14 Leasing
and related agreements
15 Limitation
on shareholding
16 Meaning
of “interest in real property”
17 Additional
interest in real property
18 Exception
to s424 of Act
19 Prescribed
subsidiaries
20 Limits
on equity acquisitions
Part 2.1
Capital Adequacy
20.1 Maintenance of adequate capital
Part 3
Transactions with Related Parties
21 Interpretation
22 Meaning
of “related party”
23 Prescribed
matters under s439 of Act
24 Prescribed
securities under s440(e) of Act
25 Prescribed
conditions under s440(g) of Act
26 Prescribed
qualifications and purposes under s440(j) of Act
27 Permitted
transactions under s440(m) of Act
28 Related
party transactions prescribed limits
Part 4
Repeal, Expiry and Coming into Force
29 Repeal
30 Expiry
31 Coming
into force
Schedule
Definition
1 In this Regulation, “Act”
means the Insurance Act.
AR 90/2006 s2
Part 1
Debt Obligations
Prescribed matters
under s115 of Act
1.01 For the purposes of section 115 of the
Act,
(a) shares
issued by a provincial life or property and casualty company that are not
eligible for use as base capital of a provincial company are prescribed shares,
and
(b) every
subsidiary of a provincial company is a prescribed subsidiary of that company
except
(i) a subsidiary that is a financial institution, or
(ii) a subsidiary of a financial institution.
AR 241/2007 s2
Part 1.1
Protection and
Maintenance of Assets
Definitions
1.1 In this Part,
(a) repealed
AR 90/2006 s3;
(b) “bond”
means a contract of insurance by which an insurer agrees to indemnify an
insured for loss arising out of the act of a third party;
(c) “security” has the meaning given to it in
the Securities Act.
AR 124/2001 s1;90/2006
Procedures to
safeguard assets
2 The board of directors of a provincial
company must ensure that there are written procedures in place designed to
safeguard assets owned or held by the company and that the procedures are
followed by the company.
Record of securities
3 A provincial company must maintain an up‑to‑date
record that identifies securities owned or held by the company.
Safeguarding of
securities
4(1) A provincial company must ensure that
securities owned or held by the company
(a) are
kept secure and in a manner that prevents unauthorized access to them, and
(b) are
stored in the custody
(i) of the company, or
(ii) of an entity that is authorized by the law of the jurisdiction
where the entity is carrying on business to act as a custodian, depository or
clearing agency for securities.
(2) Subsection
(1) does not apply in respect of a security that is
(a) under
the control of the government of a jurisdiction in which the provincial company
is carrying on business,
(b) pledged
as collateral for indebtedness or potential indebtedness of the provincial
company, or
(c) in
transit or being held temporarily by a court or a legal agent of the provincial
company.
(3) A
provincial company must not place a security in the custody of an entity referred
to in subsection (l)(b)(ii) unless the company has entered into a written
custodial agreement with that entity.
Accounts
5 A provincial company must, on a daily
basis, hold any net amount received by it as a result of any security
transaction in an account in Canada kept by the company
(a) in
the company,
(b) with
a bank,
(c) with
Alberta Treasury Branches,
(d) with
any of the following that is incorporated by or under an Act of Canada or a
province:
(i) a loan corporation or a trust corporation;
(ii) a credit union;
(iii) an entity that is engaged primarily in dealing in securities,
including portfolio management and investment counselling,
(e) with
any other trust corporation that is incorporated by or under an Act of Canada
or a province and that is authorized to hold money in trust by a law of that
jurisdiction,
(f) with
the government of a province in which the company is carrying on business, or
with an agency of that government that is authorized to act as a custodian, or
(g) with
The Canadian Depository for Securities Limited.
Registration of
securities
6(1) A provincial company must ensure that each
security owned or held by it is registered in the name of the provincial
company on the register of the entity that issued the security.
(2) Subsection
(1) does not apply in respect of a security that
(a) cannot
be registered in the company’s name for any reason that is beyond the control
of the company,
(b) is
under the control of the government of a jurisdiction in which the company is
carrying on business,
(c) is
held by the company as collateral or for safekeeping,
(d) is
registered in the name of a nominee of the company or of another entity
referred to in section 4(1)(b)(ii),
(e) is
held under a book entry, certificateless or immobilization system,
(f) is
held temporarily by
(i) an agent of the company,
(ii) a liquidator,
(iii) a trustee, or
(iv) the issuer of the security
for purposes of
reorganization, amalgamation, liquidation or voting, or
(g) is
held by the company in bearer form or in registered form in a name other than
the company’s name, if the security is otherwise protected against loss, fraud,
theft and destruction.
Bonding and insurance
7(1) A provincial company must acquire and at all
times maintain one or more bonds issued by an entity holding a licence that
indemnify the company for any loss in respect of assets owned or held by the
company arising out of a dishonest or criminal act of an officer or employee of
the company.
(2) A
provincial company must acquire and at all times maintain one or more insurance
policies that indemnify the company for
(a) any
loss arising out of damage to, or the destruction or mysterious disappearance
of, assets owned or held by the company, or
(b) any
loss arising out of any other usual contingency affecting assets owned or held
by the company.
(3) A
bond referred to in subsection (1) or an insurance policy referred to in
subsection (2) must provide that it may not be cancelled or terminated by the
insurer or the insured until at least 30 days after the receipt by the
Superintendent of a written notice from the insurer or the insured, as the case
may be, of that person’s intention to cancel or terminate the bond or insurance
policy.
(4) The
bond or insurance policy must be in an amount that is fixed by the directors of
the provincial company having regard to
(a) the
nature and value of the assets owned or held by the company,
(b) the
arrangements and procedures applicable to the handling and safeguarding of the
assets owned or held by the company, and
(c) any
other factors that might affect the extent of any loss that the company might
sustain.
Part 2
Investments
Interpretation
8(1) In this Part,
(a) repealed
AR 90/2006 s4;
(b) “generally
accepted accounting principles” means the generally accepted accounting
principles, including the accounting recommendations, of the Canadian Institute
of Chartered Accountants set out in the Handbook published by that Institute,
as amended from time to time;
(c) “securities
dealer” means a body corporate that is registered as a dealer under the Securities Act or in a similar capacity
under comparable legislation of another jurisdiction in Canada.
(2) The
definitions in section 415 of the Act apply to this Part.
(3) The aggregate prescribed amount for the purpose
of section 415(a)(i)(A) of the Act is $250 000.
AR 124/2001 s8;90/2006
Method of valuation
9 For the purpose of section 44(4) of the
Act, the assets of a provincial company, including investments, must be valued
in accordance with generally accepted accounting principles.
International
agencies
10 For the purposes of sections 415(a)(i)(B)
and 415(a)(ii)(B) of the Act, the following are prescribed international
agencies:
(a) Asian
Development Bank;
(b) Inter‑American
Bank;
(c) International
Bank for Reconstruction and Development;
(d) International
Finance Corporation;
(e) European
Bank for Reconstruction and Development.
Meaning of “connected”
11 For the purpose of section 415(b) of the
Act, a person is connected to another person if
(a) one
of them is an affiliate of the other, or
(b) in
respect of a loan by a third party to both of those persons or an investment by
a third party in both of those persons,
(i) the loans or investments are for the same purpose,
(ii) the expected source of repayment on the loans or investments is
the same, or
(iii) the security for the loans or investments is the same,
and those persons are
not to a material extent financially independent of each other.
Investment maximums
12(1) Subject to subsection (2), the prescribed
percentage for the purpose of section 418(1) of the Act is 5%.
(2) For
commercial loans, the prescribed percentage for the purpose of section 418(1)
of the Act is 2%.
Exceptions to
prohibited investments
13 The other prescribed investments for the
purpose of section 418(2)(e) of the Act are the following:
(a) any
deposit with or any debt obligation or acceptance of any of the following where
the deposit, debt obligation or acceptance has a residual maturity of less than
one year:
(i) a bank;
(ii) Alberta Treasury Branches;
(iii) a loan corporation or trust corporation incorporated by or under
an Act of Canada or a province;
(iv) a credit union incorporated under the Credit Union Act;
(b) any
deposit with any of the following that control the provincial company:
(i) a bank;
(ii) Alberta Treasury Branches;
(iii) a loan corporation or trust corporation incorporated by or under
an Act of Canada or a province;
(iv) a credit union incorporated under the Credit Union Act;
(c) any
foreign exchange, interest rate, equity or commodity contract with any of the
following where the contract has a residual maturity of less than one year:
(i) a bank;
(ii) Alberta Treasury Branches;
(iii) a loan corporation or trust corporation incorporated by or under
an Act of Canada or a province;
(iv) a credit union incorporated under the Credit Union Act;
(d) any
foreign exchange, interest rate, equity or commodity contract, in the normal
course of business, with a financial institution that controls the provincial
company or is affiliated with the provincial company;
(e) any
direct obligation of and that portion of any obligation fully and
unconditionally guaranteed by any of the following:
(i) a municipality or Metis settlement or an agency of a municipality
or Metis settlement;
(ii) a government that is a member of the Organization of Economic
Development and Cooperation or an agency of that government;
(iii) an international agency listed in section 10.
Leasing and related
agreements
14(1) In this section,
(a) “agreement”
means
(i) a security agreement as defined in the Personal Property Security Act, or
(ii) a financial lease agreement, being an agreement for a lease of
personal property in which credit is extended by the lessor to the lessee for
the purpose of enabling the lessee to meet the lessee’s obligations under the
lease;
(b) “property”
means the personal property to which an agreement relates.
(2) A
provincial company must not beneficially own shares in a financial leasing
corporation described in section 15(b) unless
(a) the
aggregate of
(i) the book value of all of the property that is subject to
agreements held by the financial leasing corporation, and
(ii) all amounts owing as receivables in respect of such agreements
is equal to at least 80% of
the assets of the subsidiary, and
(b) the
financial leasing corporation meets the requirements of the agreements.
(3) A
provincial company may enter into or acquire agreements only if the following
requirements are met:
(a) the
company must not direct its customers or potential customers to particular
dealers in the property;
(b) at
no time may the aggregate of the estimated residual values of all the property
of the company, excluding motor vehicles, leased under the financial lease
agreements exceed 10% of the aggregate of the costs of acquisition of that
leased property to the company;
(c) the
estimated residual value of property leased under a financial lease agreement
must not exceed,
(i) in the case of motor vehicles, 50% of their cost of acquisition,
or
(ii) in the case of any other property, 20% of its cost of acquisition
to the company;
(d) the
agreement must be entered into or acquired for the purpose of extending credit
to the lessee or purchaser;
(e) the
property that is the subject of the agreement must be selected by the lessee or
buyer and
(i) must be acquired by the company at the request of the lessee or
buyer, or
(ii) must have been acquired by the company through the operation of
an earlier agreement;
(f) the
agreement must yield a return that
(i) will compensate the company for not less than its full investment
in the property,
(ii) is reasonable, taking into account
(A) the term of the agreement and the other
terms and conditions of it,
(B) the technological obsolescence of the
property, and
(C) the rate of return sought by other lessors
in respect of similar agreements in respect of similar property and under the
same terms and conditions,
and
(iii) is calculated by taking into account
(A) rental charges paid by the lessee or
purchaser,
(B) estimated tax benefits of the agreement to
the company, including tax credits and capital cost allowance claims, and
(C) the amount of,
(I) where the lessee or purchaser or a third party
who is dealing at arm’s length with the company has, on or before the
commencement of the agreement, contracted to purchase the property or
unconditionally guaranteed the resale value of the property at the date of
expiry of the agreement, the purchase price or the resale value so guaranteed,
or
(II) in any other case, but subject to clause
(c), the estimated residual value of the property;
(g) the
agreement must contain a provision
(i) assigning and conveying to the lessee or purchaser the benefit of
all warranties, guarantees or other undertakings made by a manufacturer or
supplier relating to the property, or
(ii) setting out the responsibilities of the company with regard to
the warranties, guarantees or other undertakings referred to in subclause (i);
(h) the
agreement must substantially transfer to the lessee or purchaser the benefits
and risks incidental to the operation of the property and must not place
responsibility on the part of the company to install, promote, service, clean,
maintain or repair the property;
(i) where
the lessee or purchaser defaults in the manner set out in the agreement and the
default is not waived or the agreement, including any renewals or extensions of
it, expires, the company must
(i) liquidate its interest in the property, or
(ii) enter into a new agreement in respect of that property within 2
years of that default or expiry or, where proceedings in respect of that
property have prevented the company from complying with that requirement within
that period, within 2 years of the completion of those proceedings.
(4) An
agreement may be renewed on its expiry and may be extended during its term.
Limitation on
shareholding
15 The following are prescribed bodies
corporate for the purpose of section 421(3)(e) of the Act:
(a) a
factoring corporation, being a body corporate whose activities are limited to
acting as a factor in relation to accounts receivable, including the lending of
money and the raising of money for the purpose of financing those activities;
(b) a
financial leasing corporation, being a body corporate that enters into or
acquires agreements as defined in section 14(1)(a) of this Regulation;
(c) an
information management corporation, being a body corporate that carries on the
business of
(i) the collection, manipulation and transmission of information that
is primarily financial or economic in nature, or
(ii) the sale of related software;
(d) an
investment counselling corporation, being a body corporate that is registered
as an investment counsel under the Securities
Act or in a similar capacity under comparable legislation in another
jurisdiction in Canada;
(e) a
mutual fund corporation, being a body corporate whose activities are limited to
the investing of the funds of the body corporate or a body corporate that is an
issuer of securities that entitle the holder to receive, on demand or within a
specified period after demand, an amount computed by reference to the value of
a proportionate interest in the whole or in a part of the net assets, including
a separate fund or trust account, of the issuer of those securities;
(f) a
mutual fund distribution corporation, being a body corporate that is registered
as a mutual fund dealer under the Securities
Act or in a similar capacity under comparable legislation in another
jurisdiction in Canada;
(g) a
portfolio management corporation, being a body corporate that is registered as
a portfolio manager under the Securities
Act or in a similar capacity under comparable legislation in another
jurisdiction in Canada;
(h) a
real property brokerage corporation, being a body corporate whose activities
are limited to acting as an agent for vendors or purchasers of real estate;
(i) a
real property corporation, being a body corporate that is primarily engaged in
holding, managing or otherwise dealing with
(i) real property, or
(ii) shares of a body corporate or ownership interests in an
unincorporated entity that is primarily engaged in holding, managing or
otherwise dealing with real property, including another real property
corporation or a real property holding vehicle;
(j) a
real property holding vehicle, being a limited partnership or a trust that is
primarily engaged in holding, managing or otherwise dealing with
(i) real property, or
(ii) shares of a body corporate or ownership interests in an
unincorporated entity that is primarily engaged in holding, managing or
otherwise dealing with real property, including a real property corporation or
another real property holding vehicle;
(k) a
securities dealer;
(l) a
service corporation, being a body corporate whose activities are limited to the
provision of management services to
(i) a provincial company,
(ii) a financial institution that is affiliated with a provincial
company, or
(iii) a body corporate in which a provincial company or financial
institution that is affiliated with a provincial company holds or beneficially
owns, separately or in the aggregate, more than 50% of the issued and
outstanding voting shares;
(m) a
specialized financing corporation, being a body corporate that is primarily
engaged in providing specialized business management in making investments or
providing financing or advisory services.
Meaning of “interest in real property”
16 For the purposes of sections 427 and 429
of the Act, “interest in real property” means
(a) an
interest in real property that, under the generally accepted accounting
principles, would be shown as real property owned by the provincial company in
its financial statements,
(b) an
ownership interest, including shares, in a real property corporation or a real
property holding vehicle that is not a joint venture and in which the
provincial company or a subsidiary of the company that is not a financial
institution has a substantial interest,
(c) a
debt obligation issued by a real property corporation or a real property
holding vehicle that is not a joint venture and in which the provincial company
or a subsidiary of the company that is not a financial institution has a
substantial interest, and beneficially owned by the company or a subsidiary of
the company that is not a financial institution,
(d) a
loan to a real property corporation or a real property holding vehicle that is
not a joint venture and in which the provincial company or a subsidiary of the
company that is not a financial institution has a substantial interest, where
the loan is made by the company or a subsidiary of the company that is not a
financial institution,
(e) a
loan to
(i) a real property corporation or a real property holding vehicle in
which a financial institution controlled by the provincial company has a
substantial interest, where the loan is made by the company or a subsidiary of
the company that is not a financial institution, and
(ii) a real property corporation or a real property holding vehicle
that is controlled by a real property corporation or a real property holding
vehicle described in subclause (i) where the loan is made by the provincial
company or a subsidiary of the company that is not a financial institution,
(f) a
debt obligation issued by a real property corporation or a real property
holding vehicle described in clause (e) and beneficially owned by the
provincial company or a subsidiary of the company that is not a financial
institution,
(g) a
debt obligation issued by a real property corporation or a real property
holding vehicle that is not a joint venture and in which the provincial company
or a subsidiary of the company that is not a financial institution has a
substantial interest, and beneficially owned by a third party and guaranteed by
the company or a subsidiary of the company that is not a financial institution,
or
(h) a
loan made by a third party to a real property corporation or a real property
holding vehicle and guaranteed by the provincial company or a subsidiary of the
company that is not a financial institution,
but does not include
an interest in real property owned by a financial institution or by an entity
controlled by the financial institution, where the financial institution is
controlled by the provincial company.
Additional interest
in real property
17(1) In this section,
(a) “designated
entity” means an entity other than
(i) a joint venture,
(ii) a financial institution, or
(iii) an entity that is controlled by a financial institution;
(b) “real
property corporation” means a body corporate described in section 15(i);
(c) “real
property holding vehicle” means a limited partnership or trust described in
section 15(j);
(d) “related
real property entity”, in respect of a provincial company, means
(i) a real property corporation or a real property holding vehicle,
other than a designated entity controlled by the company, in which the company
or a designated entity controlled by the company beneficially owns sufficient
shares or ownership interests to cause the company or designated entity to have
a substantial interest in the real property corporation or real property
holding vehicle, or
(ii) a real property corporation or a real property holding vehicle
that is controlled by a real property corporation or a real property holding
vehicle described in subclause (i).
(2) For
the purposes of sections 427 and 429 of the Act, where a provincial company or
a designated entity controlled by a provincial company makes a loan to, or
beneficially owns or guarantees the debt obligation of, a third party, the loan
or debt obligation is an interest of the company in real property if it is
secured by
(a) real
property beneficially owned by a third party in conjunction with
(i) the company,
(ii) the designated entity,
(iii) a related real property entity of the company,
(iv) a financial institution controlled by the company,
(v) an entity controlled by a financial institution referred to in
subclause (iv), or
(vi) a real property corporation described in section 16(e),
or
(b) shares
or ownership interests beneficially owned by a third party in
(i) an entity that beneficially owns real property in conjunction
with the company, a related real property entity of the company or a designated
entity that is controlled by the company, or
(ii) a related real property entity of the
company.
AR 124/2001 s17;90/2006
Exception to s424 of
Act
18 For the purpose of section 424(3) of the
Act, section 424(1) of the Act does not apply to interests in real property
described in section 16 of this Regulation that are acquired by a provincial
company or any of its subsidiaries as a result of a realization of a security
interest.
Prescribed
subsidiaries
19 For the purposes of sections 426, 427,
428 and 429 of the Act, every subsidiary of a provincial company is a
prescribed subsidiary of that company except
(a) a
subsidiary that is a financial institution, or
(b) a
subsidiary of a financial institution.
Limits on equity
acquisitions
20 For the purpose of section 428
of the Act, the prescribed percentage of the total assets of the provincial
company is 25%.
AR 124/2001 s20;18/2008
Part 2.1
Capital Adequacy
Maintenance of adequate
capital
20.1(1) A
provincial property and casualty company maintains adequate capital if the
amount of capital available to it on an ongoing basis is equal to or exceeds
the minimum amount of capital required, as calculated using the Minimum Capital
Test form in the annual return form designated “P & C 1”, as
established for provincial property and casualty companies under section 803 of
the Act.
(2) The Minister shall ensure that a
blank copy of the test form referred to in subsection (1) is published in such
manner as is considered appropriate.
AR 340/2003 s2;90/2006
Part 3
Transactions with
Related Parties
Interpretation
21(1) Repealed AR 90/2006 s7.
(2) For
the purpose of section 433(1)(c)(vii) of the Act, a senior official of a body
corporate includes
(a) each
of the 5 highest paid employees of the body corporate,
(b) branch
managers of the body corporate, and
(c) other persons who perform for the body
corporate functions that are normally performed by a branch manager.
AR 124/2001 s21;90/2006
Meaning of “related party”
22 Notwithstanding section 434(2) of the
Act,
(a) a
financial institution that wholly owns a provincial company, and
(b) a
subsidiary of a provincial company that is wholly owned by the company
are related parties of
that provincial company for the purposes of
(c) a
transfer of real estate or securities between the provincial company and a
related party of the company, or
(d) a
transaction, guarantee or investment that involves the provincial company and a
related party of the company that is not at fair market rate.
Prescribed matters
under s439 of Act
23(1) A provincial company or a subsidiary of a
provincial company may enter into a transaction under section 439(1)(c)(i) of
the Act if the purpose of the transaction is
(a) to
support the short‑term liquidity needs of the provincial company or
subsidiary or the related party, or
(b) to
enable the clearance of cheques.
(2) A
provincial company or a subsidiary of a provincial company may enter into a
transaction under section 439(1)(c)(ii) of the Act if the transaction consists
of the acquisition of securities in which the provincial company or subsidiary
is permitted to invest under Subpart 11 of the Act, other than securities
issued by a related party.
Prescribed securities
under s440(e) of Act
24 For the purpose of section 440(e) of the
Act, a provincial company or its subsidiary may
(a) sell
to or redeem from a related party other than a subsidiary the provincial
company’s or subsidiary’s own subordinated notes, debentures or shares, and
(b) sell
to or acquire from a related party the following securities:
(i) securities that are issued or guaranteed by the Government of
Canada or the government of a province or by any of their agencies, or issued
by a university, a municipality, a Metis settlement or a hospital or school
board in Canada;
(ii) debt securities including banker’s acceptances, (other than
subordinated debt securities) that are issued or guaranteed by a financial
institution duly authorized to take deposits in Canada;
(iii) bonds, debentures or commercial paper issued by a body corporate
incorporated in Canada that have, at the date of acquisition or sale, a rating
in accordance with the table in the Schedule.
Prescribed condition
under s440(g) of Act
25 A loan may be made or a guarantee may be
given under section 440(g) of the Act only if the loan or guarantee is fully
secured by one or more of the following:
(a) real
estate valued at fair market rate at the time of the loan or guarantee, or
securities that have a rating in accordance with the table in the Schedule at
the time of the loan or guarantee;
(b) securities
that are issued or fully guaranteed by the Government of Canada or of a
province or by a municipality or Metis settlement;
(c) securities
evidencing deposits with a deposit‑taking institution other than one that
is a related party;
(d) bonds,
debentures or commercial paper issued by a body corporate incorporated in
Canada, other than a financial institution that is a related party, that have,
at the date of acquisition, a rating in accordance with the table in the Schedule.
Prescribed
qualifications and purposes under s440(j) of Act
26 A loan may be made under section 440(j)
of the Act
(a) only
if the loan is fully secured by securities of the following type:
(i) securities that are issued or fully guaranteed by the Government
of Canada or of a province or by a municipality or Metis settlement;
(ii) securities evidencing deposits with a deposit‑taking
institution other than one that is a related party;
(iii) bonds, debentures or commercial paper issued by a body corporate
incorporated in Canada, other than a financial institution that is a related
party, that have, at the date of acquisition, a rating in accordance with the
table in the Schedule,
and
(b) only
if the loan is made for the purpose of supporting the short‑term
liquidity needs of the provincial company or its subsidiary.
Permitted
transactions under s440(m) of Act
27(1) The other transactions referred to in section
440(m) of the Act are the following:
(a) a
swap or a similar agreement;
(b) an
agreement for the purchase or sale of financial futures, options or forward
contracts with a securities dealer that is a related party if the securities
dealer is acting as agent, not as principal, and the transaction is at fair
market rate;
(c) a
transaction with a securities dealer that is a related party involving the
underwriting of the provincial company’s securities or the provision of other
services associated with a primary distribution of the company’s securities.
(2) Where
a provincial company enters into a swap with another party (referred to as the
counter‑party), the counter‑party must be an issuer of and have
issued debt securities that are outstanding and having a rating in accordance
with the table in the Schedule.
(3) In
this section,
(a) “financial
future” means a contract to buy or sell a standard quantity of a specified
financial instrument on or before a specified future date at an agreed price;
(b) “forward
contract” means a contract to buy or sell currency or a specified financial instrument
on or before a specified future date at an agreed price;
(c) “option”
means a contract under which a person acquires the right to buy or sell a
particular security at a specified future date at an agreed price;
(d) “swap”
means an agreement between 2 parties whereby one party offers to pay specified
obligations of another party and in exchange the other party agrees to pay
specified obligations of the first party.
Related party
transactions prescribed limits
28 The following are the prescribed limits
for the purpose of section 444 of the Act:
(a) the
aggregate of
(i) the outstanding principal and interest owing on all loans by a
provincial company to related parties of the company,
(ii) the book value of all current investments by a provincial company
in the securities of related parties of the company, and
(iii) the contracted amount of all outstanding guarantees made or
entered into by a provincial company on behalf of related parties of the
company
must not exceed 10% of the
provincial company’s total assets;
(b) a
provincial company must not allow the aggregate amount of its liability in
respect of deposits received by it from financial institutions that are related
parties of the company to exceed 2% of the company’s total assets.
Part 4
Repeal, Expiry and
Coming into Force
Repeal
29 The Provincial
Companies Regulation (AR 289/96) is repealed.
Expiry
30 For the purpose of ensuring
that this Regulation is reviewed for ongoing relevancy and necessity, with the
option that it may be repassed in its present or an amended form following a
review, this Regulation expires on April 30, 2016.
AR 124/2001 s30;90/2006