within the preceding 12 months or as otherwise directed by the Court.

1999 cI‑5.1 s200

Right to distribution of money

201(1)  If in the course of the liquidation of a provincial company the shareholders resolve, or the liquidator proposes,

                           (a)    to exchange all or substantially all of the remaining property of the company for securities of another body corporate that are to be distributed to the shareholders or to the incorporators, or

                           (b)    to 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.

(2)  On an application under subsection (1), the Court may determine whether any shareholder or incorporator of the provincial company is opposed to the resolution or proposal and, if so, join that shareholder or incorporator as a party and may order

                           (a)    that all of the remaining property of the company is to be converted into and distributed in money, or

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

(3)  Where an order is made by the Court under subsection (2)(b), the Court

                           (a)    must fix a fair value on the share of the property of the provincial 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 clause (a),

                           (c)    must render a final order against the provincial 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, and

                           (d)    must fix the time within which the liquidator must pay the amount referred to in clause (c) to a shareholder or incorporator, which payment in the case of a shareholder may occur only after delivery of the shareholder’s shares to the liquidator.

1999 cI‑5.1 s201

Final order

202(1)  If the Court approves the final accounts rendered by a liquidator in respect of a provincial company, the Court must make an order

                           (a)    directing the custody or disposal of the documents, records and registers of the company, and

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

(2)  The liquidator must forthwith send a certified copy of the order referred to in subsection (1) to the Minister.

1999 cI‑5.1 s202

Certificate of dissolution

203(1)  After the Minister receives the order under section 202, the Lieutenant Governor in Council may issue a certificate of dissolution that dissolves the provincial company.

(2)  A provincial company is dissolved and ceases to exist on the day stated in the certificate of dissolution.

1999 cI‑5.1 s203

General

Continuation of actions

204(1)  Despite the dissolution of a provincial company under this Division,

                           (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 2 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.

(2)  Service of a document on a provincial company after its dissolution may be effected by serving the document on a person shown as a director in the most recent notice of directors filed under this Act.

1999 cI‑5.1 s204

Limitations on liability

205(1)  In this section, “shareholder” and “incorporator” include the heirs and personal representatives of a shareholder or incorporator.

(2)  Despite the dissolution of a provincial company, a shareholder or incorporator to whom any of its property has been distributed is liable to any person claiming under section 204(1) to the extent of the amount received by that shareholder or incorporator on the distribution.

(3)  An action to enforce liability under subsection (2) must not be commenced after 2 years from the date of the dissolution of the provincial company.

(4)  The Court may order an action referred to in subsections (2) and (3) to be brought against the persons who were shareholders or incorporators as a class, subject to the conditions the Court thinks fit.

(5)  If the plaintiff establishes a claim in an action under subsection (4), 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 (2), the amount that each person who was a shareholder or incorporator must contribute toward satisfaction of the plaintiff’s claim, and

                           (c)    direct payment of the amounts so determined.

1999 cI‑5.1 s205

Where creditor cannot be found

206   If, on the dissolution of a provincial company under this Division, the liquidator is unable to locate a creditor, shareholder, incorporator or other claimant who is entitled to a distribution of property, the liquidator may apply to the Court for directions.

1999 cI‑5.1 s206

Custody of records after dissolution

207   A person who has been granted custody of the documents, records and registers of a dissolved provincial company must keep them available for production for 6 years following the date of the dissolution of the company or until the expiration of a shorter period ordered by the Court under section 202.

1999 cI‑5.1 s207

Revival

Revival

208(1)  Any interested person may apply to the Minister to revive, for a specified period, a dissolved provincial company, other than one dissolved pursuant to an order of the Court.

(2)  On receipt of the application, the Minister may

                           (a)    issue a certificate of revival that revives the provincial company for a specified period, subject to any terms or conditions that the Minister considers appropriate, or

                           (b)    direct that an application be made to the Court under subsection (3).

(3)  Any interested person may apply to the Court for an order to revive, for a specified period, a dissolved provincial company

                           (a)    where the company was dissolved pursuant to an order of the Court, or

                           (b)    where the Minister makes a direction under subsection (2)(b),

and the applicant must give notice of the application to the Minister.

(4)  The Court may order that the provincial company be revived for a specified period and that the revival is subject to any terms or conditions that it considers appropriate.

(5)  If an order is made under subsection (4), the applicant must forthwith send a certified copy of it to the Minister, and the Minister must issue a certificate of revival that revives the company for the period specified in the order and that sets out any terms or conditions specified in the order.

(6)  On the application of an interested party, the Minister, in the case of a certificate of revival issued under subsection (2), or the Court, in the case of a certificate of revival issued under subsection (5), may extend the period of time for which a provincial company is revived, and the certificate of revival must be amended to show the extended period.

(7)  A provincial company is revived on the date shown in the certificate of revival, and subject to any order under this section and to rights acquired by any person prior to the revival, the company is deemed to have continued in existence as if it had not been dissolved.

(8)  A provincial company that is revived under this section is dissolved on the expiry of the period specified in its certificate of revival.

1999 cI‑5.1 s208

Division 12
Dissolution and Revival of Mutual Provincial Companies

Insolvent mutual provincial companies

209(1)  This Division does not apply to a mutual provincial company that is insolvent within the meaning of that term in the Winding‑up and Restructuring Act (Canada).

(2)  Any proceedings taken under this Division to dissolve or to liquidate and dissolve a mutual provincial company must be stayed if the company is at any time found to be insolvent within the meaning of that term in the Winding‑up and Restructuring Act (Canada).

1999 cI‑5.1 s209

Regulations

210   The Lieutenant Governor in Council may make regulations respecting the winding‑up and dissolution of mutual provincial companies and the revival of mutual provincial companies that have been dissolved under the regulations.

1999 cI‑5.1 s210

Division 13
General

Names

211(1)  Subject to the regulations, no provincial company may have a name

                           (a)    that is prohibited by the regulations or contains a word, expression or symbol that is prohibited by the regulations,

                           (b)    that is identical to the name of

                                  (i)    a body corporate, whether in existence or not, incorporated under the laws of Alberta,

                                (ii)    an extra‑provincial body corporate registered in Alberta, or

                               (iii)    a body corporate incorporated by or under an Act of the Parliament of Canada,

                           (c)    that is similar to the name of

                                  (i)    a body corporate incorporated under the laws of Alberta,

                                (ii)    an extra‑provincial body corporate registered in Alberta, or

                               (iii)    a body corporate incorporated by or under an Act of the Parliament of Canada,

                                    if the use of that name is confusing or misleading, or

                           (d)    that does not meet the prescribed requirements.

(2)  Subject to this Act and the regulations, a provincial company may have a name in an English form, a French form, an English form and a French form or a combined English and French form, and it may be legally designated by any such name.

(3)  Where, through inadvertence or otherwise, a provincial company obtains a name that does not comply with this section, the Minister may issue a certificate changing the name of the company.

(4)  The Minister must publish a notice of a change of name made under subsection (3) in The Alberta Gazette.

1999 cI‑5.1 s211

Regulations

212   The Lieutenant Governor in Council may make regulations for the purposes of sections 21 and 211

                           (a)    prohibiting names of insurers or any word, expression or symbol in the names of insurers;

                           (b)    respecting requirements for the names of insurers.

1999 cI‑5.1 s212

Use of insurance in names

213   No entity incorporated or formed by or under an enactment, other than a provincial company, may use the words “insurance company” or “insurance corporation” or the French equivalents of those words in its name.

1999 cI‑5.1 s213

Rights preserved

214   No amendment to the incorporating instrument or bylaws of a provincial 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 is a party.

1999 cI‑5.1 s214

Effective date of certificates

215   A certificate issued under this Subpart may be stated to be effective for as long as one year before the date on which the certificate is issued.

1999 cI‑5.1 s215

Subpart 3
Head Office, Records and
Financial Statements

Head office

216(1)  Every provincial company must have a head office in Alberta.

(2)  A provincial company that changes the address of its head office must, before the change occurs, notify the Minister in writing of the date of the change and of the new address.

1999 cI‑5.1 s216

Records

217(1)  Subject to the regulations, every provincial company must keep a copy of the following records at its head office:

                           (a)    its instrument of incorporation and bylaws;

                           (b)    the particulars of any terms or conditions imposed on its licence;

                           (c)    the particulars of exceptions granted by the Minister that are applicable to the company;

                           (d)    the minutes of meetings and resolutions of participating policyholders or shareholders;

                           (e)    the name, address and date of appointment of the auditor;

                            (f)    the directors register

                                  (i)    containing the name and address, including any mailing address, and a statement of citizenship of all persons who are or have been directors, the date on which each became a director, the terms of the appointments and the dates on which they ceased to be directors, and distinguishing, in the case of a life company, between  policyholders’ directors and shareholders’ directors,

                                (ii)    containing a list of the bodies corporate of which each director is an officer or director and the firms of which each director is a member,

                               (iii)    containing the names of the directors who are also officers or employees of the company or any of its affiliates and a list of the positions they occupy in the company or affiliates, and

                               (iv)    the name of each committee on which each director serves;

                           (g)    a central securities register set up and maintained in accordance with section 49 of the Business Corporations Act as incorporated by section 230 of this Act;

                           (h)    a copy of the current financial statements of the company and each of its subsidiaries;

                            (i)    a copy of the investment committee procedures and policies;

                            (j)    minutes of meetings and resolutions of the directors and any committee of the directors;

                           (k)    adequate accounting records

                                  (i)    that will enable the Minister to determine the company’s financial position and whether it is in compliance with this Act and the regulations,

                                (ii)    that set out the company’s investments,

                               (iii)    with accounts, in the form and manner determined by the Minister, in respect of participating policies that are separate from accounts maintained in respect of other policies, and

                               (iv)    that set out the amount owing to it by each customer of or claimant under a policy issued by it, and the nature of its liabilities to the customer or claimant.

(2)  Every provincial company must keep at its head office any information or data relating to the preparation and maintenance of the records referred to in subsection (1).

(3)  The Minister may make regulations respecting the manner in which the records referred to in subsection (1) are to be retained by a provincial company and the length of time those records are to be retained.

(4)  The Minister may, subject to such terms and conditions as the Minister considers appropriate, exempt a provincial company from keeping all or any of the records referred to in subsection (1) in Alberta.

(5)  A provincial company that is permitted to keep records at a place outside Alberta under the authority of subsection (4) must pay the reasonable transportation and living expenses of any examiner authorized by the Minister to travel to that place to examine those records, and the costs may be recovered from the company by the Minister in an action for debt.

RSA 2000 cI‑3 s217;2003 cP‑6.5 s69

Access to records

218(1)  Every provincial company must ensure that

                           (a)    its records referred to in section 217(1)(a) to (i) are accessible to participating policyholders, shareholders and creditors of the company and their agents during normal business hours, and

                           (b)    the participating policyholders, shareholders and creditors and their agents  may examine those records, free of charge, or have copies made of the records on payment of a reasonable fee.

(2)  Records of a provincial company referred to in section 217 must at all reasonable times be open to inspection by the directors and their agents.

(3)  Notwithstanding anything in this section, a provincial company shall not disclose any residential address kept by the provincial company under section 217.

RSA 2000 cI‑3 s218;2003 cP‑6.5 s69

Standards of financial reporting

219(1)  Where a provincial company provides its or its subsidiaries’ audited financial statements to the Minister, policyholders, shareholders or the public, the company must ensure that the statements are prepared in accordance with the following:

                           (a)    Canadian generally accepted accounting principles, which are the accounting standards set out in the CPA Canada Handbook, as published by the Chartered Professional Accountants of Canada from time to time;

                           (b)    Canadian generally accepted auditing standards, which are the auditing standards set out in the CPA Canada Handbook, as published by the Chartered Professional Accountants of Canada from time to time;

                           (c)    subject to subsection (2), generally accepted actuarial practices described in the Standards of Practice of the Canadian Institute of Actuaries, as amended from time to time;

                           (d)    any modification of those principles, standards or practices established by the Minister or any additional requirements, principles, standards or practices established by the Minister.

(2)  Subsection (1)(c) does not apply to a provincial property and casualty company or its subsidiaries if the actuary of the provincial company is not a Fellow in good standing of the Canadian Institute of Actuaries but has been approved by the Minister under section 395(2)(b).

(3)  The Regulations Act does not apply to the modifications or additional requirements, principles, standards or practices established under subsection (1)(d).

RSA 2000 cI‑3 s219;2014 cC‑10.2 s178

Approval of annual financial statements

220(1)  No provincial company may publish, issue or circulate copies of its annual financial statement unless the statement is

                           (a)    approved by the directors of the company,

                           (b)    signed in accordance with subsections (2) and (3), and

                           (c)    accompanied with the report of its auditor.

(2)  The approval of the directors must be evidenced by the signature of

                           (a)    the chief executive officer or, in the event of that officer’s absence or inability to act, any other officer authorized by the directors to sign in place of the chief executive officer, and

                           (b)    one director if the signature required by clause (a) is that of a director, or 2 directors if the signature required by clause (a) is that of an officer who is not a director.

(3)  One of the directors referred to in subsection (2)(b) must be a member of the company’s audit committee.

1999 cI‑5.1 s220

Distribution of financial statements

221   Every provincial company must send a copy of its annual audited financial statements to its participating policyholders and shareholders not later than 21 days before each annual meeting of participating policyholders and shareholders of the company.

1999 cI‑5.1 s221

List of shareholders

222(1)  In this section, “basic list of shareholders” of a provincial company means a list of the names of, the number and type of shares owned by, and the address of, each shareholder and any known holder of an option or right to acquire shares of the company, as shown in the records of the company.

(2)  Every shareholder, participating policyholder or creditor of a provincial company or their agents are entitled to a basic list of shareholders of the company.

(3)  On the request of a person who is entitled to a basic list of shareholders, the provincial company must furnish a basic list of shareholders to that person within 10 days after the company receives a statutory declaration referred to in subsection (9) and payment of a reasonable fee.

(4)  The basic list of shareholders must be made up to a date not more than 10 days before the date of receipt of the statutory declaration.

(5)  A person requesting a basic list of shareholders from a provincial company may also request in the statutory declaration that the company provide a supplemental list of shareholders.

(6)  On receiving a request for a supplemental list and payment of a reasonable fee, the provincial company must furnish a supplemental list setting out any changes from the basic list of shareholders for each business day from the date that the basic list is made up to, to the date that the supplemental list is made up to.

(7)  If the statutory declaration requests that the supplemental list be made up to the date the basic list is provided, the supplemental list must be furnished within 10 days following the date that the basic list is provided.

(8)  If the statutory declaration requests that the supplemental list be made up to a specified date after the basic list is provided, the supplemental list must be furnished within 10 days following the specified date.

(9)  A statutory declaration must state

                           (a)    the name and address for service of the applicant,

                           (b)    whether a supplemental list is required and the date that the supplemental list is to be made up to, and

                           (c)    that the basic list of shareholders and any supplemental list obtained under this section will not be used except as permitted under section 223.

(10)  If the applicant is an entity, the statutory declaration must be made by a director or officer of the entity or a person acting in a similar capacity.

1999 cI‑5.1 s222

Use of list

223   A person who receives a basic list of shareholders or a supplemental list of shareholders under section 222 may use the list only in connection with

                           (a)    an effort to influence the voting of the shareholders of the provincial company,

                           (b)    an offer to acquire shares of the provincial company, or

                           (c)    any other matter relating to the affairs of the provincial company.

1999 cI‑5.1 s223

Dealing in lists

224   No person may sell or purchase, offer for sale or purchase or otherwise traffic in

                           (a)    a basic list of shareholders or a supplemental list of shareholders referred to in section 222, or

                           (b)    a list of holders of securities of a provincial company.

1999 cI‑5.1 s224

Information to be given to Minister by provincial companies

225   Every provincial company must provide to the Minister

                           (a)    a copy of any application and supporting documents it makes to be licensed in a jurisdiction other than Alberta within 7 days after making the application and a copy of the approval or refusal of the application within 7 days after the receipt of the approval or refusal;

                           (b)    a copy of an order or direction by a court or person in a jurisdiction other than Alberta in which the company is licensed that affects the status of the company in the jurisdiction or that requires the company to undergo special examinations or to do something or to refrain from doing something.

1999 cI‑5.1 s225

Records as evidence

226   Every record that a provincial company is, by this Act, required to keep or maintain is, in any suit or proceeding against the provincial company or against a shareholder, proof, in the absence of evidence to the contrary, of all facts purporting to be stated in the record.

1999 cI‑5.1 s226

Certificate of company as evidence

227(1)  A certificate issued on behalf of a provincial company stating any fact that is set out in the bylaws, in the minutes of the meetings of the directors, a committee of directors or the shareholders, or in a contract to which the company is a party, may be signed by a director, an officer or a transfer agent of the company.

(2)  When introduced as evidence in any civil, criminal or administrative action or proceeding,

                           (a)    a fact stated in a certificate referred to in subsection (1),

                           (b)    a certified extract from a securities register of a provincial company, or

                           (c)    a certified copy of minutes or of an extract from minutes of a meeting of directors, a committee of directors or the shareholders of a provincial company,

is proof, in the absence of evidence to the contrary, of the facts so certified without proof of the signature or official character of the person appearing to have signed the certificate.

(3)  An entry in a securities register of, or a security certificate issued by, a provincial company is proof, in the absence of evidence to the contrary, that the person in whose name the security is registered is the owner of the securities described in the register or in the certificate.

1999 cI‑5.1 s227

Notices to policyholders, shareholders, directors

228(1)  A notice or document required by this Act, the regulations or the bylaws of a provincial company to be given or sent to a policyholder, shareholder or director of a provincial company may be delivered personally to the policyholder, shareholder or director or sent by mail addressed to

                           (a)    the policyholder at the policyholder’s latest address as shown in the records of the company,

                           (b)    the shareholder at the shareholder’s latest address as shown in the records of the company or its transfer agent, or

                           (c)    the director at the director’s latest address as shown in the records of the company or of the Minister.

(2)  A notice or document sent by mail in accordance with subsection (1) to a policyholder, shareholder or director is deemed to be received by the policyholder, shareholder or director at the time it would be delivered in the ordinary course of mail unless there are reasonable grounds for believing that the policyholder, shareholder or director did not receive the notice or document at that time or at all.

(3)  If a provincial company sends a notice or document to a policyholder or shareholder in accordance with subsection (1) and the notice or document is returned on 3 consecutive occasions because the policyholder or shareholder cannot be found, the company is not required to send any further notices or documents to the policyholder or shareholder until the policyholder or shareholder informs the company in writing of the policyholder’s or shareholder’s new address.

(4)  If there is a conflict between subsections (1) to (3) and a statutory condition contained in a policy, the statutory condition prevails.

1999 cI‑5.1 s228

Subpart 4
Capital Structure

Definition

229   In this Subpart, “security” means, subject to Part 6 of the Business Corporations Act as incorporated by section 230 of this Act, a share of any class or series of shares or a debt obligation of a body corporate, and includes a certificate evidencing such a share or debt obligation and includes a warrant.

1999 cI‑5.1 s229

Application of Business Corporations Act

230   Part 6 of the Business Corporations Act applies with respect to a provincial company as if the company were a corporation within the meaning of that Act, and a reference in that Part to a section of that Act, other than to a section in that Part, is deemed to be a reference to the corresponding section of this Act that deals with the same subject‑matter.

1999 cI‑5.1 s230

Requirements for Shares

Non‑par‑value shares

231  Shares of a provincial company must be in registered form and must be without nominal or par value.

1999 cI‑5.1 s231

Classes of shares

232(1)  A provincial company, other than a mutual provincial company, must have a class of shares designated as common shares.

(2)  The rights of the holders of common shares are equal in all respects and include

                           (a)    the right to vote at all meetings of shareholders except where only holders of a specified class of shares, or participating policyholders, are entitled to vote,

                           (b)    the right to receive dividends of the provincial company if declared on those shares, and

                           (c)    the right to receive the remaining property of the provincial company on dissolution.

(3)  No provincial company may designate more than one class of its shares as common shares or confer all of the characteristics of a common share described in subsection (2) on more than one class of shares.

(4)  A provincial company may have classes of shares in addition to common shares, and in that case the rights, privileges, restrictions and conditions attaching to the shares of each class must be set out in the bylaws.

(5)  Subject to section 236, if a provincial company has more than one class of shares, the rights of the holders of the shares of a class are equal in all respects.

1999 cI‑5.1 s232

Mutual provincial companies — shares

233(1)  A mutual provincial company must not issue any share that confers on the shareholder the right to vote at any meeting of the company.

(2)  Subsection (1) does not apply in respect of any share that confers on the shareholder the right to vote by reason of an event that has occurred and is continuing or by reason of a condition that has been fulfilled.

1999 cI‑5.1 s233

Issue of shares

234(1)  Subject to this Act, the instrument of incorporation and the bylaws, shares of a provincial company may be issued at the times, to the persons and for the consideration determined by the directors.

(2)  Shares issued by a provincial company are non‑assessable and the shareholders are not liable to the company or to its creditors in respect of them.

(3)  A provincial company must not issue a share until the consideration for the share is fully paid in money and received by the company.

(4)  The requirement in subsection (3) that the consideration be money does not apply

                           (a)    when a share is issued as part of an amalgamation, or

                           (b)    when the Minister has given prior approval to the consideration’s being other than money.

1999 cI‑5.1 s234

Capital account

235(1)  A provincial company must maintain a separate capital account for each class and series of shares it issues.

(2)  Unless the Minister approves otherwise, a provincial company must add to the appropriate capital account in respect of any shares it issues the full amount of the consideration it receives for the shares.

(3)  On the issue of a share, a provincial company must not add to a capital account in respect of the share an amount greater than the amount referred to in subsection (2).

(4)  If a provincial company proposes to add any amount to a capital account it maintains in respect of a class or series of shares and

                           (a)    the amount to be added was not received by the company as consideration for the issue of shares, and

                           (b)    the company has issued outstanding shares of more than one class or series,

the addition to the capital account must be approved by special resolution unless all the issued and outstanding shares are shares of not more than 2 classes of convertible shares referred to in section 250(5).

(5)  Where, in the case of a proposed addition of an amount to a capital account in a situation where a special resolution is required under subsection (4), a class or series of shares of a provincial company would be affected differently from how any other class or series of shares of the company would be affected by such action, the holders of shares of the differently affected class or series are entitled to vote separately as a class or series, as the case may be, on the proposal to take the action, whether or not such shares otherwise carry the right to vote.

1999 cI‑5.1 s235

Shares in series

236(1)  Subject to the instrument of incorporation and the bylaws, the directors of a provincial company may authorize the issue of any class of shares, other than common shares, in one or more series, and they may fix the number of shares in, and determine the designation, rights, privileges, restrictions and conditions attaching to the shares of, each series.

(2)  If any cumulative dividends 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 ratably in respect of accumulated dividends and return of capital.

(3)  No rights, privileges, restrictions or conditions attached to a series of shares authorized under this section confer on shares of a series

                           (a)    greater voting rights than are attached to shares of any other series in the same class that are then outstanding, or

                           (b)    a priority in respect of dividends or return of capital over shares of any other series in the same class that are then outstanding.

(4)  Subsection (3) does not apply to a right or privilege to exchange a share or shares for, or to convert a share or shares into, a share or shares of another class.

1999 cI‑5.1 s236

Shareholders pre‑emptive right

237(1)  For the purposes of this section, a pre‑emptive right is a right attached to a class of shares in which no shares of that class may be issued unless the shares to be issued have first been offered to each shareholder holding shares of that class

                           (a)    in an amount that is in proportion to their holdings of the shares of that class, and

                           (b)    at a price and on the same terms as those shares are to be offered to others.

(2)  The shares of a provincial company do not have a pre‑emptive right unless the instrument of incorporation or the bylaws provide for a pre‑emptive right.

(3)  A pre‑emptive right does not apply in respect of shares 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 provincial company.

1999 cI‑5.1 s237

Changes to Shares

Changing shares

238(1)  The directors of a provincial company may make, amend or repeal any bylaws

                           (a)    to change the maximum number, if any, of shares of any class that the company is authorized to issue,

                           (b)    to create new classes of shares,

                           (c)    to 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)    to 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)    to 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 to the shares in each series,

                            (f)    to 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 to the shares in each series,

                           (g)    to authorize the directors to change the rights, privileges, restrictions and conditions attached to unissued shares of any series, and

                           (h)    to revoke, diminish or enlarge any authority conferred under clause (f) or (g).

(2)  The directors must submit a bylaw, or an amendment to or a repeal of a bylaw, that is made under subsection (1) to the participating policyholders and shareholders, and the policyholders and shareholders may, by special resolution, confirm, amend or reject the bylaw, amendment or repeal.

(3)  A bylaw, or an amendment to or a repeal of a bylaw, made under subsection (1) is not effective until it is

                           (a)    confirmed or confirmed as amended by the policyholders and shareholders under subsection (2), and

                           (b)    approved by the Minister.

(4)  Where a special resolution referred to in subsection (2) so states, the directors may, before it is submitted to the Minister for approval and without further approval of the policyholders or shareholders, revoke the special resolution.

1999 cI‑5.1 s238

Class vote

239(1)  The holders of shares of a class or, subject to subsection (2), of a series are, unless the bylaws otherwise provide in the case of an amendment to the bylaws referred to in clause (a), (b) or (e), entitled to vote separately as a class or series on a proposal to amend the bylaws

                           (a)    to 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)    to effect an exchange, reclassification or cancellation of all or part of the shares of that class,

                           (c)    to 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)    to remove or change prejudicially rights to accrued dividends or rights to cumulative dividends,

                                (ii)    to add, remove or change prejudicially redemption rights,

                               (iii)    to reduce or remove a dividend preference or a liquidation preference, or

                               (iv)    to add, remove or change prejudicially conversion privileges, options, voting, transfer or pre‑emptive rights, rights to acquire securities of the provincial company or sinking fund provisions,

                           (d)    to increase the rights or privileges of any class of shares having rights or privileges equal or superior to the shares of that class,

                           (e)    to create a new class of shares equal or superior to the shares of that class,

                            (f)    to 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)    to 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.

(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 would be affected by an addition or amendment to the bylaws differently from how other shares of the same class would be affected.

(3)  Subsections (1) and (2) apply whether or not the shares of a class otherwise carry the right to vote.

(4)  A proposed addition or amendment to the bylaws referred to in subsection (1) is adopted when the holders of the shares of each class or series entitled to vote separately on the addition or amendment as a class or series and the participating policyholders have approved the addition or amendment by a special resolution.

1999 cI‑5.1 s239

Proposal to amend

240(1)  Subject to subsection (2), a director or a participating policyholder or shareholder of a provincial company may, in accordance with sections 274 and 275, make a proposal to make, amend or repeal the bylaws of the company referred to in section 238(1).

(2)  If a proposal is made to make, amend or repeal bylaws of a provincial company to effect any of the changes referred to in section 238(1), notice of the meeting of policyholders or shareholders at which the proposal is to be considered must set out the proposal.

1999 cI‑5.1 s240

Restriction on subordinated indebtedness

241(1)  A provincial company must not issue subordinated indebtedness unless the subordinated indebtedness is fully paid for in money or, with the approval of the Minister, in property.

(2)  A person must not in any prospectus, advertisement, correspondence or literature relating to any subordinated indebtedness issued or to be issued by a provincial company refer to the subordinated indebtedness otherwise than as subordinated indebtedness.

(3)  When issuing subordinated indebtedness, a provincial 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 to the subordinated indebtedness be in a currency other than that of Canada, including, without restricting the generality of the foregoing, the payment of any interest on the subordinated indebtedness.

1999 cI‑5.1 s241

Other Matters

Conversion privileges, options and rights

242(1)  A provincial company may issue certificates, warrants or other evidences of conversion privileges or options or rights to acquire securities of the company and must set out the conditions to which the conversion privileges, options or rights are subject

                           (a)    in the certificates, warrants or other evidences, or

                           (b)    in certificates evidencing the securities to which the conversion privileges, options or rights are attached.

(2)  Conversion privileges and options or rights to purchase securities of a provincial company may be made transferable or non‑transferable, and options and rights to purchase may be made separable or inseparable from any securities to which they are attached.

(3)  If a provincial 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, the company must reserve and continue to reserve sufficient authorized shares to meet the exercise of those conversion privileges, options and rights.

1999 cI‑5.1 s242

Prohibited shareholdings

243(1)  A provincial company

                           (a)    must not hold shares in itself or in its holding body corporate, and

                           (b)    must not permit any of its subsidiaries to hold shares in the company or in the holding body corporate of the company

except in accordance with this section and sections 244 to 248 unless the Minister consents to the holding.

(2)  A provincial company may in the capacity of personal representative hold shares in itself or in its holding body corporate so long as the company or the holding body corporate or a subsidiary of either of them does not have a beneficial interest in the shares.

(3)  A provincial company may hold shares in itself or in its holding body corporate by way of security for the purposes of a transaction entered into by it in the ordinary course of its business.

(4)  A provincial company holding shares in itself or in its holding body corporate must not vote or permit those shares to be voted unless the company

                           (a)    holds the shares in the capacity of personal representative, and

                           (b)    has complied with section 307.

1999 cI‑5.1 s243

Restrictions on acquisition of shares

244(1)  Subject to this section, sections 256 to 266 apply to a purchase, acquisition or redemption for cancellation of voting shares by a provincial company under section 245, 246 or 247 if the purchase, acquisition or redemption of the voting shares

                           (a)    would cause a person to have a significant interest in those voting shares or would increase the significant interest of a person in those voting shares, or

                           (b)    would cause the combined holdings of a person and a person related to that person to amount to a significant interest in those voting shares or would increase the significant interest of a person and a related person in those voting shares.

(2)  Despite subsection (1), in the case of a purchase, acquisition or redemption of shares referred to in subsection (1),

                           (a)    section 259 does not apply, and

                           (b)    the provincial company must make the application referred to in section 262(1).

1999 cI‑5.1 s244

Acquisition of own shares

245(1)  Subject to subsection (2) and to its bylaws, the directors of a provincial company may authorize the company to purchase or otherwise acquire shares issued by it.

(2)  The directors of a provincial company must not authorize the company to make any payment to purchase or otherwise acquire shares issued by it if there are reasonable grounds for believing that

                           (a)    the company is, or after the payment would be, unable to pay its liabilities as they become due, or

                           (b)    the realizable value of the company’s assets after the payment would be less than the aggregate of its liabilities and the market value of all its shares.

(3)  A provincial company that is not a reporting issuer must, within 30 days after the purchase of any of its issued shares, notify its shareholders

                           (a)    of the number of shares it has purchased,

                           (b)    of the names of the shareholders from whom it has purchased the shares,

                           (c)    of the price paid for the shares, and

                           (d)    of the balance, if any, remaining due to the shareholders from whom it has purchased the shares.

(4)  A shareholder of a provincial company other than a reporting issuer is entitled on request and without charge to a copy of the agreement between the company and any of its other shareholders under which the company has agreed to purchase, or has purchased, any of its own shares.

RSA 2000 cI‑3 s245;2013 c18 s27

Alternative acquisition of own shares

246(1)  Subject to subsection (2) and to its bylaws, the directors of a provincial company may authorize the company to purchase or otherwise acquire shares issued by it

                           (a)    to settle or compromise a debt or claim asserted by or against the company,

                           (b)    to eliminate fractional shares, or

                           (c)    to fulfil the terms of a non‑assignable agreement under which the company has an option or is obliged to purchase shares owned by a director, officer or employee of the company.

(2)  Despite section 245(2), a provincial company may purchase or otherwise acquire shares issued by it to comply with an order under section 776.

(3)  The directors of a provincial company must not authorize the company to make any payment to purchase or acquire under subsection (1) shares issued by it if there are reasonable grounds for believing that

                           (a)    the company is, or after the payment would be, unable to pay its liabilities as they become due,

                           (b)    the realizable value of the company’s assets after the payment would be less than the aggregate of

                                  (i)    its liabilities, and

                                (ii)    the amount that would be required to pay the holders of shares who have a right to be paid, on a redemption or in a liquidation, prior to the holders of the shares to be purchased or acquired,

                               or

                           (c)    the purchase or acquisition would cause the company to be in contravention of this Act or the regulations.

1999 cI‑5.1 s246

Redemption of shares

247(1)  Subject to subsection (2) and to its bylaws, the directors of a provincial company may authorize the company to purchase or redeem any redeemable shares issued by it at prices not exceeding the redemption price calculated according to a formula stated in the bylaws.

(2)  The directors of a provincial company must not authorize the company to make any payment to purchase or redeem any redeemable shares issued by it if there are reasonable grounds for believing that

                           (a)    the company is, or after the payment would be, unable to pay its liabilities as they become due,

                           (b)    the realizable value of the company’s assets after the payment would be less than the aggregate of

                                  (i)    its liabilities, and

                                (ii)    the amount that would be required to pay the holders of shares who have a right to be paid, on a redemption or in a liquidation, ratably with or prior to the holders of the shares to be purchased or redeemed,

                               or

                           (c)    the redemption would cause the company to be in contravention of this Act or the regulations.

1999 cI‑5.1 s247

Donated and escrowed shares

248   A provincial company may accept from any shareholder a share of the company

                           (a)    that is surrendered to it as a gift, or

                           (b)    that has been held in escrow pursuant to an escrow agreement required by the Executive Director under the Securities Act and that is surrendered pursuant to that agreement.

1999 cI‑5.1 s248

Reduction of share capital

249(1)  Subject to subsection (3), its instrument of incorporation and its bylaws, a provincial company, by special resolution and with the approval of the Minister, may reduce its share capital for any purpose.

(2)  Where a class or series of shares of a provincial company would be affected by a reduction of share capital under subsection (1) differently from how any other class or series of shares of the company would be affected by such action, the holders of shares of the differently affected class or series are entitled to vote separately as a class or series, as the case may be, on the proposal to take the action, whether or not the shares otherwise carry the right to vote.

(3)  A provincial company must not reduce its share capital, other than for the purpose of declaring it to be reduced by an amount that is not represented by realizable assets, if there are reasonable grounds for believing that

                           (a)    the company is, or after the reduction would be, unable to pay its liabilities as they become due, or

                           (b)    the reduction would cause the company to be in contravention of this Act or the regulations.

(4)  A special resolution under this section must specify the capital account or accounts from which the reduction of share capital effected by the special resolution will be made.

(5)  An application for the Minister’s approval of a special resolution must contain statements showing

                           (a)    the number of the provincial company’s shares issued and outstanding,

                           (b)    the results of the voting 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 share capital.

(6)  A shareholder, creditor or participating policyholder of a provincial company may apply to the Court for an order compelling another shareholder or another recipient

                           (a)    to pay to the company an amount equal to any liability of that other shareholder that was extinguished or reduced in contravention of this section, or

                           (b)    to pay or deliver to the company any money or property that was paid or distributed to that other shareholder or recipient as a consequence of a reduction of share capital made in contravention of this section.

(7)  A proceeding to enforce a liability imposed by this section must not be commenced after 2 years from the date of the action complained of.

(8)  This section does not affect any liability that arises under section 360.

1999 cI‑5.1 s249

Adjustment of capital account

250(1)  On a purchase, redemption or other acquisition by a provincial company under section 245, 246, 247, 254 or 776(3)(e) of shares or fractions of shares issued by it, the company must deduct from the capital account maintained for the class or series of shares of which the shares purchased, redeemed or otherwise acquired form a part, an amount equal to the result obtained by multiplying the market value of the shares of that class or series by the number of shares or fractions of shares of that class or series purchased, redeemed or otherwise acquired, divided by the number of issued shares of that class or series immediately before the purchase, redemption or other acquisition.

(2)  A provincial company must deduct the amount of a payment made by the company to a shareholder under section 776 from the capital account maintained for the class or series of shares in respect of which the payment was made.

(3)  A provincial company must adjust its capital account or accounts in accordance with any special resolution referred to in section 249(4).

(4)  On a conversion or change of issued shares of a provincial company into shares of another class or series, the company must

                           (a)    deduct from the capital account maintained for the class or series of shares converted or changed an amount equal to the result obtained by multiplying the market value of the shares of that class or series by the number of shares of that class or series converted or changed, divided by the number of issued shares of that class or series immediately before the conversion or change, and

                           (b)    add the result obtained under clause (a) and any additional consideration received pursuant to the conversion or change to the capital account maintained or to be maintained for the class or series of shares into which the shares have been converted or changed.

(5)  For the purposes of subsection (4), where a provincial company issues 2 classes or series of shares and there is attached to each class or series a right to convert a share of one class or series into a share of the other class or series, the amount to be attributed to a share in either class or series is the amount obtained when the sum of the market value of both classes or series of shares is divided by the number of issued shares of both classes or series of shares immediately before the conversion.

(6)  Shares or fractions of shares issued by a provincial company and purchased, redeemed or otherwise acquired by it must be cancelled or restored to the status of authorized but unissued shares.

(7)  For the purposes of this section, a provincial company holding shares in itself as permitted by section 243(2) or (3) is deemed not to have purchased, redeemed or otherwise acquired those shares.

(8)  Where shares of a class or series are converted or changed into the same or another number of shares of another class or series, those shares become the same in all respects as the shares of the class or series into which they are converted or changed.

RSA 2000 cI‑3 s250;2013 c18 s27

Enforceability of contract to purchase shares

251(1)  A contract with a provincial company providing for the purchase by it of its own shares is specifically enforceable against the company, except to the extent that it cannot perform the contract without contravening section 245 or 246.

(2)  In any action brought on a contract referred to in subsection (1), the provincial company has the burden of proving that performance of the contract is prevented by section 245 or 246.

(3)  Until the provincial company has fully performed a contract referred to in subsection (1), the other party to the contract retains the status of a claimant and is entitled

                           (a)    to be paid as soon as the company is lawfully able to perform the contract, or

                           (b)    in a liquidation, to be ranked subordinate to the rights of policyholders, creditors, holders of subordinated notes and any class of shareholders whose rights were in priority to the rights given to the class of shares that the other party contracted to sell to the company, but in priority to the rights of other shareholders.

1999 cI‑5.1 s251

Commission on sale of shares

252   The directors of a provincial company may authorize the company to pay a reasonable commission to any person in consideration of the person’s

                           (a)    purchasing or agreeing to purchase shares of the company from it or from any other person, or

                           (b)    procuring or agreeing to procure purchasers for any such shares.

1999 cI‑5.1 s252

Payment of dividend

253(1)  The directors of a provincial company may declare, and a provincial company may pay, a dividend by issuing fully paid shares of the company and, subject to subsection (3), a provincial company may pay a dividend in money or property.

(2)  If a provincial company issues shares of the company in payment of a dividend, it must add to the capital account for the shares of the class or series issued the declared amount of the dividend, stated as an amount of money.

(3)  The directors must not declare and a provincial company must not pay a dividend if there are reasonable grounds for believing that

                           (a)    the company is, or after the payment would be, unable to pay its liabilities as they become due, or

                           (b)    the payment would cause the company to be in contravention of this Act or the regulations.

1999 cI‑5.1 s253

Lien on share

254(1)  The bylaws of a provincial company may provide that the company has a lien on a share registered in the name of a shareholder or the shareholder’s personal representative for a debt of that shareholder to the company.

(2)  A provincial company may enforce a lien referred to in subsection (1) in accordance with its bylaws.

1999 cI‑5.1 s254

Restrictions on issue, transfer

255   A provincial company must not impose restrictions on the issue, transfer or ownership of shares of any class or series except to the extent that it is authorized to do so by its instrument of incorporation or this Act.

1999 cI‑5.1 s255

Interpretation

256   For the purposes of this section, section 244 and sections 257 to 265, a person is deemed to be related to

                           (a)    every body corporate the person controls and every affiliate of such a body corporate,

                           (b)    every partner of the person,

                           (c)    every trust or estate in which the person has a substantial beneficial interest or in respect of which the person serves as trustee or in a similar capacity,

                           (d)    the spouse or adult interdependent partner of the person,

                           (e)    every relative of the person, or of the person’s spouse or adult interdependent partner, who resides in the same home as the person, and

                            (f)    every other person the Minister considers is acting in concert with the person to acquire and control voting shares of a provincial company and that the Minister designates by order as a related person.

RSA 2000 cI‑3 s256;2002 cA‑4.5 s45

Constraints on ownership

257(1)  No person may, without the approval of the Minister, purchase or otherwise acquire any share of a provincial company or purchase or otherwise acquire control of any entity that holds any share of a provincial 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.

(2)  No person and no person related to that person may, without the approval of the Minister, purchase or otherwise acquire any share of a provincial company or purchase or otherwise acquire control of any entity that holds any share of a provincial company if

                           (a)    the acquisition would cause the combined holdings of the person and the related person to amount to a significant interest in any class of shares of the company, or

                           (b)    where the combined holdings of the person and the related person amount to a significant interest in a class of shares of the company, the acquisition would increase the significant interest of the person and the related person in that class of shares.

(3)  Unless the acquisition of the share has been approved by the Minister, no provincial company may record in its securities register a transfer or issue of any share of the company to any 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.

(4)  Unless the acquisition of the share has been approved by the Minister, no provincial company may record in its securities register a transfer or issue of any share of the company to any person or any person related to that person if

                           (a)    the transfer or issue of the share would cause the combined holdings of the person and the related person to amount to a significant interest in any class of shares of the company, or

                           (b)    where the combined holdings of the person and the related person amount to 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 and the related person in that class of shares.

(5)  This section does not apply to any class of non‑voting shares of a provincial company that do not amount to more than 10% of the equity of the company.

(6)  If the Minister’s approval is required under subsection (1), (2), (3) or (4) before a provincial company may record in its securities register a transfer or issue of a share of the company to a person, the person must not exercise any voting rights attached to those shares until the Minister’s approval is obtained.

1999 cI‑5.1 s257

Previous approval obtained

258(1)  Where the Minister’s approval is given under section 257 with respect to a person or other persons related to that person, no approval under section 257 is required with respect to those persons in respect of a subsequent transfer or issue of voting shares unless, as a result of the transfer or issue, the shareholdings or beneficial ownership of those persons would undergo an increase of more than 5% from the shareholdings or beneficial ownership calculated immediately after the previous approval was given.

(2)  The exception set out in subsection (1) does not apply

                           (a)    to a transfer or issue of shares that would result in a change of control of the provincial company, or

                           (b)    where, since the previous approval was given, the shareholdings or beneficial ownership of the person and other persons related to that person have decreased by more than 5% from the shareholdings or beneficial ownership calculated immediately after the previous approval was given.

1999 cI‑5.1 s258

Shares to underwriter

259   The approval of the Minister under section 257 is not required in respect of a transfer or issue of shares to an underwriter, within the meaning of that term in the Securities Act, who receives them in that capacity.

1999 cI‑5.1 s259

Exception for small holdings

260   Despite section 257(3) and (4), where, as a result of a transfer or issue of shares of a class of shares of a provincial company to a person, the total number of shares of that class registered in the securities register of the company in the name of the person

                           (a)    would not exceed 5000, and

                           (b)    would not exceed 0.1%  of the outstanding shares of that class,

the company is entitled to act as though 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 unless it has actual knowledge that the person is acquiring or increasing a significant interest in that class of shares.

1999 cI‑5.1 s260

Increasing large holdings

261   The approval of the Minister under section 257 is not required where a person who holds 95% or more of the total rights attached to all of the outstanding voting shares of a company purchases or otherwise acquires additional shares of the company.

1999 cI‑5.1 s261

Ministers approval

262(1)  Where an approval is required under section 257,

                           (a)    the person to whom the shares are to be transferred or issued, or

                           (b)    where the person referred to in clause (a) will not be the beneficial owner of the shares, that person and the beneficial owner jointly,

must apply for the approval and must provide the Minister with any information the Minister requires in support of the application.

(2)  On an application under subsection (1), the Minister must take into account  all matters that the Minister considers relevant to the application, including

                           (a)    whether any of the holders or beneficial owners to whom the approval relates

                                  (i)    is or has been bankrupt,

                                (ii)    has been convicted of a criminal offence, an offence under this Act or an offence under the Securities Act or comparable legislation of another jurisdiction in Canada,

                               (iii)    is or has been subject to a cease trading order under the Securities Act or comparable legislation of another jurisdiction in Canada,

                               (iv)    is the subject of a special examination under section 757,

                                 (v)    is, in the Minister’s opinion, contravening any provision of this Act or the regulations or of any comparable legislation of another jurisdiction or of any undertaking given to the Minister, or

                               (vi)    has failed to provide the information required under subsection (1);

                           (b)    the nature and sufficiency of the financial resources of the holders or beneficial owners to whom the application for approval relates as a source of continuing financial support for the provincial company;

                           (c)    where the transfer or issue would result in a change in control of the provincial company, the soundness and feasibility of plans of the holders or beneficial owners to whom application for the approval relates for the future conduct and development of the business of the company;

                           (d)    the business record and experience of the holders or beneficial owners to whom the application for approval relates;

                           (e)    whether the provincial company will be operated responsibly by persons who are fit as to character and are competent for that purpose;

                            (f)    the best interests of the financial system in Alberta.

(3)  The approval of the Minister under this section takes effect on the date set out in the approval, and the effective date may be a date before the date the approval is given.

1999 cI‑5.1 s262

Ministers right to information

263(1)  The Minister may in writing direct a provincial company to obtain from a person in whose name a share is registered in the securities register of the company or who is the beneficial owner of a share of the company a declaration containing any or all of the following information:

                           (a)    information concerning the ownership or beneficial ownership of the share;

                           (b)    information as to whether the share is held or beneficially owned by a person who is related to that person, and the name of the related person where applicable;

                           (c)    information as to the place in which the shareholder and any person for whose use or benefit the share is held are ordinarily resident;

                           (d)    information concerning the ownership or beneficial ownership of the shares of a holding body corporate;

                           (e)    information concerning any other matters specified by the Minister.

(2)  The directors of a provincial company that is the subject of a direction under subsection (1) must ensure that the company forthwith complies with the direction.

(3)  A provincial company that is the subject of a direction under subsection (1) may request a person who has possession of or access to the information required to provide a declaration containing the information to the Minister, and that person must forthwith comply with the request.

1999 cI‑5.1 s263

Exemption

264(1)  The Minister may by order exempt any provincial company or other person from the application of section 257 in whole or in part and on any terms and conditions set out in the order.

(2)  The Regulations Act does not apply to an order under subsection (1).

1999 cI‑5.1 s264

Bylaws re shareholder information

265(1)  The directors of a provincial company may make bylaws

                           (a)    requiring any person holding any voting share of the company to submit written declarations

                                  (i)    with respect to the ownership and beneficial ownership of a share of the company or of a holding body corporate,

                                (ii)    with respect to the place in which the shareholder and any person for whose use or benefit the share is held are ordinarily resident,

                               (iii)    as to whether the shareholder is related to other persons, and

                               (iv)    with respect to any other matters the directors consider relevant for the purposes of sections 256 to 263,

                           (b)    prescribing the times at which and the manner in which any declarations required under clause (a) are to be submitted, and

                           (c)    requiring any person desiring to have a transfer of a share to the person recorded in the securities register of the company to submit a declaration referred to in clause (a) as if the person were a shareholder.

(2)  Where under any bylaw made under subsection (1) a declaration is required to be submitted by any shareholder or person in respect of the transfer of any share, the directors may refuse to allow the entry of the transfer of the share in the securities register of the provincial company until the required declaration has been submitted.

1999 cI‑5.1 s265

Reliance on information

266   A director of a provincial company and any other person acting as proxy for a shareholder of the company may rely on a statement made in a declaration made pursuant to a bylaw under section 265(1) and on their own knowledge of the circumstances for the purposes of determining

                           (a)    the residence of a person,

                           (b)    who controls a body corporate, or

                           (c)    any other circumstances relevant to the performance of their duties under sections 256 to 263,

and the director or other person is not liable in any action for anything done or omitted by the director or other person in good faith in reliance on that statement or that knowledge.

1999 cI‑5.1 s266

Subpart 5
Participating Policyholders
and Shareholders

Division 1
Meetings and Voting

Place of meetings

267(1)  Meetings of participating policyholders or shareholders of a provincial company must be held at the place in Alberta provided for in the bylaws of the company or, in the absence of any such provision, at the place in Alberta that the directors determine.

(2)  The Minister may, on application, exempt a provincial company from holding a meeting of participating policyholders or shareholders in Alberta.

1999 cI‑5.1 s267

Calling meetings

268   The directors of a provincial company

                           (a)    must, after the meeting called pursuant to section 133, call the first annual meeting of participating policyholders and shareholders of the provincial company, which meeting must be held not later than 6 months after the end of the first financial year of the company,

                           (b)    must subsequently call annual meetings of participating policyholders and shareholders, to be held not later than 6 months after the end of each financial year, and

                           (c)    may at any time call a special meeting of participating policyholders or shareholders.

1999 cI‑5.1 s268

Record date

269(1)  For the purpose of determining

                           (a)    shareholders entitled to receive payment of a dividend,

                           (b)    participating policyholders or shareholders entitled to participate in a liquidation distribution,

                           (c)    who is a shareholder for any other purpose except the right to receive notice of, or to vote at, a meeting, or

                           (d)    who is a policyholder for any other purpose except

                                  (i)    the right to receive notice of, or to vote at, a meeting,

                                (ii)    the right to receive payment of a policy dividend or bonus, and

                               (iii)    any purpose for which the determination of policyholders is governed by contract,

the directors may fix in advance a date as the record date for the determination of policyholders or shareholders, but the record date so fixed must not precede the particular action to be taken by more than 50 days.

(2)  If no record date is fixed under subsection (1) for the determination of policyholders or shareholders for any purpose for which a record date could have been fixed under that subsection, the record date for the determination of policyholders or shareholders for that purpose is the date on which the directors pass the resolution relating to that purpose.

(3)  For the purpose of determining participating policyholders entitled to receive notice of a meeting of participating policyholders, the directors may fix in advance a date as the record date for the determination of participating policyholders, but the record date so fixed must not precede the date on which the meeting is to be held by more than 90 days or less than 21 days.

(4)  If no record date is fixed under subsection (3) for the determination of participating policyholders entitled to receive notice of a meeting, the record date for that purpose is

                           (a)    the day immediately before the day on which the notice is given, or

                           (b)    if no notice is given, the day on which the meeting is held.

(5)  Before a meeting of participating policyholders, the directors may fix a date as the record date for the purpose of determining participating policyholders entitled to vote at the meeting, and that record date must not be more than 10 days before the date on which the meeting is to be held.

(6)  If no record date is fixed under subsection (5) for the determination of participating policyholders entitled to vote at a meeting, the record date for that purpose is the day on which the meeting is held.

(7)  For the purpose of determining shareholders entitled to receive notice of and to vote at a meeting of shareholders, the directors may fix in advance a date as the record date for the determination of shareholders, but the record date so fixed must not precede the date on which the meeting is to be held by more than 50 days or less than 21 days.

(8)  If no record date is fixed under subsection (7) for the determination of shareholders entitled to receive notice of and to vote at a meeting, the record date for the determination of shareholders entitled to receive notice of and to vote at the meeting is

                           (a)    the day immediately before the day on which the notice is given, or

                           (b)    if no notice is given, the day on which the meeting is held.

(9)  Subject to subsections (10) and (11), where a record date is fixed for a provincial company, notice of the record date must be given not less than 7 days before the record date

                           (a)    by advertisement in a newspaper in general circulation in the place where the head office of the company is located 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, and

                           (b)    by written notice to each recognized stock exchange in Canada on which the shares of the company are listed for trading.

(10)  Notice of a record date fixed for a provincial company need not be given if

                           (a)    the company has no participating policyholders or notice of the record date is waived in writing by every participating policyholder who holds a policy at the close of business on the date the directors fix as the record date, and

                           (b)    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 central securities register at the close of business on the date the directors fix as the record date.

(11)  Where the bylaws provide, a provincial company is not required to give notice by advertisement in a newspaper under subsection (9) of a record date for the determination of participating policyholders or shareholders entitled to receive notice of a meeting of participating policyholders or shareholders if the record date is included in the notice of the meeting.

1999 cI‑5.1 s269

Notice of meeting

270(1)  A provincial company must send a notice of the time and place of a meeting of its participating policyholders or shareholders not less than 21 days nor more than 50 days before the meeting to

                           (a)    each shareholder entitled to receive notice of the meeting,

                           (b)    each participating policyholder who has within 3 years before the record date fixed or determined under section 269(3) or (4) completed and returned to the company the form referred to in section 292(1)(b) if no business referred to in clause (c) is to be dealt with at the meeting,

                           (c)    every participating policyholder determined under section 269(3) or (4) if any of the following business is to be dealt with at the meeting:

                                  (i)    authorizing the company to apply to the Minister for the approval of a mutualization proposal or of an amalgamation agreement,

                                (ii)    confirming a bylaw changing the rights of policyholders to vote at meetings of policyholders or shareholders,

                               (iii)    approving an agreement setting out the terms and means of effecting

                                      (A)    the transfer of all or substantially all of the company’s policies, or

                                      (B)    the reinsurance of all or substantially all of the company’s policies,

                                     or

                               (iv)    approving a proposal to convert the company from a mutual provincial company into a provincial company with common shares,

                           (d)    each director,

                           (e)    the auditor of the company, and

                            (f)    the actuary of the company.

(2)  The Minister, having regard to the size of a provincial company and of the companies or bodies corporate with which it proposes to amalgamate, may exempt the company from the application of subsection (1)(c) with respect to business consisting of the approval of an amalgamation agreement.

(3)  In addition to the notice required under subsection (1),

                           (a)    where any class of shares of a provincial company is publicly traded on a recognized stock exchange in Canada, notice of the time and place of the meeting of shareholders must be published once a week for at least 4 consecutive weeks before the date of the meeting in a newspaper in general circulation in the place where the head office of the company is located 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)    where the company is a mutual provincial company, notice of the time and place of the meeting of participating policyholders of the company and the nature of the business in sufficient detail to permit a participating policyholder to form a reasoned judgment on the nature of the business, together with information on the means by which any policyholder can receive the notice referred to in subsection (1), must be

                                  (i)    published once a week for at least 4 consecutive weeks before the date of the meeting in a newspaper in general circulation in the place where the head office of the company is located and in each province or territory in which more than 1% of the total number of participating policyholders reside, or

                                (ii)    sent to every participating policyholder.

(4)  A notice of the annual meeting of participating policyholders and shareholders must include a copy of the provincial company’s annual financial statements for the preceding year unless the participating policyholder or shareholder has advised the provincial company that the holder does not wish to receive the annual financial statements.

(5)  Failure to receive a notice of a meeting of participating policyholders or shareholders does not deprive a participating policyholder or shareholder of the right to vote at the meeting.

1999 cI‑5.1 s270

Notice of adjourned meeting

271(1)  If a meeting of participating policyholders or shareholders of a provincial company is adjourned for less than 30 days, it is not necessary, unless the bylaws otherwise provide, to give notice of the adjourned meeting, other than by announcement at the time of the adjournment.

(2)  If a meeting of participating policyholders or shareholders of a provincial company is adjourned by one or more adjournments for an aggregate of 30 days or more, notice of the adjourned meeting must be given as for an original meeting but, unless the meeting is adjourned by one or more adjournments for an aggregate of more than 90 days, section 304 does not apply.

1999 cI‑5.1 s271

Special business

272(1)  All matters dealt with at an annual or special meeting of participating policyholders or shareholders are special business except the election of directors and consideration of

                           (a)    the financial statements,

                           (b)    the auditor’s report,

                           (c)    the actuary’s report,

                           (d)    the remuneration of directors and reappointment of the incumbent auditor, or

                           (e)    the description of the roles of the actuary and the auditor in the preparation and audit of the financial statements.

(2)  Notice of a meeting of participating policyholders or shareholders of a provincial company at which special business is to be transacted must

                           (a)    state the nature of the special business in sufficient detail to permit a participating policyholder or shareholder to form a reasoned judgment on the nature of the special business,

                           (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 participating policyholder is entitled on request to receive a copy of the management proxy circular.

(3)  The Minister may exempt a provincial company from the application of subsection (2)(b) in relation to participating 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.

(4)  The text of a special resolution may be amended at a meeting of participating  policyholders or shareholders if the amendments correct manifest errors or are not material.

1999 cI‑5.1 s272

Waiver of notice

273(1)  A participating policyholder, a shareholder and any other person entitled to attend a meeting of participating policyholders or shareholders may in any manner waive notice of a meeting of participating policyholders or shareholders.

(2)  Attendance at a meeting of participating policyholders or shareholders is a waiver of notice of the meeting, except when a 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.

1999 cI‑5.1 s273

Policyholder and shareholder proposals

274(1)  A participating policyholder or shareholder of a provincial company may

                           (a)    submit to the company notice of a proposal of any matter that the participating policyholder or shareholder intends to raise at the meeting, and

                           (b)    discuss at the meeting any matter in respect of which the participating policyholder or shareholder would have been entitled to submit a proposal.

(2)  A provincial company must attach to the notice of the meeting any notice of proposal of a participating policyholder or shareholder submitted for consideration at a meeting of policyholders and shareholders.

(3)  If so requested by a participating policyholder or shareholder who submits a notice of proposal to a provincial company, the company must attach to the notice of the meeting a statement by the participating policyholder or shareholder of not more than 200 words in support of the proposal and the name and address of the participating policyholder or shareholder.

(4)  A proposal may include nominations for the election of directors if the proposal is signed by

                           (a)    one or more holders of shares representing in the aggregate not less than 5% of the shares or 5% of the shares of a class of shares of the provincial company entitled to vote at the meeting at which the proposal is to be presented, in the case of nominations for the directors to be elected by shareholders, or

                           (b)    at least 100 participating policyholders or 10% of the total number of those policyholders, whichever is fewer, in the case of nominations for the directors to be elected by participating policyholders.

(5)  A provincial company is not required to comply with subsections (2) and (3) if

                           (a)    the notice of the proposal is not submitted to the company at least 90 days before the anniversary date of the previous annual meeting of participating policyholders and shareholders,

                           (b)    it clearly appears that the proposal is submitted by the participating policyholder or shareholder primarily for the purpose of enforcing a personal claim or redressing a personal grievance against the company or its directors, officers or security holders, or for a purpose that is not related in any significant way to the business or affairs of the company,

                           (c)    the company, at the participating policyholder’s or shareholder’s  request, attached a notice of proposal to the notice of a meeting of participating policyholders or shareholders held within 2 years preceding the receipt of the request, and the participating policyholder or shareholder failed to present the proposal, in person or by proxy, at the meeting,

                           (d)    substantially the same proposal was submitted to participating policyholders or shareholders in a dissident’s proxy circular relating to, or was attached to the notice of, a meeting of participating policyholders or shareholders held within 2 years preceding the receipt of the participating policyholder’s or shareholder’s request and the proposal was defeated,

                           (e)    in the case of a proposal submitted by a participating policyholder that relates to business that is referred to in section 270(1)(c), the notice of proposal is not signed by at least 100 participating policyholders or 10% of the total number of those policyholders, whichever is fewer,

                            (f)    in the case of any other proposal submitted by a participating policyholder, the notice of proposal is not signed by at least 100 participating policyholders, or

                           (g)    in the case of a proposal submitted by a participating policyholder, the proposal

                                  (i)    relates to the management of the ordinary business and affairs of the company,

                                (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)    would result in the conversion of a mutual provincial company into a provincial company with common shares.

(6)  No provincial company or person acting on behalf of a company incurs any liability by reason only of circulating a notice of proposal or statement in compliance with subsections (2) and (3).

1999 cI‑5.1 s274

Refusal of proposal

275(1)  If a provincial company refuses to attach a proposal to the notice of the meeting, the company must, within 10 days after receiving the proposal, notify the participating policyholder or shareholder submitting the proposal of its intention not to attach the proposal to the notice of the meeting and send to the participating policyholder or shareholder a statement of the reasons for the refusal.

(2)  On the application of a participating policyholder or shareholder claiming to be aggrieved by a provincial company’s refusal under subsection (1), the Court may restrain the holding of the meeting at which the proposal is sought to be presented and make any further order it thinks fit.

(3)  A provincial company or any person claiming to be aggrieved by a proposal may apply to the Court for an order permitting the company not to attach the notice of proposal to the notice of the meeting, and the Court, if it is satisfied that section 274(5) applies, may make any order it thinks fit.

(4)  An applicant under subsection (2) or (3) must give the Minister written notice of the application, and the Minister may appear and be heard at the hearing of the application in person or by counsel.

1999 cI‑5.1 s275

Policyholder and shareholder lists

276(1)  For each meeting of participating policyholders or shareholders of a provincial company, the company must prepare

                           (a)    a list of its participating policyholders entitled to vote at the meeting, and

                           (b)    a list of its shareholders entitled to vote at the meeting arranged in alphabetical order and showing the number of shares held by each shareholder.

(2)  If a record date is fixed under section 269(5), the list of participating policyholders must be prepared not later than the day on which the meeting is held and, if no record date is fixed under section 269(5), the list must be prepared on the day on which the meeting is held.

(3)  If a record date is fixed under section 269(7), the list of shareholders must be prepared not later than 10 days after that record date, and if no record date is fixed under section 269(7), the list must be prepared

                           (a)    at the close of business on the day immediately before the day on which the notice of the meeting is given, or

                           (b)    if no notice is given, on the day on which the meeting is held.

(4)  A list of participating policyholders or shareholders may be in electronic form.

(5)  Subject to this Act, a person named in a list of participating policyholders prepared under subsection (1) is entitled to vote at the meeting to which the list relates unless, after the record date fixed under section 269(5) or, if no record date is fixed under section 269(5), after the date on which the list was prepared,

                           (a)    the person has transferred the policy entitling the holder to vote, in which case the transferee is entitled to vote at the meeting, or

                           (b)    the policy entitling the person to vote is not in force.

(6)  Subject to this Act, a person named in a list of shareholders prepared under subsection (1) is entitled to vote the shares shown opposite that person’s name at the meeting to which the list relates unless

                           (a)    the person has transferred the ownership of any of those shares after the record date fixed under section 269(7), or if no record date is fixed under section 269(7), after the date on which the list was prepared, and

                           (b)    the transferee of those shares

                                  (i)    produces properly endorsed share certificates, or

                                (ii)    otherwise establishes that the transferee owns the shares,

                                    and demands, not later than 10 days before the meeting or such shorter period before the meeting as the bylaws of the company provide, that the transferee’s name be included in the list before the meeting,

in which case the transferee may vote those transferred shares at the meeting.

(7)  A participating policyholder or shareholder of a provincial company may examine the list of shareholders prepared under subsection (1)

                           (a)    during normal business hours at the company’s head office or, if the company has been authorized to keep its central securities register at a place other than its head office, at that other place, and

                           (b)    at the meeting of shareholders for which the list was prepared.

(8)  A participating policyholder or shareholder of a provincial company may, at the meeting of participating 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.

1999 cI‑5.1 s276

Quorum

277(1)  Unless the bylaws 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.

(2)  A quorum of participating policyholders is present at a meeting of participating policyholders if at least 100 participating policyholders or 10% of the total number of those policyholders, whichever is fewer, are present in person or represented by proxyholders.

(3)  A quorum of participating policyholders and shareholders is present at a meeting of participating policyholders and shareholders if

                           (a)    unless the bylaws otherwise provide, the holders of a majority of the shares who are entitled to vote at the meeting, and

                           (b)    at least 100 participating policyholders or 10% of the total number of those policyholders, whichever is fewer,

are present in person or represented by proxyholders.

(4)  If a quorum is present at the opening of a meeting of participating policyholders or shareholders, the participating policyholders or shareholders present may, unless the bylaws otherwise provide, proceed with the business of the meeting even though a quorum is not present throughout the meeting.

(5)  If a quorum is not present at the opening of a meeting of participating policyholders or shareholders, or within such reasonable time after the opening of the meeting as the participating policyholders or shareholders present may determine, the participating policyholders or shareholders present may adjourn the meeting to a fixed time and place, but must not transact any other business.

1999 cI‑5.1 s277

One shareholder meeting

278   If a provincial 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.

1999 cI‑5.1 s278

Meeting by electronic means

279   A participating policyholder, shareholder or other person entitled to attend a meeting of participating policyholders or shareholders  may participate in the meeting by means of telephone or other communication devices that permit all persons participating in the meeting to hear each other, and a person participating in such a meeting by those means is, for the purposes of this Act, present at the meeting.

1999 cI‑5.1 s279

One share — one vote

280   Unless the bylaws otherwise provide, each share of a provincial company that entitles the holder of the share to vote at a meeting of shareholders or participating policyholders and shareholders entitles the shareholder to one vote at the meeting.

1999 cI‑5.1 s280

One participating policyholder — one vote

281   The holder of one or more participating policies issued by a provincial company is entitled to attend, and is also entitled to one vote at, a meeting of participating policyholders or participating policyholders and shareholders of the company.

1999 cI‑5.1 s281

Changing policyholders right to vote

282(1)  Subject to section 281, the directors of a provincial company may make, amend or repeal any bylaw to change the rights of participating policyholders to vote at meetings of participating policyholders and shareholders.

(2)  The directors must submit a bylaw, or an amendment to or a repeal of a bylaw, that is made under subsection (1) to the participating policyholders and shareholders, and the policyholders and shareholders may, by special resolution, confirm, amend or reject the bylaw, amendment or repeal.

(3)  A bylaw, or an amendment to or a repeal of a bylaw, made under subsection (1) is not effective until it is

                           (a)    confirmed or confirmed as amended by the participating policyholders and shareholders under subsection (2), and

                           (b)    approved by the Minister.

(4)  Where a special resolution referred to in subsection (2) so states, the directors may, before it is submitted to the Minister for approval and without further approval of the participating policyholders or shareholders, revoke the special resolution.

1999 cI‑5.1 s282

Proposal to amend

283(1)  Subject to subsection (2), a director or a participating policyholder or shareholder of a provincial company may, in accordance with sections 274 and 275, make a proposal to make, amend or repeal the bylaws of the company referred to in section 282.

(2)   If a proposal is made to make, amend or repeal the bylaws of a provincial company to effect any of the changes referred to in section 282, notice of the meeting of participating policyholders and shareholders at which the proposal is to be considered must set out the proposal.

1999 cI‑5.1 s283

Representative participating  policyholder or shareholder

284(1)  If an entity is a participating policyholder or shareholder of a provincial company, the company must recognize any individual authorized by a resolution of the directors or governing body or similar authority of the entity to represent it at meetings of participating policyholders or shareholders of the company.

(2)  An individual 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 an individual who was a participating policyholder or shareholder.

1999 cI‑5.1 s284

Joint voting policyholders or shareholders

285   Unless the bylaws otherwise provide, if 2 or more persons hold policies or shares jointly, one of those holders present at a meeting of participating policyholders or shareholders may, in the absence of the others, vote the shares or policies, but if 2 or more of those persons who are present in person or represented by proxyholder vote, they must vote as one on the policies or shares jointly held by them.

1999 cI‑5.1 s285

Voting by hands or ballot

286(1)  Unless the bylaws otherwise provide, voting at a meeting of participating policyholders or shareholders must take place by show of hands except when a ballot is demanded by a participating policyholder, shareholder or proxyholder entitled to vote at the meeting.

(2)  A participating policyholder, shareholder or proxyholder may demand a ballot either before or on the declaration of the result of a vote by show of hands.

1999 cI‑5.1 s286

Resolution instead of meeting

287(1)  Except where a written statement is submitted by a director under section 326 or by an auditor under section 379(1),

                           (a)    a resolution in writing signed by all the participating policyholders and shareholders entitled to vote on that resolution at a meeting of participating policyholders or shareholders is as valid as if it had been passed at a meeting of the participating policyholders or shareholders, and

                           (b)    a resolution in writing dealing with all matters required by this Act to be dealt with at a meeting of participating policyholders or shareholders, and signed by all the participating policyholders and shareholders entitled to vote at that meeting, satisfies all the requirements of this Act relating to meetings of participating policyholders or shareholders.

(2)  A copy of every resolution referred to in subsection (1) must be kept with the minutes of the meetings of participating policyholders or shareholders.

1999 cI‑5.1 s287

Requisitioned meetings

288(1)  Shareholders who together hold not less than 5% of the issued and outstanding shares of a provincial 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 participating policyholders and shareholders for the purposes stated in the requisition.

(2)  At least 100 participating policyholders or 10% of the total number of those policyholders, whichever is fewer, may requisition the directors to call a meeting of participating policyholders or participating policyholders and shareholders for the purposes stated in the requisition.

(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 provincial company’s head office, and

                           (b)    may consist of several documents of similar form, each signed by one or more participating policyholders or shareholders.

(4)  The requisitioner must give notice to the Minister of a requisition made under subsection (1) or (2).

(5)  On receipt of a requisition referred to in subsection (1) or (2), the directors must call a meeting of participating policyholders or shareholders to transact the business stated in the requisition, unless

                           (a)    a record date has been fixed under section 269(3) or (7) and notice of the record date has been given under section 269(9),

                           (b)    the directors have called a meeting of participating policyholders or shareholders and have given notice of the meeting under section 270, or

                           (c)    the business of the meeting as stated in the requisition includes matters described in section 274(5)(b) to (d) and (g).

(6)  If the directors do not call a meeting within 21 days after receiving a requisition referred to in subsection (1) or (2), any participating policyholder or shareholder who signed the requisition may call the meeting.

(7)  A meeting called under this section must be called as nearly as possible in the manner in which meetings are to be called pursuant to the bylaws and this Act.

(8)  Unless the participating policyholders or shareholders otherwise resolve at a meeting called under subsection (6), the provincial company must reimburse the participating policyholders or shareholders for any expenses reasonably incurred by them in requisitioning, calling and holding the meeting.

1999 cI‑5.1 s288

Meeting called by Court

289(1)  Where it is impracticable

                           (a)    to call a meeting of participating policyholders or shareholders of a provincial company in the manner in which meetings of those policyholders or shareholders are to be called, or

                           (b)    to conduct the meeting in the manner required by the bylaws and this Act,

or where the Court thinks fit to do so for any other reason, the Court, on the application of a director or a participating policyholder or shareholder, may order a meeting to be called, held and conducted in such manner as the Court directs.

(2)  Without restricting the generality of subsection (1), the Court may order that the quorum required by the bylaws or this Act be varied or dispensed with at a meeting called, held and conducted pursuant to this section.

(3)  A meeting called, held and conducted pursuant to this section is for all purposes a meeting of participating policyholders or shareholders of the provincial company duly called, held and conducted.

1999 cI‑5.1 s289

Disputed elections and appointments

290(1)  A provincial company or a participating policyholder, shareholder or director of a company may apply to the Court to resolve any dispute in respect of the election or appointment of a director or an auditor of the company.

(2)  On an application under subsection (1), the 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, including directions for the management of the business and affairs of the company until a new election is held or a new appointment is made, and

                           (d)    an order determining the voting rights of shareholders, persons claiming to own shares, participating policyholders and persons claiming to be participating policyholders.

1999 cI‑5.1 s290

Notice to Minister

291(1)  A person who makes an application under section 289(1) or 290(1) must give notice of the application to the Minister before the hearing and must deliver a copy of the order of the Court, if any, to the Minister.

(2)  The Minister may appear and be heard in person or by counsel at the hearing of an application referred to in subsection (1).

1999 cI‑5.1 s291

Triennial solicitation of policyholders

292(1)  A provincial company must, at the time of the application for or issuance of a policy the holder of which is entitled to vote at meetings of the participating policyholders or participating policyholders and shareholders of the company and at least once every 3 years after the application,

                           (a)    advise the participating policyholder of the policyholder’s right to attend and to vote in person or by proxy at those meetings,

                           (b)    provide the policyholder with a form for the policyholder to complete and return to the company if the policyholder wishes to receive notices of the meetings of the participating policyholders or participating policyholders and shareholders during the next 3 years, and

                           (c)    provide the participating policyholder with a form of proxy.

(2)  Subsection (1) does not apply in respect of a provincial company that  provides its participating policyholders with notices of all meetings of participating policyholders and shareholders.

1999 cI‑5.1 s292

Take‑over Bids — Compulsory Purchase

Application of Business Corporations Act

293   Part 16 of the Business Corporations Act, except section 195(3) of that Act, applies with respect to a provincial company as if the company were a corporation within the meaning of that Act, and a reference in that Part to a section in that Act, other than to a section in that Part, is deemed to be a reference to the corresponding section of this Act that deals with the same subject‑matter.

RSA 2000 cI‑3 s293;AR 49/2002 s5;2002 c30 s16

Participating Policies and Dividends

Participating Account

294(1)  A provincial company must maintain accounts in respect of participating policies, separate from those maintained in respect of other policies, in the form and manner determined by the Minister.

(2)  The accounts maintained in respect of participating policies are referred to in this Subpart as participating accounts.

1999 cI‑5.1 s294

Allocation of income

295   A provincial company must credit to, or debit from, a participating account 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 consideration of the written opinion of the actuary of the company, and

                           (c)    not disallowed by the Minister, within 60 days after the Minister receives the resolution under section 297, on the ground that it is not fair and equitable to the participating policyholders.

1999 cI‑5.1 s295

Allocation of expenses

296   A provincial company must debit from a participating 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,

                           (b)    approved by resolution of the directors, after consideration of the written opinion of the actuary of the company, and

                           (c)    not disallowed by the Minister, within 60 days after the Minister receives the resolution under section 297, on the ground that it is not fair and equitable to the participating policyholders.

1999 cI‑5.1 s296

Filing of allocation method

297   The directors of a provincial company must file a copy of any resolution referred to in section 295(b) or 296(b) with the Minister, together with a copy of the written opinion of the actuary of the company and any other information that the Minister requests, within 30 days after making the resolution.

1999 cI‑5.1 s297

Review of allocation method

298   The actuary of a provincial company must report annually 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.

1999 cI‑5.1 s298

Regulations

299   The Lieutenant Governor in Council may make regulations

                           (a)    with respect to a provincial company that has share capital, establishing limits on the payment to shareholders of the company from a participating account or on the transfer of an amount from a participating account to an account from which payment may be made to shareholders of the company;

                           (b)    establishing limits on the transfer from a participating account to a segregated fund maintained pursuant to section 118.

1999 cI‑5.1 s299

Declaration of policy dividend or bonus

300(1)  Subject to this section, the directors of a provincial 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.

(2)  The directors must, before declaring a dividend, bonus or other benefit on participating policies, consider a written report, which the actuary of the provincial company must make, on whether in the actuary’s opinion the dividend, bonus or other benefit is in accordance with the dividend or bonus policy of the company.

(3)  The directors of a provincial company must 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 the requirements of Subpart 10.

1999 cI‑5.1 s300

Division 2
Proxies and Proxy Solicitation

Definitions

301   In this Division,

                           (a)    “registrant” means a securities broker or dealer required to be registered to trade or deal in securities under the laws of any jurisdiction;

                           (b)    “solicit” or “solicitation” includes

                                  (i)    a request for a proxy, whether or not accompanied with or included in a form of proxy,

                                (ii)    a request to execute or not to execute a form of proxy or to revoke a proxy,

                               (iii)    the sending of a form of proxy or other communication to a participating policyholder or shareholder under circumstances reasonably calculated to result in the procurement, withholding or revocation of a proxy, and

                               (iv)    the sending of a form of proxy to a shareholder under section 304,

                                    but does not include

                                 (v)    the sending of a form of proxy in response to an unsolicited request made by or on behalf of a participating policyholder or shareholder,

                               (vi)    the performance of administrative acts or professional services on behalf of a person soliciting a proxy,

                              (vii)    the sending by a registrant of the documents referred to in section 307, or

                             (viii)    a solicitation by a person in respect of shares of which that person is the beneficial owner;

                           (c)    “solicitation by or on behalf of the management of a provincial company” means a solicitation by any person pursuant to a resolution or instructions of, or with the acquiescence of, the directors or a committee of the directors of the company.

1999 cI‑5.1 s301

Appointing proxyholder

302(1)  A participating policyholder or shareholder may, by executing a form of proxy, appoint a proxyholder or one or more alternate proxyholders, who are not required to be policyholders or shareholders, to attend and act at the meeting of participating policyholders or shareholders in the manner and to the extent authorized by the proxy and with the authority conferred by the proxy.

(2)  A form of proxy must be executed by a participating policyholder or shareholder or by a participating policyholder’s or shareholder’s attorney authorized in writing to do so.

(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)    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 section 274(1), or

                           (b)    the form of proxy was sent to a participating policyholder pursuant to section 292.

(4)  No appointment of a proxyholder by execution of a form of proxy sent to a participating policyholder pursuant to section 292 provides authority for the proxyholder to act in respect of business referred to in section 270(1)(c).

(5)  An appointment of a proxyholder by execution of a form of proxy sent to a participating policyholder pursuant to section 292 after a provincial company receives a dissident’s proxy circular does not provide authority for the proxyholder to act at the meeting in respect of which the dissident’s proxy circular is sent.

(6)  A form of proxy must indicate, in boldface type, that the participating policyholder or 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 policyholder’s or shareholder’s behalf at a meeting to which the proxy relates, and must contain instructions as to the manner in which the policyholder or shareholder may do so.

(7)  Subject to subsections (4) and (5), a proxy given by a policyholder by executing a form of proxy sent to the participating policyholder pursuant to section 292 is valid for a period of 3 years after it is given or a lesser period specified in the proxy and at any adjournment of a meeting begun during that period, and any other proxy is valid only at the meeting in respect of which it is given or any adjournment of the meeting.

(8)  A participating policyholder or shareholder may revoke a proxy

                           (a)    by depositing a letter executed by the policyholder or shareholder or by the policyholder’s or shareholder’s attorney authorized in writing to do so

                                  (i)    at the provincial company’s head office at any time up to and including the last business day preceding the day of a meeting, or an adjournment of the meeting, at which the proxy is to be used, or

                                (ii)    with the chair of the meeting on the day of the meeting or an adjournment of the meeting,

                               or

                           (b)    in any other manner permitted by law.

1999 cI‑5.1 s302

Deposit of proxies

303(1)  The directors may specify in a notice calling a meeting of participating policyholders or shareholders a time preceding the meeting or an adjournment of the meeting before which time executed forms of proxy to be used at the meeting must be deposited with the provincial company or its transfer agent.

(2)  The time specified for the deposit of forms of proxy must not precede the meeting by more than

                           (a)    48 hours, excluding Saturdays and holidays, in the case of forms of proxy executed by shareholders, and

                           (b)    10 days, in the case of forms of proxy executed by participating policyholders.

1999 cI‑5.1 s303

Mandatory solicitation

304(1)  Subject to section 271(2) and subsection (2), the management of a provincial company must, concurrently with giving notice of a meeting of shareholders, send a form of proxy to each shareholder entitled to receive notice of the meeting.

(2)  Where a provincial company has fewer than 15 shareholders, 2 or more joint holders being counted as one shareholder, the management of the company is not required to send a form of proxy to the shareholders under subsection (1).

1999 cI‑5.1 s304

Soliciting proxies

305(1)  A person must not solicit proxies unless

                           (a)    in the case of solicitation by or on behalf of the management of a provincial company, a management proxy circular, either as an appendix to or as a separate document accompanying the notice of the meeting, or

                           (b)    in the case of any other solicitation, a dissident’s proxy circular stating the purposes of the solicitation

is sent to the auditor of the company, to each participating policyholder or shareholder whose proxy is solicited and, if clause (b) applies, to the company.

(2)  A person who sends a management proxy circular or dissident’s proxy circular must concurrently file with the Minister

                           (a)    in the case of a management proxy circular, a copy of the circular together with a copy of the notice of meeting, form of proxy and any other documents for use in connection with the meeting, and

                           (b)    in the case of a dissident’s proxy circular, a copy of the circular together with a copy of the form of proxy and any other documents to be used in connection with the meeting.

(3)  Subsection (1) does not apply in respect of the solicitation of proxies by the provision of a form of proxy pursuant to section 292.

(4)  On the application of an interested person, the Minister may, on the terms the Minister thinks fit, exempt the interested person from any of the requirements of subsection (1) and section 304, and the exemption may be given retroactive effect.

(5)  The Minister must set out in The Alberta Gazette the particulars of exemptions granted under subsection (4) together with the reasons for granting the exemptions.

1999 cI‑5.1 s305

Attendance at meeting

306(1)  A person who solicits a proxy and is appointed proxyholder must 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 must comply with the directions of the participating policyholder or shareholder who executed the form of proxy.

(2)  A proxyholder or an alternate proxyholder has the same rights as the appointing participating policyholder or shareholder to speak at a meeting of  policyholders or shareholders in respect of any matter, to vote by way of ballot at the meeting and, except where the proxyholder or alternate proxyholder has conflicting instructions from more than one policyholder or shareholder, to vote at such a meeting in respect of any matter by way of a show of hands.

1999 cI‑5.1 s306

Duty of registrant

307(1)  Shares of a provincial company that are registered in the name of a registrant or registrant’s nominee and that are not beneficially owned by the registrant must not be voted unless the registrant sends to the beneficial owner

                           (a)    forthwith after receiving them, a copy of the notice of the meeting, annual statement, management proxy circular, 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 where the registrant has already received written voting instructions from the beneficial owner.

(2)  A registrant must not vote or appoint a proxyholder to vote shares of a provincial company registered in the registrant’s name or in the name of the registrant’s nominee that the registrant does not beneficially own unless the registrant receives voting instructions from the beneficial owner.

(3)  A person by or on behalf of whom a solicitation is made must, at the request of a registrant, forthwith provide the registrant, at that person’s expense, with the necessary number of copies of the documents referred to in subsection (1)(a).

(4)  A registrant must 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.

(5)  If requested by a beneficial owner, a registrant must appoint the beneficial owner or a nominee of the beneficial owner as proxyholder.

(6)  The failure of a registrant to comply with any of subsections (1) to (5) does not render void any meeting of participating policyholders or shareholders or any action taken at the meeting.

(7)  Nothing in this Subpart gives a registrant the right to vote shares that the registrant is otherwise prohibited from voting.

1999 cI‑5.1 s307

Restraining order

308(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 required in the document or necessary to make a statement contained in the document not misleading in the light of the circumstances in which it was made, an interested person or the Minister may apply to the Court and the Court may make any order it thinks fit, including, without limiting the generality of the foregoing,

                           (a)    an order restraining the solicitation or the holding of the meeting, or restraining any person from implementing or acting on any 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.

(2)  Where a person other than the Minister is an applicant under subsection (1), the applicant must give to the Minister notice of the application and the Minister is entitled to appear and to be heard in person or by counsel.

1999 cI‑5.1 s308

Subpart 6
Directors and Officers

Duties

Duty to manage

309(1)  Subject to this Act, the directors of a provincial company must manage or supervise the management of the business and affairs of the company.

(2)  Without limiting the generality of subsection (1), the directors of a provincial company must

                           (a)    establish an audit committee and a conduct review committee;

                           (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)    in the case of a company that issues participating policies, establish, before issuing any participating policies, a policy for determining the dividends and bonuses to be paid to the participating policyholders;

                           (d)    establish procedures to provide disclosure of information that this Act and the regulations require to be disclosed;

                           (e)    establish policies and procedures to ensure that the company applies prudent investment standards in accordance with section 417;

                            (f)    appoint the actuary of the company.

(3)  Subsection (2)(a) does not apply to the directors of a provincial company where

                           (a)    all the voting shares of the company, other than directors’ qualifying shares, if any, are beneficially owned by a financial institution incorporated by or under an Act of the Legislature,

                           (b)    there are no participating policyholders, and

                           (c)    the audit committee or the conduct review committee of the financial institution referred to in clause (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.

1999 cI‑5.1 s309

Duty of care

310(1)  Every director and officer of a provincial 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 must

                           (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 reasonable and prudent person would exercise in comparable circumstances.

(2)  Every director, officer and employee of a provincial company must comply with this Act, the regulations, the company’s instrument of incorporation and the bylaws of the company.

(3)  No provision in any contract, in any resolution or in the bylaws of a provincial 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 of that duty.

1999 cI‑5.1 s310

Qualifications and Number of Directors

Minimum number of directors

311(1)  A provincial company must have at least 5 directors.

(2)  A majority of the directors must be ordinarily resident in Canada.

1999 cI‑5.1 s311

Disqualified persons

312(1)  The following persons are disqualified from being directors of a provincial company:

                           (a)    a person who is less than 18 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 an undischarged bankrupt;

                           (d)    a person who is not an individual;

                           (e)    a person who holds shares of the company where, by section 257(6), the person is prohibited from exercising the voting rights attached to the shares;

                            (f)    a person who is an officer, director or full‑time employee of an entity that holds shares of the company where, by section 257(6), the entity is prohibited from exercising the voting rights attached to the shares;

                           (g)    a person who is a represented adult as defined in the Adult Guardianship and Trusteeship Act or is the subject of a certificate of incapacity that is in effect under the Public Trustee Act;

                           (h)    a person employed in the public service of Alberta or by a Provincial agency or Crown‑controlled organization within the meaning of the Financial Administration Act and to which that Act applies, whether under a contract of service or a contract for services, whose substantive duties are directly concerned with the business or affairs of insurers, insurance agents or adjusters;

                            (i)    a person who fails to meet any other qualification requirements of the bylaws;

                            (j)    a person who, within the immediately preceding 5 years,

                                  (i)    has been convicted of an indictable offence that is of a kind that is related to the qualifications, functions or duties of a corporate director, or

                                (ii)    has been convicted of an offence against this Act,

                                    if the time for making an appeal has expired without an appeal having been made or the appeal has been finally disposed of by the courts or abandoned.

(2)  A shareholder of a provincial company is disqualified from being a participating policyholders’ director of the company.

RSA 2000 cI‑3 s312;2008 cA‑4.2 s136

No requirement to hold shares or policies

313   A director of a provincial company is not required to hold shares of or a policy issued by the company.

1999 cI‑5.1 s313

Affiliated directors

314(1)  In this section,

                           (a)    “not in good standing”, in respect of a loan, means that, in respect of that loan,

                                  (i)    any payment of principal or interest is 90 days or more overdue,

                                (ii)    interest is not being accrued on the books of the lender because it is doubtful whether the principal or interest will be paid or recovered, or

                               (iii)    the rate of interest is reduced by the lender because the borrower is financially weak;

                           (b)    “significant borrower” means

                                  (i)    an entity that has outstanding indebtedness for money borrowed from the provincial company and from any affiliate of the company in an aggregate principal amount that exceeds 25% of the equity in the entity, or

                                (ii)    an individual who has outstanding indebtedness for money borrowed from the provincial company and any affiliate of the company, other than a loan secured by a mortgage on the principal residence of that individual, in an aggregate principal amount that exceeds 25% of the individual’s net worth.

(2)  Not more than 1/3 of the directors of a provincial company may be individuals who are, or within the preceding 2 years have been, remunerated officers,  employees, insurance agents, insurance brokers or adjusters of the company or any of its affiliates.

(3)  No more than 2/3 of the directors may be affiliated directors.

(4)  An individual is an affiliated director of a provincial company if the individual

                           (a)    is an officer or employee of the company or an affiliate of the company,

                           (b)    has a significant interest in a class of shares of the company,

                           (c)    has a substantial investment in an affiliate of the company,

                           (d)    is a significant borrower in respect of the company,

                           (e)    is a director, officer or employee of an entity that is a significant borrower in respect of the company,

                            (f)    controls one or more entities of which the total indebtedness to the company or to an affiliate of the company would cause those entities, if treated as a single entity, to be a significant borrower of the company,

                           (g)    provides goods or services to the company, or is a partner or an employee in a partnership that provides goods or services to the company or an officer or employee of, or a person who has a substantial investment in, a body corporate that provides goods or services to the company, if the total annual billings to the company in respect of the goods and services provided exceeds 10% of the total annual billings of the individual, partnership or body corporate, as the case may be,

                           (h)    has a loan that is not in good standing from the company or from an affiliate of the company or is a director, an officer or an employee of, or an individual who controls, an entity that has a loan that is not in good standing from the company or from an affiliate of the company,

                            (i)    is a professional advisor to the company,

                            (j)    is an insurance agent, insurance broker or adjuster of the company,

                           (k)    is the spouse or adult interdependent partner of an individual described in any of clauses (a) to (j), or

                            (l)    is a relative of an individual described in any of clauses (a) to (j) who resides in the same home as the individual.

(5)  Whether a person is affiliated with a provincial company is determined as of the day the notice of the annual meeting is sent to participating policyholders and shareholders and that determination becomes effective on the day of that meeting, and a person is deemed to continue to be affiliated or unaffiliated, as the case may be, until the next annual meeting of participating policyholders and shareholders.

RSA 2000 cI‑3 s314;2002 cA‑4.5 s45

Election and Tenure of Directors

Number of directors

315(1)  Subject to sections 311(1) and 320, the directors of a provincial company must, by bylaw, determine the number of directors or the minimum and maximum number of directors, but no bylaw that decreases the number of directors shortens the term of an incumbent director.

(2)  Subject to sections 311(1) and 320, if a provincial company has common shares and participating policyholders, the directors of the company must by bylaw 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 participating policyholders.

(3)  A bylaw made pursuant to subsection (1) or (2) that provides for a minimum and maximum number of directors may provide that the number of directors, shareholders’ directors or participating policyholders’ directors to be elected at any annual meeting of the participating policyholders and shareholders is to be the number fixed by the directors prior to the annual meeting.

(4)  The number of shareholders’ directors and the number of participating policyholders’ directors, whether determined by bylaw or fixed by the directors, must each be at least 1/3 of the total number of directors.

(5)  If the shareholders of a mutual provincial company are entitled to elect one or more directors of the company, not more than 1/3 of the directors may be elected by the shareholders.

1999 cI‑5.1 s315

Changing number of directors

316(1)   Subject to sections 311(1), 315(4) and 320, the directors of a provincial company may make, amend or repeal any bylaw to increase or decrease the number of directors or the minimum or maximum number of directors, directors who are to be elected by the shareholders or directors who are to be elected by the participating policyholders.

(2)  The directors must submit a bylaw, or an amendment to or a repeal of a bylaw, that is made under subsection (1) to the participating policyholders and shareholders, and the policyholders and shareholders may, by special resolution, confirm, amend or reject the bylaw, amendment or repeal.

(3)  A bylaw, or an amendment to or a repeal of a bylaw, made under subsection (1) is not effective until it is confirmed or confirmed as amended by the policyholders and shareholders under subsection (2).

(4)  Where a special resolution referred to in subsection (2) so states, the directors may, without further approval of the policyholders or shareholders, revoke the special resolution.

1999 cI‑5.1 s316

Proposal to amend

317(1)  Subject to subsection (2), a director or a policyholder or shareholder who is entitled to vote at an annual meeting of policyholders and shareholders of a provincial company may, in accordance with sections 274 and 275, make a proposal to make, amend or repeal the bylaws of the company referred to in section 316.

(2)  If a proposal is made to make, amend or repeal the bylaws of a provincial company to effect any of the changes referred to in section 316, notice of the meeting of policyholders and shareholders at which the proposal is to be considered must set out the proposal.

1999 cI‑5.1 s317

Term of directors

318(1)  The provincial company may, by bylaw, provide that the directors be elected for a maximum of 3 years.

(2)  The term of a director ends at the close of the annual meeting of participating policyholders and shareholders held in the year in which the director’s term ends.

(3)  A director who is not elected for an expressly stated term of office holds office for a one‑year term.

1999 cI‑5.1 s318

Determining election of directors

319(1)  Except where the bylaws of a provincial company provide for cumulative voting, the individuals who receive the greatest number of votes at an election of directors of a company, up to the number authorized to be elected, are the directors of the company.

(2)  If a provincial company has common shares and participating policyholders, a shareholder of the company

                           (a)    is not entitled to vote for the participating policyholders’ directors if the shareholder is not a participating policyholder, and

                           (b)    is not entitled to vote any shares for the policyholders’ directors.

(3)  If a provincial company has common shares and participating policyholders, a participating policyholder of the company

                           (a)    is not entitled to vote for the shareholders’ directors if the participating policyholder is not a shareholder, and

                           (b)    is not entitled to vote as a participating policyholder for the shareholders’ directors.

(4)  If at any election of directors referred to in subsection (1) 2 or more persons receive an equal number of votes and there are not sufficient vacancies remaining to enable all the individuals receiving an equal number of votes to be elected, the directors who receive a greater number of votes, or the majority of those directors, must, in order to complete the full number of directors, determine which of the persons  receiving an equal number of votes are to be elected.

1999 cI‑5.1 s319

Cumulative voting

320(1)  Where the bylaws provide for cumulative voting,

                           (a)    in the case of a provincial company that has no participating policyholders, there must be a stated number of directors determined by bylaw, and not a minimum and maximum number;

                           (b)    in the case of a provincial company that has participating policyholders, there must be a stated number of shareholders’ directors determined by bylaw, and not a minimum and maximum number;

                           (c)    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;

                           (d)    a separate vote must 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 2 or more persons to be elected by a single vote;

                           (e)    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;

                            (f)    if the number of candidates nominated exceeds the number of positions to be filled, the candidates who receive the least number of votes must be eliminated until the number of candidates remaining equals the number of positions to be filled;

                           (g)    each director elected by cumulative voting ceases to hold office at the close of the next annual meeting of participating policyholders and shareholders following the director’s election;

                           (h)    a director elected by cumulative voting must not be removed from office if the votes cast against the removal would be sufficient to elect the director and those votes could be voted cumulatively at an election at which the same total number of votes were cast and the same number of directors required by the bylaws to be elected by cumulative voting were then being elected;

                            (i)    the number of directors required by the bylaws to be elected by cumulative voting must not be decreased if the votes cast against the motion to decrease would be sufficient to elect a director and those votes could be voted cumulatively at an election at which the same total number of votes were cast and the same number of directors required by the bylaws to be elected by cumulative voting were then being elected.

1999 cI‑5.1 s320

Class or series of shares

321   Nothing in this Act precludes the holders of any class or series of shares of a provincial company from having an exclusive right to elect one or more directors.

1999 cI‑5.1 s321

Re‑election of directors

322   A director who has completed a term of office is, if otherwise qualified, eligible for re‑election.

1999 cI‑5.1 s322

Incomplete Elections and Director Vacancies

Void election or appointment

323(1)  If directors are not elected at a meeting of participating policyholders or shareholders, the incumbent directors continue in office until their successors are elected.

(2)  If a meeting of participating policyholders or shareholders fails to elect the number of directors required by this Act or the bylaws by reason of disqualification or the incapacity or death of one or more candidates, the directors elected at that meeting, if they constitute a quorum, may exercise all the powers of the directors of the provincial company pending the holding of a meeting of participating policyholders or shareholders in accordance with subsection (3).

(3)  If there is not a quorum of directors, or if there has been a failure to elect the number or minimum number of directors required by this Act or the bylaws, the directors then in office must forthwith call a special meeting of participating policyholders or shareholders, as the case may be, to fill the vacancy or vacancies, and if they fail to call a meeting or if there are no directors then in office, any participating policyholder or shareholder may call the meeting.

1999 cI‑5.1 s323

Ceasing to hold office

324(1)  A director ceases to hold office

                           (a)    when the director’s term of office expires,

                           (b)    when the director dies or resigns,

                           (c)    when the director becomes disqualified under section 312 or ineligible to hold office pursuant to section 355(2), or

                           (d)    when the director is removed under section 325.

(2)  The resignation of a director of a provincial 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.

1999 cI‑5.1 s324

Removal of director

325(1)  Subject to section 320(1)(h) and this section, the participating policyholders or shareholders of a provincial company may by resolution at a special meeting remove any director or all the directors from office.

(2)  A shareholders’ director may be removed only by a resolution of the shareholders at a meeting of shareholders or participating policyholders and shareholders.

(3)  A participating policyholders’ director may be removed only by a resolution of the participating policyholders at a meeting of participating policyholders or participating policyholders and shareholders.

(4)  Where the holders of any class or series of shares of a provincial 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.

(5)  A vacancy created by the removal of a director may be filled at the meeting of the participating policyholders or shareholders at which the director is removed or, if not so filled, may be filled under section 328.

1999 cI‑5.1 s325

Statement of director

326(1)  A director who

                           (a)    resigns,

                           (b)    receives a notice or otherwise learns of a meeting of participating policyholders or 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 participating policyholders 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 provincial company a written statement giving the reasons for the resignation or the reasons why the director opposes any proposed action or resolution.

(2)  Where a director of a provincial company resigns as a result of a disagreement with the other directors or the officers of the company, the director must submit to the company and the Minister a written statement setting out the nature of the disagreement.

1999 cI‑5.1 s326

Circulation of statement

327(1)  A provincial company must forthwith on receipt of a director’s statement referred to in section 326(1) relating to a matter referred to in section 326(1)(b) or (c), or a director’s statement referred to in section 326(2), send a copy of the director’s statement

                           (a)    to all other directors, and

                           (b)    unless the directors of the company consider on reasonable grounds that sending the statement would materially and adversely affect the financial viability of the company, to each participating policyholder and shareholder entitled to receive notice of meetings under section 270(1)(a) or (b) and to the Minister, unless the statement is attached to a notice of a meeting.

(2)  Where the directors decide, under subsection (1)(b), not to send a copy of the statement to the participating policyholders and shareholders, they must forthwith notify the Minister in writing to that effect, and the Minister may, despite that decision, order the provincial company to send the statement to the participating policyholders and shareholders entitled to receive notice of meetings under section 270(1)(a) or (b).

(3)  No provincial company or person acting on its behalf incurs any liability by reason only of circulating a director’s statement in compliance with subsection (1).

1999 cI‑5.1 s327

Shareholders or policyholders filling vacancy

328   The bylaws of a provincial company may provide that a vacancy among the directors is to be filled only by vote of

                           (a)    the participating policyholders or shareholders,

                           (b)    the shareholders, if the vacancy occurs among the shareholders’ directors,

                           (c)    the participating policyholders, if the vacancy occurs among the participating 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.

1999 cI‑5.1 s328

Directors filling vacancy

329(1)  Despite section 335(4)(b) but subject to subsection (2) and sections 328, 330 and 331, a quorum of directors may fill a vacancy among the directors except a vacancy among the directors resulting from a change in the bylaws by which the number or minimum number of directors is increased or from a failure to elect the number or minimum number of directors required by the bylaws.

(2)  Despite sections 324 and 335(4)(b), 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 sections 311, 314(2) and (3) and 315(4), the directors who, in the absence of any bylaw, would be empowered to fill that vacancy must do so forthwith.

1999 cI‑5.1 s329

Vacancy among shareholders or policyholders directors

330   Despite section 335(4)(b) but subject to sections 328 and 331, where a provincial company has shareholders’ directors and participating policyholders’ directors and a vacancy occurs among those directors,

                           (a)    the remaining shareholders’ directors or participating policyholders’ directors, as the case may be, may fill the vacancy except a vacancy resulting from an increase in, or a failure to elect, the number or minimum number of shareholders’ directors or participating policyholders’ directors,

                           (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 sections 311, 314(2) and (3) and 315(4), the other directors may fill that vacancy, and

                           (c)    if there are no such remaining directors and clause (b) does not apply, any participating policyholder or shareholder may call a meeting of participating policyholders or shareholders for the purpose of filling the vacancy.

1999 cI‑5.1 s330

Class vacancy

331   Despite section 335(4)(b) but subject to section 328, where the holders of any class or series of shares of a provincial 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 may fill the vacancy except a vacancy resulting from an increase in, or a failure to elect, the number or minimum number of directors 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 sections 311, 314(2) and (3) and 315(4), the other directors may fill that vacancy, and

                           (c)    if there are no such remaining directors and clause (b) does not apply, any holder of shares of that class or series may call a meeting of the holders of those shares for the purpose of filling the vacancy.

1999 cI‑5.1 s331

Unexpired term

332   Unless the bylaws otherwise provide, a director elected or appointed to fill a vacancy holds office for the unexpired term of the director’s predecessor in office.

1999 cI‑5.1 s332

Meetings of the Board

Meeting of directors

333(1)  Unless the bylaws otherwise provide, the directors may meet at any place.

(2)  Notice of meetings of the directors must be given in accordance with the bylaws.

1999 cI‑5.1 s333

Notice of meeting

334(1)  A notice of a meeting of directors must specify each matter referred to in section 350(2) that is to be dealt with at the meeting but, unless the bylaws otherwise provide, need not otherwise specify the purpose of or the business to be transacted at the meeting.

(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.

(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.

1999 cI‑5.1 s334

Quorum

335(1)  The number of directors referred to in subsection (2) constitutes a quorum at any meeting of directors or a committee of directors and, despite any vacancy among the directors, a quorum of directors may exercise all the powers of the directors.

(2)  A quorum for a meeting of the directors is the greater of

                           (a)    three directors, and

                           (b)    a majority of the directors.

(3)  A quorum for a meeting of a committee of the directors is a majority of the directors comprising the committee.

(4)  Despite subsections (2) and (3), there is no quorum unless

                           (a)    at least one of the directors present at the meeting is not an affiliated director as determined under section 314(4) and (5), and

                           (b)    at least 1/2 of the directors present at the meeting are ordinarily resident in Canada.

(5)  Any director present at a meeting of directors who is not present at any particular time during the meeting for the purposes of section 355(1) is considered as being present for the purposes of this section.

1999 cI‑5.1 s335

Resident Canadian majority

336   Despite section 335, the directors of a provincial company may transact business at a meeting of directors or of a committee of directors without the required proportion of directors who are ordinarily resident in Canada if

                           (a)    a director who is ordinarily resident in Canada and is unable to be present approves, in writing or by telephone or by any other means, the business transacted at the meeting, and

                           (b)    there would have been present the required proportion of directors who are ordinarily resident in Canada had that director been present at the meeting.

1999 cI‑5.1 s336

Electronic meeting

337(1)  Subject to the bylaws of a provincial company, a meeting of directors or of a committee of directors may be held by means of telephonic, electronic or other communications facilities that permit all persons participating in the meeting to communicate with each other during the meeting.

(2)  A director participating in a meeting by any means referred to in subsection (1) is, for the purposes of this Act, present at that meeting.

1999 cI‑5.1 s337

Resolution instead of meeting

338(1)  A resolution in writing signed by all the directors of a provincial company entitled to vote on that resolution at a meeting of directors or a committee of directors is as valid as if it had been passed at a meeting of directors or a committee of directors.

(2)  A resolution in writing dealing with all matters required by this Act to be dealt with at a meeting of directors or a committee of directors of a provincial company and signed by all the directors entitled to vote at that meeting satisfies all the requirements of this Act relating to meetings of directors or committees of directors.

1999 cI‑5.1 s338

Dissent of director

339(1)  A director of a provincial 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 recorded mail or delivers it to the head office of the company immediately after the meeting is adjourned.

(2)  A director of a provincial company who votes for or consents to a resolution is not entitled to dissent under subsection (1).

(3)  A director of a provincial company who is not present at a meeting at which a resolution is passed or action taken is deemed to have consented to the resolution or action taken unless, within 7 days after the director becomes aware of the resolution or action taken, 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 recorded mail or delivers it to the head office of the company.

RSA 2000 cI‑3 s339;2016 c23 s3

Meeting required by Minister

340(1)  The Minister may, by notice in writing, require a provincial company to hold a meeting of directors of the company to consider the matters set out in the notice.

(2)  The Minister may attend and be heard at a meeting referred to in subsection (1).

1999 cI‑5.1 s340

Bylaws

Bylaws

341(1)  Unless this Act otherwise provides, the directors of a provincial company may by resolution make, amend or repeal any of the company’s bylaws.

(2)  The directors must submit a bylaw, or an amendment to or a repeal of a bylaw, that is made under subsection (1) to the participating policyholders and shareholders at the next meeting of participating policyholders and shareholders, and the participating policyholders and shareholders may, by resolution, confirm, amend or reject it.

(3)  Unless this Act or the instrument of incorporation otherwise provides, a bylaw, or an amendment to or a repeal of a bylaw, 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 participating policyholders and shareholders under subsection (2) or until it ceases to be effective under subsection (4) and, where the bylaw is confirmed, or confirmed as amended, it continues in effect in the form in which it was so confirmed.

(4)  If a bylaw, or an amendment to or a repeal of a bylaw, is rejected by the participating policyholders and shareholders, or is not submitted to the participating policyholders and shareholders by the directors as required under subsection (2), the bylaw, amendment or repeal ceases to be effective from the date of its rejection or the date of the next meeting of participating policyholders and shareholders, as the case may be, and no subsequent resolution of the directors to make, amend or repeal a bylaw having substantially the same purpose or effect is effective until it is confirmed, or confirmed as amended, by the participating policyholders and shareholders.

1999 cI‑5.1 s341

Policyholder or shareholder proposal of bylaw

342   A participating policyholder or shareholder may, in accordance with sections 274 and 275, make a proposal to make, amend or repeal a bylaw.

1999 cI‑5.1 s342

Minister to receive bylaws

343   A provincial company must provide the Minister with a copy of all bylaws of the provincial company, including amendments, within 30 days after they come into force.

1999 cI‑5.1 s343

Entitlement to copies of bylaws

344   Every participating policyholder and shareholder of a provincial company is entitled, on request made not more frequently than once in each calendar year, to receive, free of charge, one copy of the bylaws of the company.

1999 cI‑5.1 s344

Committees of the Board

Committees

345   The directors of a provincial company may appoint from their number, in addition to the committees referred to in section 309(2), such other committees as they deem necessary and, subject to section 350, delegate to those committees such powers of the directors, and assign to those committees such duties, as the directors consider appropriate.

1999 cI‑5.1 s345

Audit committee

346(1)  The audit committee of a provincial company must consist of at least 3 directors.

(2)  Two thirds of the members of the audit committee of a provincial company must be directors who are not affiliated directors of the company as determined under section 314(4) and (5), and none of the members of the audit committee may be officers, employees, insurance agents, adjusters or brokers of the company or of a subsidiary of the company.

(3)  The audit committee of a provincial company must

                           (a)    review the annual financial statements of the company before the annual financial statements are approved by the directors,

                           (b)    review the annual return of the company before the annual return is approved by the directors,

                           (c)    ensure that appropriate internal control procedures are in place,

                           (d)    review the investments and transactions that could adversely affect the well‑being of the company that the auditor or any officer of the company brings to the attention of the committee,

                           (e)    meet with the auditor to discuss the annual financial statements and the annual return and transactions referred to in this subsection,

                            (f)    meet with the actuary of the company to discuss the parts of the annual financial statements and the annual return 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.

(4)  The audit committee of a provincial company must report on the annual financial statements and annual return to the directors before the directors approve the statements and return.

(5)  The audit committee of a provincial company may call a meeting of the directors of the company to consider any matter of concern to the committee.

1999 cI‑5.1 s346

Conduct review committee

347(1)  The conduct review committee of a provincial company must consist of at least 3 directors.

(2)  Two‑thirds of the members of the conduct review committee of a provincial company must be directors who are not affiliated directors of the company as determined under section 314(4) and (5), and none of the members of the conduct review committee may be officers,  employees, insurance agents, adjusters or brokers of the company or of a subsidiary of the company.

(3)  The conduct review committee of a provincial company must

                           (a)    establish procedures for the review of transactions with related parties of the provincial company to which Subpart 12 applies,

                           (b)    review all proposed transactions with related parties of the company in accordance with Subpart 12, 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.

(4)  After each meeting of the conduct review committee of a provincial company, the committee must report to the directors of the company on all transactions and other matters reviewed by the committee.

1999 cI‑5.1 s347

Authority of Directors and Officers

Chief executive officer

348   The directors of a provincial company must appoint a chief executive officer who must be ordinarily resident in Canada, must specify the duties of the chief executive officer and, subject to section 350, may delegate to that officer any of the powers of the directors.

RSA 2000 cI‑3 s348;2013 c18 s10

Appointment of officers

349(1)  The directors of a provincial company may, subject to the bylaws, designate the offices of the company, appoint officers to those offices, specify the duties of those officers and, subject to section 350, delegate to them powers to manage the business and affairs of the company.

(2)  A director of a provincial company may be appointed to any office of the company.

(3)  Two or more offices of a provincial company may be held by the same person.

1999 cI‑5.1 s349

Delegation

350(1)  The directors of a provincial company may delegate any of their powers, except for the powers specified in subsection (2).

(2)  The directors of a provincial company must not delegate the power

                           (a)    to submit to the participating policyholders or shareholders a question or matter requiring the approval of the participating policyholders or shareholders,

                           (b)    to fill a vacancy among the directors or a committee of directors or in the office of auditor or actuary of the company,

                           (c)    to issue or cause to be issued securities, except in the manner and on terms authorized by the directors,

                           (d)    to declare a dividend on shares or a policy dividend, bonus or other benefit payable to participating policyholders, other than a dividend on a group policy that is a participating policy,

                           (e)    to authorize the redemption or acquisition of shares issued by the company pursuant to section 245, 246 or 247,

                            (f)    to authorize the payment of a commission on a securities issue,

                           (g)    to approve a management proxy circular,

                           (h)    to approve the annual financial statements of the company and any other financial statements issued by the company,

                            (i)    to approve the annual return of the company, or

                            (j)    to adopt, amend or repeal bylaws.

1999 cI‑5.1 s350

Remuneration

351(1)  A provincial company must make bylaws respecting the remuneration of directors.

(2)  Subject to the bylaws, the directors of a provincial company may fix the remuneration of the officers and employees of the company.

1999 cI‑5.1 s351

Validity of acts

352(1)  An act of a director or an officer of a provincial company is valid despite a defect in the director’s qualification or an irregularity in the director’s election or in the appointment of the director or officer.

(2)  An act of the board of directors of a provincial company is valid despite 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.

1999 cI‑5.1 s352

Right to attend meetings

353   A director of a provincial company is entitled to attend and to be heard at every meeting of participating policyholders or shareholders.

1999 cI‑5.1 s353

Conflicts of Interest

Disclosure of interest

354(1)  A director or an officer of a provincial company who

                           (a)    is a party to a material contract or proposed material contract with the company,

                           (b)    is a director or an officer of any entity that is a party to a material contract or proposed material contract with the company, or

                           (c)    has a material interest in any person who is a party to a material contract or proposed material contract with the company

must disclose in writing to the company or request to have entered in the minutes of the meetings of directors the nature and extent of that interest.

(2)  The disclosure required by subsection (1) must be made, in the case of a director,

                           (a)    at the meeting of directors at which a proposed contract is first considered,

                           (b)    if the director was not then interested in the proposed contract, at the first meeting after the director becomes so interested,

                           (c)    if the director becomes interested after a contract is made, at the first meeting after the director becomes so interested, or

                           (d)    if a person who is interested in a contract later becomes a director, at the first meeting after that person becomes a director.

(3)  The disclosure required by subsection (1) must be made, in the case of an officer who is not a director,

                           (a)    forthwith after the officer becomes aware that a proposed contract is to be considered or a contract has been considered at a meeting of directors,

                           (b)    if the officer becomes interested after a contract is made, forthwith after the officer becomes so interested, or

                           (c)    if a person who is interested in a contract later becomes an officer, forthwith after the person becomes an officer.

(4)  If a material contract or proposed material contract is one that, in the ordinary course of business of the provincial company, would not require approval by the directors or the participating policyholders and shareholders, a director or an officer referred to in subsection (1) must disclose in writing to the company or request to have entered in the minutes of meetings of directors the nature and extent of the director’s or officer’s interest forthwith after the director or officer becomes aware of the contract or proposed contract.

1999 cI‑5.1 s354

Voting

355(1)  A director referred to in section 354(1) must not be present or vote on any resolution to approve the contract unless the contract is

                           (a)    an arrangement by way of security for money lent to or obligations undertaken by the director for the benefit of the provincial company or a subsidiary of the company,

                           (b)    a contract relating primarily to the director’s remuneration as a director or an officer, employee or agent of the provincial company, a subsidiary of the company, an entity controlled by the company or an entity in which the company has a substantial investment,

                           (c)    a contract for indemnity under section 365 or for insurance under section 366, or

                           (d)    a contract with an affiliate of the provincial company.

(2)  Any director who knowingly contravenes subsection (1) ceases to hold office as director and is not eligible, for a period of 5 years after the date on which the contravention occurred, for election or appointment as a director of any financial institution that is incorporated by or under an Act of the Legislature.

1999 cI‑5.1 s355

Continuing disclosure

356   For the purposes of section 354(1), a general notice to the directors by a director or an officer declaring that the director or officer is a director or officer of an entity or has a material interest in a person and is to be regarded as interested in any contract made with that entity or person is a sufficient declaration of interest in relation to any contract so made.

1999 cI‑5.1 s356

Avoidance standards

357   A material contract between a provincial company and one or more of its directors or officers, or between a provincial company and another entity of which a director or an officer of the company is a director or an officer, or between a provincial company and a person in which the director or officer has a material interest, is neither void nor voidable

                           (a)    by reason only of that relationship, or

                           (b)    by reason only that a director with an interest in the contract is present at or is counted to determine the presence of a quorum at the meeting of directors or the committee of directors that authorized the contract,

if the director or officer disclosed the interest in accordance with section 354(2), (3) or (4) or section 356 and the contract was approved by the directors or the participating policyholders and shareholders and the contract was reasonable and fair to the company at the time it was approved.

1999 cI‑5.1 s357

Application to Court

358   Where a director or an officer of a provincial company fails to disclose an interest in a material contract in accordance with sections 354 and 356, the Court may, on the application of the company, a shareholder of the company or a participating policyholder, set aside the contract on such terms as the Court thinks fit.

1999 cI‑5.1 s358

Liability and Indemnification

Liability for incorporation expenses

359(1)  The directors of a provincial company who pay incorporation or organization expenses from the capital of the company or from interest on the capital without complying with section 140 are jointly and severally liable to the shareholders or incorporators of the company for the amount of those expenses.

(2)  A director of a provincial 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.

1999 cI‑5.1 s359

Liability for other matters

360(1)  The directors of a provincial company who vote for or consent to a resolution of the directors authorizing the issue of a share in contravention of section 234(3) or the issue of subordinated indebtedness in contravention of section 241 for a consideration other than money are jointly and severally 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.

(2)  The directors of a provincial company who vote for or consent to a resolution of the directors authorizing

                           (a)    a purchase, redemption or acquisition of shares in contravention of section 245, 246 or 247,

                           (b)    a reduction of share capital in contravention of section 249,

                           (c)    a payment of a dividend in contravention of section 253,

                           (d)    a payment of an indemnity in contravention of section 365, or

                           (e)    any transaction in contravention of Subpart 12,

are jointly and severally 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.

1999 cI‑5.1 s360

Contribution

361(1)  A director who has satisfied a judgment in relation to the director’s liability under section 360 is entitled to contribution from the other directors who voted for or consented to the unlawful act on which the judgment was founded.

(2)  A director who is liable under section 360 is entitled to apply to the 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 in contravention of section 245, 246, 247, 249, 253 or 365, or

                           (b)    an amount equal to the value of the loss suffered by the provincial company as a result of any transaction that contravenes Subpart 12.

(3)  Where an application is made to the 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 in contravention of section 245, 246, 247, 249, 253 or 365 or any amount referred to in subsection (2)(b),

                           (b)    order a provincial 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.

1999 cI‑5.1 s361

Limitation

362   An action to enforce a liability imposed by section 360 must not be commenced after 2 years from the date of the resolution authorizing the action complained of.

1999 cI‑5.1 s362

Liability for wages

363(1)  Subject to subsections (2) and (3), the directors of a provincial company are jointly and severally liable to each employee of the company for all debts not exceeding 6 months’ wages payable to the employee for services performed for the company while they are directors.

(2)  A director is not liable under subsection (1) unless

                           (a)    the provincial company has been sued for the debt within 6 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 6 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 (Canada) and a claim for the debt has been allowed or proven within 6 months after the issue of the winding‑up order.

(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 2 years after the person has ceased to be a director.

(4)  Where execution referred to in subsection (2)(a) has issued, the amount recoverable from a director is the amount remaining unsatisfied after execution.

(5)  Where a director of a provincial 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.

(6)  A director of a provincial 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.

1999 cI‑5.1 s363

Reliance on statement

364   A director, an officer or an employee of a provincial company is not liable under section 310(1) or (3), 360 or 363 if the director, officer or employee relies in good faith on

                           (a)    financial statements of the company represented to the director, officer or employee by an officer of the company or in a written report of the auditor of the company to reflect fairly the financial condition of the company, or

                           (b)    a report of a professional advisor.

1999 cI‑5.1 s364

Indemnification of directors and officers

365(1)  Except in respect of an action by or on behalf of the provincial company to procure a judgment in its favour, a provincial company may indemnify

                           (a)    a director or an officer of the company,

                           (b)    a former director or officer of the company, or

                           (c)    any person who acts or acted at the company’s request as a director or an officer of an entity of which the company is or was a shareholder or creditor

against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment reasonably incurred by the person in respect of any civil, criminal or administrative action or proceeding to which the person is made a party by reason of being or having been a person referred to in any of clauses (a) to (c), if

                           (d)    the director, officer or person acted honestly and in good faith with a view to the best interests of the company, and

                           (e)    in the case of a criminal or administrative action or proceeding enforced by a monetary penalty, the director, officer or person had reasonable grounds for believing that the impugned conduct was lawful.

(2)  A provincial company may, with the approval of the Court, indemnify a person referred to in subsection (1) in respect of an action by or on behalf of the company or entity to procure a judgment in its favour to which the person is made a party by reason of being or having been a director or an officer of the company or entity against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the person in connection with that action if the person fulfils the conditions set out in subsection (1)(d) and (e).

(3)  Despite anything in this section, a person referred to in subsection (1) is entitled to indemnity from the provincial company in respect of all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the person in connection with the defence of any civil, criminal or administrative action or proceeding to which the person is made a party by reason of being or having been a director or an officer of the company or an entity if the person seeking indemnity

                           (a)    was substantially successful on the merits in the defence of the action or proceedings, and

                           (b)    fulfils the conditions set out in subsection (1)(d) and (e).

(4)  A provincial company may, to the extent referred to in subsections (1) to (3) in respect of the person, indemnify the heirs or personal representatives of any person the company may indemnify pursuant to subsections (1) to (3).

1999 cI‑5.1 s365

Directors and officers insurance

366   A provincial company may purchase and maintain insurance for the benefit of any person referred to in section 365 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 an officer of another entity where the person acts or acted in that capacity at the company’s request, except where the liability relates to a failure to act honestly and in good faith with a view to the best interests of the entity.

1999 cI‑5.1 s366

Application to Court for indemnification

367(1)  A provincial company or a person referred to in section 365 may apply to the Court for an order approving an indemnity under section 365(2) and the Court may so order and make any further order it thinks fit.

(2)  An applicant under subsection (1) must give the Minister written notice of the application and the Minister is entitled to appear and to be heard at the hearing of the application in person or by counsel.

(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 at the hearing of the application in person or by counsel.

1999 cI‑5.1 s367

Subpart 7
Insider Trading

Interpretation

368(1)  In this Subpart,

                           (a)    “business combination” means an acquisition of all or substantially all the assets of one body corporate by another body corporate or an amalgamation of 2 or more bodies corporate;

                           (b)    “insider” means, with respect to a provincial company,

                                  (i)    the company,

                                (ii)    an affiliate of the company,

                               (iii)    a director or an officer of the company,

                               (iv)    a person who has a substantial investment in the company,

                                 (v)    a person employed or hired by the company, and

                               (vi)    a person who receives specific confidential information from a person referred to in this clause, including a person referred to in this subclause, and who has knowledge that the person giving the information is a person described in this clause;

                           (c)    “officer”, in relation to a provincial company, means

                                  (i)    a chief executive officer, president, vice‑president, secretary, controller, treasurer and any other individual designated as an officer of the company by bylaw or by resolution of the directors of the company, and

                                (ii)    any individual who performs functions for the company similar to those performed by an individual referred to in subclause (i).

(2)  For the purposes of this Subpart,

                           (a)    if a body corporate becomes an insider of a provincial company or enters into a business combination with a provincial company, or

                           (b)    if a provincial company becomes an insider of a body corporate, or enters into a business combination with a body corporate,

every director or officer of the body corporate is deemed to have been an insider of the company for the previous six months or for such shorter period as the director or officer was a director or officer of the body corporate.

1999 cI‑5.1 s368

Application

369   This Subpart applies to a transaction in a security of a provincial company or any of its affiliates only if the provincial company is not a reporting issuer.

1999 cI‑5.1 s369

Civil liability

370(1)  An insider who, in connection with a transaction in a security of the provincial company or any of its affiliates, makes use of any specific confidential information for the insider’s own benefit or advantage that, if generally known, might reasonably be expected to affect materially the value of the security is

                           (a)    liable to compensate any person for any direct loss suffered by that person as a result of the transaction, unless the information was known or in the exercise of reasonable diligence should have been known to that person at the time of the transaction, and

                           (b)    accountable to the company for any direct benefit or advantage received or receivable by the insider as a result of the transaction.

(2)  An action to enforce a right created by subsection (1) must not be commenced after 2 years from discovery of the facts that gave rise to the cause of action.

1999 cI‑5.1 s370

Subpart 8
Auditors

Definition

371   In this Subpart, “designated individual” means the individual that is required to be designated by an auditor under section 373.

1999 cI‑5.1 s371

Appointment of auditor

372(1)  The shareholders and participating policyholders of a provincial company must, by ordinary resolution at each annual meeting of participating policyholders and shareholders, appoint a person as auditor to hold office until the close of the next annual meeting.

(2)  The remuneration of an auditor may be fixed by ordinary resolution of the participating policyholders and shareholders but, if not so fixed, must be fixed by the directors.

1999 cI‑5.1 s372

Designated individual

373   If the auditor of a provincial company is not an individual, the auditor must designate an individual who is responsible for acting on behalf of the auditor.

1999 cI‑5.1 s373

Qualifications of auditor

374(1)  The designated individual or individual who is the auditor of a provincial company must

                           (a)    be a member in good standing of an institute or association of accountants incorporated by or under an Act,

                           (b)    have at least 5 years’ experience in performing audits of a financial institution, and

                           (c)    be ordinarily resident in Canada.

(2)  The auditor of a provincial company, every partner in a firm that is the auditor of a provincial company and the designated individual of an auditor must be independent of the company.

(3)  For the purposes of subsection (2),

                           (a)    independence is a question of fact, and

                           (b)    a person is deemed not to be independent of a provincial company if that person

                                  (i)    is a director or an 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 2 years immediately preceding the person’s or person’s firm’s proposed appointment as auditor of the company or the individual’s proposed designation by the auditor, other than an affiliate that is a subsidiary of the company acquired pursuant to a loan workout or through a realization of security pursuant to section 421(2).

(4)  No person is disqualified from acting as the auditor of a provincial company or from being a designated individual solely on the grounds that the person or, if the person is a firm, a partner of the firm is a policyholder in the company.

1999 cI‑5.1 s374

Revocation of auditors appointment

375(1)  The directors of a provincial company must revoke the appointment of its auditor if

                           (a)    the auditor no longer meets the requirements of section 374 and the auditor does not resign, or

                           (b)    the auditor’s designated individual no longer meets the requirements of section 374 and the auditor does not replace its designated individual with an individual who meets the requirements of section 374.

(2)  The Minister may revoke the appointment of an auditor of a provincial company if the Minister is satisfied that the auditor or the auditor’s designated individual no longer meets the requirements of section 374.

(3)  The participating policyholders and shareholders of a provincial company may, by ordinary resolution at a special meeting, revoke the appointment of an auditor.

(4)  Nothing in this section permits the revocation of the appointment of an auditor if the auditor was appointed by the Court, unless the Court provides otherwise.

1999 cI‑5.1 s375

Declaration of vacancy by Court

376   Any interested person may apply to the Court for an order declaring that an auditor or its designated individual no longer meets the requirements of section 374 and declaring the office of auditor to be vacant.

1999 cI‑5.1 s376

Ceasing to hold office

377(1)  The office of auditor of a provincial company becomes vacant when

                           (a)    the auditor resigns,

                           (b)    if the auditor is an individual, the individual dies,

                           (c)    if the auditor is not an individual, the auditor is dissolved,

                           (d)    the appointment of the auditor is revoked, or

                           (e)    the office of auditor is declared to be vacant under section 376.

(2)  The resignation of an auditor becomes effective at the time a written resignation is sent to the provincial company or at the time specified in the resignation, whichever is later.

1999 cI‑5.1 s377

Filling vacancy

378(1)  If the office of auditor of a provincial company becomes vacant, the participating policyholders and shareholders or, if the bylaws permit, the directors must forthwith fill the vacancy.

(2)  An auditor appointed under subsection (1) holds office for the unexpired term of office of the predecessor auditor.

(3)  If a replacement auditor is not appointed in accordance with subsection (1), the Court may appoint an auditor to hold office for the unexpired term of the predecessor auditor and fix the remuneration of the auditor on the application of

                           (a)    a participating policyholder or shareholder of the provincial company, or

                           (b)    in addition to the persons referred to in clause (a), the Executive Director under the Securities Act if the provincial company is a reporting issuer.

1999 cI‑5.1 s378

Statement of auditor

379(1)  An auditor of a provincial company who

                           (a)    resigns,

                           (b)    receives a notice or otherwise learns of a meeting of directors or participating policyholders and 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 participating policyholders and shareholders at which another person is to be appointed in the auditor’s place, 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,

must submit to the company and the Minister a written statement giving the reasons for the resignation or the reasons why, in the auditor’s opinion, the auditor’s appointment is to be revoked or not renewed.

(2)  If the reasons in the auditor’s statement are based on a disagreement between the auditor and the directors or officers, the provincial company must forthwith send a copy of the statement to each participating policyholder and each voting shareholder.

1999 cI‑5.1 s379

Duty of replacement auditor

380(1)  Where an auditor of a provincial company has resigned or the appointment of an auditor has been revoked, or where the auditor’s term of office has expired or is about to expire and the auditor is not to be reappointed, no person may accept an appointment or consent to be appointed as auditor of the company until

                           (a)    the person has requested and received from the predecessor auditor the written statement under section 379(1), or

                           (b)    the person has requested from the predecessor auditor the written statement under section 379(1) and the person has not received the statement within 15 days after making the request.

(2)  If the predecessor auditor’s statement is not received by the person who will be the replacement auditor within 15 days after the request is made, the person must promptly notify the Minister and, if the Minister has received the written statement, the Minister must provide it to the person.

1999 cI‑5.1 s380

Right to attend meetings

381(1)  The auditor of a provincial company is entitled to receive reasonable notice of every meeting of participating policyholders or shareholders, directors, audit committee and conduct review committee of the company and, at the expense of the company, to attend and be heard at those meetings on matters relating to the duties of the auditor.

(2)  If a director, participating policyholder or shareholder of a provincial company, whether or not the shareholder is entitled to vote at the meeting, gives written notice not less than 10 days before a meeting of participating policyholders or shareholders to an auditor or former auditor of the provincial company that the director, policyholder or shareholder wishes the auditor to attend at the meeting, the auditor or former auditor must attend the meeting at the expense of the company and answer questions relating to the auditor’s or former auditor’s duties as auditor.

(3)  An auditor is not required to comply with subsection (2) where the audit committee is satisfied that the request under subsection (2) is made primarily for the purpose of enforcing a personal claim or redressing a personal grievance against the provincial company or any of its directors, officers or security holders, or for a purpose that is not related in any significant way to the duties of the auditor.

(4)  A director, participating policyholder or shareholder who gives notice under subsection (2) must send concurrently a copy of the notice to the provincial company, and the company must forthwith send a copy of the notice to the Minister regardless of any decision of the audit committee under subsection (3).

(5)  The Minister may attend and be heard at any meeting referred to in subsection (2).

1999 cI‑5.1 s381

Right to information

382(1)  On the request of the auditor of a provincial company, the present or former directors, officers, employees or representatives of the company and any former auditors of the company must, to the extent that they are reasonably able to do so,

                           (a)    obtain or 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.

(2)  A person who in good faith makes an oral or written communication under subsection (1) is not liable in any civil action arising from the communication’s having been made.

1999 cI‑5.1 s382

Auditors report

383(1)  The auditor of a provincial company must make a report in writing on the annual financial statement of the company at the annual meeting of the participating policyholders and shareholders of the company.

(2)  In each report referred to in subsection (1), the auditor must include such remarks as the auditor considers necessary when

                           (a)    the auditor’s examination conducted to report on the annual financial statement has not been made in accordance with the auditing standards referred to in section 219,

                           (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 section 219, the financial position of the 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 for that financial year.

1999 cI‑5.1 s383

Requiring new financial statements

384   If the Minister is satisfied that the financial statements and reports of a provincial company that have been sent to the Minister, policyholders, shareholders or the public were not prepared in accordance with the standards set out in section 219, the Minister may require the company

                           (a)    to prepare new financial statements or reports that are prepared in accordance with the standards set out in section 219, and

                           (b)    to send the new financial statements or reports to the persons specified by the Minister.

1999 cI‑5.1 s384

Report on directors statement

385(1)  The auditor of a provincial company must, if required by the participating policyholders and shareholders, audit and report to them on any financial statement submitted to them by the directors, and the report must state whether, in the auditor’s opinion, the financial statement presents fairly the information required by the participating policyholders and shareholders.

(2)  A report of the auditor made under subsection (1) must be attached to the financial statement to which it relates and a copy of the statement and report must be sent by the directors to every participating policyholder, to every shareholder and to the Minister.

1999 cI‑5.1 s385

Report to officers

386(1)  The auditor of a provincial company must report in writing to the audit committee of the company

                           (a)    any material transactions or conditions affecting the well‑being of the company that have come to the auditor’s attention and that in the auditor’s opinion are not satisfactory and require rectification, or

                           (b)    any material transaction that, in the auditor’s opinion, was not within the powers of the company when the transaction occurred.

(2)  An auditor is not required to make a report under subsection (1) unless the auditor becomes aware of the transactions or conditions in the ordinary course of the auditor’s duties.

(3)  If the auditor of a provincial company makes a report under subsection (1), the auditor must also transmit the report, in writing, to the chief executive officer and the actuary of the company and to the Minister.

1999 cI‑5.1 s386

Auditor of subsidiaries

387   A provincial company must take all necessary steps to ensure that its auditor or, with the permission of the Minister, another auditor selected by the company, is duly appointed as the auditor of each of its subsidiaries unless

                           (a)    in the case of a subsidiary that carries on its operations in a country other than Canada, the laws of that country do not permit the appointment of the auditor of the provincial company as the auditor of that subsidiary, or

                           (b)    the provincial company’s auditor is of the opinion that the total assets of the subsidiary are not a material part of the total assets of the company.

1999 cI‑5.1 s387

Calling meeting

388(1)  The auditor of a provincial company or a member of the audit committee may call a meeting of the audit committee.

(2)  The chief internal auditor of a provincial company or any officer or employee of the company acting in a similar capacity must, at the request of the auditor of the company and on reasonable notice, meet with the auditor.

1999 cI‑5.1 s388

Notice of errors

389(1)  A director or an officer of a provincial company must forthwith notify the audit committee, the auditor and, if applicable, a former auditor of the company of any error or misstatement of which the director or officer becomes aware in an annual financial statement or other statement on which the auditor or former auditor has reported.

(2)  If the auditor or a former auditor of a provincial company is notified or becomes aware of an error or misstatement in an annual financial statement or other statement on which the auditor or former auditor reported,

                           (a)    the auditor must, if in the auditor’s opinion the error or misstatement is material, inform each director of the company, the actuary, the former auditor, if applicable, and the Minister, or

                           (b)    the former auditor must, if in the former auditor’s opinion the error or misstatement is material, inform each director of the company, the current auditor and the Minister.

(3)  Where under subsection (2) the auditor or a former auditor of a provincial company informs the directors of an error or misstatement in an annual financial statement or other statement, the directors must

                           (a)    prepare and issue a revised annual financial statement or other statement, or

                           (b)    inform the Minister and the participating policyholders and shareholders of the company of the impact of the error or misstatement.

1999 cI‑5.1 s389

Auditors report and extended examination

390(1)  The Minister may, in writing, require that the auditor of a provincial company report to the Minister 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 must comply with the requirement of the Minister and report to the Minister.

(2)  The Minister may, in writing, require that the auditor of a provincial company make a particular examination relating to the adequacy of the procedures adopted by the company for the safety of its creditors, policyholders and shareholders, or any other examination that, in the Minister’s opinion, the public interest may require, and the auditor must comply with the requirement and report to the Minister.

(3)  The expenses incurred as a result of the auditor’s performing duties under subsections (1) and (2) are payable by the provincial company on being approved by the Minister.

1999 cI‑5.1 s390

Protection from liability

391   An oral or written statement or report made under this Act by the auditor or a former auditor of a provincial company has qualified privilege.

1999 cI‑5.1 s391

Subpart 9
Actuaries

Definition

392   In this Subpart, “designated individual” means the individual that is required to be designated by an actuary under section 394.

1999 cI‑5.1 s392

Notice of appointment

393   A provincial company must, forthwith after the directors appoint a person to be the actuary of the company in accordance with section 309(2)(f), notify the Minister in writing of the appointment.

1999 cI‑5.1 s393

Designated individual

394   If the actuary of a provincial company is not an individual, the actuary must designate an individual who is responsible for acting on behalf of the actuary.

1999 cI‑5.1 s394

Qualifications of actuary

395(1)  A designated individual or an individual who is the actuary of a provincial life company must

                           (a)    be ordinarily resident in Canada, and

                           (b)    be a Fellow in good standing of the Canadian Institute of Actuaries.

(2)  A designated individual or an individual who is the actuary of a provincial property and casualty company must

                           (a)    be ordinarily resident in Canada, and

                           (b)    be a Fellow in good standing of the Canadian Institute of Actuaries or be approved by the Minister as having the training and experience that are relevant to the duties of an actuary of a provincial company.

1999 cI‑5.1 s395

Certain officers precluded

396(1)  The chief executive officer or chief operating officer or a person performing similar functions must not be appointed as or hold the position of actuary of a provincial company unless authorized in writing by the Minister.

(2)  An authorization under subsection (1) ceases to be in effect on the day specified in the authorization but not later than the day that is 6 months after it is issued, and a person appointed or holding the position of actuary pursuant to the authorization must not hold that position after that day.

1999 cI‑5.1 s396

Chief financial officer

397(1)  The chief financial officer or a person performing similar functions must not be appointed as or hold the position of actuary of a provincial company unless

                           (a)    the audit committee of the company has provided the Minister 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 Minister.

(2)  An authorization under subsection (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 provincial company.

(3)  A person holding the position of actuary pursuant to an authorization under subsection (1)(b) must not hold that position after the time limit referred to in subsection (2).

1999 cI‑5.1 s397

Revocation of actuarys appointment

398(1)  The directors of a provincial company may revoke the appointment of the actuary of the company.

(2)  The directors of a provincial company must revoke the appointment of its actuary if

                           (a)    the actuary no longer meets the requirements of section 395 and does not resign, or

                           (b)    the actuary’s designated individual no longer meets the requirements of section 395 and the actuary does not replace its designated individual with an individual who meets the requirements of section 395.

(3)  The Minister may revoke the appointment of an actuary of a provincial company if the Minister is satisfied that the actuary or the actuary’s designated individual no longer meets the requirements of section 395.

(4)  Nothing in this section permits the revocation of the appointment of an actuary if the actuary was appointed by the Court unless the Court provides otherwise.

1999 cI‑5.1 s398

Declaration of vacancy by Court

399   Any interested person may apply to the Court for an order declaring that an actuary or its designated individual no longer meets the requirements of section 395 and declaring the office of actuary to be vacant.

1999 cI‑5.1 s399

Ceasing to hold office

400(1)  The office of actuary of a provincial company becomes vacant when

                           (a)    the actuary resigns,

                           (b)    if the actuary is an individual, the individual dies,

                           (c)    if the actuary is not an individual, the actuary is dissolved,

                           (d)    the appointment of the actuary is revoked, or

                           (e)    the office of actuary is declared to be vacant under section 399.

(2)  The resignation of an actuary becomes effective at the time a written resignation is sent to the provincial company or at the time specified in the resignation, whichever is later.

1999 cI‑5.1 s400

Filling vacancy

401   When a vacancy occurs in the office of actuary of a provincial company, the directors must forthwith

                           (a)    submit a written statement to the Minister of the circumstances and reasons why, in the directors’ opinion, the office of actuary became vacant, and

                           (b)    fill the vacancy.

1999 cI‑5.1 s401

Statement of actuary

402   An actuary of a provincial company who resigns or whose appointment is revoked must submit 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 to

                           (a)    the directors of the company,

                           (b)    the Minister, and

                           (c)    the replacement actuary of the company when a request for the statement is made by the replacement actuary.

1999 cI‑5.1 s402

Duty of replacement actuary

403(1)  If an actuary of a provincial company has resigned or the appointment of an actuary has been revoked, the replacement actuary must promptly after being appointed request the previous actuary to provide the replacement actuary with a copy of the statement referred to in section 402.

(2)  If the replacement actuary does not receive the statement within 15 days after making the request, the replacement actuary must promptly notify the Minister that the statement has not been received and, if the Minister has received the statement, the Minister must provide it to the actuary.

1999 cI‑5.1 s403

Right to information

404(1)  On the request of the actuary of a provincial company, the present or former directors, officers, employees or representatives of the company, any former actuary of the company and of any of the company’s subsidiaries and holding bodies corporate must, to the extent that they are reasonably able to do so,

                           (a)    obtain or permit access to such records held by the company or any of its subsidiaries or holding bodies corporate, 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.

(2)  A person who in good faith makes an oral or written communication under subsection (1) is not liable in any civil action arising from having made the communication.

1999 cI‑5.1 s404

Actuarys valuation

405(1)  The actuary of a provincial company must 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 made by the Minister.

(2)  An actuary who is a Fellow of the Canadian Institute of Actuaries must ensure that the valuation is in accordance with generally accepted actuarial practices with any modification established by the Minister under section 219.

1999 cI‑5.1 s405

Special valuation

406(1)  The Minister may appoint an individual as an actuary to value the matters referred to in section 405(1)(a) or (b) in relation to a provincial company if the Minister is of the opinion that the appointment is necessary.

(2)  The remuneration and expenses incurred in carrying out a valuation under subsection (1) are payable by the provincial company on being approved by the Minister.

1999 cI‑5.1 s406

Actuarys report

407(1)  The actuary of a provincial company must, not less than 21 days before the date of the annual meeting of the participating policyholders and shareholders of the company, make a report to them on the valuation made under section 405 and on any other matter that is prescribed.

(2)  In each report required under subsection (1), the actuary must state whether, in the actuary’s opinion, the annual statement presents fairly the results of the valuation made under section 405.

1999 cI‑5.1 s407

Report to directors

408(1)  The directors of the company or, where the directors so choose, the audit committee of the company must meet with the actuary of a provincial company at least once during each financial year.

(2)  The actuary must report at the meeting

                           (a)    on the financial position of the provincial company, and

                           (b)    if directed to do so by the Minister, the expected future financial condition of the company.

1999 cI‑5.1 s408

Report on matters requiring rectification

409   The actuary of a provincial company must report in writing to the directors, chief executive officer and chief financial officer of the company and to the Minister 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.

1999 cI‑5.1 s409

Actuarys procedures

410(1)  The Minister may, in writing, require that the actuary of a provincial company report to the Minister on the extent of the actuary’s procedures used in valuing the actuarially based liability figures contained in the annual return and may, in writing, require that the actuary enlarge or extend the scope of that valuation or direct that any other particular procedure be performed in any particular case, and the actuary must comply with the requirement of the Minister and report to the Minister.

(2)  The expenses incurred as a result of the actuary’s performing duties under subsection (1) are payable by the provincial company on being approved by the Minister.

1999 cI‑5.1 s410

Protection from liability

411(1)  An oral or written statement or report made under this Act by the actuary or former actuary of a provincial company has qualified privilege.

(2)  The actuary or former actuary of a company who in good faith makes an oral or written statement or report under section 402 or 409 is not liable in any civil action for damages attributable to the actuary’s or former actuary’s having made the statement or report.

1999 cI‑5.1 s411

Regulations

412   The Lieutenant Governor in Council may make regulations providing for matters to be included in an actuary’s report under section 407.

1999 cI‑5.1 s412

Subpart 10
Adequacy of Assets, Capital
and Liquidity

 

413   Repealed RSA 2000 cI‑3 s873.

Capital and liquidity

414(1)  This section comes into force when section 413 is repealed.

(NOTE:   Section 413 proclaimed repealed November 26, 2003.)

(2)  A provincial company must, in relation to its operations,

                           (a)    maintain adequate capital and adequate and appropriate forms of liquidity, and

                           (b)    comply with any regulations in relation to capital and liquidity.

(3)  The Lieutenant Governor in Council may make regulations respecting the maintenance by provincial companies of

                           (a)    adequate capital, and

                           (b)    adequate and appropriate forms of liquidity.

(4)  The regulations may specify different requirements for different classes of provincial companies.

(5)  Even though a provincial company is complying with regulations made under subsection (3), the Minister may, by order, direct the company

                           (a)    to increase its capital, or

                           (b)    to provide additional liquidity in the forms and amounts that the Minister requires.

(6)  A provincial company must comply with an order made under subsection (5) within the time the Minister specifies in the order.

1999 cI‑5.1 s414

Subpart 11
Investments

Definitions

415   In this Subpart,

                           (a)    “commercial loan” means

                                  (i)    any loan other than

                                      (A)    loans to an individual in an aggregate prescribed amount or less,

                                      (B)    a loan to the government of Canada or a province or territory, a municipality or any of their agencies, or to the government of a foreign country or any of its agencies, or to a prescribed international agency,

                                      (C)    a loan that is guaranteed by, or fully secured by securities issued by, a government, a municipality or an agency referred to in paragraph (B),

                                      (D)    a loan that is secured by a mortgage on real property

                                             (I)    where 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 75% of the value of the property at the time the loan is made, or

                                            (II)    where the mortgage is on real property other than 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 75% of the value of the property at the time the loan is made and 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,

                                      (E)    a loan that is secured by a mortgage on real property where the amount of the loan, together with the amount then outstanding of any mortgage having an equal or prior claim against the property, exceeds 75% of the value of the property at the time the loan is made if repayment of the amount of the loan that exceeds 75% of the value of the property is guaranteed or insured by an insurer approved by the Minister or a government agency, or

                                       (F)    a loan that

                                             (I)    is fully secured by a deposit with any deposit‑taking  institution,

                                            (II)    is fully secured by debt obligations that are guaranteed by any financial institution other than the provincial company or an affiliate of the company, or

                                           (III)    is fully secured by a guarantee of a financial institution other than the provincial company or an affiliate of the company,

                                           or

                                      (G)    an advance on the security of or against the cash surrender value of a policy,

                                (ii)    an investment in debt obligations, other than

                                      (A)    debt obligations that are

                                             (I)    guaranteed by any financial institution other than the provincial company or an affiliate of the company,

                                            (II)    fully secured by deposits with any deposit‑taking institution, or

                                           (III)    fully secured by debt obligations that are guaranteed by any financial institution other than the provincial company or an affiliate of the company,

                                      (B)    debt obligations that are issued by the government of Canada or a province or territory, a municipality or any of their agencies, or by the government of a foreign country or any of its agencies, or by a prescribed international agency,

                                      (C)    debt obligations that are guaranteed by, or fully secured by securities issued by, a government, a municipality or an agency referred to in paragraph (B), or

                                      (D)    debt obligations that are widely distributed,

                               (iii)    an investment in shares of a body corporate or ownership interests in an unincorporated body, other than

                                      (A)    shares or ownership interests that are widely distributed, or

                                      (B)    participating shares,

                                     and

                               (iv)    any other prescribed form of financing,

                                    but does not include a deposit with a deposit‑taking institution;

                                 (v)    repealed 2003 c19 s34;

                           (b)    “connected” means connected as defined in the regulations;

                           (c)    “debt obligation” means a bond, debenture, note or other evidence of indebtedness, whether secured or unsecured;

                           (d)    “investment” includes a loan to a person;

                           (e)    “loan” includes an acceptance, an advance on the security of or against the cash surrender value of a policy, endorsement, letter of credit or other guarantee, 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;

                            (f)    “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;

                           (g)    “widely distributed” with respect to securities of a body corporate means

                                  (i)    securities issued by way of a prospectus and traded on a recognized stock exchange, or

                                (ii)    securities issued to more than 25 investors within a 6‑month period, no one of which holds more than 10% of the total amount of the securities issued and of which, on an ongoing basis, the body corporate does not own more than 10% of the securities outstanding.

RSA 2000 cI‑3 s415;2003 c19 s34

Prudent investment standards

416(1)  A provincial company must adhere to prudent investment standards in making investment decisions and in managing its total investments.

(2)  For the purposes of this Act, prudent investment standards are those which, in the overall context of an investment portfolio, a reasonable and prudent person would apply to investments made on behalf of another person with whom there exists a fiduciary relationship to make such investments without undue risk of loss or impairment and with a reasonable expectation of fair return or appreciation.

(3)  The fact that a provincial company is in compliance with the other provisions of this Act relating to investments does not of itself mean that the company is in compliance with subsection (1).

1999 cI‑5.1 s416

Policies and procedures

417(1)  The directors of a provincial company must establish policies and procedures to ensure that the company applies prudent investment standards in making investment decisions and in managing its total investments.

(2)  The directors must review the procedures established under subsection (1) at least once each year.

1999 cI‑5.1 s417

Prohibited investments

418(1)  No provincial company may directly or indirectly make loans to or other investments in

                           (a)    any person, or

                           (b)    any 2 or more persons that to the knowledge of the company are connected,

if the outstanding balance of principal and interest of loans for the person or the connected persons, together with the market value of investments in the person or connected persons, would exceed $500 000 or the prescribed percentage of the company’s assets, whichever is greater.

(2)  This section does not apply so as to restrict a provincial company from acquiring or making investments in

                           (a)    a security issued or guaranteed by the government of Canada or any province or territory,

                           (b)    a mortgage that is

                                  (i)    insured under the National Housing Act (Canada) or through an agency of the government of Canada or a province or territory, or

                                (ii)    insured by an insurer approved by the Minister,

                           (c)    an unincorporated body referred to in section 420(2),

                           (d)    a body corporate referred to in section 421(3), or

                           (e)    other prescribed investments.

RSA 2000 cI‑3 s418;2013 c18 s27

Restriction on residential mortgages

419(1)  No provincial company may 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 mortgages having an equal or prior claim against the property, would exceed 75% of the value of the property at the time of the loan.

(2)  Subsection (1) does not apply in respect of

                           (a)    a loan if repayment of the amount of the loan that exceeds the maximum set out in subsection (1) is guaranteed or insured by the Government of Alberta, the Government of Canada, the government of another province or territory, an agency of any of those governments or an insurance policy issued by a licensed insurer;

                           (b)    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

                           (c)    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.

1999 cI‑5.1 s419

Limitation on ownership of unincorporated body

420(1)  Subject to subsections (2) and (4), no provincial company may beneficially own more than a 10% interest in an unincorporated body.

(2)  Subsection (1) does not apply where the unincorporated body is carrying on a business that may be carried on by a body corporate referred to in section 421(3) and is carrying on that business in the same way as if it were such a body corporate.

(3)  For the purposes of subsection (1), an interest beneficially owned by a subsidiary of a provincial company is deemed to be beneficially owned by the company.

(4)  Despite subsection (1), a provincial company may, through realization of a security interest held by the company or, subject to the approval of the Minister, by means of a loan workout procedure, beneficially own more than a 10% interest in an unincorporated body, but the company must dispose of the excess interest within

                           (a)    two years after acquiring the excess interest, or

                           (b)    any longer period the Minister allows.

1999 cI‑5.1 s420

Limitation on shareholding

421(1)  Subject to this section and except as otherwise prescribed, no provincial company may have a substantial investment in a body corporate.

(2)  Despite subsection (1), a provincial company may, through realization of a security interest held by the company or, subject to the approval of the Minister, by means of a loan workout procedure, have a substantial investment in a body corporate, but the company must dispose of the excess shares that give the company a substantial investment within

                           (a)    two years after acquiring the excess shares, or

                           (b)    any longer period the Minister allows.

(3)  Despite subsections (1) and (2) and except as otherwise prescribed, a provincial company may have a substantial investment in any of the following bodies corporate:

                           (a)    a bank;

                           (b)    a loan corporation or trust corporation incorporated by or under an Act of Canada or a province or territory;

                           (c)    with the approval of the Minister, an extra‑provincial company or an insurer formed by or under an Act of Canada;

                           (d)    with the approval of the Minister, a foreign financial institution;

                           (e)    a prescribed body corporate.

(4)  A provincial company must not have a substantial investment in a body corporate referred to in subsection (3) if that body corporate has a substantial investment in another body corporate that is not a body corporate referred to in subsection (3).

1999 cI‑5.1 s421

Duty to provide information

422   If a provincial company acquires control of an unincorporated body referred to in section 420(2), or of a body corporate referred to in section 421(3), the provincial company must provide the Minister with any information respecting the unincorporated body or body corporate that the Minister requires.

1999 cI‑5.1 s422

Divestment order

423(1)  If a provincial company beneficially owns an interest in an unincorporated body referred to in section 420(2) and

                           (a)    the unincorporated body is carrying on business in an unsound manner that may imperil the company’s investment if continued, or

                           (b)    in the case of an unincorporated body that is controlled by the company, the company fails to provide information to the Minister under section 422,

the Minister may, by order, direct the company to divest itself of all or part of its beneficial ownership within the time specified in the order.

(2)  If a provincial company beneficially owns shares in a body corporate referred to in section 421(3) and

                           (a)    the body corporate is carrying on business in an unsound manner that may imperil the company’s investment if continued, or

                           (b)    in the case of a body corporate that is a subsidiary, the company fails to provide information to the Minister under section 422,

the Minister may, by order, direct the company to divest itself of all or part of its beneficial ownership within the time specified in the order.

1999 cI‑5.1 s423

Portfolio Limits

Exclusion from portfolio limits

424(1)  Subject to subsection (3), the value of all investments acquired by a provincial company and any of its subsidiaries as a result of a realization of a security interest must not be included in calculating the value of the investments of the company and its subsidiaries under sections 425 to 430

                           (a)    for a period of 7 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 2 years following the day on which the investment was acquired, in the case of an investment other than an interest in real property.

(2)  The Minister may, in the case of any particular provincial company, extend any period referred to in subsection (1) for such further period or periods, and on such terms and conditions, as the Minister considers necessary.

(3)  Subsection (1) does not apply to interests in real property that are prescribed for the purposes of this subsection.

1999 cI‑5.1 s424

Lending limit — life companies

425(1)  Subject to subsection (2), a provincial life company must not, and must not permit its subsidiaries to,

                           (a)    make or acquire a commercial loan, or

                           (b)    acquire control of a body corporate referred to in section 421(3) that holds commercial loans,

if the aggregate value of all commercial loans held by the company and its subsidiaries exceeds, or if the making or acquisition of the commercial loan or the acquisition of control of the body corporate would cause the aggregate value of all commercial loans held by the company and its subsidiaries to exceed, 5% of the total assets of the company.

(2)  A provincial life company that has more than $15 000 000 of base capital may, with the prior approval of the Minister, make or acquire a commercial loan or acquire control of a body corporate referred to in section 421(3) that holds commercial loans where the aggregate value of all commercial loans held by the company and its subsidiaries would as a result exceed the limit set out in subsection (1).

RSA 2000 cI‑3 s425;2008 c19 s22

Lending limit — property and casualty companies

426   A provincial property and casualty company must not, and must not permit its prescribed subsidiaries to,

                           (a)    make or acquire a commercial loan or a loan to an individual, or

                           (b)    acquire control of a body corporate referred to in section 421(3) that holds commercial loans or loans to individuals

if the aggregate value of all such loans held by the company and its prescribed subsidiaries exceeds, or if the making or acquisition of the loan or the acquisition of control of the body corporate would cause the aggregate value of all such loans held by the company and its prescribed subsidiaries to exceed, 5% of the total assets of the company.

1999 cI‑5.1 s426

Limit on real property interest

427   A provincial company must not, and must 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 company or any of its prescribed subsidiaries has an interest,

if the aggregate value of all of the company’s interests in real property exceeds, or if the acquisition of the interest or the making of the improvement would cause that aggregate value to exceed, 10% of the total assets of the company and its prescribed subsidiaries.

1999 cI‑5.1 s427

Limits on equity acquisitions

428   A provincial company must not, and must 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 body, other than those in which the company has, or by virtue of the acquisition would have, a substantial investment, or

                           (b)    acquire control of a body corporate that holds shares or ownership interests referred to in clause (a),

if the aggregate value of

                           (c)    all participating shares, excluding participating shares of bodies corporate referred to in section 421(3) in which the company has a substantial investment, and

                           (d)    all ownership interests in unincorporated bodies

beneficially owned by the company and its prescribed subsidiaries exceeds, or if the purchase or acquisition would cause that aggregate value to exceed, the prescribed percentage of the total assets of the company and its prescribed subsidiaries.

1999 cI‑5.1 s428

Aggregate limit

429   A provincial company must not, and must not permit its prescribed subsidiaries to,

                           (a)    purchase or otherwise acquire

                                  (i)    participating shares of a body corporate, other than those of a body corporate referred to in section 421(3) in which the company has, or by virtue of the acquisition would have, a substantial investment,

                                (ii)    ownership interests in an unincorporated body, 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 clause (a)(i) and (ii) that are beneficially owned by the company and its prescribed subsidiaries, and

                           (d)    all of the company’s interests in real property referred to in clause (a)(iii)

exceeds, or if the acquisition of the shares or interests or the making of the improvement would cause that aggregate value to exceed, 30% of the total assets of the company and its prescribed subsidiaries.

1999 cI‑5.1 s429

Assets transactions

430   A provincial company must not, without the approval of the Minister, in any transaction or series of transactions with the same party during a period of 12 months, acquire or dispose of assets, directly or indirectly, other than assets that are debt obligations referred to in section 415(a)(ii)(A) to (D), having a value in excess of 10% of the total assets of the company as at the beginning of the 12‑month period.

1999 cI‑5.1 s430

Retaining investments

431(1)  If a provincial company has acquired on or before December 31, 1996 an investment that was allowed under the Insurance Act in force at the time of acquisition, but that is not permitted under this Act and the regulations, the company may retain the investment.

(2)  A provincial company that has an investment referred to in subsection (1) must not increase the amount of or renew or extend the investment without the prior consent of the Minister.

1999 cI‑5.1 s431

Regulations

432   The Lieutenant Governor in Council may make regulations

                           (a)    defining terms that are specified in section 415 as being defined in the regulations;

                           (b)    defining interests in real property for the purposes of one or more provisions of this Subpart and determining the method of valuating those interests;

                           (c)    prescribing quantitative limits on investments that may be made by a provincial company or its subsidiary, including quantitative limits on investments referred to in section 421(3) and, where a limit has been imposed by this Act, prescribing limits that are more restrictive;

                           (d)    imposing terms and conditions subject to which a provincial company or its subsidiary may make investments or enter into other transactions, and imposing restrictions on the manner in which investments and other transactions may be made, given or entered into;

                           (e)    prescribing investments and other transactions that a provincial company or its subsidiary must not make, give or enter into;

                            (f)    respecting the method to be used to value the assets of a provincial company for the purposes of this Act;

                        (f.1)    respecting the protection and maintenance of assets of a provincial company, including regulations respecting the bonding of directors, officers and employees of a provincial company;

                           (g)    respecting any matter that is to be prescribed under this Subpart.

RSA 2000 cI‑3 s432;2008 c19 s23

Subpart 12
Transactions with Related Parties

Interpretation

433(1)  In this Subpart,

                           (a)    “fundamentally reinsure” with respect to a contract of insurance means

                                  (i)    that the insurer under the contract transfers or assigns all rights and obligations under the contract to another insurer, or

                                (ii)    that the contract is replaced by novation and the insurer under the replacement contract is different from the insurer under the original contract;

                           (b)    “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;

                           (c)    “senior official” of a body corporate means an individual who

                                  (i)    is a director and a full‑time employee of the body corporate,

                                (ii)    is an officer or the chief operating officer, chief financial officer, chief accountant, chief auditor or chief actuary of the body corporate,

                               (iii)    performs functions for the body corporate similar to those performed by an official referred to in subclause (ii),

                               (iv)    is the head of the strategic planning unit of the body corporate,

                                 (v)    is the head of the unit of the body corporate that provides legal services or human resources services to the body corporate,

                               (vi)    is an official who reports directly to the body corporate’s board of directors, chief executive officer or chief operating officer, or

                              (vii)    is prescribed.

(2)  A transaction, guarantee or investment is made or entered into if an existing transaction, guarantee or investment, including one made or entered into before the coming into force of this section, is modified, added to, extended or renewed.

(3)  Where a transaction is required by or under this Subpart to be at fair market rate, that requirement is satisfied, subject to subsection (4), if the transaction is not at fair market rate but is at a rate and terms that are more financially advantageous to the provincial company or subsidiary than actual fair market rate.

(4)  Subsection (3) does not apply where the transaction is between

                           (a)    a provincial company and its affiliate, or

                           (b)    a subsidiary of a provincial company and an affiliate of the provincial company.

1999 cI‑5.1 s433

Meaning of related party

434(1)  For the purposes of this Subpart, a person is a related party of a provincial company if the person

                           (a)    has a significant interest in a class of shares of the company,

                           (b)    is a director or senior official of the company or of a body corporate that controls the company or is acting in a similar capacity in respect of an unincorporated body that controls the company,

                           (c)    is the spouse or adult interdependent partner, or a child who is less than 18 years of age, of a person described in clause (a) or (b),

                           (d)    is an entity that is controlled by a person referred to in any of clauses (a) to (c),

                           (e)    is an unincorporated body in which the company beneficially owns more than a 10% interest,

                            (f)    is a body corporate in which the company has a substantial investment,

                           (g)    is an entity in which a person who controls the company has a substantial investment,

                           (h)    is an entity in which the spouse or adult interdependent partner, or a child who is less than 18 years of age, of a person who controls the company has a substantial investment, or

                            (i)    is designated under section 435 as a related party.

(2)  Unless the regulations provide otherwise, the following are not a related party of a provincial company:

                           (a)    a financial institution that wholly owns the company;

                           (b)    a wholly owned subsidiary of the company.

(3)  Where the Minister is satisfied that a subsidiary of a provincial company that is not a wholly owned subsidiary of the company functions primarily for the purpose of providing a service, other than a financial service, to the company or the company’s subsidiaries, the Minister may, on application, exempt the subsidiary from the status of related party of the company, subject to any terms and conditions the Minister considers appropriate.

RSA 2000 cI‑3 s434;2002 cA‑4.5 s45

Designated related party

435   For the purposes of this Subpart, the Minister may designate any person as a related party of a provincial company if the Minister is of the opinion that

                           (a)    the person is acting or has acted jointly or in concert with a related party of the company with respect to entering into a transaction that would be prohibited or restricted under this Subpart if entered into by or with respect to that related party,

                           (b)    there exists or has existed between the person and the company an interest or relationship that might reasonably be expected to affect or that has affected the exercise by the company of its best judgment with respect to a transaction, or

                           (c)    the person is acting in concert with one or more other persons to own or control, directly or indirectly, 10% or more of any class of voting shares of the company.

1999 cI‑5.1 s435

Transactions contemplating related party status

436   If a person who, but for this section, is not a related party enters into a transaction with a provincial company or its subsidiary knowing that the person is going to become a related party of the company, the person is a related party of the company with respect to that transaction.

1999 cI‑5.1 s436

Prohibited transactions, guarantees and investments

437   Except as provided in this Subpart,

                           (a)    no provincial company or subsidiary of a provincial company may, directly or indirectly, enter into any transaction with a related party of the company,

                           (b)    no related party of a provincial company may, directly or indirectly, enter into any transaction with the company or its subsidiary,

                           (c)    no provincial company or subsidiary of a provincial company may, directly or indirectly, enter into any guarantee on behalf of a related party of the company, and

                           (d)    no provincial company or subsidiary of a provincial company may, directly or indirectly, make an investment in or take a security interest in any securities of a related party of the company.

1999 cI‑5.1 s437

Exceptions to the prohibition

438   This Subpart does not apply in respect of

                           (a)    the granting of indemnification in accordance with section 365,

                           (b)    the issue by the provincial 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 provincial company under Subpart 2,

                               (iv)    in accordance with the terms of an amalgamation under Subpart 2,

                                 (v)    by way of consideration in accordance with the terms of an agreement referred to in Subpart 2, Division 10 in which the provincial company agrees to sell all or substantially all of its assets, or

                               (vi)    with the approval of the Minister, in exchange for shares of another body corporate,

                           (c)    the payment of dividends or policy dividends or bonuses, or

                           (d)    transactions that consist of the payment or provision by a provincial company of salaries, fees, stock options, policy premiums, pension benefits, incentive benefits or other benefits or remuneration to persons who are related parties of the company in their capacity as directors, officers or employees of the company.

1999 cI‑5.1 s438

Permitted transactions

439(1)  A provincial company or a subsidiary of a provincial company may

                           (a)    enter into a transaction with a related party that involves minor or general expenditures by the company or the subsidiary,

                           (b)    enter into a transaction with a related party for

                                  (i)    the sale of goods, or

                                (ii)    the provision of financial services

                                    that are normally sold or provided to the public by the company or the subsidiary in the ordinary course of business, so long as the prices and rates charged by the company or subsidiary are at fair market rate,

                           (c)    enter into a transaction with a related party that is a financial institution if

                                  (i)    the transaction consists of a deposit made at fair market rate and for a prescribed purpose, or

                                (ii)    the transaction consists of the acquisition at fair market rate of prescribed securities from a securities dealer who is not an underwriter, within the meaning of that term in the Securities Act, in the distribution of those securities and is not selling them as their principal,

                               and

                           (d)    make a loan or give a guarantee on behalf of a senior official of the company or subsidiary if the aggregate of the outstanding principal and interest owing on all such loans and the contracted amount of all outstanding guarantees to or on behalf of that senior official does not exceed the lesser of

                                  (i)    $100 000, and

                                (ii)    twice the annual salary of that senior official.

(2)  The conduct review committee of a provincial company must, subject to any prescribed limits, develop criteria as to what constitutes minor or general expenditures for the purposes of subsection (1)(a).

(3)  A provincial company may, subject to Subpart 2, fundamentally reinsure its contracts of insurance with a related party of the company.

(4)  A related party of a provincial company may, subject to Subpart 2, fundamentally reinsure its contracts of insurance with the company.

(5)  A provincial company may reinsure a contract of insurance in the ordinary course of its business with a related party of the company in accordance with section 62.

(6)  A provincial company may 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 amount vary in amount depending on the market value of a specified group of assets.

1999 cI‑5.1 s439

Transactions requiring directors approval

440   A provincial company or its subsidiary may with the prior approval of the directors of the company

                           (a)    enter into a written contract with a related party for the provision of management services to or by the company or subsidiary if it is reasonable that the company or subsidiary obtain or supply the services and so long as the consideration is reasonable for the services provided and is at fair market rate,

                           (b)    enter into a written lease of real estate or personal property with a related party so long as

                                  (i)    the rent is at fair market rate,

                                (ii)    the term of the lease and all renewals does not exceed

                                      (A)    5 years in the case of a lease of personal property, or

                                      (B)    20 years in the case of a lease of real estate,

                                     and

                               (iii)    the terms of the lease are otherwise competitive and reasonable,

                           (c)    enter into a written contract with a related party at fair market rate for pension and benefit plans, stock options, incentive benefits and other reasonable commitments incidental to employment,

                           (d)    enter into a written contract with a related party respecting the provision of goods or services, or providing for a networking arrangement for the provision of goods and services, other than management services, so long as the price paid for those goods or services is at fair market rate and the term of the contract and all renewals does not exceed 5 years in total,

                           (e)    acquire from or sell to a related party prescribed securities, other than securities issued by the related party, so long as the transaction is at fair market rate,

                            (f)    acquire beneficial ownership of shares of a body corporate as permitted by section 421(3),

                           (g)    make a loan to or guarantee the obligations of an entity, other than a financial institution, in which the company beneficially owns shares as permitted by section 421(3) if the loan or guarantee is at fair market rate and meets prescribed conditions,

                           (h)    make a loan to

                                  (i)    a director or senior official of the company,

                                (ii)    an employee of a prescribed class of the company, or

                               (iii)    the spouse or adult interdependent partner of a director or senior official of the company or of an  employee referred to in subclause (ii)

                                    on the security of the residence of the person to whom the loan is made, and the loan must be at fair market rate except in the case of a loan to an employee of the prescribed class, to a senior official or to a director who is a senior official or who is an employee of the prescribed class,

                            (i)    make a personal loan to

                                  (i)    a senior official of the company,

                                (ii)    an employee of a prescribed class of the company, or

                               (iii)    the spouse or adult interdependent partner of a senior official of the company or of an employee referred to in subclause (ii)

                                    that is fully secured other than by promissory note, and the loan must be at fair market rate except in the case of a loan to a senior official or to an employee of the prescribed class,

                            (j)    make a loan to a related party that is a financial institution in which the company beneficially owns shares as permitted under section 421(3), if the loan is at fair market rate, is fully secured by securities that meet prescribed qualifications and is for prescribed purposes,

                           (k)    enter into a transaction with a related party that is a financial institution if the transaction consists of a disposition by the company or subsidiary of assets for which the consideration is fully paid in money and is at fair market rate,

                            (l)    guarantee the obligations of a related party that is a financial institution, and

                          (m)    enter into any other transaction with a related party that the regulations permit it to enter into with the prior approval of the directors of the company.

RSA 2000 cI‑3 s440;2002 cA‑4.5 s45

Procedures for approvals by directors

441(1)  Where this Subpart requires that a transaction have the prior approval of the directors of a provincial company, the approval must be given in writing and in accordance with procedures established under section 445, and the approval may be given with respect to a specific transaction or with respect to a class of transactions.

(2)  Where this Subpart requires that a transaction have prior approval of the directors of a provincial company and the transaction will be reviewed by the directors of a subsidiary of the company and the subsidiary is a financial institution, the directors of the company are not required to review the transaction.

1999 cI‑5.1 s441

Disclosure

442(1)  A person who knows or has reason to believe that the person is a related party of a provincial company and who proposes to enter into a transaction or guarantee with the company or its subsidiary for which the approval of the directors of the company is required must disclose in writing to the company the nature of the person’s interest in the proposed transaction or guarantee forthwith after becoming aware of the facts that make the person a related party of the company.

(2)  Where the related party is a director or senior official of a provincial company, disclosure must be made in accordance with section 354.

(3)  Where, with respect to a proposed transaction or guarantee referred to in subsection (1), a provincial company knows or has reason to believe that a party is a related party of the company, the company must take all reasonable steps to obtain from that other party full disclosure in writing of any interest or relationship, direct or indirect, that would make that other party a related party of the company.

(4)  The directors of the provincial company must ensure that a disclosure under subsection (1) or (3) is entered in the minutes of the first directors’ meeting held after the making of the disclosure.

(5)  A related party must not

                           (a)    vote or attempt in any way to influence the voting on any resolution to approve the transaction or guarantee, or

                           (b)    be present while the subject‑matter of the transaction or guarantee is being discussed or the vote is being conducted.

(6)  Where a provincial company does not receive full disclosure as required by this section in respect of a proposed transaction or guarantee, the company or its subsidiary, as the case may be, must not enter into the transaction or guarantee.

1999 cI‑5.1 s442

Transactions requiring Ministerial approval

443   A provincial company or its subsidiary may with the prior approval of the Minister enter into a transaction, guarantee or investment or a class of transaction, guarantee or investment with a related party of the company that would otherwise be prohibited or restricted by this Act or the regulations if the Minister is satisfied that the transaction, guarantee or investment is in the best interests of the company and is not prejudicial to the interests of the shareholders and policyholders.

1999 cI‑5.1 s443

Limits on permitted transactions

444   No provincial company or subsidiary of a provincial company may enter into a transaction with a related party of the company that is permitted under this Subpart if the transaction exceeds the prescribed limits.

1999 cI‑5.1 s444

Review and approval procedures

445(1)  The conduct review committee of a provincial company must establish written review and approval procedures to be followed by the company to ensure compliance with this Subpart.

(2)  The procedures referred to in subsection (1) must be reviewed at least once each year by the conduct review committee.

(3)  The conduct review committee must report on its review under subsection (1) and must give its recommendations, if any, with respect to the procedures to the board of directors.

(4)  The procedures referred to in subsection (1) must deal with at least the following matters:

                           (a)    the formalities governing transactions, guarantees and investments in respect of a related party;

                           (b)    the obligations of the provincial company, its subsidiaries and the related party to disclose information;

                           (c)    the protection of confidential information held by the provincial company or its subsidiaries relating to its business associates, and the conduct of the company or subsidiary in cases where the interests of the company or subsidiary or of a person affiliated with either of them may be in conflict with the interests of its business associates.

(5)  The procedures referred to in subsection (1) are subject to the approval of the directors and the directors, on receipt of any recommendation from the conduct review committee, must review the procedures and make any changes they consider necessary.

1999 cI‑5.1 s445

Duty to report contraventions

446(1)  The auditor of a provincial company must promptly report to the directors and the Minister any breach of this Subpart of which the auditor is aware or is made aware under subsection (2).

(2)  Any person undertaking professional services for a provincial company who, in providing the professional services, becomes aware of a breach of this Subpart must promptly report the breach to the directors and the auditor of the company, unless the breach has already been reported under subsection (1).

(3)  Nothing in this section abrogates any privilege that may exist between a solicitor and a client.

(4)  A person who in good faith makes a report under subsection (1) or (2) is not liable in any civil action arising from it.

(5)  Where a provincial company or its subsidiary has entered into a transaction

                           (a)    that is prohibited under this Subpart, or

                           (b)    without the approvals required under this Subpart,

the company must, on becoming aware of that fact, forthwith notify the auditor and the Minister of that fact.

1999 cI‑5.1 s446

Reliance on information

447   A provincial company and any person who is a director, officer, employee or agent of the company may rely on any information received under section 442 regarding disclosure or any information otherwise acquired in respect of any matter that might be the subject of such a disclosure, and the company and person are not liable in any civil action for anything done or omitted to be done in good faith in reliance on any such information.

1999 cI‑5.1 s447

Onus of proof

448   For the purposes of this Subpart, the onus is on the related party and the provincial company or its subsidiary to establish that a transaction, guarantee or investment between the company or subsidiary and the related party is permitted under this Subpart.

1999 cI‑5.1 s448

Personal information

448.1(1)  In this section, “personal information” means personal information as defined in the Personal Information Protection Act other than business contact information to which that Act does not apply by virtue of section 4(3)(d) of that Act.

(2)  For the purposes of complying with this Subpart and any regulations made under this Act respecting related parties, a provincial company may collect and use personal information about persons who are related parties without obtaining their consent.

(3)  Persons who are not related parties must provide personal information as is necessary for the provincial company to comply with this Subpart.

2003 cP‑6.5 s69

Applications to Court

449(1)  Where a transaction, guarantee or investment that is prohibited under this Subpart takes place, any interested person, including the Minister, may apply to the Court for an order

                           (a)    setting aside the transaction, guarantee or investment and directing that the related party account to the provincial company for any profit or gain realized, and

                           (b)    that each person who participated in or facilitated the transaction, guarantee or investment pay to the company on a joint and several basis

                                  (i)    the damages suffered,

                                (ii)    the face value of the transaction, guarantee or investment, or

                               (iii)    the amount expended by the company in the transaction, guarantee or investment,

and on the application the Court may so order or make any other order it thinks fit, including an order for compensation for the loss or damage suffered by the company and punitive or exemplary damages from the related party.

(2)  A person who is not a director is not liable under subsection (1)(b) unless the person knew or ought reasonably to have known that the transaction, guarantee or investment contravened this Subpart.

(3)  An application under subsection (1) in respect of a transaction, guarantee or investment, may only be made within 3 months of the transaction, guarantee or investments having been entered into.

1999 cI‑5.1 s449

Regulations

450   The Lieutenant Governor in Council may make regulations

                           (a)    respecting exceptions to section 434(2);

                           (b)    specifying transactions for the purposes of section 440(m) that may be entered into with a related party with the prior approval of the directors of the provincial company;

                           (c)    respecting any matter that is to be prescribed under this Subpart.

1999 cI‑5.1 s450

Part 3
Insurance Agents and Adjusters

Definitions

451   In this Part,

                           (a)    “business” means a body corporate, partnership or sole proprietorship, but does not include an insurer;

                           (b)    “designated representative” means a designated representative referred to in section 456 or 463;

                           (c)    “general insurance” means any class of property and casualty insurance other than accident and sickness insurance;

                           (d)    “group insurance” means insurance in which the lives, well‑being or employment of individuals who enroll in the insurance is insured severally under a single contract between an insurer and an employer, creditor or other person;

                           (e)    “independent contractor” means an individual who enters into a contract in the individual’s own name to provide services as an independent contractor;

                            (f)    “individual” does not include an individual who is the sole proprietor of a sole proprietorship;

                           (g)    “property and casualty insurance” means any class of insurance other than life insurance;

                           (h)    “sole proprietorship” includes an independent contractor who has entered into a contract with an insurer, but does not include an independent contractor who has entered into a contract with a business.

1999 cI‑5.1 s451

Insurance Agents

Insurance agents certificate

452(1)  No business may act or offer to act as an insurance agent in respect of a class of insurance unless the business holds a valid and subsisting insurance agent’s certificate of authority for that class of insurance.

(2)  No individual may act or offer to act as an insurance agent in respect of a class of insurance unless the individual

                           (a)    is an employee or independent contractor of a business that holds a valid and subsisting insurance agent’s certificate of authority for that class of insurance and the employee or independent contractor holds a valid and subsisting insurance agent’s certificate of authority for that class of insurance,

                           (b)    is an employee of a business that holds a valid and subsisting restricted insurance agent’s certificate of authority for that class of insurance, or

                           (c)    is an employee of an insurer that issues insurance of that class and the employee holds a valid and subsisting insurance agent’s certificate of authority for that class of insurance.

(3)  No business that holds an insurance agent’s certificate of authority, other than a restricted insurance agent’s certificate of authority, may employ an individual or enter into a contract with an individual as an independent contractor to act as an insurance agent unless the individual holds a valid and subsisting insurance agent’s certificate of authority.

(4)  No insurer may employ an individual to act as an insurance agent unless the individual holds a valid  and subsisting insurance agent’s certificate of authority.

(5)  No insurer may allow a business to act as an insurance agent on its behalf unless the business holds a valid and subsisting insurance agent’s certificate of authority.

1999 cI‑5.1 s452

Exception

453   Despite section 452, a member of a licensed fraternal society, other than a member who receives a salary or commission for the purpose of acting as an insurance agent, who acts or offers to act as an insurance agent only with respect to insurance issued by the society for its members is not required to obtain an insurance agent’s certificate of authority.

1999 cI‑5.1 s453

Restricted insurance agents certificate

454(1)  The Minister may issue a restricted insurance agent’s certificate of authority to a business

                           (a)    that is a deposit‑taking institution, or

                           (b)    that operates

                                  (i)    a transportation company,

                                (ii)    a travel agency,

                               (iii)    an automobile dealership, or

                               (iv)    another prescribed enterprise.

(2)  A restricted insurance agent’s certificate of authority authorizes the holder and the holder’s employees to act or offer to act, subject to prescribed conditions and restrictions, as an insurance agent in respect of classes or types of insurance specified by the Minister.

1999 cI‑5.1 s454

Representation

455(1)  No business that acts as an insurance agent may indicate in any manner that it represents another business that acts as an insurance agent.

(2)  No individual may act as an insurance agent for a business unless the individual holds a valid and subsisting insurance agent’s certificate of authority specifying that the individual is authorized to represent that business.

(3)  An individual who is an employee or independent contractor of a business may act as an insurance agent for more than one business, but an individual must obtain a separate insurance agent’s certificate of authority for each business that the individual represents.

(4)  An individual who is an employee of an insurer and who holds a valid and subsisting insurance agent’s certificate of authority may act as an insurance agent only for

                           (a)    that insurer,

                           (b)    an insurer that is an affiliate of that insurer, and

                           (c)    in the case of automobile insurance, an insurer that is the service carrier for the Government approved industry plan under section 609.

(5)  An individual who is an employee of an insurer and who holds an insurance agent’s certificate of authority specifying that the individual is authorized to represent that insurer must not, while that certificate of authority is subsisting, be issued another insurance agent’s certificate of authority to represent a different insurer or business.

RSA 2000 cI‑3 s455;2008 c19 s24

Designated representative for businesses

456(1)  Every business that holds an insurance agent’s certificate of authority

                           (a)    for life insurance must have a designated representative for life insurance who meets the prescribed requirements and is recommended by the licensed life company that recommended the business be issued an insurance agent’s certificate of authority for life insurance;

                           (b)    for general insurance must have a designated representative for general insurance who meets the prescribed requirements and is recommended by the licensed insurer that recommended the business be issued an insurance agent’s certificate of authority for general insurance;

                           (c)    for accident and sickness insurance must have a designated representative for accident and sickness insurance who meets the prescribed requirements and is recommended by the licensed insurer that recommended the business be issued an insurance agent’s certificate of authority for accident and sickness insurance.

(2)  The designated representative of a sole proprietorship is its sole proprietor, unless the proprietor designates someone else to be the designated representative.

(3)  This section does not apply to a business that holds a restricted insurance agent’s certificate of authority.

1999 cI‑5.1 s456

Restricted certificate holders — designated individual

457   Every business that holds a restricted insurance agent’s certificate of authority must designate an individual to be responsible for receiving notices and other documents under this Act.

1999 cI‑5.1 s457

Recommendations — life insurance

458(1)  Every business that holds an insurance agent’s certificate of authority for life insurance must be recommended by a licensed life company that has entered into an agency contract with the business.

(2)  Every individual that holds an insurance agent’s certificate of authority for life insurance must

                           (a)    be an employee or an independent contractor of a business that holds an insurance agent’s certificate of authority for life insurance and be recommended by the licensed life company that recommended the business receive its certificate of authority, or

                           (b)    be an employee of a licensed life company and be recommended by the company.

(3), (4)  Repealed 2013 cS‑19.3 s3.

(5)  A holder of an insurance agent’s certificate of authority for life insurance that has been issued on the recommendation of a licensed life company must not, while that certificate of authority is subsisting, be issued another insurance agent’s certificate of authority for life insurance to represent a different licensed life company.

RSA 2000 cI‑3 s458;2013 cS‑19.3 s3

Recommendations — property and casualty insurance

459(1)  Every business that holds an insurance agent’s certificate of authority for general insurance must be recommended by an insurer that is licensed to undertake a class of general insurance and that has entered into an agency contract with the business.

(2)  Every business that holds an insurance agent’s certificate of authority for accident and sickness insurance must be recommended by an insurer that is licensed to undertake that class of insurance and that has entered into an agency contract with the business.

(3)  Every individual that holds an insurance agent’s certificate of authority for general insurance must

                           (a)    be an employee or independent contractor of a business that holds an insurance agent’s certificate of authority for general insurance and be recommended by the designated representative of the business for general insurance, or

                           (b)    be an employee of an insurer that is licensed to undertake a class of general insurance and be recommended by the insurer.

(4)  Every individual that holds an insurance agent’s certificate of authority for accident and sickness insurance must

                           (a)    be an employee or independent contractor of a business that holds an insurance agent’s certificate of authority for accident and sickness insurance and be recommended by the licensed insurer that recommended the business receive its certificate of authority for accident and sickness insurance, or

                           (b)    be an employee of an insurer that is licensed to undertake accident and sickness insurance and be recommended by the insurer.

(5)  Subsections (3)(a) and (4)(a) do not apply to the designated representative of a business.

(6)  A business, or employee or independent contractor of a business, that holds an insurance agent’s certificate of authority for a class of property and casualty insurance may, unless the certificate is made subject to prescribed conditions that provide otherwise, act as an insurance agent for any insurer that is licensed to undertake that class of property and casualty insurance.

1999 cI‑5.1 s459

Adjusters

Insurer’s liability for employee

459.1   Where an individual referred to in section 460(2)(c) contravenes this Act or the regulations in the course of employment as an adjuster, the contravention is deemed to have been committed by the insurer that employs the individual, and any remedy available under this Act in respect of the contravention may be pursued directly against the insurer.

2001 c9 s2

Adjusters certificate

460(1)  No business may act or offer to act as an adjuster in respect of a contract of insurance unless

                           (a)    the business holds a valid and subsisting adjuster’s certificate of authority, or

                           (b)    the business holds a valid and subsisting insurance agent’s certificate of authority for the class of insurance under which the contract of insurance falls, the certificate is not a restricted insurance agent’s certificate of authority, the amount of the loss under the contract is less than the prescribed amount and the business is the business that sold the contract of insurance.

(2)  No individual may act or offer to act as an adjuster in respect of a contract of insurance unless

                           (a)    the individual is an employee or independent contractor of a business that holds a valid and subsisting adjuster’s certificate of authority and the employee or independent contractor holds a valid and subsisting adjuster’s certificate of authority,

                           (b)    the individual is an employee or independent contractor of a business that holds a valid and subsisting insurance agent’s certificate of authority and the individual holds a valid and subsisting insurance agent’s certificate of authority for the class of insurance under which the contract of insurance falls, the amount of the loss under the contract is less than the prescribed amount and the business is the business that sold the contract of insurance,

                           (c)    the individual is an employee of an insurer and the contract was issued by that insurer or by an insurer that is an affiliate of that insurer, or

                           (d)    the contract is a reciprocal contract of indemnity or inter‑insurance of a licensed reciprocal insurance exchange and the individual is the principal attorney of the exchange.

(3)  No business that holds an adjuster’s certificate of authority may employ an individual or enter into a contract with an individual as an independent contractor to act as an adjuster unless the individual holds a valid and subsisting adjuster’s certificate of authority.

(4)  No insurer may enter into a contract with

                           (a)    an individual as an independent contractor, or

                           (b)    a business

to act as an adjuster unless the individual or business holds a valid and subsisting adjuster’s certificate of authority or meets the requirements of subsection (1)(b) or (2)(b).

RSA 2000 cI‑3 s460;2001 c9 s3

 

461   Repealed 2001 c9 s4.

Representation

462(1)  No business that acts as an adjuster may indicate in any manner that it  represents another business that acts as an adjuster.

(2)  No individual may act as an adjuster for a business unless the individual holds a valid and subsisting adjuster’s certificate of authority specifying that the individual is authorized to represent that business.

(3)  An individual who is an employee or independent contractor of a business may act as an adjuster for more than one business, but an individual must obtain a separate adjuster’s certificate of authority for each business that the individual represents.

(4)  Repealed 2001 c9 s5.

RSA 2000 cI‑3 s462;2001 c9 s5

Designated representative for businesses

463(1)  Every business that holds an adjuster’s certificate of authority must have a designated representative who meets the prescribed requirements.

(2)  The designated representative of a sole proprietorship is its sole proprietor, unless the proprietor designates someone else to be the designated representative.

1999 cI‑5.1 s463

Recommendation

464(1)  Every individual who holds an adjuster’s certificate of authority must be an employee or independent contractor of a business that holds an adjuster’s certificate of authority and be recommended by the designated representative of the business.

(2)  Subsection (1) does not apply to the designated representative of a business.

RSA 2000 cI‑3 s464;2001 c9 s6

Certificates of Authority

Financial guarantee

465(1)  Every business and individual that holds a certificate of authority must meet the requirements respecting financial guarantees set out in the regulations.

(2)  This section does not apply in respect of

                           (a)    a certificate of authority issued to an employee of a licensed insurer, or

                           (b)    a certificate of authority for a prescribed class or type of insurance or for a prescribed class or type of certificate holder.

1999 cI‑5.1 s465

Names

466(1)  No business may be issued a new certificate of authority or have a certificate of authority renewed or reinstated if the name of the business

                           (a)    includes the words “insurance company” or “insurance corporation” or the French equivalent of those words, or

                           (b)    is identical or similar to the name of an insurer formed under the laws of Canada or of a province or territory.

(2)  The Minister may refuse to issue a new certificate of authority or to renew or reinstate a certificate of authority to a business if the Minister is satisfied that the name of the business is confusing or misleading.

1999 cI‑5.1 s466

Application for certificate

467(1)  An application for a certificate of authority must

                           (a)    be filed with the Minister,

                           (b)    in the case of an insurance agent’s certificate of authority, specify the classes of insurance in respect of which the applicant wishes to transact,

                           (c)    contain the information, material and evidence required by the Minister, and

                           (d)    be accompanied with proof that the requirements respecting financial guarantees referred to in section 465(1) have been met.

(2)  An application for an applicant’s new or reinstated certificate of authority must be accompanied with

                           (a)    a written recommendation of an insurer or designated representative as required by section 458, 459 or 464, as the case may be, and

                           (b)    in the case of an application by a business for an insurance agent’s or adjuster’s certificate of authority, the written designation of an individual to be the business’s designated representative.

(3)  The requirement to submit a designation under subsection (2)(b) applies to a sole proprietorship only if the sole proprietor designates someone other than the proprietor to be the designated representative.

(4)  After filing an application, the applicant must provide the Minister with any additional information, material and evidence that the Minister considers necessary.

1999 cI‑5.1 s467

Refusing certificates — general grounds

468(1)  The Minister may refuse to issue an applicant’s new certificate of authority if the requirements of this Act and the regulations relating to the certificate have not been met.

(2)  The Minister may refuse to renew or reinstate an applicant’s certificate of authority

                           (a)    on the grounds set out in section 480(1) in accordance with that section, and

                           (b)    if any of the requirements of this Act and the regulations, other than those referred to in section 480(1), relating to the certificate have not been met.

1999 cI‑5.1 s468

Issuing certificates

469(1)  A business that is entitled to receive an insurance agent’s certificate of authority for life insurance and one or more classes of property and casualty insurance must be issued

                           (a)    an insurance agent’s certificate of authority for life insurance, and

                           (b)    one or more insurance agent’s certificates of authority for the property and casualty insurance.

(2)  If a certificate of authority is issued or renewed in respect of an individual who is an employee or independent contractor of a business, the certificate must state the name of the business that the individual is authorized to represent.

(3)  If a certificate of authority is issued or renewed in respect of an individual who is an employee of an insurer, the certificate must state the name of the insurer that the individual is authorized to represent.

(4)  If an insurance agent’s certificate of authority is to be issued to a sole proprietorship that has or intends to have one or more individuals working as insurance agents or if an adjuster’s certificate of authority is to be issued to a sole proprietorship that has or intends to have one or more individuals working as adjusters, a certificate of authority must be issued in the name of the sole proprietorship and a certificate of authority must be issued in the name of the sole proprietor.

1999 cI‑5.1 s469

Terms and conditions

470(1)  The Minister may issue a certificate of authority subject to terms and conditions provided for in the regulations.

(2)  Every business and individual who holds a certificate of authority must comply with the terms and conditions to which the certificate is subject.

1999 cI‑5.1 s470

Expiration

471   A certificate of authority expires in accordance with the regulations.

1999 cI‑5.1 s471

Reinstating certificates

472   If a certificate of authority is suspended by or under this Act for an unspecified period of time, the certificate may be reinstated only if the holder submits an application for reinstatement to the Minister.

1999 cI‑5.1 s472

Ceasing to be worker

473(1)  The certificate of authority of an individual who is an employee or independent contractor of a business or an employee of an insurer is automatically suspended when the individual ceases to be an employee or independent contractor of the business or an employee of the insurer.

(2)  If an individual who

                           (a)    is an employee or independent contractor of a business and acts as an insurance agent or adjuster, or

                           (b)    is an employee of an insurer and acts as an insurance agent

ceases to be such an employee or independent contractor, the business or insurer, as the case may be, must, within 14 days from the date that the individual ceased to be such an employee or independent contractor, notify the Minister in writing of that fact.

RSA 2000 cI‑3 s473;2001 c9 s7

Changes in designated representative

474(1)  A designated representative who resigns must

                           (a)    give a notice of resignation to the business that the designated representative represents, and

                           (b)    send a copy of the notice to the Minister.

(2)  If a business that a designated representative represents revokes the designation or if the designated representative of a business dies, the business must immediately notify the Minister and, in the case of a revocation, provide the reasons for the revocation.

(3)  If an insurer that has recommended that a designated representative be issued an insurance agent’s certificate of authority cancels the recommendation, the insurer must immediately notify in writing the business and the Minister of the cancellation of the recommendation and the reasons for the cancellation.

(4)  If a designated representative of a business resigns or dies, the business must, within 14 days from the resignation or death, submit to the Minister a written designation of an individual who meets the requirements of this Act and the regulations to be the new designated representative and, if the business does not comply with this requirement, the certificate of authority of the business is automatically suspended.

(5)  When

                           (a)    a business revokes the designation of its designated representative,

                           (b)    an insurer cancels its recommendation of a designated representative, or

                           (c)    a designated representative no longer meets the prescribed requirements for being a designated representative,

the certificate of authority of the business represented by the designated representative is automatically suspended unless, before the events referred to in clauses (a) to (c) occur, the business submits to the Minister a written designation of an individual who meets the requirements of this Act and the regulations to be the new designated representative.

(6)  If a business’s certificate of authority is suspended under subsection (4) or (5), the certificates of authority of the business’s employees and independent contractors are automatically suspended.

(7)  When a designated representative of a business has died, a reference in this section to suspending the business’s certificate of authority or to suspending the certificates of authority of the employees or independent contractors of the business refers to every class of certificate of authority that was held by the designated representative.

(8)  When

                           (a)    a business’s designated representative resigns as a designated representative in respect of a class of certificate of authority,

                           (b)    a business revokes the designation of a designated representative in respect of a class of certificate of authority,

                           (c)    an insurer cancels a recommendation of a designated representative of a business, or

                           (d)    a business’s designated representative no longer meets the prescribed requirements for being a designated representative in respect of a class of certificate of authority,

a reference in this section to suspending the business’s certificate of authority or to suspending the certificates of authority of the employees or independent contractors of the business refers to those certificates of authority that are of the same class as the class of certificate of authority in respect of which the designated representative resigned, was revoked or was no longer meeting the prescribed requirements for or in respect of which the recommendation was cancelled.

(9)  This section does not apply in respect of a sole proprietorship whose designated representative is its sole proprietor.

1999 cI‑5.1 s474

Cancellation of recommendation by insurer — businesses

475(1)  If an insurer that has recommended that a business be issued an insurance agent’s certificate of authority cancels the recommendation or if the agency contract between that insurer and business is no longer in force, the insurer must immediately notify the Minister in writing

                           (a)    of the cancellation of the recommendation and the reasons for the cancellation, or

                           (b)    that the agency contract is no longer in force and the reasons why the agency contract is no longer in force.

(2)  When an insurer that has recommended that a business be issued an insurance agent’s certificate of authority cancels the recommendation or when the agency contract between that insurer and business is no longer in force, the business’s insurance agent’s certificate of authority is automatically suspended unless, before the cancellation of the recommendation or the termination or expiration of the agency contract, the business submits to the Minister a new insurer’s written recommendation referred to in section 458(1) or 459(1) or (2), as the case may be.

(3)  If a business’s insurance agent’s certificate of authority is suspended under subsection (2), the insurance agent’s certificates of authority for the business’s employees and independent contractors are automatically suspended.

(4)  If an insurer that has recommended that an employee or independent contractor of a business be issued an insurance agent’s certificate of authority cancels the recommendation, the insurer must immediately notify the Minister in writing of the cancellation and the reasons for the cancellation.

(5)  When an insurer that has recommended that an employee or independent contractor of a business be issued an insurance agent’s certificate of authority cancels the recommendation, the employee’s or independent contractor’s certificate of authority is automatically suspended unless, before the cancellation of the recommendation, the employee or independent contractor submits to the Minister a new insurer’s written recommendation referred to in section 458(2) or 459(4).

(6)  When a business is required to replace the recommendation of an insurer, a reference in this section to suspending the business’s certificate of authority or to suspending the certificates of authority of the employees or independent contractors of the business refers to

                           (a)    certificates of authority for life insurance if the insurer referred to in subsection (2) was the insurer that recommended the business receive an insurance agent’s certificate of authority for life insurance,

                           (b)    certificates of authority for general insurance if the insurer referred to in subsection (2) was the insurer that recommended the business receive an insurance agent’s certificate for general insurance, and

                           (c)    certificates of authority for accident and sickness insurance if the insurer referred to in subsection (2) was the insurer that recommended the business receive an insurance agent’s certificate of authority for accident and sickness insurance.

1999 cI‑5.1 s475

Cancellation of recommendation by designated representative

476   If a designated representative who recommended that an individual be issued a certificate of authority cancels the recommendation, the certificate of authority is automatically suspended, and the designated representative must immediately notify the Minister in writing of the cancellation and the reasons for the cancellation.

1999 cI‑5.1 s476

Cancellation of recommendation by insurer — employees

477   If an insurer that recommended that one of its employees be issued a certificate of authority cancels the recommendation, the certificate of authority is automatically suspended, and the insurer must immediately notify the Minister in writing of the cancellation and the reasons for the cancellation.

1999 cI‑5.1 s477

Financial guarantee not in force

478(1)  If, during the term of a certificate of authority, the financial guarantee referred to in section 465 maintained in respect of that certificate is no longer in force, the grantor of the financial guarantee must notify the Minister of this fact in accordance with the terms of the guarantee.

(2)  If, during the term of the certificate of authority, the financial guarantee referred to in section 465 maintained in respect of the certificate is no longer in force, the certificate of authority is automatically suspended unless, while the guarantee is in force, the holder of the certificate satisfies the Minister that the hol