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Ottawa, October 7, 1996
1996-069
Draft Legislation on Insurer's Policy Reserves
Related document:
- Draft Amendments and Explanatory Notes (Adobe Acrobat format - 117,873 bytes).
Finance Minister Paul Martin today released draft amendments to the Income Tax Act and the Income Tax Regulations dealing with insurers' policy reserves
The draft amendments are the result of extensive consultations on the reform of the taxation of life insurers. The amendments respond to a number of issues raised during consultations on the draft legislation released to the industry in April this year.
The amendments are primarily concerned with the tax treatment of life insurance policy reserves. In broad terms, the draft legislation provides that an insurer's policy reserves in respect of its policies issued after 1995 will now generally be calculated in the manner in which they are calculated for regulatory purposes. For policies issued before 1996, the insurer will generally continue to calculate policy reserves using the existing rules in Part XIV of the Income Tax Regulations.
It should be noted that the draft amendments also deal with non-life insurance policy reserves and other insurance taxation matters. A detailed description of the amendments is contained in the explanatory notes which are being released with the draft amendments.
The Minister indicated that the draft amendments to the Income Tax Act would be included in the bill containing this year's budget measures, which is expected to be tabled in the fall.
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For further information:
Brian Bloom
Tax Legislation Division
(613) 992-5634
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| Last Updated: 2004-03-21 |
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