Insurance Companies Act (S.C. 1991, c. 47)

Marginal note:Board approval required

• 530. (1) Except with the concurrence of at least two thirds of the directors present at a meeting of the board of directors of the company, a company shall not, with respect to a related party of the company referred to in subsection 529(1),

  • (a) make, take an assignment of or otherwise acquire a loan to the related party, including a margin loan referred to in section 531,

  • (b) make a guarantee on behalf of the related party, or

  • (c) make an investment in the securities of the related party

  if, immediately following the transaction, the aggregate of

  • (d) the principal amount of all outstanding loans to the related party that are held by the company and its subsidiaries, other than

    • (i) loans referred to in paragraph 525(b), and

    • (ii) if the related party is a full-time senior officer of the company, loans to the related party that are permitted by subsection 529(2),

  • (e) the sum of all outstanding amounts guaranteed by the company and its subsidiaries on behalf of the related party, and

  • (f) where the related party is an entity, the book value of all investments by the company and its subsidiaries in the securities of the entity

  would exceed 2 per cent of the regulatory capital of the company.

• Marginal note:Limit on transactions with directors, officers and their interests

  (2) A company shall not, with respect to a related party of the company referred to in subsection 529(1),

  • (a) make, take an assignment of or otherwise acquire a loan to the related party, including a margin loan referred to in section 531,

  • (b) make a guarantee on behalf of the related party, or

  • (c) make an investment in the securities of the related party

  if, immediately following the transaction, the aggregate of

  • (d) the principal amount of all outstanding loans to all related parties of the company referred to in subsection 529(1) that are held by the company and its subsidiaries, other than

    • (i) loans referred to in section 525, and

    • (ii) loans permitted by subsection 529(2),

  • (e) the sum of all outstanding amounts guaranteed by the company and its subsidiaries on behalf of all related parties of the company referred to in subsection 529(1), and

  • (f) the book value of all investments by the company and its subsidiaries in the securities of all entities that are related parties of the company referred to in subsection 529(1)

  would exceed 50 per cent of the regulatory capital of the company.

• Marginal note:Exclusion of de minimis transactions

  (3) Loans, guarantees and investments that are referred to in section 522 shall not be included in calculating the aggregate of loans, guarantees and investments referred to in subsections (1) and (2).