Guidelines Respecting Control in Fact for the Purpose of Subsection 407.2(1) of the Insurance Companies Act

Marginal note:Factors

• 5 (1) The factors referred to in section 4 are the following:

  • (a) the number, type and distribution of securities of the company or any subsidiary of the company, and the rights, privileges or features attached to the securities;

  • (b) the value of the equity and the number and type of securities of the company or any subsidiary of the company, that the applicant has or proposes to acquire, and the rights, privileges or features attached to those securities;

  • (c) the involvement of the applicant, any significant shareholder of the company or any significant shareholder of any subsidiary of the company, in the business of the company or subsidiary, and their knowledge or expertise in financial services or in areas relevant to the operations of the company;

  • (d) the relationships, agreements, understandings or arrangements

    • (i) amongst the significant shareholders of the company or amongst the significant shareholders of any subsidiary of the company,

    • (ii) between the applicant and shareholders of the company or between the applicant and shareholders of any subsidiary of the company, and

    • (iii) between the applicant and any person in relation to securities of the company;

  • (e) the composition and structure of the board of directors, any committees of the board of directors or any senior management committees of the company or any subsidiary of the company, and the voting arrangements of the board and those committees;

  • (f) whether shareholders, directors or senior officers of the company or any subsidiary of the company, are also shareholders, directors or senior officers of the applicant;

  • (g) the existence of family relationships between the applicant’s directors and senior officers and the directors and senior officers of the company or any subsidiary of the company;

  • (h) the ability of persons, including the applicant, to nominate, appoint or veto the appointment of directors, members of committees of the board of directors or senior officers of the company or any subsidiary of the company;

  • (i) the ability of persons, including the applicant, in respect of the board of directors, any committee of the board of directors or any senior management committee of the company or any subsidiary of the company, to

    • (i) require that prior to the placement of a proposal before that board or committee, as the case may be, the applicant consent to the placement of the proposal, or

    • (ii) veto a proposal put before that board or committee;

  • (j) the ability of persons, including the applicant, to determine or veto day-to-day operations, business plans, significant capital expenditures, dividend policy or the issuance of securities of the company or any subsidiary of the company;

  • (k) the material terms and conditions of any agreement or arrangement between the applicant and the company or between the applicant and any subsidiary of the company;

  • (l) the existence of any dependency of the company or any subsidiary of the company, on the applicant created by an agreement or other arrangement between them;

  • (m) any linkages between the applicant and an entity on which the company has a dependency by reason of an agreement or other arrangement between the company and the entity;

  • (n) representations about control of the company by the applicant made by the applicant to any agency or body that regulates or supervises financial institutions; and

  • (o) any other relevant factor that is related to any of the policy objectives set out in section 4.

• Marginal note:Significant shareholder

  (2) For the purpose of subsection (1), a person is a significant shareholder of an entity if the aggregate of shares of a class beneficially owned by the person and any shares of that class beneficially owned by entities controlled by the person exceeds 10% of all of the outstanding shares of that class of shares of the entity.