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Vol. 137, No. 23 — June 7, 2003
Insurance Business (Cooperative Credit Associations) Regulations
Statutory Authority
Cooperative Credit Associations Act
Sponsoring Department
Department of Finance
REGULATORY IMPACT ANALYSIS STATEMENT
For the Regulatory Impact Analysis Statement, see the Disclosure of Charges (Retail Associations) Regulations.
PROPOSED REGULATORY TEXT
Notice is hereby given that the Governor in Council, pursuant to section 381 of the Cooperative Credit Associations Act (see footnote a) , proposes to make the annexed Insurance Business (Cooperative Credit Associations) Regulations.
Interested persons may make representations with respect to the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Mr. Gerry Salembier, Financial Sector Policy Branch, Department of Finance, L'Esplanade Laurier, 15th Floor, East Tower, 140 O'Connor Street, Ottawa, Ontario, K1A 0G5.
Ottawa, May 29, 2003
EILEEN BOYD
Assistant Clerk of the Privy Council
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INSURANCE BUSINESS (COOPERATIVE CREDIT ASSOCIATIONS) REGULATIONS |
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INTERPRETATION |
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1. (1) The following definitions apply in these Regulations. |
"Act"
« Loi » |
"Act" means the Cooperative Credit Associations Act. |
"authorized type of insurance"
« assurance autorisée »
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"authorized type of insurance" means
(a) credit or charge card-related insurance,
(b) creditors' disability insurance,
(c) creditors' life insurance,
(d) creditors' loss of employment insurance,
(e) creditors' vehicle inventory insurance,
(f) export credit insurance,
(g) mortgage insurance, or
(h) travel insurance.
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"credit or charge card-related insurance"
« assurance carte de crédit ou de
paiement » |
"credit or charge card-related insurance" means a policy of an insurance company that provides insurance to a holder of a credit or charge card issued by a body corporate that is part of the cooperative credit system as a feature of the card, without request and without an individual assessment of risk,
(a) against loss of, or damage to, goods purchased with the card,
(b) under which the insurance company undertakes to extend a warranty provided by the manufacturer of goods purchased with the card, or
(c) against any loss arising from a contractual liability assumed by the card holder when renting a vehicle, where the rental is paid for with the card.
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"creditors' disability insurance"
« assurance-invalidité de crédit » |
"creditors' disability insurance" means a group insurance policy that will pay to a body corporate that is part of the cooperative credit system, all or part of the amount of a debt of a debtor to the body corporate in the event of bodily injury to, or an illness or disability of,
(a) where the debtor is a natural person, the debtor or the spouse or common law partner of the debtor;
(b) a natural person who is a guarantor of all or part of the debt;
(c) where the debtor is a body corporate, a director or an officer of the body corporate; or
(d) where the debtor is an entity, any natural person who is essential to the ability of the debtor to meet the debtor's financial obligations to the body corporate that is part of the cooperative credit system.
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"creditors' life insurance"
« assurance-vie de crédit »
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"creditors' life insurance" means a group insurance policy that will pay to a body corporate that is part of the cooperative credit system, all or part of the amount of a debt of a debtor to the body corporate, or where the debt is in respect of a small business or a farm, fishery or ranch, all or part of the amount of the credit limit of a line of credit, in the event of the death of
(a) where the debtor is a natural person, the debtor or the spouse or common-law partner of the debtor;
(b) a natural person who is a guarantor of all or part of the debt;
(c) where the debtor is a body corporate, a director or an officer of the body corporate; or
(d) where the debtor is an entity, any natural person who is essential to the ability of the debtor to meet the debtor's financial obligations to the body corporate that is part of the cooperative credit system.
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"creditors' loss of employment insurance"
« assurance crédit en cas de perte
d'emploi » |
"creditors' loss of employment insurance" means a policy of an insurance company that will pay to a body corporate that is part of the cooperative credit system, without any individual assessment of risk, all or part of the amount of a debt of a debtor to the body corporate in the event that
(a) where the debtor is a natural person, the debtor becomes involuntarily unemployed, or
(b) a natural person who is a guarantor of all or part of the debt becomes involuntarily unemployed.
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"creditors' vehicle inventory insurance"
« assurance crédit pour stocks de véhicules » |
"creditors' vehicle inventory insurance" means a policy of an insurance company that provides insurance against direct and accidental loss of, or damage to, vehicles that are held in stock, for display and sale, by a debtor to a body corporate that is part of the cooperative credit system, some or all of which have been financed by the body corporate. |
"export credit insurance"
« assurance crédit des exportateurs » |
"export credit insurance" means a policy of an insurance company that provides insurance to an exporter of goods or services against loss incurred by the exporter as a result of nonpayment for exported goods or services. |
"group insurance policy"
« police d'assurance collective » |
"group insurance policy" means a contract of insurance between an insurance company and any body corporate that is part of the cooperative credit system that provides insurance severally in respect of a group of identifiable persons who individually hold certificates of insurance. |
"insurance company"
« société d'assurances » |
"insurance company" means an entity that is approved, registered or otherwise authorized to insure risks under an Act of Parliament or of the legislature of a province. |
"line of credit"
« marge de crédit » |
"line of credit" means a commitment on the part of a body corporate that is part of the cooperative credit system, to lend to a debtor of the body corporate, without a predetermined repayment schedule, one or more amounts, where the aggregate amount outstanding does not exceed a predetermined credit limit, which limit does not exceed the reasonable credit needs of the debtor. |
"mortgage insurance"
« assurance hypothèque » |
"mortgage insurance" means an insurance policy that provides insurance to a body corporate that is part of the cooperative credit system, against loss caused by a default on the part of a debtor who is a natural person under a loan from the body corporate that is secured by a mortgage on real property or on an interest in real property. |
"personal accident insurance"
« assurance accidents corporels » |
"personal accident insurance" means a group insurance policy that provides insurance to a natural person, whereby the insurance company undertakes to pay
(a) one or more amounts in the event of bodily injury to, or the death of, the person that is caused by an accident, or
(b) a certain amount for each day that the person is hospitalized, in the event of bodily injury to the person that is caused by an accident or in the event of an illness or disability of the person.
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"small business"
« petite entreprise » |
"small business" means a business that is or, if it were incorporated, would be a small business corporation within the meaning of subsection 248(1) of the Income Tax Act. |
"travel insurance"
« assurance voyage » |
"travel insurance" means( a) a policy of an insurance company that provides insurance to a natural person in respect of a trip by the person away from the place where the person ordinarily resides, without any individual assessment of risk, against
(i) loss that results from the cancellation or interruption of the trip,
(ii) loss of, or damage to, personal property that occurs during the trip, or
(iii) loss that is caused by the delayed arrival of personal baggage during the trip, or
( b) a group insurance policy that provides insurance to a natural person in respect of a trip by the person away from the province in which the person ordinarily residesé.
(i) against expenses incurred during the trip that result from an illness or disability of the person that occurs during the trip,
(ii) against expenses incurred during the trip that result from bodily injury to, or the death of, the person that is caused by an accident during the trip,
(iii) whereby the insurance company undertakes to pay one or more sums of money in the event of an illness or disability of the person that occurs during the trip, or of bodily injury to, or the death of, the person that is caused by an accident during the trip,
(iv) against expenses incurred by the person for dental care necessitated by an accident that occurs during the trip, or
(v) in the event that the person dies during the trip, against expenses incurred for the return of the person's remains to the place where the person was ordinarily resident before death, or against travel expenses incurred by a relative of that person who must travel to identify that person's remains.
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(2) For the purposes of these Regulations, the following bodies corporate are part of the cooperative credit system:
(a) an association;
(b) a local cooperative credit society;
(c) a body corporate in which an association or a local cooperative credit society has a substantial investment and which is primarily engaged in the business of providing financial services;
(d) a body corporate that is primarily engaged in providing financial services and in which two or more associations or local cooperative credit societies hold, in aggregate, sufficient voting rights which, if exercised, would constitute control of the body corporate within the meaning of paragraph 3(1)(a) of the Act; and
(e) a cooperative corporation, the membership of which is primarily composed of associations, central cooperative credit societies or local cooperative credit societies, and which is primarily engaged in the business of providing financial services.
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PERMITTED ACTIVITIES |
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2. A retail association may carry on any aspect of the business of insurance, other than the underwriting of insurance, outside of Canada and in respect of risks outside of Canada. |
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3. (1) An association may administer an authorized type of insurance and personal accident
insurance. |
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(2) An association may administer a group insurance policy for
(a) its employees;
(b) for the employees of any body corporate that the association has control of, or a substantial investment in, under section 390 of the Act; or
(c) for the employees of a member of the
association.
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4. (1) An association may provide advice or a service in respect of ( a) an authorized type of insurance; ( b) an insurance policy that is not of an authorized type of insurance referred to in paragraph 6(1)( b); or ( c) an insurance policy that is not of an authorized type of insurance, other than a policy referred to in paragraph 6(1)( b), if (i) the advice is general in nature, (ii) the advice is not in respect of
(A) a specific risk, proposal in respect of life insurance, insurance policy or service, or
(B) a particular insurance company, agent or broker, and
(iii) the association does not thereby refer any person to a particular insurance company, agent or broker. |
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PROMOTION |
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5. No association shall, in Canada, promote an insurance company, agent or broker unless( a) the company, agent or broker deals only in authorized types of insurance; or ( b) the promotion takes place outside an office of a local cooperative credit society or a branch of a retail association and is directed to
(i) all holders of credit or charge cards issued by the association or by any body corporate that is part of the cooperative credit system,
(ii) all customers of the association and all members of local cooperative credit societies that are members of the association, who are natural persons and who receive regularly mailed statements of account, or
(iii) the general public.
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6. (1) No association shall, in Canada, promote an insurance policy of an insurance company, agent or broker, or a service in respect of such a policy, unless( a) the policy is of an authorized type of insurance or the service is in respect of such a policy; ( b) the policy is not of an authorized type of insurance and
(i) is restricted to insuring the risks of the association, a local cooperative credit society that is a member of the association or an affiliate of the association, and
(ii) does not in any way insure the risks of a customer arising from a transaction with the customer.
( c) the policy is to be provided by a corporation without share capital, other than a mutual insurance company or fraternal benefit society, that carries on business without pecuniary gain to its members and the policy provides insurance to a natural person in respect of the risks covered by travel insurance; ( d) the policy is a personal accident insurance policy and the promotion takes place outside an office of a local cooperative credit society or a branch of a retail association; ( e) the service is in respect of a policy referred to in paragraph ( c) or a policy referred to in paragraph ( d) that is promoted in the manner described in that paragraph; or ( f) the promotion takes place outside an office of a local cooperative credit society or a branch of a retail association and is directed to a group of persons referred to in any of subparagraphs 5( b)(i) to (iii). |
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(2) Despite subsection (1) and section 5, an association may exclude from a promotion referred to in paragraph (1)(f) or 5(b) any person
(a) in respect of whom the promotion would contravene an Act of Parliament or of the legislature of a province;
(b) who has given written notice to the association or to a body corporate that is part of the cooperative credit system and that is involved in the promotion, that the person does not wish to receive promotional material from the association or the body corporate;
(c) who is the holder of a credit or charge card referred to in subparagraph 5(b)(i) and in respect of which the account is not in good standing; or
(d) who is a member of a local cooperative credit society that has notified the association in writing that it does not wish its members to receive any promotional material from the association.
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PROHIBITED ACTIVITIES |
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7. (1) No association shall( a) directly or indirectly provide to an insurance company, agent or broker any information respecting
(i) a customer in Canada of a body corporate that is a member of the association,
(ii) a customer of the association in Canada, if it is a retail association,
(iii) an employee of a customer referred to in subparagraphs (i) or (ii),
(iv) if a customer referred to in subparagraphs (i) or (ii) is an entity with members
in Canada, any such member, or
(v) if a customer referred to in subparagraph (i) or (ii) is a partnership with partners in Canada, any such partner;
( b) permit any of its subsidiaries to directly or indirectly provide to an insurance company, agent or broker any information that the subsidiary receives from the association respecting a person referred to in any of subparagraphs ( a)(i) to (v); or ( c) permit a subsidiary of the association that is a trust or loan corporation incorporated by or under an Act of the legislature of a province to directly or indirectly provide to an insurance company, agent or broker any information respecting
(i) a customer in Canada of the subsidiary,
(ii) an employee of a customer referred to in subparagraph (i),
(iii) if a customer referred to in subparagraph (i) is an entity with members in Canada, any such member, or
(iv) if a customer referred to in subparagraph (i) is a partnership with partners in
Canada, any such partner.
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(2) Subsection (1) does not apply in respect of an association, or a subsidiary of an association that is a trust or loan corporation incorporated by or under an Act of the legislature of a province, if
(a) the association or subsidiary has established procedures to ensure that the information referred to in that subsection will not be used by an insurance company, agent or broker to promote, in Canada, the company, agent or broker, an insurance policy or a service in respect of an insurance policy; and
(b) the insurance company, agent or broker, as the case may be, has given an undertaking to the association or subsidiary, in a form acceptable to the Superintendent, that the information will not be used to promote in Canada the insurance company, agent or broker, an insurance policy or a service in respect of an insurance policy.
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8. No association shall provide a telecommunications device that is primarily for the use of customers or members in Canada of a local cooperative credit society or a retail association and that links a customer or member with an insurance company, agent or broker. |
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9. No retail association shall carry on business in Canada in premises that are adjacent to an office of an insurance company, agent or broker unless the retail association clearly indicates to its customers that the retail association and its premises are separate and distinct from the office of the insurance company, agent or broker. |
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COMING INTO FORCE |
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10. These Regulations come into force on the day on which they are registered. |
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[23-1-o] |
Investments in Associations and Cooperatively-owned Entities Regulations
Statutory Authority
Cooperative Credit Associations Act
Sponsoring Department
Department of Finance
REGULATORY IMPACT ANALYSIS STATEMENT
For the Regulatory Impact Analysis Statement, see the Disclosure of Charges (Retail Associations) Regulations.
PROPOSED REGULATORY TEXT
Notice is hereby given that the Governor in Council, pursuant to paragraph 396(a) (see footnote b) of the Cooperative Credit Associations Act (see footnote c) , proposes to make the annexed Investments in Associations and Cooperatively-owned Entities Regulations.
Interested persons may make representations with respect to the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Mr. Gerry Salembier, Financial Sector Policy Branch, Department of Finance, L'Esplanade Laurier, 15th Floor, East Tower, 140 O'Connor Street, Ottawa, Ontario, K1A 0G5.
Ottawa, May 29, 2003
EILEEN BOYD
Assistant Clerk of the Privy Council
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INVESTMENTS IN ASSOCIATIONS AND COOPERATIVELY-OWNED ENTITIES REGULATIONS |
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INTERPRETATION |
| Definitions |
1. The definitions in this section apply in these Regulations. |
"Act"
« Loi » |
"Act" means the Cooperative Credit Associations Act. |
"designated entity"
« entité designée »
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"designated entity" means
(a) an entity referred to in any of paragraphs 390(1)(a) to (h) of the Act;
(b) an entity whose business includes one
or more of the activities referred to in
paragraph 390(2)(a) of the Act and that engages, as part of its business, in any financial intermediary activity that exposes the entity to material market or credit risk, including a factoring entity, a finance entity or a financial leasing entity; or
(c) an entity whose business includes an activity referred to in paragraph 390(2)(b) of the Act, including a specialized financing entity, other than an entity in which an association is permitted to acquire or increase a substantial investment under subparagraph 390(4)(c)(iii) of the Act.
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"value"
« valeur » |
"value" means
(a) in respect of a share, ownership interest or loan held by an association at a particular time, the book value of the share, ownership interest or loan that would be reported on the balance sheet of the association prepared as at that time in accordance with the accounting principles and specifications of the Superintendent referred to in subsection 292(4) of the Act; and
(b) in respect of a guarantee, the face value of the guarantee.
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GENERAL |
| Non-application |
2. (1) Subsection 390(4) of the Act does not apply with respect to an association's acquisition or increase of a substantial investment in a designated entity, other than an entity referred to in paragraph 390(1)(a) of the Act, that is controlled by another association. |
| Loss of control — rights and obligations |
(2) If the designated entity ceases to be controlled by another association, the association that has acquired or increased a substantial investment in the designated entity( a) may, if the total value of the following does not exceed 50% of the association's regulatory capital, continue to hold the substantial investment, namely,
(i) all shares and ownership interests beneficially owned by the association, and all shares and ownership interests beneficially owned by entities controlled by the association, in designated entities in which the association has a substantial investment but over which it does not exercise control,
(ii) all loans held by the association, and all loans held by entities controlled by the association, that were made to designated entities in which the association has a substantial investment but over which it does not exercise control, other than loans to designated entities that are not foreign institutions and that are deemed to be controlled by a group of associations, and
(iii) all outstanding guarantees given by the association, and all outstanding guarantees given by entities controlled by the association, on behalf of designated entities in which the association has a substantial investment but over which it does not exercise control; and
( b) shall, if the total value referred to in paragraph ( a) exceeds 50% of the association's regulatory capital,
(i) without delay notify the Superintendent that the designated entity in which the association has a substantial investment has ceased to be controlled by another association, and that the total value referred to in paragraph (a) exceeds 50% of the association's regulatory capital, and
(ii) within two years after the loss of control referred to in subparagraph (i), do all things necessary to ensure that the association no longer has a substantial investment in the designated entity.
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| Non-application |
3. (1) Subsection 390(4) of the Act does not apply with respect to an association's acquisition or increase of a substantial investment in an entity referred to in paragraph 390(1)(a) of the Act if the entity is, or would as a result of the investment be, controlled by a group of associations. |
| Loss of group control — rights and obligations |
(2) If the entity referred to in paragraph 390(1)(a) of the Act ceases to be controlled by a group of associations, the association that has acquired or increased a substantial investment in the entity( a) may, if the total value of the following does not exceed 50% of its regulatory capital, continue to hold the substantial investment, namely,
(i) all shares and ownership interests beneficially owned by the association, and all shares and ownership interests beneficially owned by entities controlled by the association, in designated entities in which the association has a substantial investment but over which it does not exercise control,
(ii) all loans held by the association, and all loans held by entities controlled by the association, that were made to designated entities in which the association has a substantial investment but over which it does not exercise control, other than loans to designated entities that are not foreign institutions and that are deemed to be controlled by a group of associations, and
(iii) all outstanding guarantees given by the association, and all outstanding guarantees given by entities controlled by the association, on behalf of designated entities in which the association has a substantial investment but over which it does not exercise control; and
( b) shall, if the total value referred to in paragraph ( a) exceeds 50% of its regulatory capital,
(i) without delay notify the Superintendent that the entity has ceased to be controlled by a group of associations, and that the total value referred to in paragraph (a) exceeds 50% of the association's regulatory capital, and
(ii) within two years after the loss of control referred to in subparagraph (i), do all things necessary to ensure that the association no longer has a substantial investment in the
entity.
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| Meaning of "control" |
4. (1) For the purposes of subparagraphs 2(2)(a)(ii) and 3(2)(a)(ii), a designated entity is deemed to be controlled by a group of associations if the association mentioned in either of those subparagraphs and other associations beneficially own securities of the designated entity in such a number that, if the association and the other associations were one association, that association would control the designated entity. |
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(2) For the purpose of section 3, an entity referred to in paragraph 390(1)(a) of the Act is deemed to be controlled by a group of associations if
(a) it is controlled by an another association; or
(b) if the association mentioned in that section and other associations beneficially own, or would own as a result of the investment, securities of the entity in such a number that, if the association and the other associations were one
association, that association would control the entity.
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| Limitation |
5. In subparagraphs 2(2)(a)(i) to (iii) and 3(2)(a)(i) to (iii), any reference to a substantial investment that an association has does not include a substantial investment
(a) acquired by the association under regulations made under paragraph 396(a) of the Act, other than these Regulations;
(b) acquired by the association in an entity referred to in paragraph 390(1)(a) of the Act if the association is a central cooperative credit society for which an order has been made under subsection 473(1) of the Act; and
(c) acquired by the association by way of an investment of a specialized financing entity controlled by the association.
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COMING INTO FORCE |
| Coming into force |
6. These Regulations come into force on the day on which they are registered. |
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[23-1-o] |
Regulations Amending the Charges for Services Provided by the Office of the Superintendent of Financial Institutions Regulations 2002
Statutory Authority
Office of the Superintendent of Financial Institutions Act
Sponsoring Agency
Office of the Superintendent of Financial Institutions
REGULATORY IMPACT ANALYSIS STATEMENT
Description
Under the Office of the Superintendent of Financial Institutions Act, the Governor in Council may make regulations prescribing charges for any service provided by, or on behalf of, the Superintendent. The Regulations Amending the Charges for Services Provided by the Office of the Superintendent of Financial Institutions Regulations 2002 (the Regulations) reflect an increase of 30 percent in year one and an additional 30 percent in year two, not compounded.
OSFI proposes to increase the service charges to better account for the actual cost of providing the services and to apply a more equitable method of recovering OSFI's costs by charging specific users for services rendered.
OSFI currently funds its annual operating costs primarily through base assessments and, to a lesser extent, through service charges paid by financial institutions. The service charge increase will not provide OSFI with any additional revenues. Service charge revenue collected from institutions in a given sector will be deducted from OSFI's annual operating costs allocated to that sector. Because the increased deduction from operating costs will result overall in lower base annual assessment revenues, the service charge increase will be offset by a corresponding decrease in OSFI's base assessment revenues.
OSFI had previously indicated in a Regulatory Impact Analysis Statement published in the Canada Gazette on October 9, 2002, in relation to other changes made to the Schedule that it would review the appropriateness of the hourly rate embodied in the service charges and that it anticipated further adjustments in the near future.
The existing service charges are based on an hourly rate of $90. The hourly rate has remained constant since January 1, 1999. Recent analysis of OSFI's costs and revenues indicates that the current $90 hourly rate does not reflect the cost of providing each type of service. OSFI's analysis indicates that a rate nearer to $150/hour reflects its actual cost of providing the services. Accordingly, OSFI is proposing an hourly rate of $144, which translates into a 60 percent increase in the amounts set out in the Schedule of Charges. The charges set out in the Schedule are established by multiplying the hourly rate by the average number of hours OSFI has determined the service to require.
Depending on the promulgation timetable, OSFI expects that the initial thirty percent increase in the service charges will take effect in July 2003. The subsequent thirty percent increase will take effect one year following the date of the initial increase.
Alternatives
I. Status quo, i.e., no increase to service charges.
II. Immediate increase of 60 percent.
III. Stage the 60 percent increase over more than two years, in small increments.
Analysis
The status quo does not accurately reflect the cost of services provided by OSFI. Not appropriately capturing the costs for services rendered to specific users results in other regulated financial institutions paying a higher base assessment.
OSFI initially proposed an increase of 60 percent in order to immediately capture the actual costs related to services provided. However, various industry associations suggested staging the proposed increase over a period of between two and four years. Based on these submissions, OSFI is proposing to stage the increase over two years: 30 percent in year one and 30 percent in year two, not compounded. This staging will permit the industry to adjust its practices and appropriately budget these costs, prior to the full increase taking effect. OSFI did not accept a period of longer than two years on grounds that it would prolong the period during which all institutions are required to subsidize those that use additional OSFI services.
Benefits and Costs
The implementation of these increased fees will be of no additional cost or benefit to OSFI.
One of OSFI's priorities is to make progress towards having a larger portion of its costs charged to the specific users of services rather than to institutions through base assessments. Base assessments for regulated institutions are determined based on consolidated assets for the deposit-taking institution sector and on unconsolidated net insurance premiums for the life and property and casualty insurance company sectors. Base assessments are subject to a minimum of $10,000 for all institutions except for fraternal benefit societies, which are subject to a minimum of $1,000. The minimum base assessment is prescribed in the Assessment of Financial Institutions Regulations, 2001. It represents, and continues to represent, the minimum annual cost to OSFI of regulating and supervising an institution. Industry associations supported the view that the minimum assessment reflects the actual average cost incurred by OSFI in performing basic supervision for their smaller members. Accordingly, there is no rationale for altering the base assessment as a consequence of the proposed changes to these regulations.
Service charge revenue collected from institutions in a given sector is deducted from OSFI's annual operating costs allocated to that sector. The reduction in operating costs results in a corresponding reduction in the base assessments for that sector. Therefore, the increase in service charges will reduce the base assessment of institutions in that sector, unless an institution is paying the minimum base assessment. All institutions will continue to be subject to the minimum base assessment, as this is the minimum cost to OSFI of regulating and supervising an institution.
The assessment regime provides that all institutions must pay for services provided by OSFI that extend beyond basic regulation and supervision of the institution, such as administering applications for approvals made pursuant to an institution's governing legislation. However, those who pay the minimum base assessment will not receive a reduction in their base assessment stemming from the deduction of service charge revenue from OSFI's operating costs because their minimum base assessment only reflects the cost of basic regulation and supervision of the institution and not any additional costs incurred by OSFI.
Consultation
Federally regulated financial institutions were consulted on the proposed 60 percent increase through the following entities: the Canadian Association of Mutual Insurance Companies, the Canadian Bankers Association, the Canadian Fraternal Association, the Canadian Life & Health Insurance Association, the Credit Union Central of Canada, the Insurance Bureau of Canada and the Trust Companies Association of Canada.
The industry associations that provided comments were in agreement that an increase was justified in order to reduce base assessments. Some commented that flat service fees are particularly onerous for smaller institutions. OSFI responded that the increased rate better reflects OSFI's cost of providing the services and is not based on the size of any particular institution. Due to the potential for prudential impact, it is OSFI's experience that more time is often spent reviewing transactions undertaken by smaller institutions than comparable transactions undertaken by larger institutions.
Some industry associations also commented on the magnitude and the timing of the increase. OSFI responded that an increase was necessary to better reflect actual costs expended for services rendered and that this would allow OSFI to more equitably allocate the cost of providing its services to those institutions that use them.
It was suggested that a staged increase would be more palatable. As a result, OSFI agreed to stage the increase over a two-year period, being 30 percent in year one and 30 percent in year two, not compounded. No further consultations with the industry are necessary with respect to the increase.
Compliance and Enforcement
The Regulations amend the amount of each of the charges for services rendered. This will not require any changes in existing office procedures or monitoring.
Contact
Mr. James Bruce, Director, Registration and Approvals Division, Office of the Superintendent of Financial Institutions, 255 Albert Street, Ottawa, Ontario K1A 0H2, (613) 991-2480.
PROPOSED REGULATORY TEXT
Notice is hereby given that the Governor in Council, pursuant to sections 23.1 (see footnote d) and 38 (see footnote e) of the Office of the Superintendent of Financial Institutions Act (see footnote f) , proposes to make the annexed Regulations Amending the Charges for Services Provided by the Office of the Superintendent of Financial Institutions Regulations 2002.
Interested persons may make representations with respect to the proposed Regulations within thirty days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Michèle Legault, Policy Advisor, Legislation and Precedents Division, Office of the Superintendent of Financial Institutions, 255 Albert Street, Ottawa, Ontario, K1A 0H2.
Ottawa, May 29, 2003
EILEEN BOYD
Assistant Clerk of the Privy Council
REGULATIONS AMENDING THE CHARGES FOR SERVICES PROVIDED BY THE OFFICE OF THE SUPERINTENDENT OF FINANCIAL INSTITUTIONS REGULATIONS 2002
AMENDMENTS
1. (1) The portion of items 1 to 42 of Schedule 1 to the Charges for Services Provided by the Office of the Superintendent of Financial Institutions Regulations 2002 (see footnote 1) in column 2 is replaced by the following:
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Column 2 |
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| Item |
Charge ($) |
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| 1. |
26,000 |
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| 2. |
26,000 |
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| 3. |
26,000 |
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| 4. |
26,000 |
|
| 5. |
13,000 |
|
| 6. |
13,000 |
|
| 7. |
13,000 |
|
| 8. |
6,500 |
|
| 9. |
6,500 |
|
| 10. |
6,500 |
|
| 11. |
6,500 |
|
| 12. |
6,500 |
|
| 13. |
6,500 |
|
| 14. |
6,500 |
|
| 15. |
6,500 |
|
| 16. |
6,500 |
|
| 17. |
4,550 |
|
| 18. |
3,900 |
|
| 19. |
3,900 |
|
| 20. |
3,900 |
|
| 21. |
3,900 |
|
| 22. |
3,250 |
|
| 23. |
3,250 |
|
| 24. |
3,250 |
|
| 25. |
3,250 |
|
| 26. |
3,250 |
|
| 27. |
3,250 |
|
| 28. |
3,250 |
|
| 29. |
2,600 |
|
| 30. |
2,600 |
|
| 31. |
2,600 |
|
| 32. |
2,600 |
|
| 33. |
2,600 |
|
| 34. |
2,600 |
|
| 35. |
2,600 |
|
| 36. |
2,600 |
|
| 37. |
2,600 |
|
| 38. |
2,600 |
|
| 39. |
2,600 |
|
| 40. |
650 |
|
| 41. |
650 |
|
| 42. |
650 |
|
(2) The portion of items 1 to 42 in Schedule 1 to the Regulations in column 2 is replaced by the following:
| |
Column 2 |
|
| Item |
Charge ($) |
|
| 1. |
32,000 |
|
| 2. |
32,000 |
|
| 3. |
32,000 |
|
| 4. |
32,000 |
|
| 5. |
16,000 |
|
| 6. |
16,000 |
|
| 7. |
16,000 |
|
| 8. |
8,000 |
|
| 9. |
8,000 |
|
| 10. |
8,000 |
|
| 11. |
8,000 |
|
| 12. |
8,000 |
|
| 13. |
8,000 |
|
| 14. |
8,000 |
|
| 15. |
8,000 |
|
| 16. |
8,000 |
|
| 17. |
5,600 |
|
| 18. |
4,800 |
|
| 19. |
4,800 |
|
| 20. |
4,800 |
|
| 21. |
4,800 |
|
| 22. |
4,000 |
|
| 23. |
4,000 |
|
| 24. |
4,000 |
|
| 25. |
4,000 |
|
| 26. |
4,000 |
|
| 27. |
4,000 |
|
| 28. |
4,000 |
|
| 29. |
3,200 |
|
| 30. |
3,200 |
|
| 31. |
3,200 |
|
| 32. |
3,200 |
|
| 33. |
3,200 |
|
| 34. |
3,200 |
|
| 35. |
3,200 |
|
| 36. |
3,200 |
|
| 37. |
3,200 |
|
| 38. |
3,200 |
|
| 39. |
3,200 |
|
| 40. |
800 |
|
| 41. |
800 |
|
| 42. |
800 |
|
2. (1) The portion of items 1 to 10 in Schedule 2 to the Regulations in column 2 is replaced by the following:
| |
Column 2 |
|
| Item |
Charge ($) |
|
| 1. |
5,200 |
|
| 2. |
3,250 |
|
| 3. |
3,250 |
|
| 4. |
3,250 |
|
| 5. |
2,600 |
|
| 6. |
2,600 |
|
| 7. |
2,600 |
|
| 8. |
650 |
|
| 9. |
650 |
|
| 10. |
130 for up to 20 copies plus 4 for each additional copy |
|
(2) The portion of items 1 to 10 in Schedule 2 to the Regulations in column 2 is replaced by the following:
| |
Column 2 |
|
| Item |
Charge ($) |
|
| 1. |
6,400 |
|
| 2. |
4,000 |
|
| 3. |
4,000 |
|
| 4. |
4,000 |
|
| 5. |
3,200 |
|
| 6. |
3,200 |
|
| 7. |
3,200 |
|
| 8. |
800 |
|
| 9. |
800 |
|
| 10. |
160 for up to 20 copies plus 5 for each additional copy |
|
COMING INTO FORCE
3. (1) Subsections 1(1) and 2(1) come into force on the day on which these Regulations are registered.
(2) Subsections 1(2) and 2(2) come into force one year after the day on which these Regulations are registered.
[23-1-o]
Footnote a
S.C. 1991, c. 48
Footnote b
S.C. 2002, c. 9, s. 314
Footnote c
S.C. 1991, c. 48
Footnote d
S.C. 1999, c. 28, s. 131
Footnote e
S.C. 2001, c. 9, s. 477
Footnote f
R.S., c. 18 (3rd Supp.), Part I
Footnote 1
SOR/2002-337
|
