Interpretation                                                   

1. In this Act
"affiliated corporation" has the same meaning as "affiliate" in the Company Act except that section 1 (4) of the Company Act does not apply and, for the purposes of determining whether a corporation is an affiliate, a corporation is controlled by a person where the votes carried by shares held, other than by way of security only, by or for the benefit of the person are sufficient, if exercised, to elect a majority of the directors of the corporation;

"association" means an association of member organizations that has been in continuous existence for at least one year, where all the issued voting shares of the association captive insurance company are owned by

• all the member organizations,
• all the member organizations who are insured by the company or who will be insured by the company after purchasing the shares of the company,
• the association where it has the legal capacity to own the shares, or
• the association where it has the legal capacity to own the shares and either all the members or all the insured members;

"member organization" means a person that belongs to an association

"parent" means

• a corporation that owns all of the issued voting shares of a pure captive insurance company, or
• a group of affiliated corporations each one of which owns issued voting shares of, and the member corporations each one of which owns issued voting shares of, and the member corporations of which collectively own all the issued voting shares of a pure captive insurance company;

"registrant" means a captive insurance company registered under this Act;

"sophisticated insured" means an insured

• who in the opinion of the superintendent has expertise in insurance matters, and
• whose aggregate annual premiums for insurance on all risks insured by an insurance company total at least a prescribed amount;

"sophisticated insured group" means a group of sophisticated insureds each member of which owns issued voting shares of, and the members of which collectively own all the issued voting shares of a sophisticated insured captive insurance company;

"superintendent" means the superintendent as defined in the Financial Institutions Act.

1987-9-1; 1989-47-341; 1990-6-74.

Application                                                                

2. In the case of a conflict between this Act or the regulations and any other Act or other regulations, this Act and its regulations prevail unless the other Act or other regulation contains an express provision that it, or a provision of it, applies notwithstanding this Act or its regulations.

Application of Financial Institutions Act, Insurance Act and Company Act        

3.

1. Only the sections
   1. of the Insurance Act referred to in subsections (3) and (4), and
   2. of the Financial Institutions Act referred to in subsection (3) apply to a captive insurance company.
   
   
2. In the provisions of the Financial Institutions Act referred to in subsection (3) as they apply for the purposes of this Act, "business authorization" includes registration of a captive insurance company under this Act.
   
3. Sections 1, 6 to 8, 9 (1), 10, 18, 21, 23, 26, 27, 43 and 101 of the Insurance Act and sections 34 to 37, 39 to 46, 63, 64(2), 70, 75, 80, 81, 103, 131, 132, 210, 212, 214, 217, 242, 243, 245, 246 and 258 of the Financial Institutions Act apply to a captive insurance company.
   
4. Sections 11 to 17, 19, 20, 22, 24 and 25 of the Insurance Act apply to an association captive insurance company and a sophisticated insured captive insurance company.
   
5. Sections 36 to 38 of the Company Act do not apply to a captive insurance company.

Name                                                             

4.

1. A captive insurance company shall not carry on business under a name that includes the word "insurance" or a form of the word but it may carry on business under a name that includes the phrase "captive insurance company".
2. No company other than a captive insurance company shall carry on business under a name that includes the phrase "captive insurance company".

1. A captive insurance company shall not carry on any type of business other than the business of insurance or the business of risk management.
   
   
2. A pure captive insurance company may undertake only prescribed classes of insurance and only for the purpose of insuring
   1. its parent and the parent¡¯s affiliated corporations, and
   2. the officers, directors, employees, agents and independent contractors of itself, its parent or an affiliated corporation referred to in paragraph (a) against losses incurred while acting on behalf of itself, the parent or the parent¡¯s affiliated corporation.
   
   
3. An association captive insurance company may undertake only prescribed classes of insurance and only for the purpose of insuring
   1. the member organizations of its association and their affiliated corporations, and
   2. the officers, directors, employees, agents and independent contractors of itself, a member organization or an affiliated corporation referred to in paragraph (a) against losses incurred while acting on behalf of the member organization or affiliated corporation.
   
   
4. A sophisticated insured captive insurance company may undertake only prescribed classes of insurance and only for the purpose of insuring
   1. the sophisticated insureds that comprise its sophisticated insured group and their affiliated corporations, and
   2. the officers, directors, employees, agents and independent contractors of itself, a sophisticated insured or an affiliated corporation referred to in paragraph (a) against losses incurred while acting on behalf of the sophisticated insured or affiliated corporation.

1. A captive insurance company shall not carry on business unless it is registered by the superintendent.
   
   
2. The superintendent shall not register a captive insurance company unless the company satisfies him as to
   1. its ability to meet its present and future obligations, and
   2. other prescribed matters.
   
   
3. The superintendent may
   1. establish conditions that must be met by an applicant before registration,
   2. grant initial registration for a period, or
   3. refuse to grant initial registration.
   
   
4. The superintendent may refuse to renew registration only in accordance with section 11.
   
   
5. Registration expires and may be renewed as set out in the regulations.

1. amalgamate,
2. wilfully take any action that would facilitate a change in the actual control of the company, or
3. change its memorandum or articles without first informing, and obtaining the consent of, the superintendent.

1. A captive insurance company before initial registration shall have, and after initial registration shall maintain, shareholders¡¯ equity, calculated in accordance with the regulations, of at least the greater of the amount prescribed or the amount the superintendent considers necessary to maintain the solvency of the company.
2. After initial registration the company shall maintain reserves, calculated in accordance with the regulations, of at least the greater of the amount prescribed or the amount the superintendent considers necessary to maintain the solvency of the company.

1. A captive insurance company shall annually file with the superintendent
   1. a financial statement audited by an auditor approved by the superintendent, and
   2. an actuarial statement prepared by an actuary or other person or class of person approved by the superintendent
   in a form required by the superintendent.
2. Where a captive insurance company enters into a guarantee or indemnity under which a parent, sophisticated insured, member organization or a corporation that is an affiliated corporation with respect to any of them, may incur liability for the benefit of the captive insurance company, the captive insurance company shall file a copy of the guarantee or indemnity with the superintendent within 30 days after its execution.
3. The superintendent may, at any time, require information from a captive insurance company concerning its solvency or the conduct of its business, and the company shall provide the information fully, promptly and in the manner required by the superintendent.
4. The superintendent may, at any time, require information from a parent, member organization, sophisticated insured or a person who is affiliated corporation of any of them concerning the solvency of the captive insurance company or the conduct of its business, and the person shall provide the information fully, promptly and in the manner required by the superintendent.

1. The superintendent may, personally or by a person appointed by him, attend the premises of a captive insurance company and inspect its records during normal business hours.
2. No person shall obstruct an inspection.

1. The superintendent, after giving a captive insurance company an opportunity to be heard, may report to the minister as to whether
   1. the ability of the company to meet its present and future obligations is uncertain,
   2. insureds can reasonably rely on insurance written by the company,
   3. the company has failed to pay, within the time required by the Insurance Act, an undisputed claim for which the insurer is liable,
   4. the company has failed to comply with a requirement of an enactment,
   5. an officer, director or person having primary responsibility for the day to day management of the company¡¯s affairs is incompetent or untrustworthy, or
   6. it is in the public interest for the company to continue to be registered.
2. On receiving the report of the superintendent the minister may, after or without hearing the company, impose conditions on it, suspend or revoke its registration or order the superintendent to refuse to renew its registration.
3. Where the minister considers that the length of time that would be required to give a captive insurance company an opportunity to be heard under subsection (1) would be prejudicial to the public interest, he may, without giving the company an opportunity to be heard, decide to impose conditions, suspend or revoke registration or refuse to renew registration, but he shall forthwith notify the company in writing of his decision and the reasons for it.
4. Where the minister makes a decision under subsection (3) the superintendent, within 49 days after the decision, shall make the report to the minister referred to in subsection (1) after giving the company an opportunity to be heard.
5. The company, during a suspension, revocation or refusal of renewal, shall not carry on business, except for winding up its affairs in the Province and complying with this Act and any other applicable law, but nothing in this section prejudicially affects a policy holder or creditor of the insurer.
6. The minister may, after or without a hearing, cancel a condition, suspension or revocation or order refusing renewal, without conditions or on the conditions he thinks appropriate.
7. Notice of the imposition of conditions or of a suspension, revocation or refusal to renew, or of a cancellation under subsection (6), shall be given
   1. to the company by the superintendent and shall be published by him in the Gazette at the cost of the company, and
   2. by the company to its insureds.

1. A person who is required by this Act to comply with a provision of the Financial Institutions Act, Insurance Act or the Company Act, a contravention of which constitutes an offence under that Act of under the Offence Act, and who fails to comply with the provision, commits an offence under that Act or the Offence Act, as the case may be, and is liable to the penalty provided in the Financial Institutions Act, Insurance Act, Company Act or Offence Act, as the case may be, and a provision that applies to the offence under that Act applies as if the offence were committed under that Act.
2. A person commits an offence who
   1. makes a statement in any record or information required or given under section 6, 7 or 9 that would mislead a reasonable person with respect to a statement or omission of a material fact, or
   2. contravenes section 4(2) or 10(2).
3. A captive insurance company that contravenes section 4(1), 5, 6(1), 7, 8, 9, 11(5) or (7)(b) or 12 commits an offence.
4. Where a corporation commits an offence under this section, every director or officer of the corporation who authorized, permitted or acquiesced in the offence also commits the offence.
5. A corporation convicted of an offence under subsection (2), (3) or (4) is liable to a fine of $100 000.
6. An individual convicted of an offence under subsection (2), (3) or (4) is liable to either a fine of $100 000 or to imprisonment for not more than 5 years less one day.
7. Section 5 of the Offence Act does not apply to this Act or the regulations.

1. the creation of discretionary powers exercisable by the superintendent,
2. the solvency of captive insurance companies,
3. registration and renewal of registration, including conditions required to be met before or after registration,
4. fees,
5. advertising or holding out by a captive insurance company,
6. registers,
7. examinations,
8. hearings,
9. disclosure statements,
10. the incorporation of captive insurance companies,
11. the disapplication of all or part of
    (i) this Act,
    (ii) the Insurance Act,
    (iii) the Company Act,
    (iii.1) the Financial Institutions Act, or
    (iv) regulations made under any of the Acts referred to in this paragraph in respect of a captive insurance company or class of captive insurance company.
    
12. information required to be supplied by a captive insurance company to the superintendent or Registrar of Companies, and
13. defining, for the purpose of this Act, any word or expression not defined in this Act.