Office of the Superintendent of Financial Institutions
In this document,
“policy liability” means, in respect of an applicant governed by the ICA, any actuarial and other liability, whether actual or contingent, of the applicant that arises from the terms and conditions of a policy, including, where applicable, any declared and unpaid policy dividends. For greater certainty, this does not include any liability arising from the terms and conditions of a policy that has, with the written consent of the relevant policyholder, been transferred to another party.
“obligations” means any actual or contingent financial obligations of the applicant that are not policy liabilities or deposit liabilities. These include, without limitation: amounts owing to vendors and service providers, rent obligations, salary and employment obligations, legal expenses, outstanding litigation, Canadian regulatory expenses, tax liabilities, and unfunded retirement benefits provided by the applicant to its former employees. For greater certainty, these do not include actual or contingent financial obligatons that have, with the written consent of the relevant creditor(s), been transferred to another party.
The applicant is generally expected to provide:
the proposed name of the corporation to be continued and the name of the statute under which it will be continued (the “Continuing Statute”);
details regarding whether the proposed continuance is subject to or will trigger any regulatory approval or notification requirement, other than under the Legislative Authorities and the Continuing Statute (and where any of these requirements apply, confirmation that they have been met, together with the details of the related regulatory response, if any);
a certified copy of the special resolution authorizing the applicant to apply to the Minister for approval to apply for a certificate of continuance as a corporation under the Continuing Statute;Footnote 1
proof of publication of the notice described in the applicable Legislative Authority (“Notice”);Footnote 2
a confirmation from the applicant that it has not received any objections related to the Notice or otherwise with regard to the proposed continuance, or has addressed any objection received (together with a description of the manner in which each objection has been addressed);
audited financial statements of the applicant, as at a date no more than three months prior to the application to the Minister, showing no policy liabilities, no assets held in trust and no deposits (other than deposits of a person who controls the applicant or has a significant interest in a class of shares of the applicant and that are not insured by the Canada Deposit Insurance Corporation (“CDIC”)), together with the related report from the auditor of the applicant confirming that the statements present fairly the financial position of the applicant (the “Audited Statements”);
where the applicant is governed by the ICA:
a report of the actuary of the applicant supporting the valuation of the policy liabilities reported in the Audited Statements,
the applicant will promptly inform OSFI of the nature and amount of any policy liabilities that arise after the date of the Audited Statements until a certificate of continuance as a corporation under the Continuing Statute is issued and in force, and
Assuris or PACICC, as applicable, and the insurance regulators of all provinces and territories in which the applicant is licensed, have each been directly notified in writing, concurrently with the first publication of the Notice, of the proposed continuance,
where policy liabilities referred to in item 7(b)(i) above arise, confirmation that the applicant has discharged them or provided for their discharge (together with a description of how it has done so), and
confirmation that the applicant shall not use the word “assurance”, “assurances”, “insurance” or “lifeco” or any word or words of import equivalent to any of those words in its name after a certificate of continuance as a corporation under the Continuing Statute is issued and in force (unless it will be an entity referred to in paragraph 47(2)(b) or (c) or section 48 of the ICA);Footnote 3
where the applicant is a trust company, confirmations that the applicant:
is not carrying on any fiduciary activities referred to in section 412 of the TLCA, and
will not use the word “fiduciaire”, “fiduciary”, “fiducie”, “trust”, “trustco”, “loan”, “loanco” or “prêt” or any word or words of import equivalent to any of those words in its name after a certificate of continuance as a corporation under the Continuing Statute is issued and in force (unless it will be an entity referred to in paragraph 47(3)(a) or section 48 of the TLCA);Footnote 4
where the applicant is governed by the BA, the TLCA or the CCAA:
a confirmation that the applicant will promptly inform OSFI of the nature and amount of any deposits (other than deposits of a person who controls the applicant or has a significant interest in a class of shares of the applicant and that are not insured by the CDIC) that arise after the date of the Audited Statements until a certificate of continuance as a corporation under the Continuing Statute is issued and in force, and
where deposits referred to in item 9(a) above arise, a confirmation that the applicant has discharged them, together with a description of how it has done so; and
where the Audited Statements show obligations, in the form of commitments described in the notes to the statements or otherwise:
a description of the nature and amount of each obligation (where a description is not contained in the Audited Statements), and
a confirmation that the applicant will have sufficient assets to satisfy these obligations after a certificate of continuance as a corporation under the Continuing Statute is issued and in force.
This Transaction Instruction relates solely to the Legislative Authorities and does not address any provincial or territorial requirements (or Assuris, PACICC or CDIC requirements, as applicable) that may apply to the continuation of an applicant under a Continuing Statute. Accordingly, OSFI recommends that (a) applicable provincial and territorial statutes be reviewed, and the agencies that administer them be consulted, in connection with such proposed continuation, and (b) the applicable requirements of Assuris, PACICC or CDIC in respect of termination of membership be reviewed, and that officials of these organizations be consulted accordingly.
An applicant must continue to comply with the requirements of its governing statute (e.g., record keeping, reporting, business activity restrictions, capital requirements) until a certificate of continuance as a corporation under the Contining Statute is issued and in force.
OSFI generally expects the Notice to set out, among other things:
the name of the applicant;
the date on or after which the applicant intends to apply to the Minister for approval to apply for a certificate of continuance as a corporation under the Continuing Statute;
the proposed name (in English and French languages, where applicable) of the applicant after a certificate of continuance as a corporation under the Continuing Statute is issued and in force; and
the statute and related provision under which the Notice is given.
An applicant is encouraged to provide OSFI with a draft version of the Notice, with a view to obtain OSFI’s comments regarding this document.
The ICA requires an applicant to discharge, or provide for the discharge of, its policy liabilities.Footnote 5
OSFI is generally satisfied that an applicant governed by the ICA has discharged its policy liabilities where:
the Audited Statements show no policy liabilities; and
if the applicant has issued “claims occurring” policiesFootnote 6, the applicant has satisfied the Superintendent that it is reasonable to believe that no claims will be made under those policies, having regard to, among other things, the types of risks insured and the history of claims made under those policies.
OSFI is generally satisfied that an applicant governed by the ICA has provided for the discharge of a policy liability where it has caused the risks undertaken under the related policy to be reinsured, on an assumption basis.
The following email address should be used for the initial submission of documents in support of requests for approval(s) that are addressed in this document: firstname.lastname@example.org. Once the initial submission has been received, a case officer will be assigned to the matter. Thereafter, all case-related documents and correspondence should be directed to the case officer.
This request for approval is not subject to a user pay fee.
The information requirements and administrative guidance are intended to satisfy typical applications. They have been derived from OSFI’s experience in assessing applications. Applicants who provide all information and material requested can generally expect a more timely assessment of their applications. As appropriate to the circumstances, OSFI may request additional information, take into account other matters, impose terms and conditions, or require undertakings.
See paragraphs 39.1(2)(b) of the BA, 39(3)(d) of the ICA, 38(2)(e) of the TLCA and 32(2)(b) of the CCAA.
Return to footnote 1
The Notice is described in paragraphs 39.1(2)(a) of the BA, 39(3)(a) of the ICA, 38(2)(a) of the TLCA and 32(2)(a) of the CCAA. See also items 3 and 4 of the Administrative Guidance below for more information.
Return to footnote 2
See section 47 of the ICA for more details regarding restrictions on the use of name.
Return to footnote 3
See section 47 of the TLCA for more details regarding restrictions on the use of name.
Return to footnote 4
See paragraph 39(3)(b) of the ICA.
Return to footnote 5
These are generally “long tail” liability policies that provide coverage based on when the event occurs and that allow claims to be made for a considerable period of time.
Return to footnote 6