Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to section 1021 a of the Insurance Companies Act b, hereby makes the annexed Regulatory Capital (Insurance Holding Companies) Regulations.
Interpretation
The following definitions apply in these Regulations.
Act means the Insurance Companies Act. (Loi)
minority interest means an equity interest, in an entity that is controlled by an insurance holding company, that is held by a person other than
the insurance holding company; or
an entity controlled by the insurance holding company. (participation minoritaire)
Regulatory Capital
Subject to subsection (2), the regulatory capital of an insurance holding company, at any time, is the amount determined by the formula A - B where A is the total of the amounts of the shareholders’ equity, minority interests and subordinated indebtedness that would be reported in the financial statements of the insurance holding company prepared as at that time in accordance with the accounting principles and specifications of the Superintendent referred to in subsection 887(4) of the Act; and B is the amount of goodwill that would be included in those financial statements.
In calculating the amount of regulatory capital under subsection (1), an amount may be included in respect of a security only if
the security is, by its terms, subordinate in right of payment to all liabilities of the entity that issued the security other than liabilities that, by their terms, rank equally with, or are subordinate to, that security;
the security is issued and fully paid up; and
in respect of subordinated indebtedness or a preferred share, the security
has an initial minimum term of five years or more or has no term, and
cannot be redeemed or purchased for cancellation in the first five years after it is issued.
Coming into Force
These Regulations come into force on the day on which sections 970 and 984 of the Insurance Companies Act, as enacted by section 465 of the Financial Consumer Agency of Canada Act, chapter 9 of the Statutes of Canada, 2001, come into force.[Note: Regulations in force October 24, 2001, see SI/2001-102.]