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

Marginal note:Filing of allocation method

83.07 A mutual company the directors of which by resolution approve a method of allocating its income and losses and expenses to a participating shareholder account shall, within thirty days after the making of the resolution, file a copy of it with the Superintendent, together with a copy of the written opinion of the actuary of the company and any other information relevant to the allocation method that the Superintendent requests.

Marginal note:Review of allocation method

83.08 The actuary of a company shall annually report in writing to the directors on the fairness and equitableness of the method used by the company for allocating its income and losses and expenses to a participating shareholder account.

Marginal note:Payment of dividends

83.09 A mutual company that pays a dividend under section 83 on participating shares shall debit from the participating shareholder account in respect of those shares

• (a) in the case of a dividend paid by issuing fully paid shares, the amount recorded as stated capital in respect of the dividend as required by subsection 83(3); and

• (b) in any other case, the amount or value of the dividend.

Marginal note:Participating share redemptions, etc.

• 83.1 (1) On a purchase, redemption or other acquisition by a company of participating shares issued by it or fractions of participating shares issued by it, other than participating shares held under section 76 or acquired through the realization of security and sold as required by subsection 77(2), there shall be debited from the participating shareholder account for the class or series of shares so purchased, redeemed or otherwise acquired the amount determined by the formula

  A × B/C

  where

  A 

  is the balance of the participating shareholder account for the shares of that class or series immediately before the purchase, redemption or other acquisition;

  B 

  is the number of shares of that class or series so purchased, redeemed or otherwise acquired; and

  C 

  is the number of shares of that class or series outstanding immediately before the purchase, redemption or other acquisition.

• Marginal note:Shares converted to another class

  (2) On a conversion of outstanding participating shares of a company into shares of another class or series, or on a change of outstanding participating shares of the company into shares of another class or series

  • (a) there shall be deducted from the participating shareholder account maintained for the class or series of participating shares converted or changed the amount determined by the formula

    A × B/C

    where

    A 

    is the balance of the participating shareholder account for the shares of that class or series immediately before the conversion or change,

    B 

    is the number of shares of that class or series converted or changed, and

    C 

    is the number of shares of that class or series outstanding immediately before the conversion or change; and

  • (b) if the shares of that other class or series are participating shares, the amount determined under the formula in paragraph (a) shall be credited to the participating shareholder account for those participating shares.

• Marginal note:Participating shareholder account for convertible participating shares

  (3) For the purposes of subsection (2) and subject to the company’s by-laws, where a company issues two classes of participating shares and there is attached to each class a right to convert a share of one class into a share of the other class and a share is so converted, the amount in a participating shareholder account attributable to a share in either class is the amount determined by the formula

  A/B

  where

  A 

  is the total of the balances of the participating shareholder accounts of both classes; and

  B 

  is the number of outstanding shares of both classes immediately before the conversion.