Marginal note:Conversion into company with common shares
237. (1) On the application of a mutual company made in accordance with the regulations, the Minister may, on the recommendation of the Superintendent,
(a) approve a conversion proposal; and
(b) issue letters patent of conversion to effect the conversion proposal.
Marginal note:Special meeting of eligible policyholders
(1.1) Before an application is made under subsection (1), the directors of the company must call a special meeting of eligible policyholders to obtain
(a) approval of the conversion proposal;
(b) confirmation of any by-law or of any amendment to or repeal of a by-law that is necessary to implement the conversion proposal; and
(c) authorization to make the application.
Marginal note:Notice of meeting and policyholder list
(1.2) A company shall, in respect of a special meeting,
(a) send, not less than 45 days and not more than 75 days before the meeting, to each eligible policyholder a notice of the time and place of the meeting, describing the conversion proposal in sufficient detail to permit a policyholder to form a reasoned judgment about the terms of the proposal and its impact on both policyholders and the company, together with the prescribed information in respect of the conversion proposal; and
(b) prepare, not less than 45 days before the meeting, a list, which may be in electronic form, of all eligible policyholders.
Marginal note:Application of subsection 149(5)
(1.3) Subsection 149(5) applies, with any modifications that the circumstances require, in respect of the list of eligible policyholders.
Marginal note:Entitlement to notice and right to vote
(1.4) Only eligible policyholders are entitled to notice of and to vote at a special meeting.
Marginal note:Special resolution
(1.5) Any approval, confirmation or authorization referred to in subsection (1.1) must be given by special resolution of the eligible policyholders.
(2) The Governor in Council may make regulations
(a) respecting the application referred to in subsection (1), including the form of the application and the information to be contained in the application, and authorizing the Superintendent to require additional information in order to make a recommendation;
(a.1) respecting the conversion proposal, including the information to be contained in the conversion proposal, and authorizing the Superintendent to approve the measures to be taken by the converting company in respect of any proposed amendment to the conversion proposal;
(a.2) respecting the value of a converting company for the purposes of the regulations and authorizing the Superintendent to specify a day at which the value shall be estimated by the converting company;
(b) concerning the fair and equitable treatment of policyholders under a conversion proposal;
(c) governing the ownership of shares issued by a mutual company that has been converted into a company with common shares;
(c.1) respecting the authorization by the Superintendent of the sending of a notice of a special meeting referred to in subsection (1.1), including
(i) prescribing the information to be submitted by the converting company in support of an authorization,
(ii) authorizing the Superintendent to consider information in addition to that referred to in subparagraph (i), and
(iii) authorizing the Superintendent to require that information, in addition to the prescribed information referred to in paragraph (1.2)(a), be sent with a notice;
(c.2) authorizing the Superintendent to
(i) require the converting company to hold one or more information sessions for eligible policyholders and to take other measures to assist eligible policyholders in forming a reasoned judgment on the conversion proposal, and
(ii) set the rules under which the information sessions must be held;
(c.3) respecting restrictions on any fee, compensation or other consideration that may be paid, in respect of the conversion of a mutual company into a company with common shares, to any director, officer or employee of the company or to any entity with which a director, officer or employee of the company is associated;
(c.4) prohibiting, during the period set out in the regulations, the issuance or provision of shares, share options or rights to acquire shares, of a company that has been converted from a mutual company into a company with common shares to
(i) any director, officer or employee of the company, or
(ii) any person who was a director, officer or employee of the company during the year preceding the effective date of conversion of the company; and
(d) generally, respecting the conversion of a mutual company into a company with common shares.
Marginal note:Exemption by Superintendent
(3) A regulation made under subsection (2) may provide that the Superintendent may, on such terms and conditions as the Superintendent considers appropriate, exempt a company from prescribed requirements of that regulation.
Marginal note:Exemption by Minister
(4) The Minister may, on such terms and conditions as the Minister considers appropriate, exempt a company from any requirement of this Act or the regulations if
(a) the company is a mutual company applying for the approval of a proposal to convert the company into a company with common shares; and
(b) the Minister is of the opinion that the company is, or is about to be, in financial difficulty and that the exemption would help to facilitate an improvement in the financial condition of the company.
- 1991, c. 47, s. 237;
- 1994, c. 26, s. 38(E);
- 1997, c. 15, s. 215;
- 1999, c. 1, s. 5.
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