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This Act is current to October 6, 2021
See the Tables of Legislative Changes for this Act’s legislative history, including any changes not in force.

Financial Institutions Act

[RSBC 1996] CHAPTER 141

Contents
Part 1 — Interpretation and Application
1Definitions and interpretation
2Application of Business Corporations Act
3-5Repealed
6Repealed
7Repealed
8Pre-existing trust company
9-10Repealed
10.1Specific rules respecting Business Corporations Act application to extraprovincial corporations
11This Act paramount
Part 2 — Incorporation, Significant Changes and Winding Up
Division 1 — Names
12Names for trust companies and insurance companies
12.1False representation prohibited
Division 1.1 — Formation of Trust Companies and Insurance Companies
13Consent required for incorporation
14Preliminary activities
Division 1.2 — Alteration of Charter of Trust Companies and Insurance Companies
15Consent required for alteration of memorandum, notice of articles or articles
Division 1.3 — Conversion of Special Act Insurance Companies
16Consent required for conversion of special Act insurance company
17Continuation of business authorization on conversion of special Act insurance company
Division 1.4 — Continuation of Trust Companies and Insurance Companies
18Consent required for continuation of extraprovincial trust corporation or extraprovincial insurance corporation into British Columbia
19Consent required for continuation of trust company or insurance company out of British Columbia
Division 1.5 — Amalgamation of Trust Companies and Insurance Companies
20Consent required for amalgamation of trust company or insurance company
Division 1.6 — Arrangements, Acquisitions or Dispositions by Trust Companies and Insurance Companies
21Consent of Authority to arrangement, acquisition or disposition
Division 1.7 — Background for Consents
22Consent required for continuation or amalgamation
23Superintendent may obtain information to support consent considerations
Division 2 — Dissolution and Winding Up of Trust Companies and Insurance Companies
24Notice to superintendent required on voluntary dissolution or winding up
25Winding up by Supreme Court order — superintendent is party
25.1Liquidation and dissolution by court order
26Liquidation and dissolution on direction of Authority
27Application of this Part
28Duties of liquidators on Authority-ordered liquidation and dissolution
29Deferral of dissolution
30Publication of notice
31Filing quarterly statements and producing records
32Examination of trust and insurance companies being liquidated and dissolved
33Information required on restoration applications
33.1Provisional liquidator
34-40Repealed
Division 3 — Special Provisions Respecting Insurance Companies Ceasing Business or Winding Up
41Provisions for subsisting contracts of insurance
42Reinsurance arranged by liquidator
43Rights of the insured on reinsurance
44Termination if reinsurance is not arranged
45Liquidator's duty to give notice
46Provision for payment of losses, preferred claims and unearned premiums
47Endowment and life funds distributed
Division 4 — Ownership of Trust and Insurance Companies
48Definitions and interpretation for Division
49Determination of base level ownership percentage
50Share acquisition restrictions
51Grounds for refusal of consent to major share acquisition
52Reporting requirement
53Shares acquired in contravention of section 50 not registrable
54Prohibition on dividends
55No voting rights if excess shareholdings
56Validity of transfer of voting shares
57Directors' bylaws — members' declarations
58Superintendent may require declaration of share ownership
Part 3 — Business Authorization and Business
Division 1 — Business Authorization of Financial Institution
59Commencement of business
60Business authorizations for corporations now in business
61Application for business authorization
62Conditions on business authorization
63Certificate of business authorization
64Voluntary revocation of business authorization
Division 2 — Operation of Financial Institutions
65Authorized business
66Membership in insurance plan
67Capital and liquidity of financial institutions
68Repealed
69Restriction on right to appoint receiver
Division 3 — Trust Business
70Unauthorized trust business by corporations prohibited
71Repealed
72Common trust funds authorized
73Extent of liability
74Execution of trusts
Division 4 — Insurance Business
74.1Mutual company definition
75Unauthorized insurance business prohibited
76Exceptions
77Reserves
78Reinsurance
79Rebates of premiums prohibited
80Separation of class funds of insurance company
80.1Coverage by property insurer
80.2Obligation of insurer with respect to agent's commission
80.3Insurer — complaint resolution
Division 5 — Deposits and Borrowing of Trust Companies and Credit Unions
81Unauthorized deposit business prohibited
82Deposits in credit unions
83Deposits from persons unable to contract
84Disposition of deposits
85Inactive deposits
86Limitation on lending
87Subordinated notes
Division 6 — Marketing of Financial Products
88-90Repealed
91Disclosure of identity in advertising, etc
92Insurers to file policy forms
92.1Requirements of out of province insurers
92.2Online sale of insurance
93Prohibition against unfair, misleading or deceptive documents
94Coercive tied selling prohibited
95Repealed
96Substitute action of superintendent
Part 4 — Corporate Governance
Division 1 — Directors and Officers of Financial Institutions
97Number of directors and unaffiliated directors
98Repealed
98.1Cumulative voting for directors
99Removal of directors and officers
100Credit union directors ceasing to hold office
101Standard of care for directors and officers
101.1Director's application to Supreme Court — superintendent is party
102Indemnification of directors and officers
103Quorum and unaffiliated directors
104Misuse of confidential information
105Information required of directors and senior officers
106Meeting requested by auditor
107Meeting requested by superintendent
108Director's statement on own resignation or pending removal
109Circulation of director's statement
110Directors' remuneration
111Committees
112Conduct review committee
Division 2 — Auditors and Audit Committees of Financial Institutions
113Auditor
114Auditor may be a depositor
115Audit committee and unaffiliated directors
116Auditor has right to attend directors' meetings
117Appointment and removal of auditor
118Report to accounting body
119Resignation of auditor
120Auditor appointment for subsidiary
121Amendment of financial statements and auditor's report
122Repealed
123Report to directors
124Additional reporting
125Additional auditor
126No liability
Division 2.1 — Actuaries — Insurance Companies
126.1Definition
126.11Actuaries
126.12Notice of appointment
126.13Designated individual
126.14Qualifications of actuary
126.15Senior officers precluded
126.16Revocation of actuary's appointment
126.17Declaration of vacancy by court
126.18Ceasing to hold office
126.19Filling vacancy
126.2Statement of actuary
126.21Duty of replacement actuary
126.22Right to information
126.23Actuary's valuation
126.24Special valuation
126.25Notice of meeting to actuary
126.26Actuary's report
126.27Report to directors
126.28Report on matters requiring rectification
126.29Actuary's procedures
126.3Qualified privilege
126.31No liability
Division 3 — Books, Records, Returns and Financial Statements of Financial Institutions
127Filings
128Financial statements
129Accounting principles
130Public access to financial information
131Financial year end
132Records filed with registrar
133Location of records
134Repealed
Division 4 — Investments and Lending of Financial Institutions
135Investment and loan committee
136Investment and loan standards
137Superintendent's powers over investment and lending policy
138Compliance with investment and lending limits
139Credit unions not permitted to invest in other credit unions
140Other authorized loans, investments and activities of subsidiaries
141Investment in a corporation
142Other authorized investments
143Disposal of investments
143.1Loans and guarantees prohibited
143.2Financial assistance restricted
143.3Contract enforceable
Part 5 — Related Parties
144Interpretation and designation of related parties
145When related party transactions are permitted
146Conduct review committee's power to approve other transactions
147When superintendent may consent to related party transactions
148Restrictions on self dealing as a fiduciary
149Disclosure by related parties
150Voidable transactions
151Derivative action
152Liability arising from related party transactions
153Burden of proof
154Reporting by auditor
155-156Repealed
Part 6 — Regulation of Other Persons
Division 1 — Extraprovincial Corporations
157Definition of "primary jurisdiction"
158Application of this Division
159Authorized business
160Business authorization for extraprovincial trust or insurance corporation
160.1Business authorization for extraprovincial credit union
161Name
162Records
163Filings
164Requirement for notice of regulatory action outside British Columbia
165Examination of extraprovincial corporations
166Amalgamation of extraprovincial corporations
167Notice of ceasing business
Division 2 — Insurance Agents and Adjusters
168Definitions for Division
169Exercise of rights under licence
170Nominees
171Prohibition of unlicensed agents and salespersons
172-173Repealed
174Issue of licences
175Repealed
176Insurance applications to be accepted only from holders of licences
177Selling offences
178Payment of commission to unlicensed agents prohibited
179Persons who may negotiate settlement of personal injury claim
180Prohibition of unlicensed adjusters
181-185Repealed
Division 3 — Reciprocal Exchanges for Insurance
186Interpretation
187Permit for reciprocal insurance
Division 4 — Mutual Fire Insurance Companies
188Definition
189Application
Division 5 — Societies Engaged in Insurance
190Definition of society
191Deemed business authorization for certain existing societies
192Provisions applicable
193Certain other existing societies exempt
194When society not entitled to receive business authorization
195Actuarial certificates
196Limit of insurance money payable
197Amendment of charter
197.1Consent required for alteration to constitution or bylaws or for amalgamation of authorized society
198Society operating outside British Columbia
199Societies
200Provisions applicable to certain societies
Part 7 — Administration of the Regulation of Financial Institutions
Division 1 — BC Financial Services Authority
201BC Financial Services Authority
201.1Rules of the Authority
201.2Procedures for rules
201.3Regulation prevails over rule
202-202.1Repealed
203Panels
204-205Repealed
206Requirement to insure
207Superintendent of Financial Institutions
208Power to require undertakings and make agreements
209Capacity outside British Columbia
210Examinations, audits, inspections
211Superintendent may require information
211.1Requirement for notice of action outside British Columbia
212Examination
213Inquiries
Division 1.1 — Special Examinations and Investigations
213.1Definitions
214Special examination
215Investigation
215.1Extrajurisdictional evidence
215.2Extrajurisdictional request for evidence
216Witnesses in a special examination or investigation
216.1Powers of entry
216.2Warrant to enter residence
216.3Powers on inspection
216.4Certified copies of records as evidence
216.5Obstructing or interfering with inspection
216.6Immunities on special examination or investigation
Division 1.2 — Information and Records
217Extension of time
218Confidential information
218.1Privileged information — supervisory information
218.2Privileged information — self-evaluative compliance audits
219Agreements with other jurisdictions
219.01Agreement with other authorities and market conduct database administrator
219.1Collecting and sharing information respecting financial institutions
Division 2 — Insurance Council of British Columbia
220Establishment of the Insurance Council of British Columbia
221Alternates
222Executive director
223Committees
224Voting
225Meetings
225.1Rules of council
225.2Procedures for and availability of rules
225.3Regulation prevails over council rule
226Administrative policies
227Duties of council
228-229Repealed
230Effect of a transfer of powers to superintendent
231Council may suspend, cancel or restrict licences and impose fines
232Investigation
232.1Witnesses on an investigation
232.2Powers of entry
232.3Warrant to enter residence
232.4Powers on investigation
232.5Certified copies of records as evidence
232.6Obstructing or interfering with investigation
233-234Repealed
Division 3 — Hearings and Appeals
235Orders, consents and refusals to be in writing
236Power to impose conditions
237Hearing requirements
238Summary procedure — superintendent or council
238.1Summary procedure — superintendent or Authority
239Public hearing
240Witnesses at hearings
241Costs of investigation
241.1Assessment of costs
242Appeal from a decision of the superintendent or council
242.1Financial Services Tribunal
242.2Practice and procedure
242.3Judicial review
242.4Appeal from a decision of the Authority
243Personal liability protection
Part 8 — Sanctions
Division 1 — General Sanctions
244Authority's order to cease or remedy
245Order to freeze property
246Order for compliance
247Valuation of assets and insurance contracts
248Supervision of central credit union
249Revocation of business authorization
250Notice of revocation of business authorization
251Court order to appoint receiver, etc.
Division 2 — Offences and Penalties
252Offences
253Penalties
253.1Administrative penalties
253.2Limitation on proceedings
253.3Failure to pay administrative penalty
254Remedies preserved
255Limitation period
256Court order to comply
257Restitution
258Innocent third parties
259Remedy of irregularities
Part 9 — Deposit Insurance and Stabilization of Credit Unions
260Definitions and interpretation for Part
Division 1 — Credit Union Deposit Insurance Corporation of British Columbia
261Credit Union Deposit Insurance Corporation of British Columbia
262General powers of the deposit insurance corporation
263Accounting records
264Appointment of auditor
265Auditor's report
Division 2 — Deposit Insurance
266Guarantee of credit union deposits
267Fund
268Contributions to fund
269Issue of debentures
270Redemption of debentures
271Fund impaired
272Investment by deposit insurance corporation
273Acts not applicable
274Fund protection symbol
Division 3 — Stabilization
275Supervision of credit union
276Duration of supervision
277Orders in relation to credit union that is subject to supervision
277.1Additional circumstances in which section 277 (2) orders may be made
277.2Assistance to administrator in relation to section 277 (2) orders
278Administrator's powers
279Administrator
280Financial assistance
Division 4 — Stabilization Authority
281Stabilization authority defined
282Designation
283Mandatory membership
284Revocation of stabilization authority status and delegated powers
285Superintendent may delegate to stabilization authority
286Repealed
287Advance from fund to stabilization authority
288Annual report of stabilization authority
Part 10 — Regulations and Transition
Division 1 — Regulations
289Regulations
290Transfer of disciplinary powers
Division 2 — Transitional Provisions
291Validity of loans
292Validity of credit union amalgamations before June 25, 1975
293Variation of agreements
Part 11 — Review of Act
294Review of Act

Part 1 — Interpretation and Application

Definitions and interpretation

1   (1) In this Act:

"articles" has the same meaning as in the Business Corporations Act;

"auditor" includes a partnership of auditors and an additional auditor appointed under section 125;

"Authority" means the BC Financial Services Authority established under section 2 of the Financial Services Authority Act;

"business authorization" means an authorization to carry on

(a) trust business,

(b) deposit business,

(c) insurance business, or

(d) both trust business and deposit business,

issued under Division 1 of Part 3 to a financial institution, under Division 1 of Part 6 to an extraprovincial corporation or under Division 5 of Part 6 to a society described in section 191;

"capital base" of a financial institution or extraprovincial corporation means the capital base determined in accordance with the regulations under section 289 (3) (e) or (f) and the rules made by the Authority under section 201.1 (1) (a) or (b);

"central credit union" means a credit union in which membership is restricted to credit unions, other corporations, public bodies and the Crown in right of Canada or British Columbia or in any other right;

"charter" includes

(a) an Act, statute, ordinance, letters patent, certificate, declaration,

(b) other instrument or provision of law by or under which a corporation is incorporated, amalgamated or continued,

(c) the memorandum, articles or bylaws by whatever name called of a corporation, and

(d) the constitution and rules of a credit union;

"common trust fund" means a fund in which moneys of different estates and trusts are co-mingled for the purpose of facilitating investment;

"conduct review committee", in relation to a financial institution, means the conduct review committee elected by the directors as required under section 112;

"constitution" means the document described in section 6 (2) of the Credit Union Incorporation Act and includes the constitution of a credit union incorporated under the Credit Union Act, R.S.B.C. 1979, c. 79, or incorporated under a former Credit Unions Act;

"contract of insurance" has the same meaning as "contract" in the Insurance Act;

"council" means the Insurance Council of British Columbia continued under section 220;

"credit union" means a corporation incorporated as a credit union under the Credit Union Incorporation Act, the Credit Union Act, R.S.B.C. 1979, c. 79, or a former Credit Unions Act, and includes a central credit union and a credit union continued into British Columbia under section 15.1 of the Credit Union Incorporation Act, but does not include a credit union continued under the laws of another jurisdiction under section 15.2 of the Credit Union Incorporation Act;

"debenture" includes an instrument, secured or unsecured, issued by a financial institution which instrument is

(a) in bearer or registered form,

(b) of a kind commonly dealt in on securities exchanges or markets, or commonly recognized in any area in which it is issued or dealt in as a medium for investment, and

(c) evidence of an obligation or indebtedness of the financial institution,

but does not include

(d) a negotiable unsecured promissory note maturing not more than one year after the date of issue,

(e) a receipt or another type of instrument issued by a financial institution evidencing

(i) a deposit, or

(ii) an annuity payment, or

(f) an investment contract or mutual fund certificate;

"deposit business" means the business of receiving on deposit or soliciting for deposit money that is repayable

(a) on demand,

(b) after notice,

(c) on the expiry of a specified term, or

(d) at specified intervals for a specified term,

whether or not the person undertaking an activity or activities set out in paragraphs (a) to (d) can or does distribute any gain, profit or dividend, or otherwise disposes of the person's assets, to a member or shareholder of the person other than during winding up or on dissolution;

"deposit insurance corporation" means the Credit Union Deposit Insurance Corporation of British Columbia continued under section 261;

"depositor" means an individual or entity

(a) that has money on deposit with a credit union, extraprovincial credit union or extraprovincial trust corporation, or

(b) that holds non-equity shares in a credit union issued before January 1, 2020;

"electronic meeting" means a fully electronic meeting or a partially electronic meeting;

"entity" includes a corporation, trust, partnership, fund or other unincorporated association or organization, the Crown in right of Canada or of a province, a Crown agency, a foreign government and an agency of a foreign government, but does not include an individual;

"equity share" means a share in a credit union that represents an equity interest in a credit union;

"extraprovincial corporation" means an extraprovincial credit union, extraprovincial insurance corporation or extraprovincial trust corporation;

"extraprovincial credit union" means a credit union that is incorporated by or under the laws of a jurisdiction other than British Columbia and that is, under those laws, licensed, registered or in any way authorized to carry on activities that are substantially the same as trust business or deposit business or both, but does not include a federal credit union within the meaning of the Bank Act (Canada);

"extraprovincial insurance corporation" means

(a) a corporation that is an insurer and is incorporated by or under the laws of a jurisdiction other than British Columbia and is, under those laws, licensed, registered or in any way authorized to carry on activities that are substantially the same as insurance business, or

(b) an insurance association,

and includes a society that is named in an order of the superintendent made under section 193 (2) to which society section 159 applies because of section 193 (3), but does not include

(c) a corporation that

(i) is licensed under Division 2 of Part 6 as an insurance agent or insurance adjuster, and

(ii) carries on insurance business only in its capacity as an insurance agent or insurance adjuster;

"extraprovincial trust corporation" means a corporation incorporated by or under the laws of a jurisdiction other than British Columbia and is, under those laws, licensed, registered or in any way authorized to carry on activities that are substantially the same as trust business or deposit business or both, but does not include a credit union, a bank or a corporation that is a subsidiary of a bank and is a loan company to which the Trust and Loan Companies Act (Canada) applies;

"fair market value" means the amount, price, consideration or rent that would be obtained in an arm's length transaction in the open market between willing parties acting in good faith;

"financial institution" means a credit union, trust company or insurance company;

"financial services" includes deposit business, insurance business, trust business, trading in securities, mortgage brokerage and real estate services;

"fully electronic meeting" means a meeting in which persons are entitled to participate solely by telephone or other communications medium, as set out in the notice for the meeting, if all persons attending the meeting are able to participate in it, whether by telephone or other communications medium;

"fund", except in the definition of "entity", means the fund continued under section 267;

"general insurance" means insurance that is not life insurance;

"general insurance business" means insurance business in respect of general insurance only;

"insolvent" includes the inability of a corporation to pay its debts as they become due in the usual course of the corporation's business;

"insurance association" means an association of persons formed on the plan known as Lloyd's or on another prescribed plan by which each associate underwriter is liable for a stated, limited or proportionate part of the whole amount insured by a contract of insurance;

"insurance business" means

(a) undertaking or offering to undertake to indemnify another person against loss or liability for loss in respect of a certain risk or peril to which the object of the insurance may be exposed,

(b) soliciting or accepting any risk,

(c) soliciting an application for a contract of insurance,

(d) issuing or delivering a

(i) receipt for any contract of insurance, or

(ii) contract of insurance,

(e) in consideration of any premium or payment, granting an annuity on a life or lives,

(f) collecting or receiving any premium for a contract of insurance,

(g) adjusting any loss covered by a contract of insurance, or

(h) advertising for any business described in paragraphs (a) to (g),

whether or not the person undertaking an activity or activities set out in paragraphs (a) to (h) can or does distribute any gain, profit or dividend, or otherwise disposes of the person's assets, to a member or shareholder of the person other than during winding up or on dissolution;

"insurance company" means

(a) a company incorporated under the Business Corporations Act for the purpose of carrying on insurance business,

(b) an insurer incorporated by or under another Act, or

(c) a pre-existing insurance company,

and includes

(d) a special Act insurance company that has been converted into a company under section 266 of the Business Corporations Act for the purpose of carrying on insurance business,

(e) an extraprovincial insurance corporation that has been continued into British Columbia as a company under section 303 of the Business Corporations Act,

(f) a company that results from an amalgamation referred to in section 20 (2), and

(g) a society that is named in an order of the superintendent made under section 193 (2) of this Act to which society section 59 applies because of section 193 (3),

but does not include

(h) a corporation continued under the laws of another jurisdiction,

(i) a society deemed under section 191 to have a business authorization issued under Division 5 of Part 6,

(j) a mutual fire insurance company as defined in section 188 or a grandparented insurance society as defined in section 200,

(k) a corporation that

(i) is licensed under Division 2 of Part 6 as an insurance agent or insurance adjuster, and

(ii) carries on insurance business only in the corporation's capacity as an insurance agent or insurance adjuster, or

(l) a corporation that is registered as a captive insurance company under the Insurance (Captive Company) Act

"insurer" means an individual, corporation or other entity carrying on insurance business;

"life insurance business" means insurance business in respect of life insurance;

"member",

(a) in relation to a trust company or an insurance company, has the same meaning as "shareholder" in the Business Corporations Act, and

(b) in relation to a credit union, means a person who has been admitted to membership or junior membership in the credit union and whose name is entered in its register of members, but does not include a person who is an auxiliary member as defined in section 1 of the Credit Union Incorporation Act;

"memorandum" means, in relation to a pre-existing trust company or pre-existing insurance company, the record that constituted the company's memorandum under section 12 of this Act as that section read before the coming into force of section 67 of the Finance Statutes Amendment Act, 2011;

"non-equity share" means a share in a credit union that

(a) evidences indebtedness of the credit union to the holder of the share, and

(b) does not represent an equity interest in the credit union;

"partially electronic meeting" means a meeting in which persons are entitled to participate in person or by telephone or other communications medium, as set out in the notice for the meeting, if all persons attending the meeting are able to participate in it, whether by telephone, by other communications medium or in person;

"pre-existing insurance company" means a corporation that was, before the coming into force of section 64 of the Finance Statutes Amendment Act, 2011, incorporated under this Act for the purpose of carrying on insurance business, and includes

(a) a special Act insurance company that was, before the coming into force of section 64 of the Finance Statutes Amendment Act, 2011, converted into an insurance company under section 21 of this Act as that section read before the coming into force of section 67 of the Finance Statutes Amendment Act, 2011, and

(b) an extraprovincial insurance corporation that was, before the coming into force of section 64 of the Finance Statutes Amendment Act, 2011, continued into British Columbia as a company under section 23 of this Act as that section read before the coming into force of section 67 of the Finance Statutes Amendment Act, 2011,

but does not include any corporation referred to in paragraph (h), (i), (j), (k) or (l) of the definition of "insurance company";

"pre-existing trust company" means

(a) a corporation that was, before the coming into force of section 64 of the Finance Statutes Amendment Act, 2011, incorporated under this Act for the purpose of carrying on trust business,

(b) an extraprovincial trust company that was, before the coming into force of section 64 of the Finance Statutes Amendment Act, 2011, continued into British Columbia under section 23 of this Act as that section read before the coming into force of section 67 of the Finance Statutes Amendment Act, 2011, or

(c) a corporation that was, before the coming into force of section 64 of the Finance Statutes Amendment Act, 2011, incorporated as a trust company under the Trust Company Act, R.S.B.C. 1979, c. 412, or was incorporated as a trust company under another Act,

but does not include a corporation continued under the laws of another jurisdiction;

"prescribed" means prescribed by regulation of the Lieutenant Governor in Council;

"public body", in relation to a credit union, means

(a) a municipality or regional district,

(b) [Repealed 2003-52-64.]

(c) the Municipal Finance Authority of British Columbia under the Municipal Finance Authority Act,

(d) a government body under the Financial Administration Act, or

(e) a board, commission, authority or similar body established or authorized under an Act to administer, regulate, manage or undertake the operation of schools, libraries, hospitals, health facilities, irrigation systems, drainage systems, water supply systems, local improvements or public utilities, or to regulate or facilitate the regulation of agricultural and other natural products marketing or to levy or raise taxes under the authority of an Act;

"security instrument" means security as defined in section 1 of the Securities Act;

"senior officer" means each of the 5 highest paid officers of a corporation and includes an individual who, whether or not among those 5 highest paid officers,

(a) is the chair or a vice chair of the board of directors or the president, a vice president, the secretary, the treasurer or the general manager of the corporation, or

(b) performs functions of the corporation similar to those normally performed by an individual occupying any of the offices described in paragraph (a);

"significant borrower", in relation to a trust company or insurance company, means

(a) an entity that has outstanding indebtedness for money borrowed from the company, or from the company and one or more of its affiliates, or from one or more affiliates of the company, if the aggregate principal amount of the outstanding indebtedness exceeds the greater of

(i) $1 million, or

(ii) 1/3 of the sum of

(A) the total indebtedness then outstanding for borrowed money of the entity, and

(B) the amount by which the assets of the entity exceed its liabilities, as shown on the balance sheet of the entity at the end of its most recently completed financial year, or

(b) an individual who has outstanding indebtedness for money borrowed from the company, or from the company and one or more of its affiliates, or from one or more affiliates of the company, if the aggregate principal amount of the outstanding indebtedness, excluding indebtedness secured by a mortgage of the individual's principal residence, exceeds $100 000;

"special Act insurance company" means an insurance company incorporated by another Act;

"special resolution",

(a) in relation to a trust company or insurance company, means a resolution

(i) passed by a majority of not less than 3/4 of the votes cast by those members of the company who, being entitled to do so, vote personally or by proxy at a general meeting of the company

(A) of which notice as the articles provide and being not less than 21 days' notice specifying the intention to propose the resolution as a special resolution has been given, or

(B) if every member entitled to attend and vote at the meeting agrees, at a meeting of which less than 21 days' notice has been given, or

(ii) consented to in writing by every member of the company who would have been entitled to vote personally or by proxy at a general meeting of the company, and a resolution so consented to is deemed to be a special resolution passed at a general meeting of the company, and

(b) in relation to a credit union, means a special resolution as defined in section 1 of the Credit Union Incorporation Act;

"spouse" means a person who

(a) is married to another person, or

(b) is living with another person in a marriage-like relationship;

"superintendent" means the Superintendent of Financial Institutions appointed under section 207;

"tribunal" means the Financial Services Tribunal continued under section 242.1;

"trust business" means the business of providing or offering to provide services to the public as

(a) trustee, executor or administrator,

(b) guardian of a minor's estate,

(c) committee, under the Patients Property Act, of the estate of a person with a mental disorder,

(d) attorney under Part 2 of the Power of Attorney Act, or

(e) representative granted power over an adult's financial affairs under section 7 (1) (b) of the Representation Agreement Act,

whether or not the person undertaking an activity or activities set out in paragraphs (a) to (e) can or does distribute any gain, profit or dividend, or otherwise disposes of the person's assets, to a member or shareholder of the person other than during winding up or on dissolution;

"trust company" means

(a) a company incorporated under the Business Corporations Act for the purpose of carrying on trust business and includes

(i) an extraprovincial trust company that has been continued into British Columbia as a company under section 303 of the Business Corporations Act, and

(ii) a company that results from an amalgamation referred to in section 20 (1),

(b) a corporation incorporated as a trust company under another Act, or

(c) a pre-existing trust company,

but does not include a corporation continued under the laws of another jurisdiction;

"unaffiliated director", in relation to a trust company or insurance company, means a director who is not also

(a) an officer or employee of the company or of an affiliate of it,

(b) the owner of 5% or more of the voting shares of the company or of an affiliate of it,

(c) a significant borrower from the company, or a director or senior officer of a significant borrower from the company or the owner of 10% or more of the voting shares of a significant borrower from the company,

(d) a borrower from the company under a loan that is not in good standing, or a director, officer or employee of, or the owner of 10% or more of the voting shares of an entity that is a borrower from the company under a loan that is not in good standing,

(e) the spouse of an individual described in any of paragraphs (a) to (d),

(f) a relative of an individual described in paragraph (a) or (b) who occupies the same home as that individual,

(g) an individual who, within the 2 years before becoming a director, has been an officer or employee of the company or of an affiliate of it, or

(h) unless determined to be an unaffiliated director by the superintendent under section 97 (2),

(i) an individual,

(ii) a partner in or an employee of a partnership,

(iii) an officer or employee of a corporation, or

(iv) an owner of 10% or more of the voting shares of a corporation

that provides goods or services to the company, if the total annual billing to the company in respect of the goods or services exceeds 10% of the total annual billings of the individual, partnership or corporation, as the case may be;

"voting share" means a share of a class of shares of a corporation that carries the right to vote under all circumstances on a resolution electing directors, and includes a share of a class of shares of a corporation that carries the right to vote on such a resolution because of the occurrence of a contingency that has occurred and is continuing.

(2) For the purposes of this Act, an affiliate of a corporation is deemed to be affiliated with all other corporations with which the corporation is affiliated.

(3) and (4) [Repealed 2011-29-64.]

(5) An activity referred to in paragraph (a) of the definition of "insurance business" in subsection (1), whether or not the activity is conducted in British Columbia, is conclusively deemed for the purposes of this Act to constitute the carrying on of insurance business in British Columbia if the risk or peril is located in British Columbia.

(6) A reference to "subsidiary" in this Act as it applies to credit unions,

(a) except in sections 120 and 128, has the same meaning as in the Credit Union Incorporation Act, and

(b) in sections 120 and 128, has the same meaning as in the Business Corporations Act,

and "holding company" has the corresponding meaning.

Application of Business Corporations Act

2   (1) The following provisions of the Business Corporations Act do not apply to trust companies or insurance companies:

(a) Part 2.1;

(b) Division 4 of Part 9;

(c) sections 16, 20, 84 to 86, 137, 154 (1) (e), 159 to 165, 183, 195, 197, 200, 203 and 229.

(2) Except as expressly provided in this Act or the Credit Union Incorporation Act and except insofar as sections 31, 144, 145 and 236 and Part 12 of the Business Corporations Act apply to credit unions by virtue of their application to corporations generally, the Business Corporations Act does not apply to credit unions.

(3) A special Act insurance company is subject to the following in addition to the provisions to which it is subject under section 4 of the Business Corporations Act:

(a) sections 269 to 300 and 302 to 311 of the Business Corporations Act;

(b) regulations made under sections 269 to 300 and 302 to 311 of the Business Corporations Act;

(c) subject to subsection (4) of this section, the Pre-existing Company Provisions prescribed under section 442.1 of the Business Corporations Act.

(4) The Lieutenant Governor in Council may prescribe provisions of the Pre-existing Company Provisions that do not apply to a special Act insurance company or a class of special Act insurance companies.

Repealed

3-5   [Repealed 2011-29-65.]

Repealed

6   [Repealed 2006-12-42.]

Repealed

7   [Repealed 2011-29-65.]

Pre-existing trust company

8   (1) The memorandum of a trust company existing at September 15, 1990 is deemed to have been amended on that date by striking out the objects clause contained in it and substituting the following:

"The businesses that the company is permitted to carry on are restricted to those that were set out in Schedules A and B to the Trust Company Act, R.S.B.C. 1979, c. 412, immediately before the repeal of that Act by the Financial Institutions Act."

(2) Every copy of a memorandum that has been deemed to be altered by subsection (1) that is issued on or after September 15, 1990 must be in accordance with the alterations.

Repealed

9-10   [Repealed 2011-29-65.]

Specific rules respecting Business Corporations Act application to extraprovincial corporations

10.1   (1) Sections 90 to 102 and 302 to 307 of the Business Corporations Act do not apply to extraprovincial corporations.

(2) Without limiting Division 11 of Part 10 of the Business Corporations Act, before submitting an application to the registrar under that Division, the applicant must, if the application relates to an extraprovincial corporation,

(a) first obtain the consent of the superintendent to a name and then reserve that name under the Business Corporations Act, and

(b) obtain the consent of the superintendent to the reinstatement, limited reinstatement or extension of a limited reinstatement contemplated by the application.

(3) For the purposes of section 379 of the Business Corporations Act as it applies to extraprovincial corporations, the reference in section 379 (1) to "within 2 months" must be read as "immediately".

This Act paramount

11   If a provision of this Act is inconsistent or in conflict with a provision of the Act by or under which a financial institution is incorporated, the provision of this Act prevails.

Part 2 — Incorporation, Significant Changes and Winding Up

Division 1 — Names

Names for trust companies and insurance companies

12   (1) A trust company that proposes or is authorized to carry on trust business must have and use a name that includes the word

(a) "trust" together with a designation such as "company" or "corporation", or

(b) "trustco".

(2) An insurance company that proposes or is authorized to carry on insurance business must have and use a name that includes the word "insurance" or "assurance" together with a designation such as "company" or "corporation".

(3) A trust company, an insurance company or a person applying to incorporate a trust company or an insurance company must not apply to reserve a name under the Business Corporations Act that includes the word "trust", "trustco", "insurance" or "assurance" unless the consent of the superintendent is first obtained for that name.

False representation prohibited

12.1   A person must not, in British Columbia, assume or use, or carry on business under, a name that includes the words "trust", "trustee", "trustco", "deposit", "loan", "insurance", "assurance" or "insurer", or use any words in connection with the business of the person, in a way likely to

(a) deceive or mislead the public about the ability of the person to undertake trust business, deposit business or insurance business, or

(b) give a false impression that the person is a trust company or an insurance company.

Division 1.1 — Formation of Trust Companies and Insurance Companies

Consent required for incorporation

13   (1) A person must not apply to the registrar to incorporate a company for the purpose of carrying on trust business or carrying on insurance business unless, before the incorporation application is submitted to the registrar for filing under section 10 of the Business Corporations Act, the consent of the Authority is obtained to the incorporation.

(2) The Authority must not consent to the incorporation of a trust company or an insurance company unless

(a) the persons applying for consent (the "applicants") have

(i) submitted to the Authority the proposed notice of articles and articles of the proposed company, and

(ii) paid the prescribed fee,

(b) the applicants have submitted to the Authority a plan

(i) specifying the names and addresses of the proposed first directors and senior officers of the proposed company,

(ii) specifying the services that the proposed company intends to offer to the public,

(iii) describing, in detail satisfactory to the Authority, the period within which the proposed company will meet the requirements for being issued a business authorization and specifying the preliminary activities, not being trust business or insurance business, that the proposed company proposes to carry on during that period,

(iv) specifying, in the case of a proposed insurance company, whether the business proposed to be carried on is life insurance business, general insurance business or both, and

(v) containing any other information required by the Authority,

(c) the proposed notice of articles and articles comply with this Act and the regulations,

(d) the Authority is satisfied that the preliminary activities set out in the plan under paragraph (b) are appropriate and in compliance with this Act,

(e) each of the proposed first directors and senior officers of the proposed company has completed and submitted to the superintendent a personal information return in the form established by the superintendent that discloses the information required by the superintendent,

(f) the applicants have satisfied the Authority that the proposed company intends to obtain, and will be able to obtain, a business authorization to enable the company to offer to the public, within a reasonable time after the incorporation, the services set out in the plan under paragraph (b), and

(g) the applicants have satisfied the Authority that the proposed company will have both the financial and managerial capacity to properly carry on the business proposed to be carried on by the company in compliance with this Act.

(3) The Authority must not consent to the incorporation of a trust company or an insurance company if the Authority believes on reasonable grounds that it is not in the public interest to consent to the incorporation.

(4) The superintendent may conduct an investigation and an applicant must provide to the superintendent information, verifications, forecasts of business operations or documents that the superintendent considers necessary in relation to the application.

Preliminary activities

14   (1) A trust company or an insurance company that is incorporated but does not have a business authorization must not undertake any activity other than an activity specified under section 13 (2) (b) (iii) as a preliminary activity in the plan described in section 13 (2) (b).

(2) Until a trust company or an insurance company receives a business authorization, the trust company or insurance company, in every written communication, advertisement and document in which the name of the trust company or insurance company appears, must add immediately after the name the following: "(Not authorized)".

Division 1.2 — Alteration of Charter of Trust Companies and Insurance Companies

Consent required for alteration of memorandum, notice of articles or articles

15   A trust company or an insurance company must not alter its memorandum, notice of articles or articles without first receiving the consent of the superintendent.

Division 1.3 — Conversion of Special Act Insurance Companies

Consent required for conversion of special Act insurance company

16   A special Act insurance company must not apply under section 266 of the Business Corporations Act to convert itself into a company for the purpose of carrying on insurance business unless, before the conversion application is submitted to the registrar for filing, the consent of the superintendent is obtained to the conversion.

Continuation of business authorization on conversion of special Act insurance company

17   A business authorization held by a special Act insurance company when it is converted into a company under section 266 of the Business Corporations Act for the purpose of carrying on insurance business continues in force after that conversion, subject to a subsequent surrender of the business authorization, and to any amendment or the suspension, revocation or cancellation of the business authorization, under this Act.

Division 1.4 — Continuation of Trust Companies and Insurance Companies

Consent required for continuation of extraprovincial trust corporation or extraprovincial insurance corporation into British Columbia

18   (1) An extraprovincial trust corporation or extraprovincial insurance corporation must not apply under section 302 of the Business Corporations Act to continue into British Columbia as a company unless, before the continuation application is submitted to the registrar for filing, the consent of the Authority is obtained to the continuation.

(2) Without limiting section 22 of this Act, the Authority must not give a consent referred to in subsection (1) of this section unless satisfied that the extraprovincial trust corporation or extraprovincial insurance corporation, in its primary jurisdiction as defined in section 157, is licensed, registered or authorized to carry on the business that it proposes to carry on in British Columbia.

(3) A business authorization held by an extraprovincial trust corporation or an extraprovincial insurance corporation when it is continued into British Columbia as a company under section 303 of the Business Corporations Act, continues in force after the continuation subject to a subsequent surrender of the business authorization, and to any amendment or the suspension, revocation or cancellation of the business authorization, under this Act.

Consent required for continuation of trust company or insurance company out of British Columbia

19   (1) A trust company or an insurance company must not apply under section 308 (1) of the Business Corporations Act to continue out of British Columbia unless

(a) the jurisdiction into which the company proposes to continue has laws that permit corporations incorporated under the jurisdiction's laws to apply for continuation under the laws of British Columbia, and

(b) the consent of the Authority is obtained to the continuation.

(2) In addition to complying with its obligations under sections 308 to 311 of the Business Corporations Act, a trust company or an insurance company that is continued under the laws of another jurisdiction must promptly after continuation file with the superintendent a copy of any record issued to the continued corporation by the other jurisdiction to effect or confirm the continuation.

Division 1.5 — Amalgamation of Trust Companies and Insurance Companies

Consent required for amalgamation of trust company or insurance company

20   (1) A trust company may amalgamate and continue as one company with one or more of the following only:

(a) subsidiaries of it that are trust companies or extraprovincial trust corporations;

(b) other trust companies;

(c) extraprovincial trust corporations.

(2) An insurance company may amalgamate and continue as one company with one or more of the following only:

(a) subsidiaries of it that are insurance companies or extraprovincial insurance corporations;

(b) other insurance companies;

(c) extraprovincial insurance corporations.

(3) A trust company or an insurance company must not amalgamate with a corporation referred to in subsection (1) or (2) unless, before the amalgamation application is submitted to the registrar for filing under section 275 of the Business Corporations Act, the consent of the Authority is obtained to the amalgamation.

(4) On an amalgamation referred to in this section, the amalgamated company

(a) may carry on business under the business authorization issued with respect to one of the amalgamating corporations, as directed by the Authority, until the amalgamated company has been granted a new business authorization under section 61, and

(b) has 30 days in which to apply for a new business authorization.

(5) A trust company or an insurance company must not amalgamate with a foreign corporation within the meaning of the Business Corporations Act to form an amalgamated foreign corporation.

Division 1.6 — Arrangements, Acquisitions or Dispositions by Trust Companies and Insurance Companies

Consent of Authority to arrangement, acquisition or disposition

21   (1) An arrangement proposed with respect to a trust company or an insurance company is not binding unless, after the arrangement is adopted as required by Division 5 of Part 9 of the Business Corporations Act and before approval is given by the Supreme Court, consent is also given by the Authority.

(2) Unless it first receives the consent of the superintendent, a trust company or an insurance company must not acquire assets that, immediately after the acquisition, will constitute a percentage of the total assets of the trust company or insurance company that is greater than the prescribed percentage.

(2.1) The superintendent must not consent to an acquisition referred to in subsection (2) if the superintendent believes on reasonable grounds that it is not in the public interest to consent.

(3) Unless it first receives the consent of the Authority, an insurance company must not reinsure all or any portion of its policies with another insurance company if the reinsurance has the effect of transferring

(a) the whole, or

(b) a part that is greater than the prescribed percentage

of the business or property of the insurance company placing the reinsurance.

(4) Subsection (3) does not apply to contracts of reinsurance made by an insurance company in the ordinary course of its business.

(5) The Authority must not consent to an arrangement referred to in subsection (1) or a disposition by reinsurance referred to in subsection (3) if the Authority believes on reasonable grounds that it is not in the public interest to consent.

Division 1.7 — Background for Consents

Consent required for continuation or amalgamation

22   (1) In subsection (2) (a), "corporation" means

(a) an extraprovincial corporation proposing to be continued into British Columbia as a trust company or an insurance company, or

(b) each of one or more corporations proposing to amalgamate and continue as one company.

(2) The Authority must not consent under section 18 (1) in respect of a continuation into British Columbia of an extraprovincial corporation as a trust company or an insurance company or consent under section 20 (3) to an amalgamation, unless

(a) the directors of the corporation have submitted to the Authority

(i) the name and address of the corporation,

(ii) the financial statements of the corporation,

(iii) the notice of articles proposed for the continued company or amalgamated company,

(iv) the articles proposed for the continued company or amalgamated company,

(v) a plan for the continued company or amalgamated company

(A) specifying, in the case of an insurance company, whether the business proposed to be carried on is life insurance business, general insurance business or both,

(B) specifying the services that the company intends to offer to the public,

(C) if the company does not have a business authorization, describing in detail satisfactory to the Authority the period within which the company will meet the requirements for being issued a business authorization and specifying the preliminary activities, not being trust business or insurance business, that the company proposes to carry on during that period, and

(D) containing any other information required by the Authority, and

(vi) the full particulars, in the case of a proposed amalgamation, of

(A) the terms on which the amalgamation is to take place, together with copies of every agreement relating to the amalgamation, and

(B) the financial resources that will be available to the amalgamated company,

(b) the Authority approves the notice of articles and articles submitted under paragraph (a),

(c) each proposed director and senior officer of the continued company or amalgamated company has completed and submitted to the superintendent a personal information return in the form established by the superintendent and disclosing information required by the superintendent, and

(d) the Authority believes on reasonable grounds that it is in the public interest to consent to the continuation or amalgamation.

Superintendent may obtain information to support consent considerations

23   The superintendent may conduct an investigation and the directors and officers must provide the superintendent with information, verifications, forecasts of business operations or documents that the superintendent considers necessary for determining whether to consent or refuse consent under section 16, 18 (1), 20 (3) or 21.

Division 2 — Dissolution and Winding Up of Trust Companies and Insurance Companies

Notice to superintendent required on voluntary dissolution or winding up

24   The following are of no force and effect, and do not provide the purported authorization, unless 30 days' written notice of the company's intention to pass the resolution has been given to the superintendent and to any similar authority in any other province in which the company is registered, licensed or authorized to carry on business:

(a) an ordinary resolution purporting to authorize the dissolution of a trust company or an insurance company in accordance with section 314 (1) of the Business Corporations Act;

(b) a directors' resolution purporting to authorize the dissolution of a trust company or an insurance company in accordance with section 314 (2) of the Business Corporations Act;

(c) a special resolution purporting to authorize liquidation in accordance with section 319 (1) of the Business Corporations Act.

Winding up by Supreme Court order — superintendent is party

25   The superintendent is a party to any legal proceedings in which an application is made under section 324 of the Business Corporations Act for the liquidation and dissolution of a trust company or an insurance company.

Liquidation and dissolution by court order

25.1   On an application made by the superintendent in respect of a trust company or an insurance company, the Supreme Court may order that the company be liquidated and dissolved if

(a) in the case of an insurance company, the company has not, during the previous year, undertaken an activity set out in any of paragraphs (d) to (g) of the definition of "insurance business" in section 1 (1), except to the extent necessary to wind up its insurance business, or

(b) in the case of a trust company or an insurance company,

(i) the company's business authorization has been revoked under section 64 (1) or 249 (1) (j),

(ii) the company has contravened this Act or the regulations and it is in the public interest to liquidate and dissolve the company, or

(iii) the court otherwise considers it just and equitable to do so.

Liquidation and dissolution on direction of Authority

26   (1) If the Authority believes on reasonable grounds that it is contrary to the public interest that a trust company or an insurance company that is incorporated but has not been issued a business authorization continue in business, the Authority may order that the trust company or insurance company be liquidated and dissolved.

(2) Without limiting subsection (1), if a trust company or an insurance company

(a) has not within the time limited by section 61 (1) applied for a business authorization,

(b) is refused a business authorization,

(c) has contravened section 20 (1) or (2), or

(d) without having a business authorization for that business, holds itself out to the public as authorized to carry on trust business or insurance business,

the Authority may order that the trust company or insurance company be liquidated and dissolved.

(3) If the Authority makes an order under this section, the Authority must, in the order, appoint one or more liquidators and, in that event, Part 10 of the Business Corporations Act applies to the powers and duties of the liquidator.

(4) An appointment of a liquidator under subsection (3) takes effect on the commencement of the liquidation.

(5) For the purposes of section 30, subsection (4) of this section and Part 10 of the Business Corporations Act, "commencement of the liquidation" means, for a liquidation commenced by order of the Authority under this section,

(a) the date the order was made, or

(b) if the order specifies a date, or a date and time, for the commencement of the liquidation that is later than the date the order was made, the specified date and time or, if no time is specified, the beginning of the specified date.

(6) If a vacancy occurs by death, resignation or otherwise in the office of liquidator in a liquidation and dissolution ordered by the Authority under this section, the Authority may fill the vacancy on its own initiative or on application of any person referred to in section 325 (1) of the Business Corporations Act.

(7) The Authority must set the remuneration of any liquidator it appoints under this section.

(8) In a liquidation and dissolution ordered by the Authority under this section, the Authority may impose, either generally or with respect to certain matters, restrictions on the exercise of the powers of a liquidator.

Application of this Part

27   Any proceedings taken under this Act or the Business Corporations Act to liquidate and dissolve a trust company or an insurance company must be stayed if the company is at any time found, in a proceeding under the Winding-Up and Restructuring Act (Canada), to be insolvent within the meaning of that Act.

Duties of liquidators on Authority-ordered liquidation and dissolution

28   If the Authority makes an order under section 26 that a trust company or an insurance company be liquidated and dissolved,

(a) the duties of the liquidator referred to in section 330 of the Business Corporations Act are subject to any restrictions or directions imposed or given by the Authority,

(b) the notice of appointment filed by the liquidator under section 329 of the Business Corporations Act must be accompanied by a copy of the order of the Authority,

(c) the notice published under section 331 (1) (a) of the Business Corporations Act must disclose that the Authority has made an order that the company be liquidated and dissolved, and

(d) a person who has been appointed as a liquidator by the Authority and who is not, or who ceases to be, qualified to act as a liquidator must promptly seek directions from the Authority.

Deferral of dissolution

29   (1) If the Authority makes an order under section 26 that a trust company or an insurance company be liquidated and dissolved, the Authority may, subject to subsection (2) of this section, make an order under this subsection

(a) deferring the date of dissolution to a new date, or

(b) deferring the dissolution generally.

(2) No order made under subsection (1) is effective unless a copy of that order is filed with the registrar before the company is dissolved.

(3) If an order is made under subsection (1) (a) and is filed with the registrar before the company is dissolved, the company is dissolved on the beginning of the new date specified by that order.

Publication of notice

30   If the Authority makes an order under section 26 that a trust company or an insurance company be liquidated and dissolved, the registrar must publish in the Gazette or in any other prescribed manner

(a) notice that the company is being liquidated,

(b) the date of the order, and

(c) if the order specifies a date, or a date and time, for the commencement of the liquidation that is later than the date of the order, the specified date and time or, if no time is specified, the specified date,

and the cost of the publication must be paid by the company to the government and is recoverable by the government from the company as a simple contract debt.

Filing quarterly statements and producing records

31   Without limiting a liquidator's obligations under section 338 of the Business Corporations Act, when a trust company or an insurance company is being liquidated and dissolved, the liquidator must, within 7 days after the close of each period of 3 months and until the date on which the final accounts of the liquidation are deposited in accordance with section 341 (1) of the Business Corporations Act,

(a) in the case of a liquidation ordered by the Supreme Court, file with the Supreme Court and with the superintendent the accounts of the liquidation referred to in section 338 of the Business Corporations Act unless otherwise ordered by the Supreme Court, or

(b) in the case of a liquidation ordered by the Authority, file with the superintendent the accounts of the liquidation referred to in section 338 of the Business Corporations Act unless otherwise ordered by the Authority.

Examination of trust and insurance companies being liquidated and dissolved

32   The superintendent, at any time, may examine the records of a trust company or an insurance company that is being liquidated and dissolved.

Information required on restoration applications

33   A person must not apply to the registrar or the Supreme Court for restoration under Division 11 of Part 10 of the Business Corporations Act of a trust company or an insurance company unless, before making the application, the consent of the superintendent is obtained to the restoration.

Provisional liquidator

33.1   (1) If the business authorization of a trust company or an insurance company has been revoked under section 64 (1) or 249 (1) (j), the superintendent may appoint an employee of the Authority or another person as the provisional liquidator of the company.

(2) The provisional liquidator of a trust company or an insurance company must apply under section 324 of the Business Corporations Act for the liquidation and dissolution of the company.

(3) The provisional liquidator of a trust company or an insurance company has the following powers:

(a) to carry on, manage and conduct the operations of the company;

(b) in the name of the company, to preserve, maintain, realize, dispose of and add to the property of the company;

(c) to receive the income and revenues of the company;

(d) to exercise all the powers of the company and of its directors and officers;

(e) to exclude the directors, officers, employees, servants and agents of the company from the property and business of the company.

(4) If a provisional liquidator of a trust company or an insurance company is appointed, a director, officer, employee, servant or agent of the company must not, without the approval of the provisional liquidator, do any of the following:

(a) make a contract on behalf of the company;

(b) incur any liability on behalf of the company;

(c) expend any money of the company.

(5) For the purposes of section 42 of this Act, a provisional liquidator of an insurance company is a liquidator of that company.

(6) A trust company or an insurance company must pay its provisional liquidator's remuneration at a rate directed by the superintendent.

Repealed

34-40   [Repealed 2011-29-67.]

Division 3 — Special Provisions Respecting Insurance Companies Ceasing Business or Winding Up

Provisions for subsisting contracts of insurance

41   (1) An insurance company before or concurrently with ceasing to carry on business in British Columbia must provide for the whole sum insured under each of its contracts of insurance in British Columbia subsisting at the time of ceasing to carry on business by

(a) obtaining the reinsurance of the sum insured, by agreement with

(i) an insurance company, or

(ii) an extraprovincial insurance corporation that has a business authorization,

(b) obtaining a surrender or discharge of the insurance contract, or

(c) obtaining the written consent of the insured to the continuance of the insurance contract for its unexpired term.

(2) If an insurance company is ceasing or has ceased to carry on insurance business in British Columbia then, concurrently with and after ceasing to carry on business in British Columbia, the insurance company must

(a) make timely written reports to the superintendent showing how it is providing, and has provided, under subsection (1), for its contracts of insurance in British Columbia, and

(b) file with the superintendent the agreements, lists or other documents that the superintendent may require with respect to the insurance business of the insurance company in British Columbia and the disposition of that insurance business.

Reinsurance arranged by liquidator

42   (1) In this section, "available assets" of an insurance company that is being wound up means those assets of the insurance company that, according to the liquidator's reasonable estimates, will remain after payment in full of

(a) the costs of winding up and dissolution,

(b) claims for losses covered by the insurance company's contracts of insurance, of which claims notice is received by the liquidator or insurance company before the date on which reinsurance is obtained, and

(c) claims of the secured creditors of the insurance company.

(2) Subject to subsection (3), the liquidator of an insurance company that is being wound up

(a) may use available assets of the insurance company to obtain the reinsurance in full of the sum insured under each of the insurance company's contracts of insurance subsisting at the time of winding up, or

(b) if there are not enough available assets to obtain reinsurance in full under paragraph (a), may use the available assets to obtain the reinsurance of the largest possible proportion of the sum insured under each contract, that must be the same proportion for each contract.

(3) The liquidator of an insurance company that is being wound up must not obtain reinsurance under subsection (2) except through a contract of reinsurance with

(a) an insurance company, or

(b) an extraprovincial insurance corporation

that has a business authorization and the liquidator must not enter into the contract of reinsurance without first applying for and receiving the approval of the Supreme Court to the terms of the proposed contract of reinsurance.

Rights of the insured on reinsurance

43   If

(a) reinsurance has been obtained under section 41 (1) (a) or 42 (2) through an insurance company or extraprovincial insurance corporation (which company or corporation is in this section called the "reinsurer"), and

(b) the insurance company for whose contracts of insurance the reinsurance was obtained ceases to carry on business in British Columbia or is wound up,

an insured or other person entitled to rights under any of those contracts of insurance may enforce the rights against the reinsurer to the extent of the reinsurance as though the contract had been issued by the reinsurer.

Termination if reinsurance is not arranged

44   (1) If the liquidator of an insurance company that is being wound up is unable to obtain reinsurance, or it is impractical, inexpedient or uneconomical for the liquidator to obtain reinsurance, the liquidator may apply to the Supreme Court to set a termination date proposed by the liquidator for the insurance company's subsisting contracts of insurance.

(2) On application by the liquidator under subsection (1), the Supreme Court, on the terms, if any, specified by the court, may set as the termination date for the insurance company's subsisting contracts of insurance the date proposed by the liquidator or another date that the court considers appropriate in order to give adequate notice to policy holders.

(3) On the termination date set under subsection (2) for the termination of an insurance company's subsisting contracts of insurance, the insurance company ceases to be liable under the contracts for any losses that occur on or after that termination date.

Liquidator's duty to give notice

45   (1) Promptly after a termination date is set under section 44, the liquidator must publish

(a) in the Gazette,

(b) in the gazette of each other province in which the insurance company is licensed or authorized to carry on insurance business, and

(c) in newspapers the Supreme Court may direct

notice to the effect that on the termination date the insurance company being wound up will cease to be liable under its subsisting contracts of insurance for any losses that occur on or after that date.

(2) On or before publication of the notice referred to in subsection (1), the liquidator must mail a copy of the notice to each policy holder at the address of the policy holder as shown in the records of the insurance company.

Provision for payment of losses, preferred claims and unearned premiums

46   (1) The liquidator of an insurance company that is being wound up must pay or set aside from the assets of the insurance company assets sufficient in the liquidator's opinion to cover payment in full of

(a) the costs of winding up and dissolution,

(b) claims for losses covered by the insurance company's contracts of insurance and that occurred before the termination date set by the Supreme Court under section 44 and of which claims notice is received by the liquidator or the insurance company,

(c) the amount of the legal reserve in respect of each unmatured life insurance contract, and

(d) claims of the secured creditors of the insurance company.

(2) Except in the case of unmatured life insurance contracts referred to in subsection (1) (c), the assets remaining after payment, or making provision for payment as set out in subsection (1) must be used to pay claims of insured persons for refunds of unearned premiums on a proportional basis in proportion to the periods of their contracts respectively unexpired on the termination dates.

(3) The claims of the insured persons for refunds of unearned premiums must be calculated as at the earlier of

(a) the termination date set by the Supreme Court under section 44, or

(b) the date the insured person cancelled the contract.

(4) The refund of all or a portion of the premium does not affect any other remedy the insured person may have against the insurance company.

(5) This section does not affect the priority of a mortgage, lien or charge on the property of the insurance company.

Endowment and life funds distributed

47   (1) If a fraternal society transacts endowment or expectancy insurance and has an endowment fund separate and distinct from its life insurance fund, the society, by resolution passed at a general meeting after at least one month's notice of the intended resolution, may determine that the endowment or expectancy be discontinued, with the endowment or expectancy fund, as the case may be, to be distributed proportionately among the society's members then in good standing who are contributing to the fund, to each member according to the member's total contribution.

(2) Subject to first receiving the written approval of the superintendent, the fraternal society may proceed to ascertain the persons entitled to rank on distribution of the fund and may distribute the fund among those entitled, and the distribution discharges the society from all liability in respect of the fund, and of the endowment or expectancy contracts undertaken by the society.

(3) If all the members interested in the endowment or expectancy fund are also interested as holders of life insurance contracts, members at the general meeting, instead of determining that the endowment or expectancy fund be distributed, by resolution passed at the meeting, may determine that the fund be converted into or merged in a life insurance fund, and then, subject to the superintendent first approving the resolution, the endowment or expectancy fund becomes a life insurance fund.

Division 4 — Ownership of Trust and Insurance Companies

Definitions and interpretation for Division

48   (1) In this Division:

"base level ownership percentage", used in relation to a person and connected parties who have a substantial interest in a trust company, insurance company or holding company, means the base level ownership percentage of votes in the company that under section 49 is from time to time applicable to that person and connected parties;

"connected party", used in relation to a person, means

(a) a corporation that the person controls,

(b) an affiliate of a corporation that the person controls,

(c) a partner of the person if each of the person and the partner controls a 10% or greater interest in the partnership,

(d) a trust or an estate in which the person has a 50% or greater beneficial interest,

(e) if the person is not a trust company or extraprovincial trust corporation, a trust or estate for which the person is a trustee,

(f) a relative by blood or marriage of the person or of the spouse of the person if the person and the relative have the same home, or

(g) a person specified in an order of the superintendent under subsection (2);

"holding company" means a corporation that alone or together with all of its connected parties, if any, controls, within the meaning of section 2 (3) of the Business Corporations Act, a trust company or insurance company;

"person and connected parties" means a person and all connected parties, if any, of the person, with the person and the connected parties considered together as one unit;

"substantial interest", used in relation to a trust company, insurance company or holding company, means ownership or control, direct or indirect, of 10% or a higher percentage of all votes in the company;

"votes in the company" means the votes that

(a) are attached to the outstanding voting shares in the company, and

(b) may be cast in an election of the directors.

(2) For the purposes of this Division, the superintendent by order may designate a person as a connected party of another person designated in the order if the superintendent believes on reasonable grounds that the first mentioned person is acting in concert with that other person to acquire or control voting shares of a trust company, insurance company or holding company.

Determination of base level ownership percentage

49   (1) If, on September 15, 1990, a person and connected parties had a substantial interest in a trust company, insurance company or holding company, then on that date the person and connected parties were by this subsection assigned a base level ownership percentage that was the same as that substantial interest.

(2) If, at the end of the consent expiry day specified in a consent under section 50 (4), the person and connected parties to which the consent applies have a substantial interest in the company named in the consent, then the person and connected parties are by this subsection, as of the end of that day, assigned a base level ownership percentage that is the same as

(a) the substantial interest of the person and connected parties at the end of that day, if that substantial interest is less than the proposed base level ownership percentage specified in the expired consent, or

(b) the proposed base level ownership percentage specified in the expired consent, if the substantial interest of the person and connected parties at the end of that day is the same as or greater than the proposed base level ownership percentage specified in the expired consent.

(3) If the substantial interest of a person and connected parties in a trust company, insurance company or holding company is decreased to a level constituting a substantial interest that is more than 5% lower than the base level ownership percentage applicable to the person and connected parties immediately before the decrease, then as of the time of the decrease to that level the person and connected parties are by this subsection assigned a new base level ownership percentage that is equal to the sum of

(a) the substantial interest that the person and connected parties have in the company immediately after the decrease to that level, and

(b) 5% of the total votes in the company.

(4) A base level ownership percentage assigned by subsection (2) or (3) to a person and connected parties who have voting shares in a trust company, insurance company or holding company

(a) replaces any base level ownership percentage previously assigned by this section to that person and connected parties, and

(b) continues to apply to that person and connected parties until

(i) replaced under paragraph (a), or

(ii) made inapplicable by subsection (5).

(5) If the substantial interest of a person and connected parties in a trust company, insurance company or holding company is decreased to a level that is not a substantial interest in the company then as of the time of the decrease to that level any base level ownership percentage previously assigned by this section to that person and connected parties ceases to be assigned to them and is on and after that time inapplicable to them.

Share acquisition restrictions

50   (1) Subject to subsection (3), a person must not acquire, directly or indirectly, enough voting shares in a trust company, insurance company or holding company to give the person and connected parties a substantial interest in that company.

(2) Subject to subsection (3), if a person and connected parties have a substantial interest in a trust company, insurance company or holding company, then neither the person nor any of the connected parties may acquire, directly or indirectly, the ownership or control of enough additional voting shares to give the person and connected parties an increased substantial interest in the company that is more than the sum of

(a) the base level ownership percentage of votes in the company that is applicable to the person and connected parties, and

(b) 5% of the total votes in the company.

(3) Subsections (1) and (2) do not apply in respect of the acquisition of a substantial interest or an increased substantial interest, as the case may be, that is

(a) made

(i) in accordance with a consent under subsection (4), and

(ii) before the consent expiry date, or

(b) by a person acting as an underwriter, as defined in section 1 of the Securities Act, in connection with a distribution as defined in that Act of the voting shares that are the subject of the acquisition.

(4) Subject to section 51, on application, the superintendent may consent to the acquisition of a substantial interest or increased substantial interest in a trust company, insurance company or holding company named in the consent, and, in giving the consent, the superintendent must specify in it

(a) the name of the person to whom the consent is given,

(b) the consent expiry day that the superintendent considers appropriate, and

(c) the proposed base level ownership percentage of votes in the company or the proposed increased base level ownership percentage of votes in the company, as the case may be, that the superintendent considers appropriate.

(5) A consent under subsection (4) allows the named person to whom the consent is given and any connected party of that named person to acquire, during the period ending at the end of the consent expiry day, the ownership or control of enough voting shares in the trust company, insurance company or holding company, named in the consent to give the person and connected parties a substantial interest or increased substantial interest in that company that is no greater than the sum of

(a) the proposed base level ownership percentage or proposed increased base level ownership percentage of votes in the company specified in the consent, and

(b) 5% of the total votes in the company.

Grounds for refusal of consent to major share acquisition

51   The superintendent must not consent under section 50 if the superintendent believes on reasonable grounds that the applicant for the consent or any connected party of the applicant is a person who, in the public interest, ought not to be in a position to control or influence a trust company, insurance company or holding company.

Reporting requirement

52   (1) On the earlier of

(a) the end of the consent expiry date specified in the consent, or

(b) completion of the acquisition of the ownership or control of enough voting shares to reach the proposed base level ownership percentage or proposed increased base level ownership percentage specified in the consent,

the named person to whom a consent under section 50 (4) is given must report to the superintendent in writing, stating the percentage of the total votes in the company named in the consent that on the date of the report are owned or controlled, directly or indirectly, by the named person and connected parties.

(2) A person who

(a) has a substantial interest, or

(b) is one person in a unit consisting of a person and connected parties that have a substantial interest

in a trust company, insurance company or holding company, unless the decrease has been reported by another person, must report any decrease in that substantial interest to the superintendent in writing immediately.

Shares acquired in contravention of section 50 not registrable

53   The directors of a trust company, insurance company or holding company must not allow a transfer of voting shares in the company to be entered in its register of members, in any branch register of its members or in its register of transfers if the directors have reasonable grounds to believe that the shares transferred were acquired in contravention of section 50.

Prohibition on dividends

54   (1) When a person holds voting shares in a trust company or insurance company or holding company consequent to an acquisition made in contravention of section 50,

(a) no dividend is payable, and

(b) if the company has knowledge of the contravention, its directors must not authorize the payment of a dividend

in respect of the voting shares so held.

(2) If dividends are paid by a trust company, insurance company or holding company in respect of voting shares in the company that are at the time of the dividend held by a person who holds them consequent to an acquisition made in contravention of section 50, the company has a cause of action for the recovery of the amount of the dividends paid against the members to whom they were paid whether or not the company had knowledge of the contravention.

(3) Despite subsection (1), the directors may authorize the payment of a dividend in respect of any voting shares to a person who would otherwise be disentitled to the dividend under that subsection if in the directors' opinion the contravention was inadvertent or of a technical nature; and a dividend so authorized and paid is not recoverable under subsection (2).

No voting rights if excess shareholdings

55   When voting shares in a trust company, insurance company or holding company are held by a person who holds them consequent to an acquisition made in contravention of section 50, the voting rights attaching to them must not be exercised.

Validity of transfer of voting shares

56   The validity of a transfer of voting shares in a trust company, insurance company or holding company that has been entered in its register of members, in any branch register of its members or in its register of transfers is not affected by the fact that those shares are held consequent to an acquisition made in contravention of section 50.

Directors' bylaws — members' declarations

57   (1) The directors of a trust company, insurance company or holding company may make directors' bylaws

(a) requiring a member of the trust company, insurance company or holding company to submit to the directors written declarations respecting

(i) the ownership of a voting share of the trust company, of the insurance company or of the holding company,

(ii) whether the member is a connected party of any other member, and

(iii) other matters that the directors consider relevant for the purposes of this Division,

(b) establishing the times at which and the manner in which any written declarations required under paragraph (a) are to be submitted, and

(c) requiring persons who desire that a transfer of a voting share to them be entered in the register of members or in the register of transfers of the trust company, insurance company or holding company to submit written declarations respecting the matters referred to in paragraph (a) (i) to (iii).

(2) If, under a directors' bylaw made under subsection (1), a written declaration is required to be submitted by a member or other person in respect of the transfer of a voting share, the directors must not allow the transfer to be entered in its register of members, in any branch register of its members or in its register of transfers until the required written declaration has been submitted.

Superintendent may require declaration of share ownership

58   If the superintendent has reasonable grounds to believe that a person is the holder of a share in a trust company, insurance company or holding company, the superintendent may order that person to submit a written declaration to the superintendent respecting

(a) the ownership or beneficial ownership of the share,

(b) whether the share is held or beneficially owned by a person who is a connected party of a person specified by the superintendent,

(c) the names and addresses of connected parties of the person, and

(d) other matters specified by the superintendent.

Part 3 — Business Authorization and Business

Division 1 — Business Authorization of Financial Institution

Commencement of business

59   (1) A trust company must not carry on trust business unless

(a) it is authorized to do so by a business authorization issued to it under this Division,

(b) it is carrying on business in accordance with section 70 (d), or

(c) it is authorized to carry on trust business without a business authorization by regulations under section 70 (e).

(1.1) A credit union must not carry on

(a) deposit business unless it is authorized to do so by a business authorization issued to it under this Division, or

(b) trust business unless it is authorized to do so by a business authorization issued to it under this Division or it is authorized by regulations under section 70 (e).

(2) An insurance company must not carry on insurance business unless authorized to do so by a business authorization issued to it under this Division.

(3) A business authorization issued to a trust company must be confined to trust business.

(4) A business authorization issued to an insurance company

(a) may be confined to

(i) general insurance business or life insurance business, or

(ii) one or more classes of insurance, or

(b) may authorize both general insurance business and life insurance business.

(5) A business authorization issued to a credit union may be confined to deposit business or may authorize both deposit business and trust business.

Business authorizations for corporations now in business

60   (1) Without the necessity of an application, a credit union incorporated or amalgamated under the Credit Union Act, R.S.B.C. 1979, c. 69, is deemed to have a business authorization, issued under this Division on September 15, 1990, to carry on deposit business.

(2) On application under section 61 (5) of a credit union described in subsection (1), the superintendent, if satisfied that the credit union

(a) was carrying on trust business immediately before September 15, 1990, and

(b) has the financial and managerial capacity to carry on trust business,

may issue to the credit union a business authorization to carry on both trust business and deposit business.

(3) [Repealed 2004-48-41.]

Application for business authorization

61   (1) A financial institution other than

(a) a financial institution described in section 60 (1) or (2) of the Financial Institutions Act, S.B.C. 1989, c. 47, or

(b) a society that is named in an order of the superintendent made under section 193 (2),

must file with the superintendent, within one year after the date of its incorporation under this Act or under the Credit Union Incorporation Act or its continuation into British Columbia, an application in the form established by the superintendent for a business authorization.

(2) The superintendent, by order applicable to a financial institution named in it, may extend the period referred to in subsection (1) before or after the expiry of that period for a further period not exceeding 6 months, but not more than one order may be made in respect of the same financial institution.

(3) A society that is named in an order of the superintendent made under section 193 (2) must file with the superintendent, by a date not later than 30 days before the date specified under section 193 (2) (b) in the order under section 193 (2), an application in the form established by the superintendent for a business authorization.

(4) On an amalgamation referred to in section 20 of this Act, the amalgamated financial institution must, within 30 days after the date of amalgamation, file with the superintendent an application in the form established by the superintendent for a business authorization.

(4.1) On the issue of a certificate of amalgamation under section 20 (7) (b) of the Credit Union Incorporation Act, the superintendent must issue the appropriate business authorization for which the credit union would qualify under this Part.

(5) A credit union that has a business authorization confined to deposit business may file with the superintendent at any time an application in the form established by the superintendent for a business authorization for the credit union to carry on both trust business and deposit business.

(6) [Repealed 2004-48-42.]

(7) An insurance company that has a business authorization confined to

(a) general insurance business or life insurance business, or

(b) one or more classes of insurance

may file with the superintendent at any time an application in the form established by the superintendent for a business authorization for the insurance company to carry on

(c) both general insurance business and life insurance business, or

(d) one or more additional classes of insurance.

(8) On application in accordance with this section, the superintendent may issue a business authorization to a financial institution if the superintendent is satisfied that

(a) the financial institution has a capital base that

(i) is adequate, taking into account the class of business that it proposes to carry on, the expected volume of its business and the restrictions on its business, and

(ii) is at least equal to the appropriate minimum imposed under section 67 (1),

(b) the financial institution has at least 5 directors and, in the case of a trust company or insurance company, at least 1/3 of the directors are unaffiliated directors,

(c) [Repealed 2004-48-42.]

(d) if

(i) the financial institution is an insurance company that will carry on insurance business, and

(ii) there is an insurance compensation plan designated by regulation for the purpose of section 66 (2),

the financial institution that will carry on insurance business will not carry on a class of insurance business in respect of which insurance is offered under that plan unless the financial institution is a member of that plan, and

(e) the financial institution has a proposed plan of operations that is feasible.

(9) Before issuing a business authorization to a financial institution, the superintendent may

(a) conduct an investigation, and

(b) require the financial institution to provide the superintendent with additional information, verifications, forecasts of business operations or documents

that the superintendent considers necessary for the evaluation of the application.

Conditions on business authorization

62   If conditions of any class of business authorization are prescribed under section 289 (3) (g), the conditions are applicable to and are conclusively deemed to be part of every business authorization of that class, whether issued before or after the coming into force of the regulation prescribing the conditions.

Certificate of business authorization

63   A certificate of the superintendent that on a day stated in the certificate

(a) a financial institution was or was not authorized as set out in the certificate under a business authorization to carry on trust business, deposit business, insurance business, or both trust business and deposit business, or

(b) the business authorization of a financial institution was revoked

is evidence of the facts stated in the certificate.

Voluntary revocation of business authorization

64   (1) On the written application of a financial institution, the superintendent may revoke the financial institution's business authorization, effective on a date specified by the superintendent, and in that case sections 249 (8) and 250 apply.

(2) If a financial institution proposes to cease doing business, it must give the superintendent at least 30 days' written notice.

Division 2 — Operation of Financial Institutions

Authorized business

65   (1) Subject to section 14 (1) of this Act and to section 13 (1) of the Credit Union Incorporation Act, a financial institution that has a business authorization must not carry on business other than

(a) the business authorized under its business authorization,

(b) business that

(i) is ancillary to the business authorized under its business authorization, or

(ii) is a financial or related service that does not constitute business for which a business authorization is required, and

(c) business or an activity of a prescribed type.

(2) A contravention of this section does not affect or invalidate

(a) a transaction entered into by a financial institution, or

(b) a contractual right or civil remedy that a person may have in respect of such a transaction.

Membership in insurance plan

66   (1) [Repealed 2004-48-44.]

(2) If an insurance compensation plan has been designated by regulation for the purpose of this subsection, an insurance company must not carry on a class of insurance business in respect of which insurance is offered under that plan unless the insurance company is a member of that plan.

Capital and liquidity of financial institutions

67   (1) A financial institution must ensure that it has adequate liquid assets and an adequate capital base in relation to the business carried on by it, in accordance with the regulations and the rules made by the Authority.

(2) If the superintendent considers that the liquid assets or capital base of a financial institution are, or within one year will be, inadequate in relation to the business carried on by it whether or not the financial institution is complying with the regulations and the rules made by the Authority, the superintendent may order the financial institution to acquire additional liquid assets or increase its capital base in the amount and form and by the date specified in the order.

(2.1) Whether or not a credit union is otherwise complying with the regulations and the rules made by the Authority, the credit union must obtain the superintendent's written consent before engaging in the activities referred to in subsection (2.2) if the amount of the capital base of a credit union does not comprise any of the following percentages of the calculated value of the credit union's risk weighted assets:

(a) a prescribed percentage;

(b) a percentage within a prescribed range of percentages;

(c) a percentage set out in the rules;

(d) a percentage within a range of percentages set out in the rules.

(2.2) For the purpose of subsection (2.1), the credit union must obtain the superintendent's written consent before engaging in the following activities:

(a) prescribed activities;

(b) prescribed activities

(i) in prescribed circumstances, or

(ii) that have or may have prescribed consequences;

(c) activities set out in the rules made by the Authority;

(d) activities set out in the rules

(i) in circumstances set out in the rules, or

(ii) that have or may have consequences set out in the rules.

(3) Without first receiving the written consent of the superintendent, a trust company or an insurance company must not

(a) redeem or purchase or otherwise acquire shares issued by it, or

(b) declare a dividend, except a dividend in shares

if the redemption, purchase or other acquisition or the declaration would reduce the capital base of the financial institution to an amount less than the amount that constitutes an adequate capital base for that financial institution in accordance with the regulations and the rules made by the Authority.

Repealed

68   [Repealed 2004-48-46.]

Restriction on right to appoint receiver

69   (1) Unless it first receives the written consent of the superintendent, a financial institution must not grant to a person the right to appoint a receiver or a receiver manager of the property or business of the financial institution.

(2) The superintendent must not consent under subsection (1) if the superintendent believes on reasonable grounds that the person, in the public interest, ought not to be in a position to control or influence a financial institution.

Division 3 — Trust Business

Unauthorized trust business by corporations prohibited

70   A corporation must not carry on trust business in British Columbia unless the corporation is

(a) a trust company, an extraprovincial trust corporation or a credit union that has a business authorization to carry on trust business,

(b) a law corporation as defined in section 1 (1) of the Legal Profession Act,

(c) [Repealed 1998-9-100.]

(d) a corporation that is carrying on the business of a trustee in bankruptcy, receiver, receiver manager or liquidator and that is licensed as a trustee in bankruptcy under the Bankruptcy and Insolvency Act (Canada), or

(e) a corporation that is carrying on a prescribed trust business or class of trust business or a prescribed corporation or class of corporations that is carrying on a prescribed trust business or class of trust business.

Repealed

71   [Repealed 1998-42-10.]

Common trust funds authorized

72   A trust company or credit union must keep any asset acquired or held in trust by it separate and distinct from the assets of the trust company or credit union not held in trust and must keep a separate account for each trust, but, unless the instrument creating a trust otherwise provides, a trust company or credit union may, subject to the regulations, co-mingle assets held in trust in a common trust fund for the purposes of investment.

Extent of liability

73   (1) Subject to the terms of the instrument creating a trust, the liability of a trust company or credit union to persons interested in an estate held by the trust company or credit union as executor, administrator, trustee, receiver, liquidator, assignee, committee under the Patients Property Act, attorney under Part 2 of the Power of Attorney Act or representative granted power over an adult's financial affairs under section 7 (1) (b) of the Representation Agreement Act is the same as if the estate were held by an individual in the like capacity, and the powers of the trust company or credit union are the same as the powers of an individual holding an estate in the like capacity.

(2) A trust company or credit union authorized to carry on trust business may be appointed

(a) a sole trustee, notwithstanding that but for this Act it would be necessary to appoint more than one trustee, or

(b) the holder of an office mentioned in subsection (1) jointly with another person,

and the appointment may be made whether the trustee is required under a deed, will or other instrument creating a trust or whether the appointment is under the Trustee Act or otherwise.

(3) Revocation of the business authorization of a trust company or credit union is sufficient cause to remove that company or credit union from an appointment or office held by it under this or another Act.

(4) Despite any rule, practice or statutory provision, it is not necessary for a trust company or credit union to give security for the due performance of its duty as executor, administrator, trustee, receiver, liquidator, assignee, committee under the Patients Property Act, attorney under Part 2 of the Power of Attorney Act or representative granted power over an adult's financial affairs under section 7 (1) (b) of the Representation Agreement Act unless so ordered by a court.

Execution of trusts

74   Unless the trust company or credit union is a trustee under the trust, a trust company or credit union is not bound to see to the execution of a trust, whether express, implied or constructive.

Division 4 — Insurance Business

Mutual company definition

74.1   In this Division, "mutual company" has the same meaning as "mutual fire insurance company" in Division 4 of Part 6.

Unauthorized insurance business prohibited

75   A person must not carry on insurance business in British Columbia unless the person is

(a) an insurance company or extraprovincial insurance corporation that has a business authorization to carry on insurance business,

(b) a company registered under the Insurance (Captive Company) Act,

(c) a member of a reciprocal exchange as defined in section 186 for which a permit under section 187 has been issued and is in effect,

(d) licensed under Division 2 of Part 6 as an insurance agent, insurance salesperson, insurance adjuster or employed insurance adjuster and is carrying on the insurance business only in that capacity,

(e) the deposit insurance corporation, the Canada Deposit Insurance Corporation or the Insurance Corporation of British Columbia,

(f) an insurer

(i) [Repealed 2004-48-48.]

(ii) that administers an insurance compensation plan designated by regulation for the purpose of section 66 (2),

(g) a society described in section 193 (1) (a) to (g) that, immediately before September 15, 1990, was carrying on the business of insurance,

(h) a credit union that is carrying on insurance business only by making or participating in contracts of insurance as permitted by section 82 of the Credit Union Incorporation Act, or

(i) a central credit union that is carrying on insurance business only by providing or arranging insurance as permitted by section 90 (2) of the Credit Union Incorporation Act.

Exceptions

76   (1) Despite section 75,

(a) any person may require insurance to be placed by a borrower as security for a loan,

(b) any person may

(i) adjust a loss,

(ii) prosecute or maintain a writ, action or proceeding, or

(iii) perform an obligation

under or arising out of a contract of insurance that was made or issued in British Columbia at a time when the person was authorized to carry on insurance business,

(c) an insurance agent licensed under Division 2 of Part 6 who is authorized by the resident to effect the contract of insurance may negotiate or procure a contract of insurance between a resident of British Columbia and an insurer prohibited by section 75 from carrying on business in British Columbia, subject to the requirements or conditions, if any, imposed by regulation,

(d) an insurer referred to in paragraph (c) may, without a business authorization, enter into a contract of insurance in the circumstances set out in that paragraph, and

(e) a person or insurer is exempted from the requirement to have a business authorization to carry on insurance business when permitted by the regulations.

(2) An insurance agent licensed under Division 2 of Part 6 who, under subsection (1) (c), procures or negotiates a contract of insurance must keep a record showing the particulars of the contract and at the request of the Commissioner of Income Tax or of the superintendent, must provide the record to the Commissioner of Income Tax or superintendent as requested.

(3) If

(a) the sum imposed by way of tax under section 4 of the Insurance Premium Tax Act in respect of an insurance contract lawfully made under subsection (1) (c) has been paid,

(b) the insurer described in subsection (1) (c) has notified the superintendent that it proposes to make an inspection for the purpose of the insurance contract or to adjust or appraise a loss under the contract, and

(c) the superintendent has given written approval to the proposed activity by the insurer,

the insurer may make the inspection or adjust and appraise the loss.

(4) The approval referred to in subsection (3) (c) is valid for all necessary inspections, adjustment and appraisals during the period specified in the approval.

(5) The superintendent may suspend, cancel or refuse to issue an approval referred to in subsection (3) (c) if an insurer contravenes a provision of this Act.

Reserves

77   An insurance company must

(a) establish adequate reserves against the value, as determined by the company's actuary,

(i) under section 126.23 (1) (a), of its actuarial and other policy liabilities, and

(ii) under section 126.23 (1) (b), of any other matter specified in an order made by the superintendent, and

(b) include those reserves in the liabilities set out in its annual return.

Reinsurance

78   An insurance company, in accordance with the regulations, may reinsure its liability under, or interest in, a lawful contract.

Rebates of premiums prohibited

79   (1) A person, in relation to the sale of insurance, must not, directly or indirectly, pay or allow, or offer or agree to pay or allow, a rebate of premium or part of it or other consideration or thing of value intended to be a rebate of premium, unless the rebate of premium is less than a prescribed amount or percentage.

(2) This section does not apply to or in respect of

(a) a payment by way of dividend, of patronage allocation, of bonus or of profit that is provided for by a contract of insurance,

(b) a person who is licensed under Division 2 of Part 6 as an insurance agent or insurance salesperson and who negotiates for or procures insurance on the agent's or salesperson's own person or property, and receives for own use the regular agent's commission having first in good faith negotiated or placed insurance on other persons or property the premiums for which, in the aggregate, are not less than the aggregate of the premiums for the insurance negotiated or procured on the agent's or salesperson's own person or property, or

(c) the payment of a fee for a referral under section 178 (2).

Separation of class funds of insurance company

80   (1) An insurance company transacting more than one class of insurance business must

(a) keep separate accounts for each class, and

(b) account for all premiums and claims in relation to each class as a separate fund.

(2) The investments of a separate fund kept under subsection (1) need not be kept separate from the investments of another fund.

Coverage by property insurer

80.1   An insurer that has a business authorization for property insurance may insure a vehicle against loss or damage under a policy that includes coverage for loss or damage to property.

Obligation of insurer with respect to agent's commission

80.2   (1) In this section:

"agent" means an insurance agent

(a) licensed under Division 2 of Part 6,

(b) authorized by an insurer that has a business authorization for property insurance to solicit, obtain or take applications for insurance, and to collect or receive premiums, on its behalf, and

(c) whose compensation or profit for those activities consists wholly of a commission on premiums derived from that business;

"premium" has the same meaning as in the Insurance Act.

(2) The commission, if any, on a policy that includes insurance against loss or damage to property and is issued at the head office of an insurer in British Columbia must be paid to an agent, and there must be written on the policy the words "Issued on behalf of ________________, authorized agent at ________________", with the name of the agent and of the place where the agent carries on business.

(3) The person in charge of the head office of an insurer in British Columbia must immediately, on the issue of a policy referred to in subsection (2), notify the agent of the date of the policy, the name of the insured and the property insured.

(4) This section does not apply to

(a) a mutual company,

(b) a contract of reinsurance,

(c) a contract insuring property in transit that is in the possession or custody of a railway company or common carrier, or

(d) a contract insuring movable property owned by a railway company or other common carrier and used in the course of its business as such.

Insurer — complaint resolution

80.3   (1) An insurer must

(a) establish procedures for dealing with complaints made to the insurer by persons who have requested or received in British Columbia products or services from the insurer,

(b) designate an officer or employee who is responsible for implementing those procedures, and

(c) designate one or more officers or employees who are responsible for receiving and dealing with those complaints.

(2) Subsection (1) does not apply to

(a) a mutual company, or

(b) a prescribed class of insurers.

(3) The procedures established under subsection (1) do not apply in relation to

(a) a matter to which section 12 of the Insurance Act applies, or

(b) complaints respecting a prescribed class of insurance.

(4) An insurer must

(a) publish the procedures it establishes under subsection (1) on websites through which its products or services are offered in British Columbia, and

(b) provide those procedures in writing to any person who requests them.

Division 5 — Deposits and Borrowing of Trust Companies and Credit Unions

Unauthorized deposit business prohibited

81   (1) A person must not carry on deposit business in British Columbia unless the person is

(a) an extraprovincial trust corporation that has a business authorization to carry on deposit business,

(b) a credit union or extraprovincial credit union that has a business authorization to carry on deposit business,

(c) a bank, or

(d) a corporation that is a subsidiary of a bank and is a loan company to which the Trust and Loan Companies Act (Canada) applies.

(2) Subsection (1) does not prohibit an insurance company or extraprovincial insurance company from carrying on life insurance business in accordance with a business authorization issued to it.

Deposits in credit unions

82   (1) A credit union may receive money on deposit only from, or on behalf of,

(a) its members,

(b) the government of Canada,

(c) the government of British Columbia,

(d) a public body,

(e) any 2 or more members jointly on behalf of a partnership if the directors of the credit union are satisfied that a majority of the members of the partnership are persons who are eligible for membership in the credit union,

(f) a member acting as trustee, whether for a named beneficiary or otherwise,

(g) a member in joint ownership with another person,

(h) a person, including the credit union, acting as trustee or agent as permitted by this Act, and

(i) a person in a prescribed class of persons,

and the credit union may allow interest on deposits at a rate and in the manner determined by its directors.

(2) A deposit permitted under subsection (1) (e) may be recorded in the books of the credit union in the name of the partnership, and the credit union is not obliged to

(a) see to the application of the money so deposited or any interest on it, whether or not it has notice of any trust, or

(b) determine the powers of the members or the partnership,

and the partnership or a member of the partnership is not entitled to notice of, to be represented at or to vote at meetings of the credit union.

Deposits from persons unable to contract

83   A credit union, without the intervention of any other person being required, may

(a) accept a deposit from any person whether or not the person is qualified by law to enter into ordinary contracts, and

(b) pay any or all of the principal of the deposit and any or all of the interest to the order of the person.

Disposition of deposits

84   (1) A person who has deposits, non-equity shares or both with a credit union may nominate a person in writing to receive the amount at the death of the depositor.

(2) On receiving a certificate of death, or certified copy of a certificate of death, as described in section 38 of the Vital Statistics Act or an affidavit showing that a person who has made a nomination under subsection (1) has died, the credit union must substitute on its books the name of the nominee in place of the name of the person or must pay to the nominee the amount due in accordance with the instructions of the nominee.

(3) A payment by a credit union in accordance with this section is valid and effectual discharge of the credit union with respect to a demand by a person against the credit union as to the amount paid.

Inactive deposits

85   (1) In this section, "administrator" has the same meaning as in the Unclaimed Property Act.

(1.1) If a debt is owing by a credit union because of a deposit and no transaction has taken place and no statement of account has been requested or acknowledged by the creditor during a period of 10 years,

(a) in the case of a deposit made for a fixed period, from the day on which the fixed period terminated, and

(b) in the case of any other deposit, from the day on which the last transaction took place or a statement of account was last requested or acknowledged by the creditor, whichever is later,

then, the debt is an inactive deposit for the purposes of this section.

(1.2) When a debt becomes an inactive deposit under subsection (1.1), the credit union must, in accordance with section 64 (1) to (7) of the Credit Union Incorporation Act, redeem any shares held by the depositor in the credit union.

(1.3) If the shares redeemed under subsection (1.2) are membership shares, the redemption is deemed to be required by section 52 (1) (d) of the Credit Union Incorporation Act and, as a consequence, section 64 (5) of that Act applies to the redemption.

(1.4) Section 64 (8) of the Credit Union Incorporation Act does not apply to any redemption of shares under subsection (1.2) of this section.

(1.5) Any amount payable to the depositor under section 52 (1) (d) or 64 (6) of the Credit Union Incorporation Act in respect of the shares redeemed under subsection (1.2) of this section is a debt of the credit union and is to be treated as part of the depositor's inactive deposit referred to in subsection (1.1).

(2) If the amount of an inactive deposit, including interest, is less than $100, then, subject to subsection (6), the credit union may treat it as income of the credit union.

(3) If the amount of an inactive deposit, including interest, is $100 or more, then, within 30 days after the debt becomes an inactive deposit, the credit union must mail written notice to the depositor, at the depositor's last address known to the credit union, informing the depositor that the debt has become an inactive deposit and will be dealt with under this section if the depositor does not, within 30 days after the date of the notice, give instructions as to the disposition of the deposit.

(4) If, under subsection (3), a credit union mails written notice to its depositor and does not, within 30 days after the date of the notice, receive instructions from its depositor as to the disposition of the deposit, then the credit union must pay to the administrator an amount equal to the debt, including interest if any, in accordance with the terms and conditions of the debt, and the payment discharges the credit union from all liability to the creditor in respect of the debt and interest.

(5) Money paid to the administrator under subsection (4) is deemed to be an unclaimed money deposit under the Unclaimed Property Act.

(6) If, under subsection (2), a credit union has treated a debt and interest as income and payment is demanded of the credit union by the person who, but for that subsection, would be entitled to receive payment of the debt, the credit union must pay to that person

(a) an amount equal to the amount so treated as income, and

(b) if interest was payable in accordance with the terms and conditions of the debt or instrument, interest on the amount so treated as income

(i) for the period not exceeding 5 years from the day on which the debt and interest were treated as income until the date of payment to the claimant, and

(ii) at the prescribed rate.

(7) If a credit union has under subsection (2) treated a debt and interest as income or under subsection (4) has paid an amount to the administrator, the credit union must keep all related signature cards and signing authorities or microfilm copies of them for a prescribed period after which the credit union may destroy them.

Limitation on lending

86   A credit union must not exercise its powers to lend money or guarantee an obligation at any time when it is in contravention of the requirements of section 67 in respect of adequate liquid assets.

Subordinated notes

87   (1) A trust company or credit union must not issue a note under which the indebtedness evidenced is subordinated in right of payment to all other indebtedness not evidenced by a subordinated note unless the note so issued meets each of the following requirements:

(a) the note is evidenced by a certificate in a form approved by the superintendent and contains a statement in it to the effect of the statements made in paragraphs (b) and (c) and contains the information that it is a subordinated note and contains any other information that the superintendent requires in approving the form of certificate;

(b) the borrowing evidenced by the note does not constitute a deposit of money with the trust company or credit union that issues the note and is not insured by the Canada Deposit Insurance Corporation or the deposit insurance corporation;

(c) in the event of the insolvency or winding up of the trust company or credit union, the indebtedness evidenced by the note is subordinated in right of payment to all other indebtedness that is not evidenced by a subordinated note.

(2) A trust company or credit union or person acting on behalf of a trust company or credit union, in any offering, circular, advertisement, correspondence or literature relating to a subordinated note issued or to be issued, must not refer to the subordinated note otherwise than as a subordinated note, and the trust company or credit union must indicate clearly in the offering, circular, advertisement, correspondence or literature that the money secured by the subordinated note is not an insured deposit.

Division 6 — Marketing of Financial Products

Repealed

88-90   [Repealed 2004-48-56.]

Disclosure of identity in advertising, etc

91   In all advertising, correspondence, application forms, evidences of indebtedness and other documents in its control relating to its business, a financial institution must ensure that its identity is clearly stated.

Insurers to file policy forms

92   The superintendent may order an insurer to file a copy of any form that is specified or otherwise described in the order and is used or intended to be used by the insurer in its insurance business.

Requirements of out of province insurers

92.1   (1) In this section, "insurer", "policy", "third party liability insurance coverage", "vehicle insurance" and "vehicle liability policy" have the same meanings as in the Insurance (Vehicle) Act.

(2) An insurer that issues a policy evidencing a contract of vehicle insurance that provides third party liability insurance coverage outside British Columbia must file with the superintendent, in a form established by the superintendent,

(a) a power of attorney authorizing the superintendent to accept service of notice or process for the insurer in any action or proceeding against the insurer arising out of a vehicle accident in British Columbia, and

(b) an undertaking

(i) to appear in any action or proceeding against the insurer or its insured arising out of a vehicle accident in British Columbia, and of which the insurer has knowledge,

(ii) that on receipt from the superintendent of any notice or process served on the superintendent in respect of its insured, or in respect of its insured and another or others, and sent by the superintendent to the insurer as provided, the insurer will immediately have the notice or process personally served on its insured,

(iii) not to set up any defence to any claim, action or proceeding, under a policy issued by the insurer, that might not be set up if the policy had been issued in British Columbia in accordance with the law of British Columbia relating to vehicle liability policies, and

(iv) to satisfy up to the limits of liability stated in the policy, and in any event to an amount not less than the limits of liability established under Part 1 of the Insurance (Vehicle) Act and the regulations under that Part any judgment rendered against the insurer or its insured by a court in British Columbia in the action or proceeding referred to in subparagraph (iii).

Online sale of insurance

92.2   (1) In this section:

"electronic agent" has the same meaning as in section 1 of the Electronic Transactions Act;

"insurance agent" has the same meaning as in section 168 of this Act;

"insurance salesperson" has the same meaning as in section 168 of this Act.

(2) An insurance company, an insurance agent or an insurance salesperson who issues, delivers or offers to undertake a contract of insurance through the use of an electronic agent must meet the prescribed requirements and the requirements established in the rules made by the Authority.

Prohibition against unfair, misleading or deceptive documents

93   (1) If, in the opinion of the superintendent, a form of contract, trust instrument or other document provided by a financial institution to its customers, or a form of application or advertisement relating to such a document, is unfair, misleading or deceptive, the superintendent, by order, may prohibit the use of that form by a financial institution.

(2) If, in the opinion of the superintendent, an insurer is issuing contracts of insurance for less than fair market value, the superintendent may order the insurer to cease doing so.

Coercive tied selling prohibited

94   A financial institution or person acting in a transaction with the approval of a financial institution must not place undue pressure on, or coerce, a person to obtain a product or service from another person, including the financial institution, its subsidiaries, affiliates or agents, as a condition of obtaining another product or service from the financial institution.

Repealed

95   [Repealed 2004-48-58.]

Substitute action of superintendent

96   (1) If the superintendent is satisfied that a customer, in respect of a transaction, has

(a) a cause of action,

(b) a defence to an action,

(c) grounds for setting aside a default judgment, or

(d) grounds for an appeal or to contest an appeal,

then, on behalf of the customer, the superintendent may institute or assume the conduct of any proceedings, or defend any proceedings, with a view to enforcing or protecting the rights of the customer respecting a contravention or suspected contravention of those rights or of any enactment or law relating to the protection or interests of customers.

(2) The superintendent must not institute, assume the conduct of or defend any proceedings under subsection (1) unless the superintendent

(a) considers that the conduct of the financial institution or other person involved in the transaction was misleading, deceptive or unconscionable, and

(b) first obtains

(i) the irrevocable written consent of the customer, and

(ii) the written consent of the minister.

(3) In respect of proceedings referred to in subsection (1),

(a) the superintendent, on behalf of the customer, has the same rights in and control over the proceedings, including the same right to settle an action or part of an action, as the customer,

(b) the superintendent, without consulting or seeking the further consent of the customer, may conduct the proceedings in the manner the superintendent considers appropriate, and

(c) any money, excluding costs, recovered by the superintendent belongs to and must be paid to the customer without deduction, and any amount, excluding costs, awarded against the customer must be paid by and is recoverable from the customer, but in every case any costs of the proceedings awarded by the court having jurisdiction must be borne by, or paid to and retained by, the Authority, as the case may be.

(4) If

(a) a party to proceedings to which this section applies files a counterclaim, or

(b) the customer on whose behalf the proceedings are being defended is entitled to file a counterclaim,

and that counterclaim is not related to

(c) the cause of action, and

(d) the interests of the customer as a customer,

the court having jurisdiction in the proceedings must, on the application of the superintendent, order

(e) that the counterclaim be heard separately, and

(f) that the customer be made a party to the counterclaim in the customer's own right,

and the court may make other orders or give directions in that regard that it considers just.

Part 4 — Corporate Governance

Division 1 — Directors and Officers of Financial Institutions

Number of directors and unaffiliated directors

97   (1) A financial institution must have at least 5 directors, and, in the case of a trust company or an insurance company, at least 1/3 of the directors must be unaffiliated directors.

(2) On application by a trust company or an insurance company, if the superintendent believes, on reasonable grounds, that it is in the public interest, the superintendent may, for the purposes of subsection (1) and sections 61 (8) (b), 103 (2), 111 (3) and (4), 112 (1), 115 (1) and 135 (c), make a determination that an individual described by paragraph (h) of the definition of "unaffiliated director" is an unaffiliated director, unless that individual is also described in one or more of paragraphs (a) to (g) of that definition.

(3) The majority of the directors of every financial institution must be persons ordinarily resident in Canada.

(4) One director of every financial institution must be ordinarily resident in British Columbia.

(5) Without limiting section 124 of the Business Corporations Act, an individual is not qualified to become or act as a director of a trust company or an insurance company if that individual's registration in any capacity has been cancelled under

(a) the Securities Act by either the British Columbia Securities Commission or the executive director, or

(b) the Mortgage Brokers Act by the Commercial Appeals Commission, the Financial Services Tribunal or the registrar under that Act,

unless the person or body that cancelled the registration otherwise orders at the time of cancellation, or unless 5 years have elapsed since the cancellation of the registration.

(6) An order must not be made under subsection (5) of this section unless notice of the application for the order is given to the superintendent, who may appear as a party to the application.

Repealed

98   [Repealed 2011-29-72.]

Cumulative voting for directors

98.1   (1) The articles of a trust company or an insurance company may provide for cumulative voting by members in the election of directors and, in that event, the articles must include provisions to the following effect:

(a) that the trust company or insurance company have a specific number of directors, with no allowance for minimum and maximum numbers of directors;

(b) that each member entitled to vote at an election of directors has the right to cast a number of votes equal to the number of votes attached to the shares held by the member multiplied by the number of directors to be elected, and that each member may cast all the votes in favour of one candidate or distribute the votes among the candidates in any manner;

(c) that a separate vote of members must be taken with respect to each candidate nominated for director unless a resolution is passed unanimously permitting 2 or more persons to be elected by a single resolution;

(d) that, if a member has voted for more than one candidate without specifying the distribution of votes among the candidates, the votes must be distributed equally among the candidates;

(e) that, if the number of candidates nominated for director exceeds the number of positions to be filled, the candidates who receive the least number of votes must be eliminated until the number of candidates remaining equals the number of positions to be filled;

(f) that a director may not be removed from office if the votes cast against removal would be sufficient to elect a director if they were voted cumulatively at an election at which the same total number of votes were cast and the number of directors required by the articles were being elected;

(g) that the number of directors required by the articles may not be decreased if the votes cast against the motion to decrease would be sufficient to elect a director if they were voted cumulatively at an election at which the same total number of votes were cast and the number of directors required by the articles were being elected.

(2) Despite subsection (1), a provision in the articles of a trust company or an insurance company that authorizes cumulative voting by members in the election of directors does not apply when any one member of the company beneficially owns or controls, directly or indirectly, all of the issued voting shares in the company.

(3) If the articles of a trust company or an insurance company provide for cumulative voting, no holders of any class of shares of the trust company or insurance company have an exclusive right to elect one or more directors.

(4) If the articles of a trust company or an insurance company provide for cumulative voting, the members of the trust company or insurance company must,

(a) at the first annual meeting of members held not earlier than 90 days following the date that cumulative voting is provided for in the articles, and

(b) at each succeeding annual meeting,

elect directors to hold office until the close of the next annual meeting of members following the directors' election.

Removal of directors and officers

99   (1) Without limiting section 97 (5) of this Act, section 124 or 141 (3) of the Business Corporations Act or section 84.12 or 84.3 (2) of the Credit Union Incorporation Act, no person is qualified to become or act as a director or officer of a financial institution who is a public servant whose duties relate to financial institutions.

(2) Without limiting section 128 of the Business Corporations Act or section 84.24 of the Credit Union Incorporation Act, if the superintendent is satisfied that a director or officer of a financial institution or of its subsidiary

(a) because of section 97 (5) of this Act, section 124 or 141 (3) of the Business Corporations Act or section 84.12 or 84.3 (2) of the Credit Union Incorporation Act, is not qualified to be a director or an officer,

(b) because of subsection (1), is not qualified to be a director or officer,

(c) within the last 5 years has been bankrupt in Canada or elsewhere,

(d) has a conflicting interest that prevents the director or officer from properly discharging the duties as director or officer,

(e) is contravening or has contravened a written undertaking given under this Act,

(f) is an individual who ought not to be in a position to control or influence a financial institution, or

(g) is an individual who has been

(i) convicted of an offence in Canada or another jurisdiction arising from a transaction, business or course of conduct related to financial services, or

(ii) found by a regulator or a court in Canada or another jurisdiction to have contravened the laws of that jurisdiction respecting financial services,

the superintendent may order that the director or officer cease to be a director or officer of the financial institution; and on the date of the order the director or officer ceases to be a director or officer of the financial institution.

(3) When an individual ceases to be a director or officer of a financial institution under subsection (2), then, despite the Business Corporations Act or the Credit Union Incorporation Act, the individual is not eligible to again be or act as a director or officer of a financial institution without first applying for and receiving the consent of the superintendent.

(4) A financial institution must deliver written notice immediately to the superintendent of the resignation, removal, election or appointment of a director or senior officer.

(5) The superintendent may require a financial institution to provide any information the superintendent considers necessary to determine if there are grounds to take action under subsection (2).

Credit union directors ceasing to hold office

100   Without limiting section 99 of this Act or section 84.24 of the Credit Union Incorporation Act, a director of a credit union ceases to hold office when the director

(a) is not qualified under section 83 (3) of the Credit Union Incorporation Act,

(b) is not, or ceases to be, eligible to be insured as required under section 206 of this Act,

(c) being a person who is required under section 84 (3) of the Credit Union Incorporation Act to complete a director training program, fails to complete the program within the period specified under section 84 (2) (b) of that Act.

Standard of care for directors and officers

101   (1) A director or officer of a financial institution, in exercising the powers and performing the functions of a director or officer, must

(a) act honestly, in good faith and in the best interests of the financial institution, and

(b) exercise the care, diligence and skill of a reasonably prudent person under comparable circumstances,

and in doing so must take into account the interests of shareholders, depositors, if any, and policy holders, if any, and, without limiting this, of those to whom the directors owe a fiduciary duty.

(2) The provisions of this section are in addition to, and not in derogation of, any enactment or rule of law or equity relating to the duties or liabilities of directors of a corporation.

(3) Every director and officer of a financial institution must act in accordance with this Act and the regulations under it.

Director's application to Supreme Court — superintendent is party

101.1   The superintendent is a party to any proceedings in which a director of a trust company or an insurance company applies to the Supreme Court under section 70 (3) or 78 (2) of the Business Corporations Act.

Indemnification of directors and officers

102   (1) Except for an action by or on behalf of the financial institution to procure a judgment in favour of the financial institution, a financial institution may indemnify

(a) a director or officer of the financial institution,

(b) a former director or officer of the financial institution, or

(c) an individual who, at the request of the financial institution, is or was a director or officer of a corporation of which the financial institution is or was a member or creditor,

against any costs, charges and expenses, including an amount paid to settle an action or proceeding or to satisfy a judgment, reasonably incurred for any civil, criminal or administrative action or proceeding, whether threatened, pending, continuing or completed, to which the director or officer is or may be made a party because of being or having been a director or officer of the financial institution or corporation, if

(d) the director or officer acted honestly and in good faith with a view to the best interests of the financial institution or corporation, as the case may be, and

(e) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the director or officer had reasonable grounds for believing that the conduct was lawful.

(2) With the approval of a court, a financial institution may indemnify a person referred to in subsection (1) (a) or (b) for an action, whether threatened, pending, continuing or completed, by or on behalf of the financial institution to procure a judgment in favour of the financial institution, to which the person is or may be made a party because of being or having been a director or officer of the financial institution, against any costs, charges and expenses reasonably incurred in connection with the action if the conditions set out in subsection (1) (d) and (e) are fulfilled.

(3) A financial institution must indemnify a person referred to in subsection (1) (a) or (b) who has been substantially successful on the merits in the outcome of a civil, criminal or administrative action or proceeding, to which the person is made a party because of being or having been a director or officer of the financial institution, against all costs, charges and expenses reasonably incurred for the action or proceeding if the conditions set out in subsection (1) (d) and (e) are fulfilled.

(4) A financial institution or a person referred to in subsection (1) (a), (b) or (c) may apply to a court for an order approving an indemnity under this section and the court may make any order it thinks fit.

(5) An applicant under subsection (4) must give the superintendent not less than 14 days' notice of the application and the superintendent is entitled to appear and be heard in person or by counsel.

(6) On an application under subsection (4), the court may order notice to be given to any interested person and that person is entitled to appear and be heard in person or by counsel.

(7) A financial institution may purchase and maintain insurance for the benefit of a person referred to in subsection (1) (a), (b) or (c) against any liability incurred as a director or officer.

Quorum and unaffiliated directors

103   (1) A quorum

(a) of a meeting of directors of a financial institution consists of the greater of

(i) 3 directors, or

(ii) a majority of the directors, and

(b) of a meeting of a committee consists of a majority of the individuals comprising the committee.

(2) Even though

(a) sufficient directors to form a quorum are present at a meeting of the directors of a trust company or insurance company, or

(b) sufficient individuals to form a quorum are present at a meeting of a committee that is required to have unaffiliated directors as members,

there is not a quorum unless at least one of them is an unaffiliated director.

Misuse of confidential information

104   If a director or officer of a financial institution or of an affiliate of a financial institution knows or reasonably ought to know that information is confidential to the financial institution, or to any affiliate of the financial institution the director or officer must not

(a) disclose the information, or

(b) enter into a transaction in which the director or officer makes use of the information,

in order, directly or indirectly, to obtain a benefit or advantage for the director, officer or anyone else other than the financial institution or any affiliate of it.

Information required of directors and senior officers

105   Before commencing duties, a director or senior officer of a financial institution must complete and submit to the superintendent a personal information return in the form established by the superintendent that discloses the information required by the superintendent.

Meeting requested by auditor

106   The directors of a financial institution, if requested to do so by its auditor, must call a general meeting of members or a meeting of directors within 30 days after the request, to consider a report made by the auditor regarding any matter arising out of the financial affairs of the financial institution.

Meeting requested by superintendent

107   (1) The superintendent by order may require a meeting of the directors of a financial institution for the purpose of considering matters specified in the order within the time specified in the order; and on receiving the order the directors must inform the superintendent in advance of the time and, if applicable, the place of the meeting.

(1.1) If a meeting ordered under subsection (1) is an electronic meeting, the directors of the financial institution must also provide the superintendent with instructions for attending and participating in the meeting by telephone or other communications medium.

(2) The superintendent may attend and be heard at a meeting ordered under subsection (1).

Director's statement on own resignation or pending removal

108   (1) A director of a financial institution who

(a) resigns,

(b) receives a notice or otherwise learns of a meeting of members called for the purpose of removing the director from office, or

(c) receives a notice or otherwise learns of a meeting of directors or members at which another person is to be appointed or elected to fill the office of director because of the director's resignation or removal

is entitled to submit to the financial institution a written director's statement giving the reasons for the resignation or the reasons why the director opposes any proposed action or resolution.

(2) If a director of a financial institution resigns as a result of a disagreement with the other directors or the management of a financial institution and does not take action under subsection (1), the director must submit to the superintendent a written director's statement giving the reasons for the resignation.

Circulation of director's statement

109   (1) On receiving a written director's statement under section 108 (1), the financial institution must deliver it to the superintendent immediately, and, unless the directors consider on reasonable grounds that delivery of the statement would materially and adversely affect the financial institution's financial viability, the financial institution must also deliver the statement immediately to its members who are entitled to notice of meetings.

(2) If the directors, on the basis set out in subsection (1), decide against delivery of the statement to the members, they must so inform the superintendent who, despite that decision, may order the financial institution to deliver the statement immediately to its members who are entitled to notice of meetings.

(3) A financial institution or person acting on its behalf does not incur any liability only because of circulating a written director's statement in compliance with subsection (1).

Directors' remuneration

110   (1) The remuneration, if any, of the directors of a financial institution in relation to their service as directors may be established by ordinary resolution.

(2) The members of a financial institution, by special resolution, may permit the remuneration, if any, of the directors to be established by the directors.

Committees

111   (1) Subject to subsections (2) and (3) and the charter of the financial institution, the directors of a financial institution may delegate any of their powers to a committee appointed or elected by them.

(2) A committee does not have authority to

(a) fill a vacancy among the directors or the members of the audit committee, or the investment and loan committee, or in the office of the auditor, or appoint or remove the chief operating officer, however designated, the chief executive officer, however designated, the chief financial officer, however designated, the chair of the board or the president of the company,

(b) issue securities except in the manner and on the terms authorized by the directors,

(c) declare dividends,

(d) purchase, redeem or otherwise acquire shares issued by the financial institution,

(e) approve an information circular,

(f) approve a take over bid circular, directors' circular or issuer bid circular,

(g) approve financial statements, or

(h) adopt, amend or repeal directors' bylaws.

(3) If the directors of a financial institution appoint or elect a committee, the committee must consist of not fewer than 3 individuals and, in the case of a trust company or insurance company, at least one of them must be an unaffiliated director.

(4) A committee appointed by the directors of a trust company or insurance company must not conduct any business unless at least one unaffiliated director is present at the meeting.

Conduct review committee

112   (1) The directors of a financial institution must elect from among themselves a conduct review committee consisting of at least 3 directors and, in the case of a trust company and an insurance company, 2/3 of the committee members must be unaffiliated directors.

(2) The conduct review committee, in addition to the duties set out in Part 5, must establish written procedures

(a) to provide disclosure in prescribed circumstances to customers of the financial institution, and

(b) designed to prevent conflicts of interest and to resolve them if they occur, setting out in those procedures techniques for the identification of potential conflict of interest situations and for restricting the flow of confidential information.

(3) The conduct review committee at intervals of not more than 2 years must review the written procedures established under subsection (2).

Division 2 — Auditors and Audit Committees of Financial Institutions

Auditor

113   Without limiting section 205 of the Business Corporations Act or section 39.51 of the Credit Union Incorporation Act, every financial institution must have an auditor who meets the prescribed qualifications.

Auditor may be a depositor

114   For the purpose of section 39.52 of the Credit Union Incorporation Act, the fact that the auditor of a credit union or the auditor's partner or employee is a depositor in the credit union or holds membership shares in the credit union does not by itself affect the independence of the auditor from the credit union, its affiliates and its directors and officers.

Audit committee and unaffiliated directors

115   (1) Without limiting section 224 (2) of the Business Corporations Act, not less than 1/3 of the members of the audit committee of a trust company or an insurance company must be unaffiliated directors.

(2) On the written request of the auditor, of a member of the audit committee or of any director, the chair of the audit committee must convene a meeting of the audit committee to consider any matters the auditor, member or director, as the case may be, believes should be brought to the attention of the directors or members.

(3) In addition to complying with its obligations under section 225 of the Business Corporations Act, the audit committee of a trust company or an insurance company must review

(a) returns of the trust company or insurance company that are to be filed with the superintendent under section 127 (1) of this Act,

(b) reports that have been made by the auditor under section 123, and

(c) prescribed reports, transactions or matters.

(3.1) In addition to complying with its obligations under section 225 of the Business Corporations Act, the audit committee of an insurance company must meet with the actuary of the company to discuss the parts of the annual financial statements and the annual return prepared by the actuary.

(4) If, under this Act or the Business Corporations Act, financial statements or a return requires the approval of the directors, that approval must not be given until

(a) the audit committee has reviewed and reported on those financial statements or that return, and

(b) the directors have received the report.

Auditor has right to attend directors' meetings

116   The auditor of a financial institution must be given notice of, and has the right to attend and to be heard at, every meeting of the financial institution's

(a) directors, or

(b) conduct review committee

on matters with respect to which the auditor has a duty or function or has made a report; and the auditor must attend a meeting of the directors or of the conduct review committee when requested to do so by the directors or by the committee, as the case may be.

Appointment and removal of auditor

117   (1) A financial institution must deliver written notice promptly to the superintendent of the appointment, removal or resignation of an auditor and of any other occurrence that causes a vacancy in the office of auditor and, in the case of a removal, of the reasons for the removal.

(2) If the office of auditor is vacant and no application has been made under section 204 (5) of the Business Corporations Act or section 39.5 (4) of the Credit Union Incorporation Act, the superintendent by order delivered to the financial institution, may require the appointment of an auditor by a deadline stipulated in the order; and if an auditor is not appointed by that deadline

(a) the superintendent may appoint an auditor to hold office until the close of the next annual general meeting, and, despite section 207 of the Business Corporations Act or section 39.53 of the Credit Union Incorporation Act, the financial institution must pay to the auditor so appointed remuneration at a rate directed by the superintendent, and

(b) despite section 209 of the Business Corporations Act or section 39.54 of the Credit Union Incorporation Act, without the written permission of the superintendent, the financial institution must not remove an auditor so appointed before the expiration of the auditor's term of office.

Report to accounting body

118   (1) If the superintendent has reasonable grounds to believe that the auditor of a financial institution

(a) has failed to perform duties,

(b) has failed to comply with this Act,

(c) has been a party to the preparation of or has approved financial statements that do not fairly present the financial position of the financial institution,

(d) is incompetent, or

(e) has committed professional misconduct,

the superintendent must deliver a written report promptly to the financial institution, and,

(f) if the auditor is

(i) a chartered accountant, to a provincial institute of chartered accountants within Canada of which the auditor is a member, or

(ii) a chartered professional accountant, to a provincial organization of chartered professional accountants within Canada of which the auditor is a member.

(g) [Repealed 2015-1-91.]

(h) [Repealed 2018-23-17.]

(2) The superintendent may require a financial institution or its auditor to provide information the superintendent considers necessary to determine if there are reasonable grounds for a report under subsection (1).

Resignation of auditor

119   (1) An auditor of a financial institution on resigning as auditor must deliver to the financial institution a written statement of the reasons for resignation.

(2) On receiving the statement under subsection (1), the financial institution must deliver a copy of it to the superintendent.

(3) On appointing a new auditor, a financial institution must deliver a copy of any statement made under subsection (1) by the new auditor's predecessor to the new auditor.

Auditor appointment for subsidiary

120   (1) A financial institution must

(a) ensure that its auditor, or one of them if more than one, is also auditor of any of its subsidiaries, or

(b) deliver to the superintendent a written explanation to the satisfaction of the superintendent of why it is unable to ensure that result.

(2) A trust company or insurance company that is a subsidiary of another corporation must

(a) ensure that its auditor, or one of them if more than one, is also auditor of that other corporation, or

(b) deliver to the superintendent a written explanation to the satisfaction of the superintendent of why it is unable to ensure that result.

Amendment of financial statements and auditor's report

121   In addition to complying with any applicable obligations under section 216 of the Business Corporations Act,

(a) the directors to whom section 216 (1) and (2) of that Act applies must ensure that the amended financial statements referred to in section 216 (2) of that Act are delivered to the superintendent promptly after they are prepared,

(b) the auditor of a trust company or an insurance company to whom section 216 (3) of that Act applies must provide to the superintendent, in writing, the same information that the auditor is required by that section to provide to the directors of the trust company or insurance company, and

(c) without limiting section 216 (5) (a) (ii) of that Act, the auditor of an insurance company must deliver to the company's actuary, in writing, the amended report referred to in that section.

Repealed

122   [Repealed 2011-29-87.]

Report to directors

123   (1) The auditor of a financial institution must report in writing promptly to the financial institution's directors and, in the case of an insurance company, the company's actuary whenever, in the ordinary course of the auditor's duties, the auditor

(a) has reasonable grounds to believe that the circumstances of the financial institution have changed, are changing or are likely to change in a way that does or might

(i) materially and adversely affect the viability of the financial institution, or

(ii) otherwise impair the financial institution's ability to carry on or transact business,

(b) becomes aware of an occurrence or transaction or a series of them that does or might reasonably be expected to

(i) materially and adversely affect the viability of the financial institution, or

(ii) otherwise impair the financial institution's ability to carry on or transact business, or

(c) becomes aware that the financial institution or its director or officer has contravened this Act or the regulations under this Act or has contravened the Business Corporations Act or the Credit Union Incorporation Act.

(2) If the auditor considers that a matter that is the subject of a report under subsection (1) has not been appropriately responded to by the directors within 30 days after receipt by the directors of the report, the auditor must inform the superintendent immediately to that effect in writing, giving full particulars.

Additional reporting

124   (1) The superintendent may order the auditor of a financial institution

(a) to report to the superintendent on the adequacy of the accounting procedures used by the financial institution,

(b) to enlarge or extend the scope of an audit,

(c) to examine and report on information prepared by the financial institution,

(d) to supply to the superintendent additional information pertinent to an audit, and

(e) to apply standards specified by the superintendent in addition to generally accepted auditing standards.

(2) In addition to the remuneration set under section 207 of the Business Corporations Act or section 39.53 of the Credit Union Incorporation Act, the financial institution must pay the auditor additional remuneration at a rate directed by the superintendent for the work required under subsection (1) by the superintendent.

(3) The auditor must address to the directors and deliver to the financial institution and, in the case of an insurance company, the company's actuary, a copy of a report under subsection (1) (a) or (c).

Additional auditor

125   (1) The superintendent may order a financial institution to appoint an additional auditor to hold office for a term specified by the superintendent.

(2) The financial institution must pay remuneration to an auditor appointed under subsection (1) at a rate specified by the superintendent in the order.

No liability

126   An auditor or former auditor of a financial institution who in good faith makes a statement or report under section 123 or 124 is not liable in a civil action because of making the statement or report or because of anything in it.

Division 2.1 — Actuaries — Insurance Companies

Definition

126.1   In this Division, "designated individual" means the individual that is required to be designated under section 126.13.

Actuaries

126.11   The directors of an insurance company must appoint an actuary for the company.

Notice of appointment

126.12   An insurance company must, immediately after the directors appoint a person to be the actuary of the company in accordance with section 126.11, notify the superintendent in writing of the appointment.

Designated individual

126.13   If the actuary of an insurance company is not an individual, the actuary must designate an individual who is responsible for acting on behalf of the actuary.

Qualifications of actuary

126.14   (1) A designated individual or an individual who is the actuary of an insurance company that is authorized to carry on life insurance business must be a fellow in good standing of the Canadian Institute of Actuaries.

(2) A designated individual or an individual who is the actuary of an insurance company that is authorized to carry on one or more classes of general business insurance, but is not authorized to carry on life insurance business, must be a fellow in good standing of the Canadian Institute of Actuaries or be approved by the superintendent as having the training and experience necessary to perform the duties of an actuary of a provincial company.

Senior officers precluded

126.15   (1) A senior officer of an insurance company may not be appointed as or hold the position of actuary of the insurance company unless authorized in writing by the superintendent.

(2) An authorization under subsection (1) may contain limitations and conditions, including a limitation on the time during which the person named in the authorization may hold the position of actuary of the insurance company.

(3) If an authorization under subsection (1) includes a time limit as described in subsection (2), the person holding the position of actuary pursuant to the authorization may not hold that position after the time limit expires.

Revocation of actuary's appointment

126.16   (1) The directors of an insurance company may revoke the appointment of the actuary of the company.

(2) The directors of an insurance company must revoke the appointment of its actuary if

(a) the actuary no longer meets the requirements of section 126.14 and does not resign, or

(b) the actuary's designated individual no longer meets the requirements of section 126.14 and the actuary does not replace its designated individual with an individual who does meet the requirements of that section.

(3) The superintendent may revoke the appointment of an actuary of an insurance company if the superintendent is satisfied that the actuary or the actuary's designated individual no longer meets the requirements of section 126.14.

Declaration of vacancy by court

126.17   Any interested party may apply to the Supreme Court for an order declaring that an actuary or its designated individual no longer meets the requirements of section 126.14 and that the office of actuary is vacant.

Ceasing to hold office

126.18   (1) The office of actuary of an insurance company becomes vacant when

(a) the actuary resigns,

(b) if the actuary is an individual, the individual dies,

(c) if the actuary is not an individual, the actuary is dissolved,

(d) the appointment of the actuary is revoked, or

(e) the office of actuary is declared to be vacant under section 126.17.

(2) The resignation of an actuary becomes effective at the time a written resignation is delivered to the insurance company or at the time specified in the resignation, whichever is later.

Filling vacancy

126.19   When a vacancy occurs in the office of actuary of an insurance company, the directors must immediately

(a) submit a written statement to the superintendent of the circumstances and the reasons why, in the directors' opinion, the office of actuary became vacant, and

(b) fill the vacancy.

Statement of actuary

126.2   An actuary of an insurance company who resigns or whose appointment is revoked must submit a written statement of the circumstances and reasons why the actuary resigned or why, in the actuary's opinion, the actuary's appointment was revoked, to

(a) the directors of the insurance company,

(b) the superintendent, and

(c) the replacement actuary of the company, when the replacement actuary requests the statement.

Duty of replacement actuary

126.21   (1) Where an actuary of an insurance company resigns or the appointment of an actuary is revoked, a person may not accept an appointment or consent to be appointed as actuary of the insurance company before requesting and receiving from the other actuary the statement referred to in section 126.2.

(2) A person may accept an appointment or consent to be appointed as actuary of an insurance company if no reply is received from the other actuary within 15 days after a request under subsection (1) is made.

(3) Unless subsection (2) applies, an appointment as actuary of an insurance company is void if subsection (1) is contravened.

Right to information

126.22   (1) On the demand of the actuary of an insurance company, a person who is a former actuary of or is or has been a director, officer, employee or agent of the insurance company or any of its subsidiaries or holding companies must, to the best of the person's ability to do so,

(a) furnish all information and explanations to the actuary, and

(b) allow the actuary access to and furnish to the actuary copies of records, documents, books, accounts and vouchers of the insurance company and of any of its subsidiaries or holding companies

as the actuary considers necessary to enable the actuary to perform his or her duties as the company's actuary.

(2) A person who in good faith makes any communication under this section is not liable in a civil action only because of making the communication.

Actuary's valuation

126.23   (1) The actuary of an insurance company must value

(a) the actuarial and other policy liabilities of the company as at the end of a financial year, and

(b) any other matter specified in a direction made by the superintendent.

(2) The actuary's valuation must be in accordance with generally accepted actuarial practice, with such changes as may be specified in an order by the superintendent and any additional directions that may be made by the superintendent.

Special valuation

126.24   (1) The superintendent may appoint an actuary to value the matters referred to in section 126.23 (1) (a) or (b) if the superintendent is of the opinion that the appointment is necessary.

(2) The insurance company must pay remuneration to an actuary appointed under subsection (1), at a rate directed by the superintendent, for carrying out the valuation.

Notice of meeting to actuary

126.25   An insurance company must provide the company's actuary with not less than 21 days' notice of any general meeting of the company, unless the members of the insurance company have waived or reduced the period of notice for the meeting in accordance with section 170 of the Business Corporations Act.

Actuary's report

126.26   (1) The actuary of an insurance company must, not less than 21 days before the date of the annual general meeting of the members of the company, make a report to them on the valuation made under section 126.23 and on any other prescribed matter.

(2) In each report required under subsection (1), the actuary must state whether, in the actuary's opinion, the annual financial statement presents fairly the results of the valuation made under section 126.23.

Report to directors

126.27   (1) The directors or, where the directors so choose, the audit committee of the insurance company must meet with the actuary of the company at least once during each financial year.

(2) At the meeting, the actuary must report, in accordance with generally accepted actuarial practice and any change or direction made by the superintendent under section 126.23,

(a) on the financial position of the insurance company, and

(b) if directed to do so by the superintendent, the expected future financial condition of the company.

Report on matters requiring rectification

126.28   The actuary of an insurance company must report in writing to

(a) the directors, president and treasurer of the insurance company, and

(b) the superintendent

any matters that have come to the actuary's attention in the course of carrying out the actuary's duties that, in the actuary's opinion,

(c) have material adverse effects on the financial condition of the insurance company, and

(d) require rectification.

Actuary's procedures

126.29   (1) The superintendent may, in writing, require that the actuary of an insurance company

(a) report to the superintendent on the actuary's procedures in valuing the actuarially based liability figures contained in the annual return, and

(b) enlarge or extend the scope of that valuation, or perform any other procedure in any particular case,

and the actuary must comply with the superintendent's requirement and report to the superintendent.

(2) The insurance company must pay any additional remuneration, at a rate directed by the superintendent, to the actuary for the work required under subsection (1) by the superintendent.

Qualified privilege

126.3   An oral or written statement or report made under this Act by the actuary or former actuary of an insurance company has qualified privilege.

No liability

126.31   The actuary or former actuary of an insurance company who in good faith makes a statement or report under section 126.2, 126.28 or 126.29 is not liable in a civil action because of making the statement or report or because of anything in it.

Division 3 — Books, Records, Returns and Financial Statements of Financial Institutions

Filings

127   (1) Subject to subsection (1.1), within 90 days after the end of its financial year in each year, a financial institution must file with the superintendent a return in the form established by the superintendent outlining its financial condition and affairs during that financial year and must attach to the return

(a) its financial statements for that financial year,

(b) if its financial statements for that financial year are in consolidated form, the unconsolidated statements on which the consolidated financial statements are based,

(c) the report of the auditor required under section 212 of the Business Corporations Act or section 39.57 of the Credit Union Incorporation Act,

(d) a copy of a resolution of the directors showing that the return was approved by them, and

(e) if the financial institution is a subsidiary of another corporation, a copy of the annual financial statements for that financial year and auditor's report of the other corporation.

(1.1) An insurance company must, within 60 days after the end of its financial year in each year, file with the superintendent a return referred to in subsection (1).

(1.2) The actuary of an insurance company must make, and the company must file with its annual return, a report in a form determined by the superintendent on the reserve referred to in section 77.

(2) Within 5 days after a financial institution

(a) files with or delivers to the British Columbia Securities Commission or a similar authority outside British Columbia a statement concerning the financial affairs of the financial institution,

(b) distributes such a statement to the members of the financial institution, or

(c) makes an amendment to the financial institution's investment and lending policy established under section 136 (4),

the financial institution must file a copy of the statement or the amendment with the superintendent.

(3) At intervals specified by the superintendent, a financial institution must file with the superintendent one or more of the following reports as specified, and in the form established, by the superintendent:

(a) a financial affairs report;

(b) a market conduct practices report;

(c) a risk management practices report;

(d) a corporate governance report.

(4) For the purposes of subsection (3), the superintendent may specify different intervals for trust companies, insurance companies and credit unions.

(5) The superintendent may require an insurance company to file with the administrator of a national database of market conduct, with whom the Authority has entered into an agreement under section 219.01, a market conduct practices report

(a) instead of filing such a report with the superintendent under subsection (3), or

(b) if so directed by the superintendent, in addition to filing such a report with the superintendent under subsection (3).

Financial statements

128   (1) [Repealed 2011-29-91.]

(2) A financial institution that is a holding company must include,

(a) in the financial statements to be placed before an annual general meeting, and in each of its comparative interim financial statements, the assets and liabilities, and income and expense, of its subsidiaries, making due provision for minority interests, and indicating in the statement that it is presented in consolidated form, and

(b) in the financial statements to be placed before an annual general meeting,

(i) the names of each corporation that is its subsidiary, and

(ii) if the financial year of any of its subsidiaries does not coincide with the financial year of the financial institution, the date of the financial year end of the subsidiary and the reason why the financial years do not coincide.

(3) It is sufficient compliance with section 39.48 (1) of the Credit Union Incorporation Act if a credit union that otherwise complies with the requirements of that section substitutes for the financial statements referred to in that section condensed financial statements that conform to the requirements of subsection (4) of this section.

(4) The condensed financial statements referred to in subsection (3) must contain

(a) a condensed statement of profit and loss for the relevant financial year,

(b) a condensed balance sheet made up to the end of that financial year, and

(c) a notice in conspicuous type that any member or auxiliary member may obtain a free copy of the full financial statements at any branch of the credit union.

(5) A credit union that sends condensed financial statements to each member and auxiliary member as permitted by subsection (3) must

(a) keep at each of its branches or offices a copy of the full financial statements, and

(b) provide a free copy of the full financial statements to any member or auxiliary member who requests one.

(6) If financial statements are presented in accordance with this section, the auditor must qualify the auditor's report if, in the auditor's opinion, due provision has not been made for minority interests.

Accounting principles

129   A financial institution must prepare its financial statements in accordance with generally accepted accounting principles and with the regulations.

Public access to financial information

130   (1) A financial institution must keep at each branch or office of the financial institution a copy of its most recent annual financial statements and auditor's report.

(2) Every person may examine free of charge during the usual business hours of the financial institution a copy of the financial statements and auditor's report referred to in subsection (1).

(3) At the request of any person, a financial institution must provide that person with a copy of the financial statements and auditor's report on payment of a reasonable amount, if any, for that service that the directors may specify.

Financial year end

131   (1) The financial year end of a financial institution, incorporated on or after September 15, 1990, is December 31.

(2) If, immediately before September 15, 1990, the financial year end of a financial institution is a date other than December 31, the financial institution may change its financial year end to December 31, but not to another date.

(3) If, in any 12 month period, every credit union acting in concert with every other credit union adopts by special resolution the same date other than December 31 as its financial year end, then despite subsections (1) and (2), the financial year end of every credit union is changed to that date.

(4) Despite subsections (1) and (2), a financial institution may change its financial year end to October 31, if approved by the superintendent.

Records filed with registrar

132   The superintendent must file with the registrar a copy of

(a) every business authorization,

(b) any conditions attached to a business authorization or any modification of such conditions,

(c) an order under section 249 revoking a business authorization, and

(d) an order of the Supreme Court under section 251 appointing a receiver, a receiver manager or a trustee,

within 10 days after the business authorization is issued, the conditions are attached or modified or the order is made.

Location of records

133   (1) A financial institution must maintain facilities that the superintendent considers satisfactory by which the superintendent may obtain access to,

(a) if the financial institution is authorized to carry on deposit business, a record of all depositors, their names and addresses as far as is known and the sums deposited by the depositors,

(b) if the financial institution is authorized to carry on trust business, full and adequate records relating to the trust business of the financial institution,

(c) a record of all loans and investments made by the financial institution, and

(d) if the financial institution is authorized to carry on insurance business,

(i) a record of contracts of insurance in which the financial institution is an insurer, and

(ii) a record of all contracts of reinsurance and reinsurance treaties in which the financial institution is an insured or insurer.

(2) and (3) [Repealed 2004-48-65.]

Repealed

134   [Repealed 2004-48-66.]

Division 4 — Investments and Lending of Financial Institutions

Investment and loan committee

135   The directors of a financial institution must appoint or elect at the directors' first meeting following each annual general meeting, a committee, to be known as the investment and loan committee, composed of not fewer than 3 individuals, of which

(a) at least one member must be an officer,

(b) a majority of the members must not be officers or employees of the financial institution or of an affiliate of the financial institution, and

(c) in the case of a trust company or insurance company, not less than 1/3 of the members must be unaffiliated directors,

to hold office until the next annual general meeting.

Investment and loan standards

136   (1) For the purposes of this section and section 137, "prudent standards" are those that, in the overall context of an investment and loan portfolio, a prudent person would apply to investments and loans made on behalf of another person to whom there is owed a fiduciary duty to make investments without undue risk of loss and with a reasonable expectation of a fair return on the investments.

(2) A financial institution and any subsidiary of the financial institution must adhere to prudent standards in making investment and lending decisions, in giving guarantees and committing itself to other financial obligations, in writing down the value of investments and loans on its books and in managing its investments and loans.

(3) The investment and loan committee of a financial institution

(a) must recommend to the directors of the financial institution for their approval a written investment and lending policy that, for the financial institution and its subsidiaries, if any, the committee considers to

(i) be consistent with prudent standards,

(ii) comply with the regulations under subsection (5) and with sections 138 to 142,

(iii) be comprehensive in addressing all aspects of risk associated with the investments and loans of the financial institution, and

(iv) include mechanisms for measuring, limiting and managing risk, and

(b) as the committee or the directors consider necessary, and at least annually, must review the investment and lending policy and recommend amendments that the committee considers to be necessary or desirable.

(4) If the directors of the financial institution receive a recommendation under subsection (3), the financial institution must

(a) adopt the recommendation and establish the recommended policy, or the recommended amendments to that policy as part of the investment and lending policy of the financial institution and of its subsidiaries, if any, or

(b) make changes to the proposed policy or to the proposed amended policy that it considers to be necessary or desirable, and establish the policy, with those changes, as the investment and lending policy of the financial institution and of its subsidiaries, if any.

(5) A financial institution must ensure that the investment and lending policy established under subsection (4) contains the prescribed requirements.

(6) A financial institution must file with the superintendent a copy of the investment and lending policy established under subsection (4).

Superintendent's powers over investment and lending policy

137   If the superintendent believes on reasonable grounds that the investment and lending policy established under section 136 (4)

(a) is inconsistent with prudent standards,

(b) is not in compliance with regulations under section 136 (5) and with sections 138 to 142,

(c) is not comprehensive in addressing all aspects of risk associated with the investments and loans of the financial institution, or

(d) does not include mechanisms for measuring, limiting and managing risk,

the superintendent may order the directors of the financial institution to review immediately the investment and lending policy and must specify in the order the grounds under paragraph (a), (b), (c) or (d).

Compliance with investment and lending limits

138   (1) A financial institution and any subsidiary of the financial institution must not make investments or loans other than ones that,

(a) subject to section 140, are within the limits, if any, prescribed for the purpose of this section,

(b) subject to section 140, are in accordance with the conditions, if any, prescribed for the purposes of this section,

(c) are consistent with the investment and loan policy established under section 136 (4) by the financial institution, and

(d) subject to sections 140 and 141 (2), will not result in the financial institution, or any of its subsidiaries, or any combination of the financial institution and its subsidiaries, acquiring, holding or controlling, whether directly or indirectly,

(i) more than 10% of the voting shares in a corporation, or

(ii) more than a 10% interest in any entity.

(2) and (3) [Repealed 2019-39-24.]

Credit unions not permitted to invest in other credit unions

139   A credit union that is not a central credit union must not

(a) make a loan to or guarantee indebtedness of, or

(b) invest in equity shares issued by

another credit union that is not a central credit union.

Other authorized loans, investments and activities of subsidiaries

140   Section 138 (1) (a), (b) or (d) does not apply in respect of a prescribed type of loan or investment made in accordance with the regulations or a prescribed type of business or activity carried on by a subsidiary of a financial institution.

Investment in a corporation

141   (1) In this section, "venture capital corporation" means a corporation the activities of which are limited to

(a) the provision of financing and loans to entities in circumstances that involve the corporation in the holding of equity and debt security instruments of the entities being financed, and

(b) the provision of financial or management consulting services to entities whose security instruments have been acquired by the corporation that provides the services in a manner described in paragraph (a) or that participates in the provision of those services in contemplation of so acquiring security instruments.

(2) Section 138 (1) (d) does not apply if a financial institution directly or indirectly acquires, holds or controls

(a) more than 10% of the voting shares in a corporation that carries on, or more than a 10% interest in another type of entity that carries on, one or more of a prescribed type of business or activity,

(b) more than 10% of the voting shares in a venture capital corporation, or

(c) subject to first receiving the written consent of the superintendent and to any conditions that the superintendent in giving the consent may impose, more than 10% of the voting shares in a corporation that carries on a business that is reasonably ancillary to the business of a financial institution.

(3) [Repealed 2004-48-70.]

Other authorized investments

142   (1) Subject to subsection (2), a financial institution or a subsidiary of a financial institution may acquire assets that it would not otherwise be permitted to acquire under this Division,

(a) subject to first receiving the consent of the superintendent, in payment or part payment for security instruments sold by the financial institution or the subsidiary,

(b) subject to first receiving the consent of the superintendent, under an arrangement in good faith for the reorganization of a corporation whose security instruments were previously owned by the financial institution or the subsidiary,

(c) subject to first receiving consent of the superintendent, on amalgamation with another corporation of a corporation whose security instruments were previously owned by the financial institution or the subsidiary,

(d) for the purpose in good faith of protecting investments of the financial institution or the subsidiary,

(e) in the case of a trust company or an insurance company, on an amalgamation referred to in section 20 or on the company doing any of those things described in section 21, or

(f) by realizing on the security for a loan if the security is shares in a corporation and the effect of realizing on the security is that the financial institution or the subsidiary will hold, directly or indirectly, more than 10% of the voting shares in a corporation not described in section 141 (2).

(2) If a financial institution has acquired assets in accordance with subsection (1), it must dispose of them within 5 years after their acquisition unless the superintendent extends the time by order made before the time expires.

Disposal of investments

143   The superintendent may order a financial institution to dispose of and realize on, within a period specified by the superintendent, an investment or loan made in contravention of a provision of this Part.

Loans and guarantees prohibited

143.1   (1) A trust company or an insurance company must not give financial assistance to a person, directly or indirectly, by way of loan, guarantee, the provision of security, or otherwise,

(a) if at the time of the giving of financial assistance the trust company or insurance company is insolvent, or

(b) if, in the case of a loan, the giving of the loan would render the trust company or insurance company insolvent.

(2) On the application of a director of a trust company or an insurance company, the court may declare whether the giving of financial assistance by the trust company or insurance company would contravene subsection (1).

Financial assistance restricted

143.2   (1) A trust company or an insurance company must not give financial assistance to a person, directly or indirectly, by way of loan, guarantee, the provision of security, or otherwise,

(a) for the purpose of a purchase or subscription made or to be made by that person of, or for, shares of the trust company or insurance company, or any debt obligations of the trust company or insurance company carrying a right of conversion into or exchange for shares of the trust company or insurance company,

(b) on the security, in whole or in part, of a pledge of or charge on shares of the trust company or insurance company given by that person to the trust company or insurance company, or

(c) in any other case, unless there are reasonable grounds for believing that, or the directors are of the opinion that, the giving of the financial assistance is in the best interests of the trust company or insurance company.

(2) Despite subsection (1), a trust company or an insurance company, if previously authorized by special resolution and if there are reasonable grounds for believing that the giving of the financial assistance is in the best interests of the trust company or insurance company, may

(a) provide money, in accordance with a scheme for the time being in force, for the subscription for or purchase of shares or debt obligations of the trust company or insurance company by trustees, to be held by or for the benefit of a bona fide employee of the trust company or insurance company or of an affiliate of the trust company or insurance company, and

(b) provide financial assistance to bona fide full time employees of the trust company or insurance company, or of an affiliate, to enable the employees to purchase or subscribe for shares or debt obligations of the trust company or insurance company to be held beneficially by the employees.

(3) Despite subsection (1), financial assistance may be given to or for the benefit of

(a) a wholly owned subsidiary by its holding company,

(b) its holding company by a wholly owned subsidiary,

(c) a company by another company, if both companies are wholly owned subsidiaries of the same holding company or are wholly owned by the same person, and

(d) the sole member of a company, by that company.

Contract enforceable

143.3   Despite a contract to which a trust company or an insurance company is a party being made in contravention of section 143.1 or 143.2, a bona fide lender for value without notice, or the trust company or insurance company, may enforce the contract.

Part 5 — Related Parties

Interpretation and designation of related parties

144   (1) In this Part, a "related party" of a financial institution means a person who

(a) is a director or senior officer of the financial institution or of the holding company of the financial institution or is acting in a similar capacity in respect of an unincorporated entity that controls the financial institution,

(b) is a member of a prescribed class of employees of the financial institution or the holding company of the financial institution,

(c) owns directly 10% or more of the non-voting shares in the financial institution, not counting any non-equity shares in the case of a credit union,

(d) owns or controls, directly or indirectly, 10% or more of any class of voting shares in the financial institution,

(e) is a sole practitioner who is an auditor of the financial institution,

(f) is actively engaged in auditing the financial institution and is a partner in a partnership that is an auditor of the financial institution,

(g) is the spouse of an individual who is a related party under paragraph (a), (b), (c), (d) or (j) or under subsection (2),

(h) is a child who is less than 18 years of age of an individual who is a related party under paragraph (a), (b), (c), (d) or (j) or under subsection (2),

(i) is a corporation in which a person who is a related party under paragraph (a), (b), (c), (d) or (j) or under subsection (2) has or controls, directly or indirectly, more than 50% of the votes that are attached to the outstanding voting shares of the corporation and that may be cast in the election of the directors, or

(j) is designated under subsection (3) as a related party,

but does not include,

(k) when used in relation to a credit union, a central credit union or an entity that is designated by regulation, or

(l) when used in relation to a central credit union,

(i) a member of the central credit union,

(ii) a cooperative credit society incorporated under the Cooperative Credit Associations Act (Canada), or

(iii) an entity that is designated by regulation, and a member or shareholder of that entity.

(2) An individual who, having been a related party under subsection (1) (a), (b), (c), (d) or (j) of a financial institution, ceases to be a related party under that subsection nevertheless continues for the purposes of this Part to be a related party of the financial institution for the 12 months commencing on the date the individual ceases to be a related party as defined in subsection (1) (a), (b), (c), (d) or (j).

(3) For the purposes of this Part, the superintendent by order may

(a) designate a person as a related party of a financial institution if in the superintendent's opinion there exists between the person and the financial institution an interest or relationship that might reasonably be expected to affect the exercise of the best judgment of an officer or director of the financial institution with respect to an investment, loan or other transaction, or

(b) designate a person as a related party of the financial institution if in the superintendent's opinion the person is acting in concert with one or more other persons to own or control, directly or indirectly, 10% or more of any class of voting shares in the financial institution.

When related party transactions are permitted

145   A financial institution or a subsidiary of it may enter into the following transactions with related parties:

(a) pay or confer a salary, fee, stock option, pension, benefit or incentive benefit to a director or senior officer of the financial institution, or to a person who is in the class of employees prescribed for the purpose of section 144 (1) (b) or designated under section 144 (3);

(b) provide to related parties of the financial institution, at not less than fair market value, services or products that the financial institution or the subsidiary also provides in the ordinary course of its business to the public or, in the case of a credit union, to its members;

(c) if the aggregate amount outstanding under all loans to an individual who is a related party of the financial institution will not exceed the prescribed amount, counting the amount of the intended loan, make a loan to an individual who is a related party of the financial institution under paragraph (a) or (b) of the definition of "related party" in section 144;

(d) buy from, or sell to, a related party of the financial institution, for a nominal amount, as defined in the regulations, property or services having a fair market value that does not exceed that nominal amount.

Conduct review committee's power to approve other transactions

146   (1) Except for a transaction that is described in section 145 or that is the subject of a consent under section 147, a financial institution or a subsidiary of it must not enter into a transaction with a related party of the financial institution unless the transaction, at the time it is entered into, is

(a) a specific transaction, or

(b) in a class of transactions

approved in writing for the purpose of this section by the conduct review committee of the financial institution.

(2) The conduct review committee of a financial institution must not approve a specific transaction or class of transactions for the purpose of this section unless the specific transaction or class of transactions is in the best interests of the financial institution or, if entered into by a subsidiary of it, in the best interests of both the financial institution and the subsidiary.

(3) The conduct review committee must specify in the written approval referred to in subsection (1) the factors considered by it in determining whether the specific transaction or the class of transactions is in the best interests of the financial institution or the financial institution and its subsidiary, as the case may be, and the factors considered must include

(a) the fair market value of the consideration paid by or received by the financial institution or the subsidiary,

(b) the nature of the transaction in relation to the usual business of the financial institution or the subsidiary,

(c) in the case of a transaction involving a loan by the financial institution or the subsidiary, the nature of the security and its value in relation to the principal amount of the loan, and

(d) prescribed factors.

When superintendent may consent to related party transactions

147   (1) A financial institution or a subsidiary of it may enter into a transaction with a related party of the financial institution if the transaction, at the time it is entered into, is

(a) a specific transaction, or

(b) in a class of transactions

consented to by the superintendent.

(2) The superintendent may give a consent under subsection (1) if satisfied that the specific transaction or that any transaction in the class of transactions, as the case may be,

(a) is not and will not be contrary to the interests of

(i) the financial institution or the subsidiary or both, as the case may be,

(ii) depositors or policy holders of the financial institution,

(iii) any persons for whom the financial institution acts in a fiduciary capacity, or

(iv) the related party, and

(b) does not, will not and is not intended to obscure the financial condition of the financial institution, of the subsidiary or of the related party.

Restrictions on self dealing as a fiduciary

148   (1) Except as provided in this section, a financial institution that holds money as a fiduciary must not

(a) invest that money in securities issued by the financial institution or by a related party of it, or

(b) use that money in any transaction with a related party of the financial institution.

(2) A financial institution may act as a fiduciary in one or more trusts or estates in which there are securities issued by the financial institution or a related party of the financial institution if the securities were

(a) acquired by the person for whom the financial institution acts as a fiduciary, or

(b) held in the trust or estate before the financial institution assumed responsibility as a fiduciary.

(3) If a financial institution acts as a fiduciary in one or more trusts or estates in which securities are held that were issued by the financial institution or by a related party of it, the financial institution must not sell or vote the securities or refuse an offer for them without first receiving the written approval of the conduct review committee and that committee must enter the reasons for the sale, vote or refusal in its minutes.

(4) The conduct review committee at least annually must provide a written report to the directors of the financial institution on securities that have been

(a) issued by the financial institution or by a related party of it, and

(b) held in a trust or estate by the financial institution as a fiduciary

during its immediately preceding financial year and the conduct review committee in the report must give the reasons for any approvals given or denied under subsection (3) during that financial year.

(5) Even though subsection (1) would otherwise prohibit it from doing so, a financial institution or a related party of it may

(a) carry out an express or a specific permission or a direction that is

(i) made by a court, or

(ii) contained in an instrument creating a fiduciary duty

(A) to purchase or sell securities of the financial institution or of the related party, or

(B) to enter into a transaction with the financial institution or a related party of the financial institution, as the case may be,

(b) if the financial institution or related party does so as a fiduciary, make an investment in a bond, note or other evidence of indebtedness that is issued by the financial institution or by the related party, as the case may be, and for which there is a published market, or

(c) if the financial institution or related party does so as a fiduciary, make an investment or enter into a transaction in which one or more co-fiduciaries of the financial institution or related party can direct and has or have directed that the investment or transaction be made without the agreement of the financial institution or related party.

Disclosure by related parties

149   (1) Where, in respect of any proposed transaction of the financial institution or its subsidiary, a financial institution has reason to believe that the other party to the transaction is a related party of the financial institution, the financial institution must take all reasonable steps to obtain from the other party full disclosure, in writing, of an interest or relationship, direct or indirect, that would make the other party a related party of the financial institution.

(2) A financial institution and a director, officer, employee or agent of the financial institution may, if acting reasonably, rely on the information contained in a disclosure received by the financial institution in accordance with subsection (1) or information otherwise acquired in respect of a matter that might be the subject of the disclosure and no action or proceeding lies against the financial institution or a director, officer, employee or agent for anything done or omitted in good faith in reliance on the information, including without limitation, an action or proceeding under section 150 or 151.

(3) The disclosure referred to in subsection (1) of this section must not be relied on under subsection (2) of this section unless it is evidenced in a consent resolution, the minutes of a meeting or another record deposited in the financial institution's records office.

Voidable transactions

150   (1) If

(a) a financial institution or its subsidiary, director, senior officer or employee fails to comply with this Part, or

(b) a transaction that is prohibited under this Part takes place,

the financial institution or superintendent may apply to the Supreme Court for an order setting aside the transaction.

(2) On application under subsection (1), the Supreme Court may make any order it thinks fit, including, instead of or in addition to an order setting aside the transaction,

(a) an order that a person

(i) account for a profit or gain realized in the transaction,

(ii) pay to the financial institution or a subsidiary of a financial institution any damages suffered by the financial institution or the subsidiary in the transaction, or

(iii) pay to the financial institution or the subsidiary any amount

(A) paid by the financial institution or the subsidiary,

(B) lent by the financial institution or the subsidiary, or

(C) expended by the financial institution or the subsidiary in the transaction,

(b) an order for compensation for loss or damage suffered, and

(c) an order awarding punitive or exemplary damages against any person.

(3) A person is not liable in a proceeding under this section unless the person knew or reasonably ought to have known that the transaction was made in contravention of this Part.

Derivative action

151   (1) If an action is brought under section 232 of the Business Corporations Act or section 84.4 of the Credit Union Incorporation Act in relation to a transaction that is prohibited under this Part, the powers of the Supreme Court include the power to make an order that a person who authorizes, acquiesces in, participates in or facilitates the transaction pay to the financial institution or a subsidiary of a financial institution any

(a) damages suffered by the financial institution or the subsidiary,

(b) amount paid by the financial institution or the subsidiary in the transaction,

(c) amount lent by the financial institution or the subsidiary, or

(d) amount expended by the financial institution in the transaction.

(2) If a transaction that is prohibited under this Part is made or entered into, the right to bring an action conferred on a complainant by section 232 (2) (a) and (b) of the Business Corporations Act or section 84.4 (2) (a) and (b) of the Credit Union Incorporation Act is deemed also to be conferred on the superintendent.

Liability arising from related party transactions

152   (1) A person who authorizes, acquiesces in, participates in or facilitates a transaction that is prohibited under this Part is liable in an action brought under section 232 of the Business Corporations Act or section 84.4 of the Credit Union Incorporation Act, jointly and severally with every other person who authorizes, acquiesces in, participates in or facilitates the prohibited transaction.

(2) A person is not liable in an action brought under section 232 of the Business Corporations Act or section 84.4 of the Credit Union Incorporation Act unless the person knew or reasonably ought to have known that the transaction was made in contravention of this Part.

Burden of proof

153   If a question arises in civil proceedings as to whether a financial institution, a subsidiary of a financial institution or a related party of a financial institution has, in acting under this Part, acted in compliance with the requirements of this Part, the burden of proof that it acted in compliance with the Part is on the financial institution, the subsidiary or the related party, as the case may be.

Reporting by auditor

154   If an auditor of a financial institution has made a report to the directors of a financial institution under section 123 (1) (c), and the report discloses a breach of a provision of this Part, the auditor must also immediately report the matter in writing to the superintendent.

Repealed

155-156   [Repealed 2004-48-71.]

Part 6 — Regulation of Other Persons

Division 1 — Extraprovincial Corporations

Definition of "primary jurisdiction"

157   In this Part, "primary jurisdiction",

(a) in relation to an extraprovincial corporation that is licensed, registered or authorized to do business under law enacted by the Parliament of Canada, means Canada, and

(b) in relation to an extraprovincial corporation whose primary jurisdiction is not Canada and that is

(i) incorporated or continued, and

(ii) licensed, registered or authorized to do business

under law enacted by a province or another jurisdiction, means that province or that other jurisdiction, as the case may be.

Application of this Division

158   (1) Sections 33, 63, 64, 66, 67 (1), (2.1) and (2.2), 79, 91, 92.2 to 94.3, 96, 130, 201.4, 209.1, 211, 213 to 216.1, 218 to 218.2, 244 to 246, 249, 250, 252 (3), (5) and (6) and 253.1 to 253.3 apply to and in respect of an extraprovincial corporation.

(2) In addition to the sections referred to in subsection (1), sections 65, 86, 210, 247 and 259 apply to and in respect of an extraprovincial corporation, except for an extraprovincial corporation whose primary jurisdiction is Canada.

(3) In addition to the sections referred to in subsection (1), sections 67 (2) and 136 (1) and (2) apply to and in respect of the following:

(a) an extraprovincial corporation whose primary jurisdiction is not Canada or a province;

(b) an extraprovincial corporation whose primary jurisdiction is a province that is not designated under subsection (5) for the purposes of this section in respect of that type of extraprovincial corporation.

(4) For the purposes of subsections (1) to (3), references in the sections referred to in those subsections

(a) to "trust company" must be read as including "extraprovincial trust corporation",

(b) to "insurance company" must be read as including "extraprovincial insurance corporation",

(c) to "credit union" must be read as including "extraprovincial credit union", and

(d) to "financial institution" must be read as including "extraprovincial corporation".

(5) The Lieutenant Governor in Council by regulation may designate a province for the purposes of this section and of section 160 in respect of a specified type of extraprovincial corporation and, in determining whether to make such a designation, the Lieutenant Governor in Council may have regard to whether

(a) legislation similar to this Act has been enacted by the legislature of the province concerned, and

(b) the province concerned has adequate administrative, inspection, audit and compliance procedures and is adequately applying those procedures.

(6) Nothing in this Division affects the applicability to an extraprovincial corporation of a provision that is contained in any other section of this Act or in the regulations or the rules made by the Authority and that is of

(a) specific application to an extraprovincial corporation, or

(b) general application.

Authorized business

159   (1) An extraprovincial corporation must not carry on trust business, deposit business or insurance business in British Columbia unless it has a business authorization.

(2) A business authorization issued to an extraprovincial trust corporation

(a) must be confined to trust business, or

(b) in respect of an extraprovincial trust corporation whose primary jurisdiction is Canada, may authorize both trust business and deposit business provided that the extraprovincial trust corporation maintains prescribed deposit insurance

and does not authorize insurance business.

(3) Despite subsection (2), a business authorization issued to an extraprovincial trust corporation other than an extraprovincial trust corporation referred to in subsection (2) (b), before the date this section comes into force, that authorizes deposit business, or trust business and deposit business, remains in effect, subject to the maintenance by the extraprovincial trust corporation of prescribed deposit insurance, and to

(a) a subsequent surrender of the business authorization or an amendment that removes its authorization to carry on deposit business,

(b) the suspension, revocation or cancellation of the business authorization, or

(c) a continuation or amalgamation of the extraprovincial trust corporation referred to in section 18 or 20 that does not, in the Authority's opinion and in its sole discretion, meet the prescribed criteria.

(4) A business authorization issued to an extraprovincial insurance corporation

(a) may be confined to

(i) general insurance business or life insurance business, or

(ii) one or more classes of insurance, or

(b) may authorize both general insurance business and life insurance business.

(5) A business authorization issued to an extraprovincial credit union

(a) may be confined to deposit business, or

(b) may authorize both trust business and deposit business.

Business authorization for extraprovincial trust or insurance corporation

160   (1) The following extraprovincial corporations may file with the superintendent an application for a business authorization, in the form established by the superintendent, in accordance with this section:

(a) an extraprovincial trust corporation whose primary jurisdiction is not Canada;

(b) an extraprovincial trust corporation whose primary jurisdiction is Canada;

(c) an extraprovincial insurance corporation whose primary jurisdiction is not Canada, or a province that is designated under section 158 (5) for the purposes of that section and this section in respect of extraprovincial insurance corporations;

(d) an extraprovincial insurance corporation whose primary jurisdiction is Canada, or a province that is designated under section 158 (5) for the purposes of that section and this section in respect of extraprovincial insurance corporations.

(2) [Repealed 2021-2-8.]

(3) The superintendent may issue a business authorization to an extraprovincial corporation referred to in subsection (1) (a) or (c) if

(a) the corporation provides information in support of its application that is satisfactory to the superintendent,

(b) the superintendent is satisfied that the corporation has liquid assets and a capital base that

(i) is at least equal to the applicable minimum imposed under section 67, and

(ii) is adequate in relation to the business that the corporation proposes to carry on,

(c) the corporation provides

(i) financial statements in the form established by the superintendent that have been approved by a resolution of the directors, and

(ii) a report of the auditor of the corporation

that demonstrate the corporation is solvent and able to meet its obligations as shown by the financial statements submitted and accompanied by a report of the auditor and a copy of a resolution of the directors showing that the statements were approved by them,

(d) the corporation has a proposed plan of operations that is feasible,

(e) in the case of an extraprovincial insurance corporation, there is an insurance compensation plan designated by regulation for the purposes of section 66 (2) and the superintendent is satisfied that the corporation will not carry on a class of insurance business in respect of which insurance is offered under the plan unless the corporation is a member of the plan, and

(f) [Repealed 2021-2-8.]

(g) the superintendent is satisfied

(i) with the corporation's business record and past performance respecting deposit business, insurance business or trust business, and

(ii) that the corporation's operations in British Columbia will be conducted responsibly by persons with the competence and experience suitable for involvement in the operation of a financial institution.

(4) The superintendent must not issue a business authorization under subsection (3) if the superintendent believes on reasonable grounds that it is not in the public interest to issue the business authorization.

(5) Before issuing a business authorization to an extraprovincial corporation under subsection (3), the superintendent may

(a) conduct an investigation, and

(b) require the extraprovincial corporation to provide the superintendent with additional information, documents, verifications or forecasts of business operations

that the superintendent considers necessary for evaluation of the application.

(6) The superintendent must issue a business authorization to an extraprovincial corporation referred to in subsection (1) (b) or (d) if the corporation provides information in support of its application that is satisfactory to the superintendent.

Business authorization for extraprovincial credit union

160.1   (1) The following extraprovincial credit unions may file with the Authority an application for a business authorization, in the form established by the superintendent, in accordance with this section:

(a) an extraprovincial credit union whose primary jurisdiction is not Canada;

(b) an extraprovincial credit union whose primary jurisdiction is Canada.

(2) The Authority may issue a business authorization to an extraprovincial credit union referred to in subsection (1) (a) if

(a) the credit union meets the requirements of section 160 (3) (a) to (d) and (g), with all references to "superintendent" in that section to be read as references to "Authority", and

(b) the Authority is satisfied that, in the credit union's primary jurisdiction, a credit union from British Columbia could be authorized to carry on business as an extraprovincial corporation.

(3) The Authority must not issue a business authorization under subsection (2) if

(a) the Authority believes on reasonable grounds that it is not in the public interest to issue the business authorization, or

(b) the Authority has not received the consent of the deposit insurance corporation.

(4) Section 160 (5) applies to the issuance of a business authorization under subsection (2) of this section, with all references to "superintendent" in section 160 (5) to be read as references to "Authority".

(5) [Not in force.]

(6) The Authority must issue a business authorization to an extraprovincial credit union referred to in subsection (1) (b) if the corporation provides information in support of its application that is satisfactory to the Authority.

Name

161   The power of the Authority or the superintendent under section 236 to impose conditions includes the power to impose as a condition of a business authorization issued to an extraprovincial corporation that it use "Caisse Populaire", "Credit Union", "Trust", "TrustCo", "Deposit", "Insurance" or other prescribed words as part of the name in which it carries on business in British Columbia.

Records

162   An extraprovincial corporation to which a business authorization has been issued must maintain facilities that the superintendent considers satisfactory by which the superintendent may obtain access to,

(a) if the extraprovincial corporation is authorized to carry on deposit business, a record of all persons whose money is deposited with the extraprovincial corporation, showing the names and addresses of those persons and the amount deposited by or on behalf of each,

(b) if the extraprovincial corporation is authorized to carry on trust business, full and adequate records respecting the fiduciary activities carried on by the extraprovincial corporation,

(c) a record of all loans and investments made by the extraprovincial corporation, and

(d) if the extraprovincial corporation is authorized to carry on insurance business,

(i) a record of contracts of insurance in which the extraprovincial corporation is an insurer, and

(ii) a record of contracts of reinsurance and reinsurance treaties in which the extraprovincial corporation is an insurer or insured.

Filings

163   (1) Subject to subsection (2), within 90 days after the end of its financial year in each year, an extraprovincial corporation must file with the superintendent a return in the form established by the superintendent outlining its financial condition and affairs during that financial year and must attach to the return

(a) a copy of any financial statements for that financial year of the extraprovincial corporation and of any auditor's report on them that must be filed with the proper authority in the primary jurisdiction of the extraprovincial corporation, and

(b) if the extraprovincial corporation is a subsidiary of another corporation, a copy of any annual financial statements for that financial year of that other corporation and of any auditor's report on them.

(2) An extraprovincial insurance corporation must, within 60 days after the end of its financial year in each year, file with the superintendent a return referred to in subsection (1).

(3) At intervals specified by the superintendent, an extraprovincial corporation must file with the superintendent one or more of the following reports as specified, and in the form established, by the superintendent:

(a) a financial affairs report;

(b) a market conduct practices report;

(c) a risk management practices report;

(d) a corporate governance report.

(4) For the purposes of subsection (3), the superintendent may specify different intervals for extraprovincial credit unions, extraprovincial insurance corporations and extraprovincial trust corporations.

(5) The superintendent may require an extraprovincial insurance corporation to file with the administrator of a national database of market conduct, with whom the Authority has entered into an agreement under section 219.01, a market conduct practices report

(a) instead of filing such a report with the superintendent under subsection (3), or

(b) if so directed by the superintendent, in addition to filing such a report with the superintendent under subsection (3).

Requirement for notice of regulatory action outside British Columbia

164   (1) If

(a) an extraprovincial corporation, pursuant to extraprovincial legislation, enters into a program of voluntary compliance similar to a voluntary compliance agreement referred to in section 244,

(b) an extraprovincial corporation is the subject of an order similar to an order referred to in section 244, 245, 247 or 251,

(c) an extraprovincial corporation, pursuant to extraprovincial legislation, is the subject of an investigation or an inquiry,

(d) under extraprovincial legislation, conditions or restrictions are placed on the licence, registration or business authorization of an extraprovincial corporation,

(e) an extraprovincial corporation is placed under the control of a public official,

(f) an extraprovincial corporation's licence, registration or business authorization, issued pursuant to extraprovincial legislation, is suspended or revoked,

(g) an extraprovincial corporation has been convicted of an offence in Canada or another jurisdiction arising from a transaction, business or course of conduct related to financial services, or

(h) an extraprovincial corporation has been found by a regulator in Canada or another jurisdiction to have contravened the laws of that jurisdiction respecting financial services,

the extraprovincial corporation must inform the superintendent immediately in writing of that fact.

(2) If the superintendent receives information under subsection (1) (a), (b), (c) or (d), then

(a) the superintendent by order under section 236 may impose conditions on the business authorization issued to the extraprovincial corporation under this Act, and

(b) the superintendent may require the extraprovincial corporation to file with the superintendent within a time the superintendent requires documents that the superintendent considers relevant to the situation disclosed by that information.

(3) If the superintendent receives information under subsection (1) (e) or (f), the superintendent must take action under section 249.

Examination of extraprovincial corporations

165   (1) At any time the superintendent may conduct an examination or cause a person acting under the superintendent's direction to conduct an examination of the condition and affairs of an extraprovincial corporation.

(2) On an examination under this section, the superintendent or other person must make reasonable inquiries respecting

(a) the extraprovincial corporation's condition and ability to meet its obligations as and when they become due,

(b) the adequacy of the extraprovincial corporation's business and financial practices and of its management procedures and standards, and

(c) compliance with

(i) any order made under this Act,

(ii) a condition under which a consent under this Act is given, or

(iii) a condition of its business authorization.

(3) The superintendent or other person may conduct an examination under this section at the principal place of business and at any office of the extraprovincial corporation or of any affiliate of the extraprovincial corporation.

(4) Instead of making an examination under this section, the superintendent may accept and rely on a report made by an official of the primary jurisdiction of the extraprovincial corporation.

Amalgamation of extraprovincial corporations

166   (1) If an extraprovincial corporation authorized under this Part to carry on business in British Columbia amalgamates with one or more extraprovincial corporations, all of which are authorized under this Part to carry on the same kind of business in British Columbia as the first extraprovincial corporation, it must file with the superintendent

(a) the written consent to the amalgamation from the appropriate official of the corporation's primary jurisdiction, and

(b) any other documents or information required by the superintendent,

and the superintendent must issue the appropriate business authorization for which the amalgamated extraprovincial corporation would qualify under this Part.

(2) An amalgamated corporation referred to in subsection (1) may carry on business, as directed by the superintendent, under the existing business authorization issued with respect to one of the amalgamating corporations until the superintendent has issued the amalgamated corporation a new business authorization under subsection (1).

(3) If an extraprovincial corporation authorized under this Part to carry on business in British Columbia amalgamates with one or more extraprovincial corporations, one or more of which are not authorized under this Part to carry on the same kind of business in British Columbia as the first extraprovincial corporation, it must file with the superintendent

(a) the written consent to the amalgamation from the appropriate official of the corporation's primary jurisdiction, and

(b) any other documents or information required by the superintendent.

(4) On receipt of the written consent, documents and information required under subsection (3), the superintendent may

(a) issue the appropriate business authorization for which the amalgamated extraprovincial corporation would qualify under this Part, or

(b) direct the amalgamated corporation referred to in subsection (3) to apply for a business authorization.

(5) The superintendent must not issue a business authorization under subsection (4) (a) if the superintendent believes on reasonable grounds that it is not in the public interest.

(6) An amalgamated corporation referred to in subsection (3) may continue to carry on business, as directed by the superintendent, under the existing business authorization issued with respect to one of the amalgamating corporations until a new business authorization has been

(a) issued to the amalgamated corporation by the superintendent, or

(b) refused by the superintendent.

(7) If the superintendent has refused an application from an extraprovincial corporation for a business authorization referred to in subsection (4) (b), the extraprovincial corporation may carry on business under its existing business authorization only to the extent permitted by section 249 (8) as it applies for the purposes of this Part.

Notice of ceasing business

167   An extraprovincial corporation that has a business authorization must give 30 days' advance notice in writing to the superintendent of

(a) any action it takes that is intended to lead to it being wound up voluntarily, or

(b) ceasing to carry on business in British Columbia.

Division 2 — Insurance Agents and Adjusters

Definitions for Division

168   In this Division, unless the context otherwise requires,

"act", when used as a verb, includes offering or undertaking to act and holding oneself out;

"applicant" means a person applying for a licence, or an amendment of a licence or a transfer of a licence;

"insurance adjuster" means a person who makes an adjustment or settlement of a claim under a contract of insurance other than a contract of marine insurance;

"insurance agent" means a person, other than an insurance company or an extraprovincial insurance corporation, who solicits, obtains or takes an application for insurance, or negotiates for or procures insurance, or signs or delivers a policy, or collects or receives a premium;

"insurance salesperson" means an individual who is employed by an insurance agent or by an insurer to solicit, obtain or take an application for general insurance, or to negotiate for or procure general insurance, or to collect or receive a premium for general insurance;

"licence" means a licence issued under this Division;

"licensee" means a person licensed under this Division.

Exercise of rights under licence

169   (1) A person other than

(a) the licensee,

(b) a person named in the licence as a nominee of the licensee, or

(c) an individual to whom the rights and privileges under the licence have been delegated under subsection (2)

must not exercise the rights and privileges conferred by a licence.

(2) If the insurers that a licensee represents first give written consent to the delegation, a licensee who is an individual and who

(a) carries on business as a licensee at more than one office, and

(b) is unable through illness or absence or for other good cause to conduct business as a licensee in person

may delegate the rights and privileges conferred by the licence to a qualified individual approved by the council and must deliver the licence to the council to be amended accordingly.

Nominees

170   A partnership or corporation must nominate an individual who is a licensed insurance agent or licensed insurance adjuster approved by the council to exercise on behalf of the partnership or corporation the rights and privileges conferred by the licence.

Prohibition of unlicensed agents and salespersons

171   (1) [Repealed 2004-48-79.]

(2) A person must not act in British Columbia as an insurance agent or insurance salesperson unless the person is licensed as an insurance agent or insurance salesperson, as the case may be.

(3) Subsection (2) does not apply to a person or class of persons exempted by the regulations.

Repealed

172-173   [Repealed 2004-48-80.]

Issue of licences

174   (1) An applicant must deliver to the council an application that fulfills the requirements of the rules of the council.

(2) A licence issued by the council

(a) must be issued in accordance with the rules of the council,

(b) must be issued for one or more prescribed classes of insurance and state the class of insurance in respect of which the licensee is authorized to act, and

(c) authorizes the licensee to act in accordance with the licence and its terms, conditions or restrictions, if any, unless the licence is suspended or cancelled under section 225.1 (2) (i) or 231.

(3) Before issuing a licence to an applicant or consenting to a transfer of a licence, the council may

(a) conduct an investigation, and

(b) require the applicant to provide the council with additional information, documents or verification that the council considers necessary for evaluation of the application.

Repealed

175   [Repealed 2004-48-80.]

Insurance applications to be accepted only from holders of licences

176   Subject to section 171 (2), an insurer must not make a contract of insurance or issue or deliver a policy unless the application for the insurance is

(a) made by the person to be insured or by an agent of that person, or

(b) is received by or from an insurance agent licensee.

Selling offences

177   A life insurance agent licensee must not

(a) induce an insured to lapse, forfeit or surrender for cash, or for paid up or extended insurance, or for other valuable consideration, the insured's contract of life insurance with one insurer in order to effect a contract of life insurance with another insurer, except in accordance with regulations made under section 289 (4) (d) and (e),

(b) make any false or misleading statement or representation in the solicitation or negotiation of insurance, or

(c) coerce a prospective buyer of life insurance through the influence of a business or a professional relationship or otherwise to give a preference in respect of the placing of life insurance that would not otherwise be given in the effecting of a life insurance contract.

Payment of commission to unlicensed agents prohibited

178   (1) An insurer, officer, agent or employee of an insurer, insurance agent or insurance salesperson must not pay or allow to be paid, or offer or promise, a commission or compensation to a person who is not an insurance agent licensee or insurance salesperson licensee

(a) for acting as an insurance agent or insurance salesperson in British Columbia,

(b) for referring business in relation to the insurance of a strata corporation within the meaning of the Strata Property Act, or

(c) for any other prescribed purposes.

(2) An insurance agent licensee may pay a fee or a portion of a commission to another insurance agent licensee in respect of business referred to that licensee.

(3) Despite subsection (1), an insurer, officer, agent or employee of an insurer, insurance agent or insurance salesperson may

(a) pay or allow to be paid, or

(b) offer or promise

a commission or compensation to a person or class of persons prescribed by regulation.

Persons who may negotiate settlement of personal injury claim

179   (1) A person other than a claimant must not

(a) negotiate, or solicit the right to negotiate on behalf of the claimant, or

(b) act as an investigator, consultant, advisor or adjuster for the claimant

respecting settlement of a claim for loss or damage because of bodily injury to or the death of any person.

(2) Subsection (1) does not apply to a person who

(a) performs an activity described in subsection (1) for free, or

(b) is a solicitor or an employee of one in the solicitor's regular practice of law.

Prohibition of unlicensed adjusters

180   (1) A person must not act in British Columbia as an insurance adjuster or as an employed insurance adjuster unless the person is licensed as an insurance adjuster or as an employed insurance adjuster, as the case may be.

(2) Subsection (1) does not apply to a person or class of persons exempted by the regulations.

Repealed

181-185   [Repealed 2004-48-80.]

Division 3 — Reciprocal Exchanges for Insurance

Interpretation

186   In this Division, "reciprocal exchange" means a group of persons the members of which agree to insure each other, to the extent and in the manner agreed on, under one or more contracts of reciprocal insurance, in consideration of each of the others entering into one or more of the contracts.

Permit for reciprocal insurance

187   (1) If persons proposing a reciprocal exchange

(a) file with the superintendent an application in the form established by the superintendent for a permit,

(b) pay the prescribed fee,

(c) satisfy the superintendent that they are able to meet and to continue to meet their contractual obligations pertaining to the proposed reciprocal exchange, and

(d) undertake to comply with any conditions imposed under section 236 (1) by the superintendent in respect of the permit,

the superintendent may issue a permit for the reciprocal exchange.

(2) After the issue of a permit under subsection (1), the members of the reciprocal exchange may

(a) enter into contracts of reciprocal insurance in British Columbia,

(b) solicit further such contracts,

(c) make inspections for the purpose of the contracts, and

(d) adjust or appraise losses under the contracts.

(3) If an application has been made under subsection (1), the superintendent may

(a) conduct an investigation, and

(b) require the members of the reciprocal exchange to provide the superintendent with information, documents, verifications or forecasts of business operations.

(4) It is a condition of a permit issued under subsection (1) that there be filed with the superintendent not later than March 31 in each year

(a) a return showing the premium income derived during the year ending the preceding December 31,

(b) an actuarial statement prepared by an actuary or other qualified person approved by the superintendent, and

(c) any other information the superintendent requires,

in respect of the reciprocal exchange.

(5) The members of the reciprocal exchange, whenever required to do so by the superintendent, must provide the names of persons entering into contracts, particulars of property insured, terms of policies, premiums and details of any reinsurance contracts entered into by the members of the reciprocal exchange.

(6) On its own motion or on application by a reciprocal exchange, the superintendent may amend or remove a condition of a permit issued under subsection (1).

(7) The superintendent may suspend or cancel a permit issued under subsection (1) for failure to comply with

(a) an order made under this Act, or

(b) a condition of a permit issued under subsection (1).

(8) Permits issued under this section in any calendar year expire at the end of March in the next calendar year and may be reissued by the superintendent.

(9) If conditions of a permit for a reciprocal exchange are prescribed under section 289 (3) (g), the conditions are applicable to and are conclusively deemed to be part of every permit for a reciprocal exchange, whether issued, or deemed to have been issued, before or after the coming into force of the regulation prescribing the conditions.

Division 4 — Mutual Fire Insurance Companies

Definition

188   In this Division, "mutual fire insurance company" has the same meaning as "mutual fire insurance company", or "mutual company", or "company" in the Mutual Fire Insurance Companies Act, R.S.B.C. 1960, c. 262, and includes a corporation that is designated as a mutual company for the purposes of this Division by a regulation made under section 289 (4) (p).

Application

189   (1) This Division and sections 1, 11, 59 (2) and (4), 61 (1) to (3) and (8) to (9), 62 to 64, 66, 67, 69, 70, 75 to 81, Division 6 of Part 3, sections 112, 127, 129, 130 to 133, 135 to 143, Part 5, Divisions 1 and 3 of Part 7, Part 8 and Part 10 apply to and in respect of a mutual fire insurance company as if the mutual fire insurance company were an insurance company as defined in section 1.

(2) Section 4 of the Business Corporations Act does not apply to a mutual fire insurance company.

Division 5 — Societies Engaged in Insurance

Definition of society

190   In this Division, other than section 197.1, "society" includes a society formed outside British Columbia.

Deemed business authorization for certain existing societies

191   A society that immediately before September 15, 1990

(a) was within a class described in section 286 (1) (a), (b) or (c) of the Insurance Act, R.S.B.C. 1979, c. 200, and

(b) was a corporation and licensed under the Insurance Act, R.S.B.C. 1979, c. 200,

is deemed to have a business authorization issued under this Division on September 15, 1990 authorizing the society to carry on insurance business, but only to the extent necessary to allow the society to exercise the powers it has on that date, and that it continues to have after that date, to

(c) make contracts of life insurance under which more than $400 may be paid,

(d) make contracts under which more than $400 may be paid by way of funeral benefit or relief, or

(e) undertake to pay benefits or render services in the event of accident, sickness or disability or by way of pensions or annuities and to carry out the undertakings.

Provisions applicable

192   (1) Sections 1, 11, 59, 62 to 64, 70, 75 to 81, Division 6 of Part 3, sections 112, 127, 129, 132, 133, 135 to 143, 159, Part 5, Divisions 1 and 3 of Part 7, Part 8 and Part 10 apply to and in respect of a society that, under section 191, is deemed to have a business authorization, as if the society were an insurance company as defined in section 1.

(2) Section 4 of the Business Corporations Act does not apply to a society referred to in subsection (1) of this section.

Certain other existing societies exempt

193   (1) Subject to subsections (2) and (3), sections 59 and 159 do not apply to a society described in paragraphs (a) to (g) below that, immediately before September 15, 1990, was carrying on the business of insurance:

(a) a society that has the power to make contracts of life insurance under which no more than $400 may be paid;

(b) a society that has the power to make contracts under which no more than $400 may be paid by way of funeral benefit or relief;

(c) a fraternal society as defined in section 37 of the Insurance Act or a branch of such a fraternal society;

(d) a society registered under an Act of Canada as a fraternal benefit society or a branch of such a society;

(e) a society

(i) that has the power to undertake to pay benefits or render services in the event of accident, sickness or disability or by way of pensions or annuities, and

(ii) that carries on its operations in a limited locality or whose membership is restricted to a certain class of persons;

(f) a society whose membership is restricted to employees of the same employer, including, if the employer is a corporation, any subsidiary of the employer;

(g) a society whose membership is restricted to municipal or government employees and that, immediately before September 15, 1990, was exempt from section 286 (1) of the Insurance Act, R.S.B.C. 1979, c. 200, because of section 286 (2) (d) of that Act.

(2) If the superintendent considers that the nature or extent of the business carried on by a society referred to in subsection (1) warrants it, the superintendent, by an order naming that society may

(a) direct that under section 61 or 160, whichever is appropriate, the society must file with the superintendent an application in the form established by the superintendent for a business authorization, and

(b) specify a date as the date on and after which section 59 or 159, whichever is appropriate, commences to apply to that society.

(3) On and after the date specified under subsection (2) (b) in an order made under subsection (2) of this section, section 59 or 159, as the case may be, applies to the society named in the order.

When society not entitled to receive business authorization

194   Despite

(a) section 61 (3) and (8), as applicable to a society because of section 193 (3), or

(b) section 160 (1) to (3) as applicable either because of section 193 (3) or otherwise to a society that is an extraprovincial corporation,

the superintendent must not issue to a society a business authorization to carry on insurance business

(c) if the society has power to make a contract of life insurance with a person who is not a member,

(d) if the society does not have at least 75 members in good standing, except that the superintendent may issue a temporary business authorization if the number of members is less than 75,

(e) if the society operates for the acquisition of gain, or as a commercial or business enterprise, or by or for any person other than its members,

(f) if the society's property or funds are under the control of persons not periodically elected by the members, or are not held in the name of the society,

(g) if under the society's charter the amount of insurance money payable under a contract of life insurance made by it may depend in whole or in part on the number of its members at the date of the death of a member or on the payment by its members of any assessment levied in case of the death of a member,

(h) if in the case of a society incorporated in British Columbia the officers do not reside in British Columbia,

(i) if in the case of a society to which section 199 applies its membership in any one group is not sufficient to pay a dependent after assessment a sum equal to 50% of the maximum benefit permitted for that group,

(j) if the society varies or attempts to vary the terms or benefits of any group or class of members, or

(k) if the society was not licensed or exempted from a requirement to be licensed under the Insurance Act, immediately before September 15, 1990.

Actuarial certificates

195   (1) A society that under section 191 is deemed to have a business authorization must file with its annual report the results of a valuation of its contracts in force at the last preceding December 31.

(2) The valuation referred to in subsection (1) must be made and certified by an actuary or other qualified person approved by the superintendent, and must have regard to the prospective liabilities of the society under its contracts and to the premiums to be received from its members under their contracts according to the scale in force at the date of the valuation.

Limit of insurance money payable

196   A society deemed under section 191 to have a business authorization must not make a contract with a member under which the total insurance money payable exceeds $5 000.

Amendment of charter

197   The superintendent may object to a provision of or an amendment to the charter of a society authorized to carry on insurance business, on the ground that the provision or amendment is contrary to this Act or the Insurance Act, or unfair to any member or class of members, or unjust, or unreasonable, or actuarially unsound, and by order may require that the provision or amendment be

(a) deleted, or

(b) changed

to the superintendent's satisfaction.

Consent required for alteration to constitution or bylaws or for amalgamation of authorized society

197.1   (1) In this section, "authorized society" means

(a) a society that is deemed, under section 191, to have a business authorization, or

(b) a society that

(i) has been directed, under section 193 (2) (a), to file with the superintendent an application for a business authorization, and

(ii) has that business authorization.

(2) Unless a contrary intention appears, words and expressions used in this section have the same meaning as in the Societies Act.

(3) An authorized society must not, under the Societies Act, alter the society's constitution or bylaws without first obtaining the consent of the superintendent.

(4) An authorized society must not, under Division 1 of Part 7 of the Societies Act, amalgamate with one or more other corporations unless, before the amalgamation application is submitted to the registrar for filing under section 87 of that Act, the consent of the superintendent to the amalgamation is obtained.

(5) Section 23 applies in relation to a consent under this section except that, for the purposes of applying that section, the reference to "officers" in that section must be read as a reference to "senior managers".

Society operating outside British Columbia

198   A society incorporated in British Columbia that is deemed under section 191 to have a business authorization must not carry on in another jurisdiction any operation that is not in accordance with the law of that jurisdiction; and if such a society is prohibited by the law of another jurisdiction from soliciting within that jurisdiction, it must not solicit an application for membership from a person resident in that jurisdiction.

Societies

199   Sections 37 to 91 of the Insurance Act apply to a society described in section 193 (1) (a) and (b) of this Act in the same manner as those sections apply to a fraternal society as defined by section 37 of the Insurance Act.

Provisions applicable to certain societies

200   (1) In this section, "grandparented insurance society" means a society described in section 286 (1) (a) or (b) of the Insurance Act, R.S.B.C. 1979, c. 200, as that section read immediately before September 15, 1990.

(2) Despite the repeal of section 293 of the Insurance Act, R.S.B.C. 1979, c. 200, section 293 (2) to (10) of that Act continues to apply to a grandparented insurance society as though section 293 (2) to (10) of that Act had not been repealed.

(3) Sections 51 and 55 of the Insurance Act and sections 194 (e) and 195 of this Act do not apply to a grandparented insurance society.

Part 7 — Administration of the Regulation of Financial Institutions

Division 1 — BC Financial Services Authority

BC Financial Services Authority

201   (1) The BC Financial Services Authority must exercise the powers and perform the duties of the Authority under this Act.

(2) Subject to subsections (3) and (3.1), the minister may make regulations

(a) transferring to the superintendent appointed under section 207 a power or duty given to the Authority under this Act or the Credit Union Incorporation Act, and

(b) reversing a transfer of a power or duty made under paragraph (a).

(3) A regulation made under this section must not transfer the following:

(a) and (b) [Not in force.]

(c) the power to make rules under section 201.1;

(d) the power to require the council to establish written administrative policies and procedures under section 226 (1) and the power to give consent to their implementation under section 226 (3);

(e) a power or duty under Part 9, other than a power or duty under section 277, 277.1 or 277.2.

(3.1) A regulation made under this section must be effective on a date specified in the regulation that is at least 3 months after the date of deposit of the regulation under the Regulations Act.

(3.2) [Repealed 2021-2-16.]

(4) A regulation made under this section may

(a) impose terms and conditions that the minister considers advisable, including limits on delegation by the superintendent under section 207 (2) of a transferred power or duty, and

(b) establish transitional rules in relation to the transfer of a power or duty under subsection (2) (a) or (b) of this section.

(5) to (8) [Repealed 2021-2-15.]

Rules of the Authority

201.1   (1) Subject to section 201.2, the Authority may make rules as follows:

(a) respecting the adequacy of liquid assets and the capital base of a financial institution or extraprovincial corporation for the purpose of section 67;

(b) for the purpose of section 67,

(i) prescribing the types of assets and types of liabilities that must be included in determining what constitutes a financial institution's or extraprovincial corporation's capital base,

(ii) establishing formulae or other methods of determining the value of those prescribed types of assets and types of liabilities, and

(iii) prescribing the proportion of the value of those prescribed types of assets, and the proportion of the extent of those prescribed types of liabilities, that constitutes an adequate capital base for a financial institution or extraprovincial corporation;

(c) for the purpose of section 67 (2.1), setting out a percentage, or a range of percentages, of the calculated value of the risk weighted assets of a credit union or extraprovincial credit union;

(d) for the purpose of section 67 (2.2),

(i) setting out activities, circumstances and consequences, and

(ii) establishing matters about which the superintendent must be satisfied before giving its consent;

(e) [Not in force.]

(f) respecting the corporate governance of financial institutions and extraprovincial corporations;

(g) respecting the market conduct of financial institutions and extraprovincial corporations;

(h) respecting codes of market conduct adopted by credit unions and extraprovincial credit unions under section 94.2, including the form and content of those codes and the manner and time for filing them;

(i) for the purpose of section 92.2 (2), establishing requirements for insurance companies, insurance agents and insurance salespersons who issue, deliver or offer to undertake contracts of insurance through the use of electronic agents;

(j) for the purpose of section 174.1 (2), respecting oversight by restricted insurance agent licensees of their employees and agents in British Columbia;

(k) respecting operational oversight of financial institutions and extraprovincial corporations by the superintendent;

(l) setting out risks to financial institutions for the purposes of section 135.1;

(m) respecting risk management of financial institutions and extraprovincial corporations;

(n) respecting the funding requirements and corporate governance of reciprocal exchanges as defined in section 186;

(o) respecting the methodology for deposit insurance assessments under section 268 or 271;

(p) establishing formulae or other methods of determining the amounts referred to in sections 64 (8) and 65 (3) (b) of the Credit Union Incorporation Act;

(p.1) respecting general meetings of credit unions, and meetings of directors or creditors of credit unions, that are partially electronic meetings or fully electronic meetings, including

(i) prescribing requirements for notice of those meetings, and

(ii) prescribing procedures for voting at those meetings;

(p.2) prescribing circumstances in which a credit union must hold general meetings, and meetings of directors or creditors, that are fully electronic meetings, even if the rules of the credit union provide otherwise;

(q) adopting by reference, in whole or in part and with any changes the Authority considers appropriate, rules or guidelines of other financial services regulatory authorities.

(2) A rule or guideline referred to in subsection (1) (q) may be adopted as amended from time to time.

(3) In making a rule, the Authority may

(a) make different rules for different classes of persons, entities, things or transactions, or

(b) exempt a person or entity or a class of persons or entities from one or more of the rules made under this section.

(4) The Lieutenant Governor in Council may, by regulation,

(a) make a rule or repeal or amend a rule made by the Authority under this section, and

(b) specify powers of the Lieutenant Governor in Council to make regulations under this Act and authorize the Authority to make rules under those specified powers.

(5) A regulation made under subsection (4) (a) is deemed to be a rule made by the Authority.

(6) No rule made by the Authority may amend or repeal a regulation made by the Lieutenant Governor in Council.

Procedures for rules

201.2   Before making, amending or repealing a rule under section 201.1, the Authority must do the following:

(a) publish the proposed rule for public comment in accordance with the regulations unless the regulations provide otherwise;

(b) obtain the consent of the minister in accordance with the regulations;

(c) comply with any other prescribed procedures and requirements.

Regulation prevails over rule

201.3   If a rule made by the Authority conflicts with a regulation made by the Lieutenant Governor in Council, the regulation prevails.

Repealed

202-202.1   [Repealed 2019-14-39.]

Panels

203   (1) The chair of the Authority's board of directors may

(a) establish one or more panels of the Authority consisting of one or more directors of the Authority, and

(b) appoint directors as members of the panel.

(2) The chair may refer a matter under this Act

(a) that is before the Authority to a panel, or

(b) that is before a panel to the Authority or to another panel.

(3) In a matter referred to a panel by the chair, a panel has the jurisdiction of the Authority and may exercise the powers and perform the duties of the Authority.

Repealed

204-205   [Repealed 2019-14-39.]

Requirement to insure

206   (1) The superintendent by order may require a credit union to

(a) carry insurance satisfactory to and against all risks designated by the superintendent on all directors, committee members, officers and employees of the credit union and its subsidiaries, and

(b) insure the credit union and its assets against all other risks designated by the superintendent.

(2) A credit union must maintain insurance required by and in a manner satisfactory to the superintendent.

(3) A credit union and every director, committee member, officer and employee of a credit union must supply the superintendent any information requested by the superintendent pertaining to a director, officer, committee member or employee in connection with any insurance required under this section.

Superintendent of Financial Institutions

207   (1) The Authority's board of directors must appoint a Superintendent of Financial Institutions in accordance with section 10 of the Financial Services Authority Act.

(2) The superintendent

(a) may exercise the powers and must perform the duties vested in or imposed on the superintendent under this Act and the Credit Union Incorporation Act, and

(b) subject to a limit under section 201 (4), may, in writing and with or without terms and conditions, delegate to an officer, employee or agent of the Authority a power or duty that is transferred to the superintendent by a regulation made under section 201.

(2.1) A delegation under this section is revocable and does not prevent the superintendent from exercising a delegated power.

(2.2) A person purporting to exercise a power of the superintendent by virtue of a delegation under this section must, when requested to do so, produce evidence of the person's authority to exercise the power.

(3) The superintendent must comply with the policy directives given by the Authority.

(4) [Repealed 2019-14-39.]

Power to require undertakings and make agreements

208   In the administration and enforcement of this Act, the superintendent may

(a) require and receive written undertakings, and

(b) enter into written agreements.

Capacity outside British Columbia

209   For the purposes of the administration and enforcement of this Act and the regulations, the following persons may act outside British Columbia as if acting inside it:

(a) the superintendent;

(b) investigators, examiners or other persons

(i) acting under the direction of the superintendent under section 165 or 212, or

(ii) [Repealed 2019-39-44.]

(iii) appointed by the superintendent under section 214 or 215.

Examinations, audits, inspections

210   (1) It is a condition of every business authorization that the financial institution that has it must facilitate examinations, audits and inspections under this Act.

(2) For the purpose of an examination, audit or inspection under this Act,

(a) a financial institution and its subsidiary must prepare and submit to the person conducting the examination, audit or inspection the statements or returns with respect to its business, finances or other affairs that the superintendent requires, and

(b) the officers, agents and employees of the financial institution and its subsidiary must cause its books to be open for inspection and must otherwise facilitate the examination, audit or inspection.

(3) In order to facilitate an examination, audit or inspection of the books and records of a financial institution, the superintendent may require the financial institution and its subsidiary to produce the books and records at the principal place of business, or at another place the superintendent may direct.

(4) If an examination, audit or inspection of a financial institution or a subsidiary is made at an office outside British Columbia, the financial institution, if the superintendent so directs, must pay the costs and expenses in connection with the examination, audit or inspection.

Superintendent may require information

211   The superintendent may,

(a) for the purposes of administering this Act, or

(b) on the request of a financial regulatory authority in another Canadian jurisdiction, for the purposes of assisting in the administration of the laws of that jurisdiction regulating deposit business, insurance business or trust business,

order a financial institution to provide information or to produce records specified or otherwise described in the order within the time or at the intervals specified in the order.

Requirement for notice of action outside British Columbia

211.1   A credit union, an insurance company or a trust company must inform the superintendent immediately in writing if

(a) the credit union, insurance company or trust company has been convicted of an offence in Canada or another jurisdiction arising from a transaction, business or course of conduct related to financial services, or

(b) the credit union, insurance company or trust company has been found by a regulator in Canada or another jurisdiction to have contravened the laws of that jurisdiction respecting financial services.

Examination

212   (1) The superintendent must periodically conduct an examination or appoint a person acting under the superintendent's direction to conduct an examination of the condition and affairs of every financial institution.

(2) On the examination required under this section, the superintendent or other person must make reasonable inquiries respecting

(a) the financial institution's condition and ability to meet its obligations as and when they become due,

(b) the adequacy of the financial institution's business and financial practices and of its management procedures and standards, and

(c) compliance with

(i) any order made under this Act or the Credit Union Incorporation Act,

(ii) a condition under which a consent under this Act or the Credit Union Incorporation Act is given, or

(iii) a condition of its business authorization.

(3) The superintendent or other person may conduct the examination required by this section at the principal place of business and at any office of the financial institution or of any affiliate of the financial institution.

Inquiries

213   (1) The superintendent may address a written inquiry to a financial institution or its subsidiary or to any officer of the financial institution or its subsidiary or to the agent of either of them

(a) for the purpose of ascertaining the condition and ability of the financial institution or its subsidiary to meet its obligations when they become due,

(b) as to the conduct of the business of the financial institution or its subsidiary, or

(c) as to complaints made by insureds, depositors or borrowers of the financial institution or by persons for whom the financial institution or its subsidiary acts in a fiduciary capacity or other interested parties,

and the financial institution, subsidiary, officer or agent so addressed must reply promptly in writing with information or records that the superintendent requests.

(2) If the superintendent makes an inquiry under subsection (1), the superintendent may require the financial institution or its subsidiary to

(a) deliver to each director of the financial institution or the subsidiary a copy of the inquiry and of the reply to the inquiry, and

(b) include a copy of the inquiry and of the reply in the minutes of the next meeting of the directors of the financial institution or of the subsidiary.

Division 1.1 — Special Examinations and Investigations

Definitions

213.1   In this Division:

"inspection" means a special examination or an investigation;

"investigation" means an investigation under section 215;

"investigator" means a person appointed under section 215 (1);

"special examination" means a special inspection, examination and audit under section 214;

"special examiner" means a person appointed under section 214 (1).

Special examination

214   (1) By the superintendent's own motion or on a written application by an interested party, the superintendent may appoint a person as a special examiner to make a special inspection, examination and audit of a financial institution's books, accounts and securities, and to inquire generally into the conduct of its business.

(2) An application under subsection (1) must be supported by evidence the superintendent requires for the purpose of showing that there is good reason for requiring the special inspection, examination and audit to be made and that it is not frivolous, vexatious or prompted by malice.

(3) The superintendent may require an applicant under subsection (1) to give security for the payment of the costs of the special inspection, examination and audit before appointing the special examiner.

(4) On the conclusion of the special inspection, examination and audit, the special examiner must report in writing to the superintendent.

(5) On the conclusion of a special inspection, examination and audit, the superintendent may order the financial institution or the party requesting the special inspection, examination and audit to pay the costs of the special inspection, examination and audit.

Investigation

215   (1) If the superintendent considers it necessary or desirable to establish whether there is or has been compliance by any person with the provisions of this Act, the regulations or the rules made by the Authority, the superintendent by order may appoint a person to make an investigation the superintendent considers expedient for the due administration and enforcement of this Act and in the order must direct the scope of the investigation.

(2) For the purpose of an investigation ordered under this section, the person appointed to make the investigation may investigate, inquire into and examine

(a) the affairs of the person in respect of whom the investigation is being made and records, communications, negotiations, transactions, investigations, loans, borrowings and payments to, by, on behalf of, in relation to or connected with the person and property, assets or things owned, acquired or alienated in whole or in part by the person, or by any person acting on behalf of or as agent for the person, and

(b) the assets at any time held, the liabilities, debts, undertakings and obligations at any time existing, the financial or other conditions at any time prevailing in, or in relation to or in connection with the person and the relationship that may at any time exist or have existed between the person and any other person because of investments, purchases, commissions promised, secured or paid, interests held or acquired, purchase or sale of security instruments or other property, the transfer, negotiation or holding of security instruments, interlocking directorates, common control, undue influence or control or any other relationship.

(3) If an investigation is ordered under this section, the superintendent may also appoint an accountant or other expert to examine records and things of the person whose affairs are being investigated.

(4) Every person appointed under subsection (1) or (3) must provide the superintendent with a full and complete report of the investigation including any transcript of evidence and material in that person's possession relating to the investigation.

Extrajurisdictional evidence

215.1   (1) On an application made by the superintendent, if it appears to the Supreme Court that a person outside British Columbia may have evidence that may be relevant to

(a) an investigation ordered by the superintendent under section 215, or

(b) a hearing required or permitted under this Act,

the Supreme Court may issue a letter of request directed to the judicial authority of the jurisdiction in which the person to be examined is believed to be located.

(2) The letter of request referred to in subsection (1) must

(a) be signed by the judge hearing the application or another judge of the Supreme Court, and

(b) be provided to the superintendent for disposition under subsection (5).

(3) A letter of request issued under subsection (1) may request the judicial authority to which it is directed to

(a) order the person referred to in the letter of request to be examined under oath in the manner, at the place and by the date referred to in the letter of request,

(b) order, in the case of an examination for the purposes of a hearing referred to in subsection (1) (b), that a person who is a party to the hearing is entitled to

(i) be present or represented by counsel during the examination, and

(ii) examine the person referred to in paragraph (a) of this subsection,

(c) appoint a person as the examiner to conduct the examination,

(d) order the person to be examined to produce at the examination the records and things or classes of records and things specified in the letter of request,

(e) direct that the evidence obtained by the examination be recorded and certified in the manner specified by the letter of request, and

(f) take any further or other action that the Supreme Court considers appropriate.

(4) The failure of the person entitled under subsection (3) (b) to be present or represented by counsel during the examination or to examine the person referred to in subsection (3) (a) does not prevent the superintendent from reading in the evidence at the hearing if the examination has otherwise been conducted in accordance with the order made under that subsection.

(5) The superintendent must send the letter of request,

(a) if the examination is to be held in Canada, to the Deputy Attorney General for British Columbia, or

(b) if the examination is to be held outside Canada, to the Under Secretary of State for External Affairs of Canada.

(6) The letter of request must have attached to it

(a) any interrogatories to be put to the person to be examined,

(b) if known, a list of the names, addresses and telephone numbers, both in British Columbia and in the other jurisdiction, of

(i) the solicitors or agents of the superintendent,

(ii) the person to be examined, and

(iii) if applicable, the person entitled under subsection (3) (b) to be present or represented by counsel during the examination and to examine the person referred to in subsection (3) (a),

and

(c) a translation of the letter of request and any interrogatories into the appropriate official language of the jurisdiction where the examination is to take place, along with a certificate of the translator, bearing the full name and address of the translator, that the translation is a true and complete translation.

(7) The superintendent must file with the Under Secretary of State for External Affairs of Canada or with the Deputy Attorney General of British Columbia, as the case may be, an undertaking to be responsible for all of the charges and expenses incurred by the Under Secretary or the Deputy Attorney General, as the case may be, in respect of the letter of request and to pay them on receiving notification of the amount.

(8) This section does not limit any power the superintendent may have to obtain evidence outside British Columbia by any other means.

(9) The making of an order by a judicial authority referred to in subsection (1) in accordance with a letter of request issued under that subsection does not determine whether evidence obtained under the order is admissible in evidence in a hearing before the superintendent.

(10) Unless otherwise provided by this section, the practice and procedure in connection with appointing a person, conducting an examination and certifying and returning the appointment under this section are, as far as possible, the same as those that govern similar matters in civil proceedings in the Supreme Court.

Extrajurisdictional request for evidence

215.2   (1) In this section, "qualifying letter of request" means a letter of request that

(a) is issued by a court or tribunal of competent jurisdiction in a jurisdiction other than British Columbia,

(b) is issued on behalf of the body that is, in the jurisdiction from which the letter is issued, empowered by the laws of that jurisdiction to administer or regulate deposit business, insurance business or trust business in that jurisdiction,

(c) is issued in relation to

(i) a matter under investigation by the body referred to in paragraph (b), or

(ii) a matter that is the subject of a hearing before the body referred to in paragraph (b), and

(d) requests that evidence in relation to a matter referred to in paragraph (c) be obtained from a person believed to be located in British Columbia.

(2) On receipt of a qualifying letter of request, the Supreme Court may make the order it considers appropriate and may, without limitation,

(a) order that the person referred to in subsection (1) (d) be examined under oath in the manner, at the place and by the date requested by the foreign court or tribunal,

(b) order, in the case of an examination for the purposes of a hearing referred to in subsection (1) (c) (ii), that a person who is a party to the hearing is entitled to

(i) be present or represented by counsel during the examination, and

(ii) examine the person referred to in paragraph (a) of this subsection,

(c) appoint a person as the examiner to conduct the examination,

(d) order that the person referred to in subsection (1) (d) produce at the examination any records and things or classes of records and things specified in the request,

(e) direct that the evidence obtained by the examination be recorded and certified in the manner requested, and

(f) make any further or other order that the Supreme Court considers appropriate.

(3) An order under subsection (2) may be enforced in the same manner as if the order were made in or in respect of a proceeding brought in the Supreme Court and, if the person referred to in subsection (1) (d) fails without lawful excuse to comply with the order, the person is in contempt of the Supreme Court and is subject to the penalty that the Supreme Court imposes.

(4) A person ordered to give evidence under subsection (2) has the same rights

(a) to receive conduct money or any other money that the person would have had if the examination were held in relation to a proceeding in the Supreme Court, and

(b) to refuse to answer questions and produce records and things or classes of records and things that the person would have in a proceeding in the Supreme Court.

(5) The person appointed by the Supreme Court as the examiner has the authority to administer an oath or affirmation to the person to be examined.

(6) Unless otherwise provided in this section, the practice and procedure in connection with appointing a person, conducting an examination and certifying and returning the appointment under this section are, as far as possible, the same as those that govern similar matters in civil proceedings in the Supreme Court.

Witnesses in a special examination or investigation

216   (1) For the purposes of an inspection, the superintendent, a special examiner and an investigator have the same power that the Supreme Court has for the trial of civil actions

(a) to summon and enforce the attendance of witnesses,

(b) to compel witnesses to give evidence on oath or in any other manner, and

(c) to compel witnesses to produce records and things.

(2) On application to the Supreme Court, a person is liable to be committed for contempt as if in breach of an order or judgment of the Supreme Court if the person fails or refuses

(a) to attend,

(b) to take an oath,

(c) to answer questions, or

(d) to produce the records or things in that person's custody or possession.

(3) Section 34 (5) of the Evidence Act does not apply for the purposes of a special examination or an investigation.

(4) A person giving evidence in a special examination or an investigation may be represented by counsel.

Powers of entry

216.1   For the purposes of an inspection to determine compliance with this Act, the regulations or the rules made by the Authority, the superintendent, a special examiner or an investigator may at any reasonable time enter any of the following places:

(a) the principal place of business of a financial institution or of any affiliate of the financial institution;

(b) any office of a financial institution or of any affiliate of the financial institution;

(c) any place where records are kept relating to a financial institution or to any affiliate of the financial institution;

(d) any place where the superintendent, special examiner or investigator reasonably believes records are being held that relate to whether a person is or has been in compliance with this Act, the regulations or the rules made by the Authority;

(e) subject to section 216.2, a private dwelling where the superintendent, special examiner or investigator reasonably believes evidence is present that is relevant to the purposes of the inspection;

(f) any other place the superintendent, special examiner or investigator reasonably believes to contain evidence relevant to the purposes of the inspection.

Warrant to enter residence

216.2   (1) The superintendent, a special examiner or an investigator must not, for the purposes of an inspection, enter premises that are occupied as a residence unless

(a) an occupant of the premises gives consent to enter, or

(b) a warrant under subsection (2) authorizing the entry is issued.

(2) On being satisfied by evidence on oath that there are reasonable grounds to believe that records or other things relevant to the purposes of an inspection are present in premises that are occupied as a residence, a justice may issue a warrant authorizing a person named in the warrant to enter the residence in accordance with the warrant in order to exercise the powers referred to in section 216.3.

Powers on inspection

216.3   On entering a place under section 216.1 or 216.2, the superintendent, a special examiner or an investigator may do any of the following:

(a) examine records or any other things that may be relevant to the purposes of the inspection;

(b) remove the records or things referred to in paragraph (a) for the purposes of examination or making copies or extracts;

(c) require any person to produce or provide access to records or things in the person's possession or control that may be relevant to the purposes of the inspection;

(d) require a person who may have information related to the purposes of the inspection, including personal information, to provide that information.

Certified copies of records as evidence

216.4   If the superintendent, a special examiner or an investigator certifies as a true copy a copy or extract of a record examined under section 216.3, the certified true copy is admissible in evidence to the same extent as, and has the same evidentiary value as, the record of which it is a copy, without proof of the signature of the superintendent, special examiner or investigator.

Obstructing or interfering with inspection

216.5   When an inspection is conducted, a person must not

(a) obstruct the superintendent, the special examiner or the investigator, or withhold, destroy, conceal or refuse to provide or produce information, a record or other thing required by the superintendent, the special examiner or the investigator or that is otherwise related to the inspection,

(b) provide false or misleading information,

(c) interfere with the exercise by the superintendent, the special examiner or the investigator of any of the powers under this Division, or

(d) prevent or attempt to prevent the superintendent, a special examiner or an investigator from exercising any of the powers under this Division.

Immunities on special examination or investigation

216.6   (1) In this section, "protected individual" means an individual who is or was any of the following:

(a) a special examiner;

(b) an investigator;

(c) a person appointed under section 215 (3);

(d) a person acting on behalf of or under the direction of a special examiner, an investigator or a person appointed under section 215 (3).

(2) Subject to subsection (3), no legal proceeding for damages lies or may be commenced or maintained against a protected individual because of anything done or omitted

(a) in the exercise or intended exercise of any power under this Act, or

(b) in the performance or intended performance of any duty under this Act.

(3) Subsection (2) does not apply to a protected individual in relation to anything done or omitted in bad faith.

(4) Subsection (2) does not absolve the Authority from vicarious liability arising out of anything done or omitted by a protected individual for which the Authority would be vicariously liable if this section were not in force.

Division 1.2 — Information and Records

Extension of time

217   (1) On application, the Authority or the superintendent, as appropriate under the applicable provision, may extend the time under this Act within which any return or other record must be filed with, or delivered or submitted to, the Authority or superintendent, as the case may be.

(2) The power to extend time under subsection (1) may be exercised before or after the time limit provided under the Act has expired.

Confidential information

218   (1) An individual or entity that creates, compiles or receives information or records under this Act or under an agreement referred to in section 219 or 219.01 of this Act must not, subject to subsections (2) and (3) of this section, disclose the information or records.

(2) With the consent of the Authority or the superintendent and subject to any conditions that the Authority or the superintendent imposes, the information or records may be disclosed

(a) for the purposes of administering this Act or the regulations,

(b) for the purposes of a prosecution, or

(c) if permitted by another provision of this Act or a provision of the regulations.

(3) The information or records must be disclosed if required by law.

Privileged information — supervisory information

218.1   (1) In this section, "supervisory information" means any of the following information or any part of that information:

(a) any rating assigned by the superintendent to a financial institution to assess its financial condition and any other similar rating that is substantially based on information obtained from the superintendent;

(b) information about any stage of intervention made by the Authority or the superintendent in relation to a financial institution;

(c) any order made under section 67 (2) or 215 in respect of a financial institution;

(d) any order made under section 239 (2);

(e) any order made under section 248 (1) or (2), 275 or 277 in respect of a credit union;

(f) any undertaking given to the superintendent under section 208 or 244 (2) (g);

(g) any decision to make a special inspection, examination and audit under section 214;

(h) any report prepared by or at the request of the Authority or the superintendent, or any recommendation made by the Authority or the superintendent, as a result of an examination, audit, inspection or investigation of a financial institution under this Act, including any related correspondence to or from the directors or officers of the financial institution;

(i) any other prescribed information related to the administration and enforcement of this Act or the Credit Union Incorporation Act.

(2) Despite any other enactment or law, supervisory information is privileged information and a person or entity must not be required, in connection with any legal proceedings, to give or produce evidence relating to any supervisory information.

Privileged information — self-evaluative compliance audits

218.2   (1) In this section:

"self-evaluative compliance audit" means an evaluation, review, assessment, examination, audit, inspection or investigation conducted by or on behalf of a financial institution, either voluntarily or at the request of the superintendent, for the purpose of identifying or preventing non-compliance with, or promoting compliance with or adherence to, this Act, other Acts, regulations, rules, guidelines or industry, corporate or professional standards;

"self-evaluative compliance audit document" means a document or component of a document with recommendations or evaluative or analytical information prepared by or on behalf of a financial institution or the superintendent as a result of or in connection with a self-evaluative compliance audit and includes any response to the findings of a self-evaluative compliance audit, but does not include documents kept or prepared in the ordinary course of business of a financial institution.

(2) Subject to subsection (6), a self-evaluative compliance audit document is privileged information and is not discoverable or admissible as evidence in any civil or administrative proceeding.

(3) Subject to subsection (6), a person or entity must not be required to give or produce evidence relating to a self-evaluative compliance audit or any self-evaluative compliance audit document in any civil or administrative proceeding.

(4) Disclosure of a self-evaluative compliance audit document to a person reasonably requiring access to it, including to a person acting on behalf of a financial institution with respect to the self-evaluative compliance audit, to the external auditor, the board or a committee of the financial institution, or to the Authority or the superintendent, whether voluntarily or pursuant to law, does not constitute a waiver of the privilege with respect to any other person.

(5) A financial institution that prepares or causes to be prepared a self-evaluative compliance audit document may expressly waive privilege in respect of all or part of the document.

(6) The privileges set out in subsections (2) and (3) do not apply

(a) to a proceeding commenced against a financial institution by the Authority or the superintendent in which a self-evaluative compliance audit document has been disclosed,

(b) if the privilege is asserted for fraudulent purposes,

(c) to a proceeding in which a person who was involved in conducting a self-evaluative compliance audit is a party seeking admission of the self-evaluative compliance audit document in a dispute related to the person's participation in conducting the audit, or

(d) to information referred to in a self-evaluative compliance audit document that was not prepared as a result of or in connection with a self-evaluative compliance audit.

Agreements with other jurisdictions

219   Subject to the regulations, the Authority and the superintendent may each enter into agreements with the government of Canada, a province or another authority respecting the administration and enforcement of this Act or of comparable legislation of Canada or of another province and, without restricting the generality of this, the agreement may provide for the provision and exchange of information.

Agreement with other authorities and market conduct database administrator

219.01   The Authority and the superintendent may each enter into an agreement with other financial services regulatory authorities in Canada and the administrator of a national database of market conduct that provides for the provision and exchange of information respecting the market conduct practices of insurers.

Collecting and sharing information respecting financial institutions

219.1   (1) For the purposes of administering this Act or assisting in the administration of the laws of another jurisdiction regulating deposit business, insurance business or trust business, the superintendent or a person described in section 209 (b) may, directly or indirectly, collect information from, and use information collected from,

(a) the Insurance Council of British Columbia, the deposit insurance corporation, an insurance compensation plan prescribed for the purposes of section 66 (2) or any entity that insures deposits of an extraprovincial trust corporation or an extraprovincial credit union in Canada,

(b) a financial institution or extraprovincial corporation or the auditor or actuary of a financial institution or extraprovincial corporation,

(c) a person licensed under Division 2, or issued a permit under Division 3, of Part 6,

(d) a society referred to in section 191,

(e) a law enforcement agency, government, governmental authority or financial services regulatory authority,

(f) a central credit union designated as the stabilization authority under section 282, or

(g) prescribed organizations referred to in section 289 (3) (p.3) or (p.31),

in British Columbia or elsewhere.

(2) For the purposes of administering this Act or assisting in the administration of the laws of another jurisdiction regulating deposit business, insurance business or trust business, the superintendent may disclose information to, or share information with,

(a) the Insurance Council of British Columbia, the deposit insurance corporation, an insurance compensation plan in Canada prescribed for the purposes of section 66 (2) or any entity in Canada that insures deposits of an extraprovincial trust corporation or an extraprovincial credit union,

(b) the auditor or actuary of a financial institution,

(c) a law enforcement agency, government, governmental authority, financial regulatory authority or securities regulatory authority in British Columbia,

(d) a law enforcement agency, government, governmental authority or financial services regulatory authority in another jurisdiction in Canada with which the superintendent has entered into an arrangement or agreement that relates to or includes the sharing of information,

(e) a central credit union designated as the stabilization authority under section 282, or

(f) prescribed organizations referred to in section 289 (3) (p.3) or (p.31).

Division 2 — Insurance Council of British Columbia

Establishment of the Insurance Council of British Columbia

220   (1) The Insurance Council of British Columbia, established by regulation under the Insurance Act, R.S.B.C. 1979, c. 200, by this subsection,

(a) despite the repeal of section 357 (2) of that Act by this Act, is continued, and

(b) is constituted as a corporation under the name "Insurance Council of British Columbia".

(2) The council consists of 11 voting members appointed under subsection (3) by the Lieutenant Governor in Council and an unlimited number of non-voting members whom the minister may appoint.

(3) The Lieutenant Governor in Council must appoint the 11 voting members of whom

(a) 2 must be officers or employees of insurers authorized in respect of life insurance business,

(b) 2 must be officers or employees of insurers authorized in respect of general insurance business,

(c) 2 must be agents licensed in respect of life insurance,

(d) 2 must be agents or salespersons licensed in respect of at least one class of general insurance,

(e) one must be a licensed insurance adjuster, and

(f) 2 must be individuals who need not be licensed under this Act and who are to be members at large.

(4) Different voting members of the council may be appointed for terms of office that may vary from member to member, each not exceeding 3 years.

(5) An individual who is or has been a voting member of the council is eligible for reappointment or appointment as a voting member for successive or additional terms, but is not eligible to be a voting member for more than 6 years altogether.

(6) The minister may appoint an unlimited number of non-voting members of the council for terms of office that may vary from member to member.

(7) The voting members of the council, from among the voting members, must elect a chair of the council to hold office for a single term of one year.

(8) In accordance with the general directives of Treasury Board, the council may

(a) reimburse or pay an allowance to members of the council for reasonable travelling and out-of-pocket expenses necessarily incurred in carrying out their duties, and

(b) pay remuneration to members of the council.

(9) [Repealed 2019-39-57.]

Alternates

221   (1) If a voting member of the council is unable to attend personally any meeting of the council, the voting member, by writing to the chair of the council, may nominate a person who is

(a) licensed as an agent, salesperson or adjuster, is an officer or employee of a licensed insurer or is an individual described in section 220 (3) (f), and

(b) of the same representative character as the voting member.

(2) A person nominated under subsection (1) may act in the voting member's place at the meeting and, for the purpose of the meeting, has the same duties and powers, including the power to vote, as the voting member who is unable to attend the meeting.

Executive director

222   (1) The council must employ an executive director who holds office during the pleasure of the council.

(2) The executive director must

(a) keep minutes of all the proceedings of the council,

(b) conduct all the correspondence of the council,

(c) make preliminary investigations and obtain information respecting matters the council determines, and

(d) perform other duties assigned by the council.

Committees

223   (1) The council may delegate to one or more committees composed of 3 or more members of the council any duty of the council that is required under this Act to

(a) hold a hearing, and

(b) decide on the matter that is the subject of the hearing.

(2) A member of the council must not participate in a hearing on any matter in which the member has an interest.

(3) The chair of a committee referred to in subsection (1) must be a voting member of the council.

(4) If, under subsection (1), the council delegates to a committee the duty to hold a hearing and decide on the matter that is the subject of the hearing, the committee must hold the hearing and may decide on the matter on behalf of the council.

Voting

224   Questions arising at a meeting of the council must be decided by a majority of votes cast by its voting members present at the meeting.

Meetings

225   (1) [Repealed 2019-39-59.]

(2) The executive director, at the request of the chair or any 2 voting members of the council, must summon a special meeting of the council.

(3) Five days' notice of a special meeting must be given to all voting members.

(4) If a non-voting member of the council serves on a committee that conducts a hearing with respect to a matter that is discussed at a meeting of the voting members of the council, the non-voting member may attend the meeting for the purpose of participating in the discussion of that matter.

(5) Subject to section 221, a non-voting member who attends a meeting under subsection (4) must not vote on council business.

Rules of council

225.1   (1) The council may make rules for the purposes of licensing and regulating the conduct of insurance agents, insurance salespersons, insurance adjusters and employed insurance adjusters.

(2) Without limiting subsection (1) but subject to section 225.2, the council may make rules as follows:

(a) respecting applications for, and issuance and transfer of, licences to insurance agents, insurance salespersons, insurance adjusters and employed insurance adjusters;

(b) providing for the supervision of

(i) salespersons by insurance agents, and

(ii) employed insurance adjusters by insurance adjusters;

(c) respecting nominees for insurance agents, insurance adjusters, partnerships or corporations and the requirements of nominees;

(d) respecting the education, experience or other qualifications of applicants for a licence, including rules conferring the discretion to determine equivalent education, experience or qualifications;

(e) imposing terms, conditions or restrictions on a licence or licensee, or varying those terms, conditions or restrictions;

(e.1) respecting the remuneration of licensees;

(f) respecting or adopting a continuing professional education program that is required of licensees;

(g) establishing codes or standards for the conduct of licensees or incorporating or adopting by reference, in whole or in part and with any changes the council considers appropriate, provincial, national or international association codes, standards or rules for the conduct of licensees;

(h) establishing the criteria to be applied and the procedures to be followed by the council or a committee of the council respecting hearings and suspension, cancellation or restriction of licences and the imposition of fines;

(i) providing for circumstances in which a licence is automatically suspended and invalid and procedures for reinstatement of the licence;

(j) for the purpose of funding the council's expenses, establishing a maximum amount of fees to be collected

(i) from applicants and licensees for

(A) applications for a licence,

(B) the amendment, transfer or reinstatement of a licence, and

(C) the annual fee for a licence, and

(ii) for services performed by the council.

(3) If the council imposes terms, conditions or restrictions under subsection (2) (e), the council may also deem the terms, conditions or restrictions to be part of every licence or every licence of a class of licences, whether issued before or after the imposition of the term, condition or restriction.

(4) A code, standard or rule referred to in subsection (2) (g) may be adopted as amended from time to time.

(4.1) If the council makes a rule under subsection (2) (j) establishing a maximum amount of a fee, the council may, for the purpose of funding its expenses but subject to the maximum amount in the rule, set the fee by order.

(5) In making a rule, the council may

(a) make different rules for different classes of licences, applicants or licensees, or

(b) exempt an applicant or licensee or a class of applicants or licensees from one or more of the rules made under this section.

(6) The Lieutenant Governor in Council may, by regulation, make a rule or repeal or amend a rule made by the council under this section and the regulation is deemed to be a rule made by the council.

Procedures for and availability of rules

225.2   (1) Before making, amending or repealing a rule under section 225.1, the council must obtain the consent of the minister in accordance with the regulations and comply with any other prescribed procedures and requirements.

(2) The Regulations Act does not apply to a rule made by the council under section 225.1.

(3) The council must publish a copy of its rules in accordance with the regulations.

Regulation prevails over council rule

225.3   If a rule made by the council conflicts with a regulation made by the Lieutenant Governor in Council under section 225.1 (6), the regulation prevails.

Administrative policies

226   (1) The Authority may require the council to establish written administrative policies and procedures for exercising its powers and performing its duties under this Act.

(2) The council must submit written administrative policies and procedures prepared under subsection (1) to the Authority.

(3) If the Authority has required the council to establish written administrative policies and procedures under subsection (1), the council must not implement them without first receiving the Authority's consent.

Duties of council

227   In addition to any other duties given to it under this Act, the council

(a) may, and on request must, tender advice to the superintendent on insurance matters,

(b) must maintain proper records respecting council business, on any matter before the council or any decision made by the council including

(i) a copy of every licence issued by the council under this Act,

(ii) a record of every decision made by the council under this Act concerning the issue, amendment, suspension, cancellation or transfer of a licence including the reasons for the decision if required,

(iii) records of appeals heard by the Commercial Appeals Commission and the tribunal from decisions of the council,

(iv) copies of approvals required under the rules made by the council under section 225.1,

(v) every application made to the council under this Act,

(vi) minutes of all proceedings of the council,

(vii) copies of all documents introduced as evidence at hearings, and

(viii) any other records the superintendent may require,

(c) must permit the public to inspect at its office records required to be kept under paragraph (b) (i), (ii), (iii) or (iv) and may publish those records online, and

(d) must provide to the public on request and on payment of the prescribed fee a copy or extract of any of the council records required to be kept under paragraph (b) (i), (ii), (iii) or (iv).

Repealed

228-229   [Repealed 2004-48-95.]

Effect of a transfer of powers to superintendent

230   On and after the effective date specified in a regulation under section 290 and while the regulation remains in effect, a reference in sections 231 to 232.1 and 232.6 to the council, except if the reference is to rules made by the council, must be read as a reference to the superintendent.

Council may suspend, cancel or restrict licences and impose fines

231   (1) If, after due investigation, the council determines that the licensee or former licensee or any officer, director, employee, controlling shareholder, partner or nominee of the licensee or former licensee

(a) no longer meets a licensing requirement established by a rule made by the council or did not meet that requirement at the time the licence was issued, or at a later time,

(b) has breached or is in breach of a term, condition or restriction of the licence of the licensee,

(c) has made a material misstatement in the application for the licence of the licensee or in reply to an inquiry addressed under this Act to the licensee,

(d) has refused or neglected to make a prompt reply to an inquiry addressed to the licensee under this Act,

(e) has contravened section 79, 94, 177 or 178 (1), or

(e.1) has contravened a prescribed provision of the regulations,

then the council by order may do one or more of the following:

(f) reprimand the licensee or former licensee;

(g) suspend or cancel the licence of the licensee;

(h) attach conditions to the licence of the licensee or amend any conditions attached to the licence;

(i) in appropriate circumstances, amend the licence of the licensee by deleting the name of a nominee;

(j) require the licensee or former licensee to cease any specified activity related to the conduct of insurance business or to carry out any specified activity related to the conduct of insurance business;

(k) in respect of conduct described in paragraph (a), (b), (c), (d), (e) or (e.1), fine the licensee or former licensee an amount

(i) not more than $50 000 in the case of a corporation or a partnership, or

(ii) not more than $25 000 in the case of an individual.

(2) A person whose licence is suspended or cancelled under this section must surrender the licence to the council immediately.

(3) If the council makes an order under subsection (1) (g) to suspend or cancel the licence of an insurance agent, or insurance adjuster, then the licences of any insurance salesperson employed by the insurance agent, and of any employees of the insurance adjuster are suspended without the necessity of the council taking any action.

(3.1) On application of the person whose licence is suspended under subsection (1) (g), the council may reinstate the licence if the deficiency that resulted in the suspension is remedied.

(4) If an insurance agent's licence or an insurance adjuster's licence is reinstated, the licences of any insurance salespersons or employees of the insurance adjuster who

(a) were employed by that agent or adjuster at the time of the suspension, and

(b) remain employees of that agent or adjuster at the time of reinstatement,

are also reinstated without the necessity of the council taking any action.

Investigation

232   (1) If the council considers it necessary or desirable

(a) to establish whether there is or has been compliance by a licensee or former licensee, or any officer, director, controlling shareholder, partner or nominee of the licensee or former licensee with the requirements of Division 2 of Part 6, of this Division, of the regulations or rules made by the council under section 225.1 or of the licence of the licensee or former licensee, or

(b) to ascertain any facts relevant to the exercise of the council's power under section 231,

the council may conduct an investigation or appoint, as an investigator, a person acting under the council's direction to conduct an investigation.

(2) The council may determine the scope of an investigation it conducts under subsection (1) and may specify the scope of an investigation by an investigator it appoints to conduct an investigation under subsection (1).

Witnesses on an investigation

232.1   (1) For the purposes of an investigation under section 232, the council or the investigator has the same power

(a) to summon and enforce the attendance of witnesses,

(b) to compel witnesses to give evidence on oath or in any other manner, and

(c) to compel witnesses to produce records and things and classes of records and things

as the Supreme Court has for the trial of civil actions.

(2) The failure or refusal of a witness

(a) to attend,

(b) to take an oath,

(c) to answer questions, or

(d) to produce the records and things or classes of records and things in the custody, possession or control of the witness

makes the witness, on application to the Supreme Court, liable to be committed for contempt as if in breach of an order or judgment of the Supreme Court.

(3) Section 34 (5) of the Evidence Act does not apply to an investigation under section 232.

(4) A person giving evidence at an investigation conducted under section 232 may be represented by counsel.

Powers of entry

232.2   For the purposes of an investigation under section 232, the investigator may at any reasonable time enter any of the following places:

(a) any place of business of a licensee or former licensee, or of any officer, director, controlling shareholder, partner or nominee of a licensee or former licensee;

(b) any place where records are kept relating to a licensee or former licensee, or to any officer, director, controlling shareholder, partner or nominee of a licensee or former licensee;

(c) any place where the investigator reasonably believes records are being held that relate to whether a person is or has been in compliance with this Act, the regulations, the rules made by the council under section 225.1 or the requirements of a licence;

(d) subject to section 232.3, a private dwelling where the investigator reasonably believes evidence is present that is relevant to the purposes of the investigation;

(e) any other place the investigator reasonably believes to contain evidence relevant to the purposes of the investigation.

Warrant to enter residence

232.3   (1) For the purposes of an investigation under section 232, the investigator must not enter premises that are occupied as a residence unless

(a) an occupant of the premises gives consent to enter, or

(b) a warrant under subsection (2) authorizing the entry is issued.

(2) On being satisfied by evidence on oath that there are reasonable grounds to believe that records or other things relevant to the purposes of an investigation under section 232 are present in premises that are occupied as a residence, a justice may issue a warrant authorizing a person named in the warrant to enter the residence in accordance with the warrant in order to exercise the powers referred to in section 232.4.

Powers on investigation

232.4   On entering a place under section 232.2 or 232.3, the investigator may do any of the following:

(a) examine records or any other things that may be relevant to the purposes of the investigation;

(b) remove the records or things referred to in paragraph (a) for the purposes of examination or making copies or extracts;

(c) require any person to produce or provide access to records or things in the person's possession or control that may be relevant to the purposes of the investigation;

(d) require a person who may have information related to the purposes of the investigation, including personal information, to provide that information.

Certified copies of records as evidence

232.5   If the investigator appointed under section 232 certifies as a true copy a copy or extract of a record examined under section 232.4, the certified true copy is admissible in evidence to the same extent as, and has the same evidentiary value as, the record of which it is a copy, without proof of the signature of the investigator.

Obstructing or interfering with investigation

232.6   When an investigation is conducted under section 232, a person must not

(a) obstruct the council or the investigator, or withhold, destroy, conceal or refuse to provide or produce information, a record or other thing required by the council or the investigator or that is otherwise related to the investigation,

(b) provide false or misleading information,

(c) interfere with the exercise by the council or the investigator of any of the powers under sections 232 to 232.4, or

(d) prevent or attempt to prevent the council or the investigator from exercising any of the powers under those sections.

Repealed

233-234   [Repealed 2004-48-99.]

Division 3 — Hearings and Appeals

Orders, consents and refusals to be in writing

235   (1) The following orders must be in writing:

(a) an order of the Authority under any of the following provisions:

(i) section 26 (1) or (2) [liquidation and dissolution];

(ii) section 31 (b) [filing quarterly statements and producing records];

(iii) section 241.1 [assessment of costs];

(iv) section 248 (2) [supervision of central credit union];

(v) section 249 (1) or (7) [revocation of business authorization];

(vi) section 277 (2) [orders in relation to credit union that is subject to supervision];

(b) an order of the superintendent under any of the following provisions:

(i) section 48 (2) [designation of connected party];

(ii) section 58 [requiring declaration of share ownership];

(iii) section 61 (2) [extension to apply for business authorization];

(iv) section 67 (2) [capital and liquidity of financial institutions];

(v) section 93 [prohibition against unfair, misleading or deceptive documents];

(vi) section 99 (2) [removal of directors and officers];

(vii) section 107 (1) [requiring meeting of directors];

(viii) section 109 (2) [circulation of director's statement];

(ix) section 117 (2) [appointment of auditor];

(x) section 124 [additional reporting by auditor];

(xi) section 125 (1) [appointment of additional auditor];

(xii) section 137 [requiring review of investment and lending policy];

(xiii) section 142 (2) [other authorized investments];

(xiv) section 143 [disposal of investments];

(xv) section 144 (3) [designation of related parties];

(xvi) section 193 (2) [requiring existing societies to apply for business authorization];

(xvii) section 197 [amendment of charter];

(xviii) section 206 [requirement to insure];

(xix) section 211 [requirement to provide information];

(xx) section 214 [special examination];

(xxi) section 215 [investigation];

(xxii) section 241.1 [assessment of costs];

(xxiii) section 244 (2) or (5) [order to cease or remedy];

(xxiv) section 245 [order to freeze property];

(xxv) section 247 [valuation of assets and insurance contracts];

(xxvi) section 248 (1) [requiring central credit union to hold special general meeting];

(xxvii) section 249 (1.01) or (7.1) [revocation of business authorization];

(xxviii) section 253.1 (8) [administrative penalties];

(xxix) section 275 [supervision of credit union];

(xxx) section 276 (e) [duration of supervision];

(xxxi) section 277 (1) [orders in relation to credit union that is subject to supervision];

(xxxii) section 285 (1) [delegation to stabilization authority];

(c) an order of the council under any of the following provisions:

(i) section 231 (1) [council's powers in relation to licences];

(ii) section 241.1 [assessment of costs].

(2) A consent or a refusal of a consent of the Authority under any of the following provisions must be in writing:

(a) section 13 (1) [incorporation];

(b) section 18 (1) [continuation of extraprovincial trust corporation or extraprovincial insurance corporation into British Columbia];

(c) section 19 (1) (b) [continuation of trust company or insurance company out of British Columbia];

(d) section 20 (3) [amalgamation of trust company or insurance company];

(e) section 21 (1) or (3) [arrangement or disposition by reinsurance];

(f) section 226 (3) [administrative policies].

(2.1) A consent or a refusal of a consent of the superintendent under any of the following provisions must be in writing:

(a) section 10.1 (2) (a) or (b) [Business Corporations Act application to extraprovincial corporations];

(b) section 12 (3) [names for trust companies and insurance companies];

(c) section 15 [alteration of memorandum, notice of articles or articles];

(d) section 16 [conversion of special Act insurance company];

(e) section 21 (2) [acquisition of assets];

(f) section 33 [restoration of trust company or insurance company];

(g) section 50 (4) [major share acquisition];

(h) section 67 (2.1) or (3) [capital and liquidity of financial institutions];

(i) section 69 (1) [appointment of receiver];

(j) section 99 (3) [removed directors and officers];

(k) section 141 (2) (c) [investment in a corporation];

(l) section 142 (1) (a), (b) or (c) [other authorized investments];

(m) section 147 [related party transactions];

(n) section 197.1 (3) or (4) [alteration to constitution or bylaws or amalgamation of authorized society];

(o) section 276 (c) [duration of supervision].

(2.2) A refusal of the Authority to issue a business authorization must be in writing.

(3) A refusal of the superintendent to issue

(a) a business authorization, or

(b) a permit under section 187 (1)

must be in writing.

(4) A refusal of the council to issue a licence under Division 2 of Part 6 must be in writing.

(5) Written reasons must be given for

(a) an order referred to in section 237 (2) (a),

(b) a refusal of an order under section 245 (5) or 249 (7),

(c) a refusal of a consent referred to in subsection (2) or (2.1) of this section, and

(d) a refusal to issue

(i) a business authorization,

(ii) a permit under section 187 (1), or

(iii) a licence under Division 2 of Part 6.

Power to impose conditions

236   (1) The Authority, superintendent or council, depending on which of them has the power to make the order, give the consent or issue the business authorization, permit or licence may

(a) impose conditions that the person considers necessary or desirable in respect of

(i) an order referred to in section 235 (1),

(ii) a consent referred to in section 235 (2) or (2.1),

(iii) a business authorization,

(iv) a permit issued under section 187 (1), or

(v) a licence issued under Division 2 of Part 6, and

(b) remove or vary the conditions by own motion or on the application of a person affected by the order or consent, or of the holder of the business authorization, permit or licence.

(2) A condition imposed under subsection (1) is part of the order, consent, business authorization, permit or licence in respect of which it is imposed, whether contained in or attached to it or contained in a separate document.

(3) Except

(a) on the written application or with the written permission of the holder, or

(b) in the circumstances described in section 164, 231 or 249 (1.01),

a power of the Authority, superintendent or council under this Act to impose or vary conditions in respect of

(c) a business authorization is exercisable only on or before its issue date, or

(d) a permit under section 187 (1) or a licence under Division 2 of Part 6 is exercisable only on or before its issue date

with effect on and after that date.

Hearing requirements

237   (1) This section applies to hearings by the Authority, superintendent or council under this Act.

(2) The Authority, superintendent or council, depending on which of them has the power to take the action, must give written notice in accordance with the regulations of the intended action to any person who will be directly affected by it, before taking any of the following actions:

(a) making an order under section 26 (1) or (2), 48 (2), 67 (2), 93 (1) or (2), 99 (2), 109 (2), 125 (1), 137, 143, 144 (3), 193, 197, 231 (1), 241.1 (1) (a), 244 (2) or (5), 245 (1), 247 (2) or (4), 249, 275 or 277 (1) (d) or (2) (a), (c) or (d);

(b) refusing an order under section 245 (5);

(c) giving a consent referred to in section 235 (2) or (2.1) subject to conditions;

(d) imposing or varying conditions on a previously made order referred to in section 235 (1);

(e) imposing or varying conditions on a previously given consent referred to in section 235 (2) or (2.1);

(f) refusing to give a consent referred to in section 235 (2) or (2.1);

(g) issuing

(i) a business authorization,

(ii) a permit under section 187 (1), or

(iii) a licence under Division 2 of Part 6,

subject to conditions;

(h) imposing or varying conditions in respect of a previously issued

(i) business authorization,

(ii) permit under section 187 (1), or

(iii) licence under Division 2 of Part 6;

(i) refusing to issue a

(i) business authorization,

(ii) permit under section 187 (1), or

(iii) licence under Division 2 of Part 6.

(3) Not later than 14 days after receiving notice under subsection (2) of an intended action, a person directly affected,

(a) by delivering notice in writing to the Authority may require a hearing before the Authority in any case in which it is the Authority that intends to take the action, or

(b) by delivering notice in writing to the superintendent or the council, as appropriate, may require a hearing

(i) before the superintendent in any case in which it is the superintendent who intends to take the action, and

(ii) before the council in any case in which it is the council that intends to take the action.

(4) A hearing required under subsection (3) must be held within a reasonable time after delivery of the written notice under subsection (2).

(5) [Repealed 2004-48-102.]

(6) After

(a) the expiry of the 14 day period referred to in subsection (3) if no hearing has been required within that period, or

(b) after the hearing, if one has been required within that period,

the Authority, the superintendent or the council, as the case may be, may proceed in the exercise of the powers conferred under this Act in respect of the matter that was the subject of the notice delivered under subsection (2).

Summary procedure — superintendent or council

238   (1) If the superintendent or the council, depending on which of them has the power to make the order,

(a) intends to make an order under section 93 (1) or (2) [prohibition against unfair, misleading or deceptive documents] or 231 (1) (g), (h), (i) or (j) [council may suspend, cancel or restrict licences], and

(b) considers that the length of time that would be required to hold a hearing would be detrimental to the due administration of this Act,

then, despite section 237, the superintendent or council, as applicable, may make the intended order without giving a person directly affected by it an opportunity to be heard, but the superintendent or council, as soon as practicable after making the order, must deliver to that person

(c) a copy of the order and written reasons for it, and

(d) written notice of the person's rights under subsection (2).

(2) A person directly affected by an order made under subsection (1) may, within 14 days of receiving a copy of the order,

(a) require a hearing before the superintendent or council, as applicable, by delivering written notice to the superintendent or council, or

(b) appeal the order to the tribunal.

(3) Within a reasonable time after receiving written notice referred to in subsection (2) (a), the superintendent or council, as applicable, must hold the required hearing and following the hearing must confirm, revoke or vary the order.

Summary procedure — superintendent or Authority

238.1   (1) If the superintendent, or the Authority, depending on which of them has the power to make the order,

(a) intends to make an order under section 48 (2), 99 (2), 144 (3), 244 (2) or (5), 245 (1), 275 or 277 (1) (d) or (2) (a) or (c), and

(b) considers that the length of time that would be required to hold a hearing would be detrimental to the due administration of this Act,

then, despite section 237, the superintendent or Authority, as applicable, may make the intended order without giving a person directly affected by it an opportunity to be heard, but the superintendent or Authority, as soon as practicable after making the order, must deliver to that person

(c) a copy of the order and written reasons for it, and

(d) written notice of the person's rights under subsection (2).

(2) The person directly affected by an order made under subsection (1) may, within 14 days of receiving a copy of the order,

(a) require a hearing before the superintendent or Authority, as applicable, by delivering written notice to the superintendent or Authority, or

(b) appeal the order to the Supreme Court, and, for this purpose, section 242.4 (2) to (4) applies.

(3) Within a reasonable time after receiving written notice referred to in subsection (2) (a), the superintendent or Authority, as applicable, must hold the required hearing and following the hearing must confirm, revoke or vary the order.

Public hearing

239   (1) A hearing before the Authority, superintendent or council must be open to the public.

(2) If the Authority, superintendent or council considers that a public hearing would be unduly prejudicial to a party or witness, the Authority, superintendent or council, as the case may be, may order that the public be excluded from all or part of the hearing.

Witnesses at hearings

240   (1) For the purpose of hearings under this Act, the Authority, a panel of it, the superintendent or the council has the same power

(a) to summon and enforce the attendance of witnesses,

(b) to compel witnesses to give evidence on oath or in any other manner, and

(c) to compel witnesses to produce records and things

that the Supreme Court has for the trial of civil actions, and the failure or refusal of a person

(d) to attend,

(e) to take an oath,

(f) to answer questions, or

(g) to produce the records or things in the person's custody or possession

makes the person, on application to the Supreme Court, liable to be committed for contempt as if in breach of an order or judgment of the Supreme Court.

(2) Section 34 (5) of the Evidence Act does not apply for the purpose of hearings under this Act.

(3) A person giving evidence at a hearing under this Act may be represented by counsel.

Costs of investigation

241   (1) A person convicted of an offence under this Act is liable, after review and filing of a certificate under this section, for the costs of the investigation of the offence.

(2) The superintendent may prepare a certificate setting out the cost of the investigation of an offence, including the cost of the time spent by the superintendent or the Authority's staff and any fees paid to an expert, investigator or witness.

(3) The superintendent may apply to a master or registrar of the Supreme Court to review the certificate under the Supreme Court Civil Rules as if the certificate were a bill of costs, and on the review the master or registrar must review the costs and may vary them if the master or registrar considers that they are unreasonable or not related to the investigation.

(4) The tariff of costs in the Supreme Court Civil Rules does not apply to and in respect of a certificate reviewed under this section.

(5) On the review, the master or registrar of the Supreme Court must take into account any costs already paid by the defendant under section 233 before its repeal or section 241.1 (1) in respect of the same investigation.

(6) After review, the certificate may be filed in the court in which the proceedings were heard and may be enforced against the person convicted as if it were an order of the court.

Assessment of costs

241.1   (1) If an investigation or hearing is held under this Act, the Authority, the superintendent or the council may by order require the financial institution, licensee, former licensee or other person subject to the investigation or hearing to pay, in accordance with the regulations, the costs, or part of the costs, of one of the following:

(a) the investigation;

(b) the hearing;

(c) the investigation and the hearing.

(2) Costs assessed under subsection (1)

(a) must not exceed the actual costs incurred by the Authority, superintendent or council for the investigation and hearing, and

(b) may include the costs of remuneration for employees, officers or agents of the Authority, superintendent or council who are engaged in the investigation or hearing.

(3) If a person fails to pay costs as ordered by the date specified in the order or by the date specified in the order made on appeal, if any, whichever is later, the Authority, superintendent or council, as the case may be, may file with the court a certified copy of the order assessing the costs and, on being filed, the order has the same force and effect and all proceedings may be taken on the order as if it were a judgment of the court.

Appeal from a decision of the superintendent or council

242   (0.1) In this section, "consent" means consent under any of the following provisions:

(a) section 10.1 (2) (b) [Business Corporations Act application to extraprovincial corporations];

(b) section 21 (2) [acquisition of assets];

(c) section 67 (2.1) [capital and liquidity of financial institutions];

(d) section 141 (2) (c) [investment in a corporation];

(e) section 142 (1) (a) [other authorized investments].

(1) A person directly affected by any of the following decisions of the superintendent or the council, depending on which of them has the power to make the decision, may appeal the decision to the tribunal:

(a) an order under any of the following provisions:

(i) section 93 [prohibition against unfair, misleading or deceptive documents];

(ii) section 109 (2) [circulation of director's statement];

(iii) section 125 (1) [appointment of additional auditor];

(iv) section 137 [requiring review of investment and lending policy];

(v) section 143 [disposal of investments];

(vi) section 231 (1) [council may suspend, cancel or restrict licences and impose fines];

(vii) section 247 (2) or (4) [valuation of assets and insurance contracts];

(viii) section 253.1 (8) [administrative penalties];

(a.1) an order under section 241.1 [assessment of costs] that is not related to a decision that may be appealed to the Supreme Court under section 242.4 (1);

(b) a consent given subject to conditions;

(c) the imposition or variation of conditions on a previously given consent;

(d) a refusal to give a consent;

(e) the issuance subject to conditions of a licence under Division 2 of Part 6;

(f) the imposition or variation of a term, condition or restriction on a previously issued licence under Division 2 of Part 6;

(g) and (h) [Repealed 2021-2-29.]

(i) a refusal to issue a licence under Division 2 of Part 6.

(2) No person is disqualified from acting as a member of a panel of the tribunal on the hearing of an appeal only because the person is a depositor in a credit union, an extraprovincial credit union or an extraprovincial trust corporation or is a policy holder of an insurance company or extraprovincial insurance corporation that is the subject of the proceedings before the panel.

(3) The superintendent

(a) is a party to an appeal of a decision of the council to the tribunal, and

(b) may appeal a decision of the council to the tribunal.

(4) [Repealed 2003-51-28.]

Financial Services Tribunal

242.1   (1) The Financial Services Tribunal is continued consisting of

(a) one member appointed by the Lieutenant Governor in Council as the chair after a merit-based process, and

(b) other members appointed by the Lieutenant Governor in Council after a merit-based process and consultation with the chair.

(1.1) Tribunal members must faithfully, honestly and impartially perform their duties and must not, except in the proper performance of those duties, disclose to any person any information obtained as a member.

(2) The Lieutenant Governor in Council may designate one member of the tribunal to be vice chair after consultation with the chair.

(3) The Lieutenant Governor in Council may terminate the appointment of a member for cause.

(4) [Repealed 2015-10-73.]

(5) The chair

(a) is the chief executive officer of the tribunal,

(b) may hire and supervise staff required for the exercise of the powers and the performance of the duties of the tribunal, provided the staff are hired under the Public Service Act,

(c) may, subject to this Act and the regulations, establish forms and rules of practice and procedure, and

(d) must prepare and deliver to the minister an annual report describing the number of appeals heard by the tribunal, the issues under consideration, the disposition of those issues, and any other matter the minister may direct.

(6) [Repealed 2004-45-99.]

(7) The following provisions of the Administrative Tribunals Act apply to the tribunal or to appeals conducted by the tribunal:

(a) Part 1 [Interpretation and Application];

(b) Part 2 [Appointments];

(c) Part 3 [Clustering];

(d) Part 4 [Practice and Procedure], except the following:

(i) section 17 [withdrawal or settlement of application];

(ii) section 21 [notice of hearing by publication];

(iii) section 23 [notice of appeal (exclusive of prescribed fee)];

(iv) section 25 [appeal does not operate as stay];

(v) section 26 [organization of tribunal];

(vi) section 27 [staff of tribunal];

(vii) section 28 [facilitated settlement];

(viii) section 29 [disclosure protection];

(ix) section 30 [tribunal duties];

(x) section 33 [interveners];

(xi) section 34 [power to compel witnesses and order disclosure];

(xii) section 36 [form of hearing of application];

(e) section 44 [tribunal without jurisdiction over constitutional questions];

(f) section 46.2 [limited jurisdiction and discretion to decline jurisdiction to apply the Human Rights Code];

(g) Part 6 [Costs and Sanctions], except sections 47.1 [security for costs] and 47.2 [government and agents of government];

(h) Part 7 [Decisions];

(i) Part 8 [Immunities];

(j) section 57 [time limit for judicial review];

(k) section 58 [standard of review with privative clause];

(l) section 59.1 [surveys];

(m) section 59.2 [reporting];

(n) Part 10 [Miscellaneous], except section 62 [application of Act to BC Review Board].

Practice and procedure

242.2   (1) [Repealed 2004-45-100.]

(2) Subject to subsection (10) (a), a decision is not stayed by the filing of an appeal.

(3) On receipt of a notice of appeal and any prescribed fee, the chair must consider the appeal or assign another member of the tribunal to consider the appeal.

(4) At any time, the chair may do any of the following:

(a) extend or abridge any time limit contained in this section;

(b) refer a matter that is before a member to another member.

(c) and (d) [Repealed 2004-45-100.]

(5) Subject to subsection (8), an appeal is an appeal on the record, and must be based on written submissions.

(6) For the purposes of subsection (5), the record consists of the following:

(a) the record of oral evidence, if any, before the original decision maker;

(b) copies or originals of documentary evidence before the original decision maker;

(c) other things received as evidence by the original decision maker;

(d) the decision and written reasons for it, if any, given by the original decision maker.

(7) The original decision maker must forward the record described in subsection (6) to the chair within 14 days of receiving the chair's request for it.

(8) On application by a party, the member considering the appeal may do the following:

(a) permit oral submissions;

(b) permit the introduction of evidence, oral or otherwise, if satisfied that new evidence has become available or been discovered that

(i) is substantial and material to the decision, and

(ii) did not exist at the time the original decision was made, or, did exist at that time but was not discovered and could not through the exercise of reasonable diligence have been discovered.

(9) If oral submissions or new evidence are permitted under subsection (8), the member considering the appeal may

(a) require the parties to participate in any proceeding that might assist in clarifying or narrowing the facts or issues, or otherwise facilitating the appeal,

(b) make any order in respect of matters arising from a proceeding held under paragraph (a),

(c) subject to this Act, the regulations and any rules set by the chair under section 242.1 (5) (c), determine the manner in which a proceeding held under paragraph (a) or an appeal is conducted,

(d) require the party requesting the attendance of a witness to pay the costs in connection with the attendance of that witness, and

(e) proceed with a proceeding held under paragraph (a) or an appeal in the absence of the appellant, if the appellant has been given at least 10 days notice of the proceeding or the appeal, as applicable.

(10) In respect of an appeal,

(a) on application, the member hearing the appeal may

(i) stay the decision under appeal for any length of time, with or without conditions, or

(ii) lift a stay of a decision under appeal for any length of time, with or without conditions,

(b) at any time before or during a hearing, but before its decision, the member hearing the appeal may make an order requiring a person

(i) to attend an oral or electronic hearing to give evidence on oath or affirmation or in any other manner that is admissible and relevant to an issue in an appeal, or

(ii) to produce for the member hearing the appeal or a party a document or other thing in the person's possession or control, as specified by the member hearing the appeal, that is admissible and relevant to an issue in an appeal,

(b.1) the member hearing the appeal may apply to the court for an order

(i) directing a person to comply with an order made by the member hearing the appeal under paragraph (b), or

(ii) directing any directors and officers of a person to cause the person to comply with an order made by the member hearing the appeal under paragraph (b),

(c) the member hearing the appeal may permit a person who is not a party to the appeal to provide submissions in respect of the appeal if, in the opinion of the member, the submissions would substantially assist in the determination of the appeal,

(d) [Repealed 2004-45-100.]

(e) section 34 (5) of the Evidence Act does not apply,

(e.1) if an appellant withdraws all or part of an appeal or the parties advise the member hearing the appeal that they have reached a settlement of all or part of an appeal, the member may order that the appeal or part of it is dismissed, and

(f) [Repealed 2006-12-58.]

(g) the original decision maker is a party to an appeal of a decision of the original decision maker to the tribunal.

(11) The member hearing the appeal may confirm, reverse or vary a decision under appeal, or may send the matter back for reconsideration, with or without directions, to the person or body whose decision is under appeal.

(12) For a decision under subsection (11), the member hearing the appeal must provide written reasons, and forward those reasons to the chair for distribution to the parties.

(13) [Repealed 2004-45-100.]

Judicial review

242.3   (1) In respect of this Act or any other Act that confers jurisdiction on the tribunal, the tribunal has exclusive jurisdiction to

(a) inquire into, hear and determine all those matters and questions of fact and law arising or requiring determination, and

(b) make any order permitted to be made.

(2) A decision of the tribunal on a matter in respect of which the tribunal has exclusive jurisdiction is final and conclusive and is not open to question or review in any court.

Appeal from a decision of the Authority

242.4   (0.1) In this section, "consent" means consent under any of the following provisions:

(a) section 13 (1) [incorporation];

(b) section 15 [alteration of memorandum, notice of articles or articles];

(c) section 16 [conversion of special Act insurance company];

(d) section 18 (1) [continuation of extraprovincial trust corporation or extraprovincial insurance corporation into British Columbia];

(e) section 19 (1) (b) [continuation of trust company or insurance company out of British Columbia];

(f) section 20 (3) [amalgamation of trust company or insurance company];

(g) section 21 (1) or (3) [arrangement or disposition by reinsurance];

(h) section 33 [restoration of trust company or insurance company];

(i) section 50 (4) [major share acquisition];

(j) section 67 (3) [capital and liquidity of financial institutions];

(k) section 69 (1) [appointment of receiver];

(l) section 99 (3) [removed directors and officers];

(m) section 142 (1) (b) or (c) [other authorized investments];

(n) section 147 [related party transactions];

(o) section 197.1 (3) or (4) [alteration to constitution or bylaws or amalgamation of authorized society];

(p) section 276 (c) [duration of supervision].

(1) A person directly affected by any of the following decisions of the Authority or the superintendent, depending on which of them has the power to make the decision, may appeal the decision to the Supreme Court:

(a) an order under any of the following provisions:

(i) section 48 (2) [designation of connected party];

(ii) section 67 (2) [capital and liquidity of financial institutions];

(iii) section 99 (2) [removal of directors and officers];

(iv) section 144 (3) [designation of related parties];

(v) section 193 (2) [requiring existing societies to apply for business authorization];

(vi) section 197 [amendment of charter];

(vii) section 244 (2) or (5) [order to cease or remedy];

(viii) section 245 (1) [order to freeze property];

(ix) section 275 [supervision of credit union];

(x) section 277 (1) (d) or (2) (a), (c) or (d) [orders in relation to credit union that is subject to supervision];

(a.1) an order under section 241.1 [assessment of costs] that is related to a decision that may be appealed to the Supreme Court under this subsection;

(a.2) any other order of the Authority under section 241.1;

(b) a consent given subject to conditions;

(c) the imposition or variation of conditions on a previously given consent;

(d) the refusal to give a consent;

(e) the issuance, subject to conditions, of

(i) a business authorization, or

(ii) a permit under section 187 (1);

(f) the imposition or variation of a condition on a previously issued

(i) business authorization, or

(ii) permit under section 187 (1);

(g) a refusal to issue

(i) a business authorization, or

(ii) a permit under section 187 (1).

(2) The Authority is a party to an appeal of a decision of the Authority to the Supreme Court.

(2.1) The superintendent is a party to an appeal of a decision of the superintendent to the Supreme Court.

(3) An appeal under subsection (1) is an appeal on the record.

(4) For the purposes of subsection (3), the record consists of the following:

(a) the record of oral evidence, if any, before the Authority or superintendent, as the case may be;

(b) copies or originals of documentary evidence before the Authority or superintendent, as the case may be;

(c) other things received as evidence by the Authority or superintendent, as the case may be;

(d) the decision of the Authority or superintendent, as the case may be;

(e) the written reasons for the decision, if any.

(5) An appeal under subsection (1) must be commenced not more than 30 days after the earlier of the following:

(a) the mailing to the appellant, at the appellant's most recent address known to the Authority or superintendent, as the case may be, of a notice of the decision to be appealed;

(b) actual notice to the appellant of the decision to be appealed.

Personal liability protection

243   (1) In this section, "protected individual" means an individual who is or was any of the following:

(a) a director of the Authority;

(b) the chief executive officer of the Authority;

(c) an administrator appointed under section 248 (2) or 277 (2) (a);

(d) a person appointed under section 277.2;

(e) the superintendent;

(f) an individual acting on behalf of or under the direction of the Authority, the Authority's chief executive officer or the superintendent;

(g) a member of the council;

(h) an individual acting on behalf of or under the direction of the council;

(i) an individual acting on behalf of or under the direction of the deposit insurance corporation.

(2) Subject to subsection (3), no legal proceeding for damages lies or may be commenced or maintained against a protected individual because of anything done or omitted

(a) in the exercise or intended exercise of any power under this Act, or

(b) in the performance or intended performance of any duty under this Act.

(3) Subsection (2) does not apply to a protected individual in relation to anything done or omitted in bad faith.

(3.1) Subsection (2) does not absolve the Authority from vicarious liability arising out of anything done or omitted by an individual referred to in any of paragraphs (a) to (f) of the definition of "protected individual" for which the Authority would be vicariously liable if this section were not in force.

(3.2) Subsection (2) does not absolve the government from vicarious liability arising out of anything done or omitted by an individual referred to in paragraph (g) or (h) of the definition of "protected individual" for which the government would be vicariously liable if this section were not in force.

(3.3) Subsection (2) does not absolve the deposit insurance corporation from vicarious liability arising out of anything done or omitted by an individual referred to in paragraph (i) of the definition of "protected individual" for which the corporation would be vicariously liable if this section were not in force.

(4) Subject to subsection (5), all communications with, and information supplied and records or things produced to, the Authority, superintendent or council with respect to

(a) an applicant for an insurance agent, insurance salesperson, insurance adjuster or employed insurance adjuster licence, a licensee or former licensee,

(b) an applicant for a business authorization or a permit under section 187,

(c) an inquiry, examination or investigation under this Act, or

(d) the compliance of a person with this Act

are privileged and no action may be brought against a person as a consequence of the person having made that communication.

(5) Subsection (4) does not apply to a person who makes a communication, supplies information or produces records or things maliciously.

Part 8 — Sanctions

Division 1 — General Sanctions

Authority's order to cease or remedy

244   (1) In this section, "committing an act or pursuing a course of conduct" includes failing or neglecting to perform an act or failing or neglecting to pursue a course of conduct.

(2) If, in the opinion of the superintendent, a person is committing an act or pursuing a course of conduct that

(a) does not comply with this Act, the regulations or the rules made by the Authority,

(a.01) does not comply with the Credit Union Incorporation Act,

(a.02) does not comply with the Business Corporations Act as that Act applies to trust companies, insurance companies or extraprovincial corporations,

(a.03) does not comply with the Societies Act as that Act applies to societies referred to in section 191 of this Act,

(a.04) does not comply with the Insurance Act as that Act applies to insurers,

(a.1) [Repealed 2011-29-105.]

(a.2) does not comply with regulations under section 72 (d), (f) or (g) or 73 of the Insurance (Vehicle) Act,

(b) does not comply with a condition of

(i) a business authorization, consent or order under this Act,

(ii) a licence issued under Division 2 of Part 6, or

(iii) a permit issued under section 187,

(c) might reasonably be expected to result in a state of affairs not in compliance with

(i) this Act, the regulations or the rules made by the Authority,

(ii) the Credit Union Incorporation Act,

(iii) the Business Corporations Act as that Act applies to trust companies, insurance companies or extraprovincial corporations,

(iv) the Societies Act as that Act applies to societies referred to in section 191 of this Act, or

(v) the Insurance Act as that Act applies to insurers,

(d) does not comply with a written undertaking given under this Act, or

(e) might reasonably be expected to harm

(i) in the case of a trust company or credit union, the interests of depositors or persons for whom the trust company or credit union acts in a fiduciary capacity, or

(ii) in the case of an insurance company, the interests of insureds,

then the superintendent may

(f) order the person to

(i) cease doing the act,

(ii) cease pursuing the course of conduct, or

(iii) do anything that the superintendent considers to be necessary to remedy the situation, or

(g) if the person is a financial institution and the superintendent considers it appropriate to do so, give the financial institution an opportunity to make a written voluntary compliance agreement with the superintendent, by which the financial institution undertakes to rectify the act or course of conduct.

(3) Despite a voluntary compliance agreement, the superintendent may make an order under subsection (2) (f) in respect of the financial institution or another person that is the subject of an order under subsection (2)

(a) on matters not covered by the agreement,

(b) if the agreement is not complied with, on matters covered in the agreement,

(c) if in the opinion of the superintendent there has been a deterioration in the financial condition of the financial institution, or

(d) on matters provided for in the agreement if all the facts related to the matter provided for in the agreement were not known by the superintendent at the time of the agreement.

(4) On the application of a financial institution that has made a voluntary compliance agreement with the superintendent, the superintendent may approve the alteration of the agreement.

(5) If a person has been

(a) convicted of an offence in Canada or another jurisdiction arising from a transaction, business or course of conduct related to financial services, or

(b) found by a regulator or a court in Canada or another jurisdiction to have contravened the laws of that jurisdiction respecting financial services,

the superintendent may order the person to

(c) cease doing any act or pursuing any course of conduct that is the same or similar to the act or course of conduct that resulted in the conviction or finding described in paragraph (a) or (b), or

(d) carry out specified actions that the superintendent considers necessary to remedy the situation.

Order to freeze property

245   (1) When

(a) the superintendent under section 215 has ordered, orders or is about to order an investigation of a person,

(b) after a special inspection, examination and audit under section 214 or an investigation under section 215, the superintendent believes on reasonable grounds that a person has contravened this Act, the regulations or the rules made by the Authority in a way which materially damages or is likely to materially damage the interests of the financial institution or its customers,

(c) the Authority has ordered, orders or is about to order the revocation of a business authorization under section 249,

(d) criminal proceedings that in the superintendent's opinion involve the conduct of the affairs of a financial institution have been instituted, are being instituted or are about to be instituted, or

(e) the superintendent receives a request in respect of an extraprovincial corporation, based on grounds similar to those in paragraphs (a) to (d), from an official in another jurisdiction,

the superintendent may make orders requiring

(f) a person having in British Columbia on deposit or under control or for safe keeping any assets of a person named in the order to hold the assets in trust,

(g) a person named in the order not to withdraw any of the person's assets from the possession of another person named in the order having them on deposit, under control or for safe keeping,

(h) a financial institution named in the order or a subsidiary of one named in the order not to trade in or otherwise part with assets left with it by customers or other persons,

(i) a lessor, named in the order, of safety deposit boxes, safes or compartments in safes, not to permit the opening or removal of a safety deposit box, safe or compartment in a safe leased to a person named in the order, or

(j) a person named in the order to hold the assets affected by the order in that person's possession, safekeeping or control in trust for

(i) a receiver or receiver manager who has been appointed or whose appointment has been applied for under section 251, or

(ii) an interim receiver, custodian, trustee, receiver manager, receiver or liquidator who has been appointed or whose appointment has been applied for under the Business Corporations Act, the Company Act, the Credit Union Incorporation Act, the Law and Equity Act, the Personal Property Security Act, the Supreme Court Act, the Bankruptcy and Insolvency Act (Canada) or the Winding-up and Restructuring Act (Canada).

(2) Particular assets affected by an order made under subsection (1) continue to be affected by the order and remain frozen under it until

(a) all of the assets are released because of a revocation under subsection (5) (a) of the order, or

(b) an order is made under subsection (5) (b) releasing the particular assets.

(3) An order under subsection (1) does not apply to assets in a stock exchange clearing house or to securities in process of transfer by a transfer agent unless the order expressly so states.

(4) If a bank, trust company or credit union is the holder of assets described in subsection (1) (f) or (g) or is the lessor described in subsection (1) (i), an order under that subsection applies only to offices, branches or agencies specified in the order.

(5) On the superintendent's own motion, or on the written application of a person named in or directly affected by an order under subsection (1), the superintendent may

(a) revoke an order made under subsection (1), or

(b) order the release of particular assets among the assets affected by an order made under subsection (1).

(6) The superintendent may apply to the court without notice to any person for an order under subsection (8).

(7) If

(a) a person to whom an order under subsection (1) is directed is uncertain respecting the application of the order to property, or

(b) a claim is made to the property,

the person may, on giving notice to the superintendent, apply to the Supreme Court for an order under subsection (8).

(8) On an application under subsection (6) or (7), the Supreme Court may direct the disposition of the property as it considers just.

Order for compliance

246   If the superintendent considers that a person has failed to comply with an order made under this Act, the superintendent may apply to the Supreme Court for either or both of the following:

(a) an order directing the person to comply with the order or restraining the person from violating the order;

(b) an order directing the directors and officers of the person to cause the person to comply with or to cease violating the order,

and the Supreme Court may make an order it considers appropriate.

Valuation of assets and insurance contracts

247   (1) If the superintendent considers that the fair market value of an investment or loan made by a financial institution or its subsidiary, including land held by the financial institution or subsidiary other than improved land occupied by it and used primarily for the purposes of conducting its business, is less than the value shown in the books of the financial institution or subsidiary, the superintendent by an order identifying the investment or loan may direct the financial institution to obtain one or more appraisals of it by one or more appraisers approved by the superintendent.

(2) If the superintendent considers on the basis of an appraisal under subsection (1) that the fair market value of the investment or loan is less than the value shown in the books of the financial institution or its subsidiary, the superintendent may order the financial institution or subsidiary to include in the financial statements of the financial institution or subsidiary for the year in which the order is made a statement that discloses the amount that the superintendent considers to be the fair market value of the asset.

(3) The superintendent may order an insurance company to obtain a valuation of its contracts or claims liabilities.

(4) If the superintendent considers on the basis of a valuation under subsection (3) that the actual value of the contracts of insurance or claims liabilities is materially different than the value shown in the books of the insurance company, the superintendent may order the insurance company to include in its financial statements for the year in which the order is made a statement that discloses the amount that the superintendent considers to be the actual value of the contracts or claims liabilities.

Supervision of central credit union

248   (1) If

(a) the superintendent has made an order under section 244 in respect of a central credit union, and

(b) the central credit union does not immediately comply with the order,

the superintendent

(c) must order the central credit union, on proper notice to its members and the superintendent, to hold a special general meeting of its members as soon as possible for the purpose of receiving the superintendent's report under paragraph (d), and

(d) at the meeting when it is held must report to the members about the order under section 244.

(2) If

(a) the central credit union, having been ordered under subsection (1) (c) to hold a special general meeting, fails to hold the meeting within 30 days after the date of the order, or

(b) the voting members at the special general meeting do not take action that the Authority considers satisfactory to ensure compliance with the order under section 244,

the Authority by order may appoint a person as an administrator of the central credit union that is the subject of the order under section 244, and may terminate the appointment.

(3) and (4) [Repealed 2004-48-110.]

(5) An administrator of a central credit union, appointed under subsection (2),

(a) has the powers described in section 278 of an administrator appointed under section 277 (2) (a),

(b) must report regularly to the Authority, and

(c) on being discharged must account to the Authority for the administration of the central credit union.

(6) The central credit union must pay the administrator the remuneration established and the expenses allowed by the Authority.

Revocation of business authorization

249   (1) If the Authority has reasonable grounds to believe that

(a) a financial institution has failed to comply with an order of the Authority, superintendent, Commercial Appeals Commission or tribunal,

(b) a financial institution has failed to comply with an order of the Supreme Court made under section 246,

(c) a financial institution's licence, registration, permit or business authorization has been cancelled or suspended, or limitations, restrictions or conditions have been imposed on the financial institution's authority to carry on business under a law of Canada or a province,

(d) a financial institution has failed to comply with a condition of its business authorization,

(e) a financial institution is carrying on or soliciting business in another jurisdiction without first being authorized to do so under the laws of that jurisdiction,

(f) a financial institution has ceased to do business in British Columbia, or

(g) a credit union has fewer than 25 members,

the Authority by order may

(h) [Repealed 2021-2-35.]

(i) require the financial institution to cease carrying on business for a period of not more than 21 days specified in the order, or

(j) revoke the financial institution's permit or business authorization.

(1.01) If the superintendent has reasonable grounds to believe any of the things set out in subsection (1) (a) to (g), the superintendent by order may impose conditions in respect of the financial institution's permit or business authorization.

(1.1) The Authority may make an order under subsection (1) (i) or (j) or the superintendent may make an order under subsection (1.01) if a financial institution has been

(a) convicted of an offence in Canada or another jurisdiction arising from a transaction, business or course of conduct related to financial services, or

(b) found by a regulator or a court in Canada or another jurisdiction to have contravened the laws of that jurisdiction respecting financial services.

(2) If the Authority makes an order under subsection (1) (i), then, on or after the expiry of the specified period, the Authority may make an order under subsection (1) (j) or the superintendent may make an order under subsection (1.01).

(3) to (6) [Repealed 2004-48-111.]

(7) The Authority may by order reinstate a permit or business authorization that has been revoked under subsection (1) (j), either unconditionally or subject to conditions the Authority considers appropriate.

(7.1) The superintendent may by order cancel a condition imposed under subsection (1.01) in respect of a permit or business authorization.

(8) A financial institution must not transact or undertake any business after the revocation of its business authority, except so far as it is necessary for the winding up of its business, but any liability incurred by it whether before, on or after the revocation may be enforced against it as if the revocation had not taken place.

(9) If the Authority has made an order under subsection (1) (i) and the financial institution first obtains the consent of the deposit insurer or of the insurer under the appropriate insurance compensation plan, if any, the financial institution may

(a) pay valid claims of depositors within the limits of and in accordance with the deposit insurance coverage, or

(b) pay valid claims of insured persons within the limits of and in accordance with the insurance compensation plan,

as the case may be, but must not make any other payments.

(10) If an order is made under subsection (1) (i), then, on liquidation of the financial institution that is the subject of the order, the deposit insurer or the insurer under the appropriate insurance compensation plan, as the case may be, must reimburse the financial institution for money paid by the financial institution in accordance with subsection (9), and the deposit insurer or the insurer under the insurance compensation plan, as the case may be, is subrogated for the amount paid to all the rights and interests of the depositor or insured person as against the financial institution in respect of the claims for which payment is made.

(11) While an order under subsection (1) (i) is in force, the Authority may exclude the directors, officers, employees and the public from the premises of the financial institution.

Notice of revocation of business authorization

250   If the business authorization of a financial institution is revoked, the superintendent must publish notice of the revocation in the Gazette or in any other prescribed manner.

Court order to appoint receiver, etc.

251   (1) The Authority may apply to the Supreme Court for the appointment of a receiver or receiver manager of all or any part of the assets of a trust company or insurance company if

(a) in the case of a trust company or insurance company, the company's business authorization is revoked under section 249, or

(b) in the case of an insurance company, the company has failed to comply with an order under section 244 and, in the opinion of the Authority,

(i) the company is conducting its affairs in a manner that may reasonably be expected to harm the interests of its insureds, and

(ii) the appointment is in the public interest.

(2) On an application under subsection (1), if the Supreme Court is satisfied that the appointment of a receiver or receiver manager of all or any part of the assets of the trust company or insurance company is in the best interests of

(a) the trust company's or insurance company's creditors or insureds,

(b) persons, any of whose property is in the possession or under the control of the trust company or insurance company, or

(c) the security instrument holders of or subscribers to the trust company or insurance company,

the Supreme Court by order may appoint a receiver or receiver manager of all or any part of the property of the trust company or insurance company.

(3) The Authority may make an application under this section without notice to any person, and in that event the Supreme Court may make a temporary order under subsection (2) appointing a receiver or receiver manager for a period not exceeding 15 days.

(4) A receiver or receiver manager appointed under this section becomes the receiver or receiver manager of all or any part of the assets belonging to the trust company or insurance company or held by the trust company or insurance company on behalf of, or in trust for, any other person, and the receiver, if authorized by the Supreme Court, may wind up or manage the business and affairs of the trust company or insurance company and may exercise powers necessary or incidental to the winding up or management.

(5) On an application under this section, the court may admit as evidence

(a) any hearsay evidence that the court considers reliable, or

(b) any oral or written statement, record or report that the court considers relevant.

Division 2 — Offences and Penalties

Offences

252   (1) Section 5 of the Offence Act does not apply to this Act, the regulations or the rules made by the Authority.

(2) A person commits an offence who

(a) contravenes section 50 (1) or (2), 52 (1) or (2), 66 (2), 70, 75, 81 (1), 91, 92.2, 94, 104, 133, 138, 146, 148 (1), 149 (1) or (3), 162, 164 (1), 216.5 or 232.6,

(b) contravenes section 12.1, 76 (2), 79 (1), 80 (1), 105, 108 (2), 109 (1), 167, 169 (1), 171 (2), 176, 178 (1), 179 (1), 180 (1) or 274,

(b.1) contravenes a prescribed provision of the regulations or the rules made by the Authority,

(c) neglects or refuses to comply with

(i) a business authorization,

(ii) an order referred to in section 237 (2) (a),

(iii) a condition imposed on a consent referred to in section 235 (2), or

(iv) a written undertaking given under this Act,

(d) neglects or refuses to comply with

(i) a permit issued under section 187 (1),

(ii) a licence issued under Division 2 of Part 6,

(iii) an order under this Act other than an order referred to in section 237 (2) (a), or

(iv) a requirement under this Act that the person file or provide information or any record,

(e) being a member of the conduct review committee of a financial institution authorizes, permits or acquiesces in giving an approval under section 146 (1) that the conduct review committee, by section 146 (2), is prohibited from giving,

(f) makes a statement in a record filed or provided under this Act that, at the time and in the light of the circumstances under which the statement is made, is false or misleading with respect to a material fact or that omits to state a material fact, the omission of which makes the statement false or misleading, or

(g) [Repealed 2011-29-109.]

(h) is an extraprovincial corporation and contravenes the Business Corporations Act.

(i) [Repealed 2019-39-74.]

(3) A financial institution that

(a) enters into a voluntary compliance agreement approved under section 244 by the superintendent, and

(b) complies fully with the agreement

does not commit an offence under subsection (2) in respect of a contravention of this Act that the agreement is intended to rectify.

(4) A person does not commit an offence under subsection (2) (f) if at the time of the statement the person did not know that the statement was false or misleading and, in the exercise of reasonable diligence, could not have known that the statement was false or misleading.

(5) If a financial institution commits an offence under this Act, an employee, officer, director or agent of the financial institution who authorizes, permits or acquiesces in the offence commits the same offence whether or not the financial institution is convicted of the offence.

(6) If an extraprovincial corporation commits an offence under subsection (2) (h), a director or officer of the extraprovincial corporation who authorizes, permits or acquiesces in the offence commits the same offence whether or not the extraprovincial corporation is convicted of the offence.

Penalties

253   (1) A person who commits an offence under section 252 (2) (a), (c), (e) or (f) or a prescribed provision of the regulations or the rules made by the Authority is liable

(a) in the case of a corporation on a first conviction to a fine of not more than $500 000 and on each subsequent conviction to a fine of not more than $1 000 000, and

(b) in the case of an individual

(i) on a first conviction, to a fine of not more than $500 000 or to imprisonment for not more than 2 years or to both, and

(ii) on each subsequent conviction, to a fine of not more than $1 000 000 or to imprisonment for not more than 2 years or to both.

(2) A person who commits an offence under section 252 (2) (b), (d) or (h) or a prescribed provision of the regulations or the rules made by the Authority is liable

(a) in the case of a corporation to a fine of not more than $50 000, and

(b) in the case of an individual to a fine of not more than $25 000.

Administrative penalties

253.1   (1) If, in the opinion of the superintendent, a person has contravened

(a) a prescribed provision of the Act,

(b) a prescribed provision of the regulations or the rules made by the Authority,

(c) a condition of a business authorization,

(d) an order under section 244 (2) (f), 245 (1) (f) to (j) or 247, or

(e) an undertaking given to the superintendent under section 208 or 244 (2) (g),

the superintendent may give written notice to the person requiring the person to pay an administrative penalty in the amount specified in the notice.

(2) A notice of administrative penalty under subsection (1) must specify all of the following:

(a) the contravention;

(b) the amount of the administrative penalty;

(c) the date by which the person must pay the administrative penalty;

(d) the right of the person, within 14 days after the notice is delivered, to dispute the administrative penalty, including disputing the amount of the administrative penalty, and the procedure for disputing the penalty.

(3) A person to whom an administrative penalty notice is given must, within 14 days after receiving the notice,

(a) pay the administrative penalty, or

(b) by delivering notice in writing to the superintendent, dispute the administrative penalty, including disputing the amount of the administrative penalty, in accordance with the regulations.

(4) A notice of dispute respecting a penalty described under subsection (5) (b) must indicate whether the person wishes to proceed by way of written submissions or oral hearing.

(5) A person may dispute an administrative penalty as follows:

(a) by written submissions only, if the administrative penalty specified in the notice is less than

(i) $5 000, in the case of a corporation, or

(ii) $2 000, in the case of an individual;

(b) by written submissions or oral hearing, if the administrative penalty specified in the notice is

(i) $5 000 or more, in the case of a corporation, or

(ii) $2 000 or more, in the case of an individual.

(6) If a person is proceeding by way of written submissions, the submissions must be delivered to the superintendent no later than 30 days after the person receives the administrative penalty notice.

(7) If a person requests an oral hearing, the superintendent must hold an oral hearing within a reasonable time after delivery of the notice referred to in subsection (3) (b).

(8) The superintendent must, within a reasonable time after receiving written submissions or holding an oral hearing, confirm whether the person committed the contravention, and if so, may, by order, confirm the penalty specified in the notice under subsection (1) or order a lesser penalty or no penalty.

(9) If a person requests an oral hearing respecting a penalty described under subsection (5) (b) and fails to appear at the time scheduled for the hearing, the superintendent may exercise its powers under subsection (8) in the person's absence.

(10) An administrative penalty for a contravention must not exceed the amount prescribed by regulation for that contravention, and in any event must not exceed

(a) $50 000, in the case of a corporation, and

(b) $25 000, in the case of an individual.

(11) An order made under subsection (8) must specify all of the following:

(a) the contravention;

(b) the amount of the administrative penalty;

(c) the date by which the person must pay the administrative penalty;

(d) the person's right to an appeal.

(12) The superintendent must deliver to the person a copy of any order made under subsection (8).

(13) A person on whom an administrative penalty is imposed by order under subsection (8) must, within 30 days after receiving the order,

(a) pay the administrative penalty, or

(b) file notice of appeal.

(14) An appeal of an order made under subsection (8) operates as a stay and suspends the order until disposition of the appeal.

(15) The time limit for serving an administrative penalty notice under subsection (1) is 2 years after the date that the superintendent or the Authority first had knowledge of the facts on which the notice of contravention is based, whichever is earlier.

(16) If a corporation commits a contravention referred to in subsection (1), the superintendent may, in accordance with this section, impose an administrative penalty on an officer, director or agent of the corporation who authorized, permitted or acquiesced in the contravention, even though the corporation is liable for or pays an administrative penalty.

(17) [Repealed 2019-14-39.]

Limitation on proceedings

253.2   (1) A person on whom a penalty is imposed and who pays the penalty may not be charged and a prosecution does not lie against the person for an offence under this Act for the same contravention.

(2) The superintendent may not impose an administrative penalty under section 253.1 in respect of a contravention if the person has been charged with an offence under this Act for the same contravention.

Failure to pay administrative penalty

253.3   If a person fails to pay an administrative penalty within the time period specified in a notice under section 253.1 (1) or an order under section 253.1 (8), as applicable, or by the date specified in the order made on appeal, if any, the superintendent may file with the court a certified copy of the order imposing the administrative penalty and, on being filed, the order has the same force and effect and all proceedings may be taken on the order as if it were a judgment of the court.

Remedies preserved

254   Subject to section 253.2, a proceeding, conviction or penalty for an offence under this Act does not relieve a person from any other liability.

Limitation period

255   No proceeding for an offence under this Act may be commenced in any court more than 3 years after the facts on which the proceedings are based first come to the knowledge of the superintendent or Authority, whichever comes first.

Court order to comply

256   If a person is convicted of an offence under

(a) this Act, or

(b) the Business Corporations Act as that Act applies to trust companies, insurance companies or extraprovincial corporations,

the court may, in addition to any punishment the court may impose, order the person to comply with the applicable enactment.

Restitution

257   If a person is convicted of an offence under this Act, then, in addition to any other penalty, the court may order the person convicted to pay compensation or make restitution.

Innocent third parties

258   (1) A provision of this Act or of the Business Corporations Act as that Act applies to trust companies, insurance companies or extraprovincial corporations, that makes a transaction by a person illegal, void or unenforceable, must not be construed as extinguishing rights of any other party to the transaction if that other party acted in good faith in the transaction.

(2) A provision of the Company Act as that Act applied for the purpose of this Act, that made a transaction by a person illegal, void or unenforceable, must not be construed as having extinguished rights of any other party to the transaction if that other party acted in good faith in the transaction.

Remedy of irregularities

259   (1) If an omission, defect, error or irregularity has occurred in the conduct of the business or affairs of a financial institution by which

(a) a breach of a provision of this Act or of the Company Act, as that Act applied for the purposes of this Act, has occurred,

(a.1) a breach of a provision of the Business Corporations Act has occurred,

(b) there has been default in compliance with the memorandum, notice of articles or articles of the trust company or insurance company, or the constitution or rules of the credit union, as the case may be, or

(c) proceedings at or in connection with

(i) a general meeting, class meeting or series meeting of the financial institution,

(ii) a meeting of the directors or of any committee of the financial institution, or

(iii) an assembly purporting to be a meeting described in subparagraph (i) or (ii)

have been rendered ineffective,

then, despite any other provision of this Act or the Business Corporations Act, the Supreme Court

(d) either on its own motion, or on the application of an interested person, may make an order to rectify or cause to be rectified or to negative or modify or cause to be modified the consequences in law of the omission, defect, error or irregularity, or to validate any act, matter or thing rendered or alleged to have been rendered invalid by or as a result of the omission, defect, error or irregularity, and may give ancillary or consequential directions it considers necessary, but

(e) before making an order, must consider the effect of the order on the financial institution and on its directors, officers, members and creditors.

(2) An order made under subsection (1) does not prejudice the rights of a third party who has acquired those rights for valuable consideration without notice of the omission, defect, error or irregularity cured by the order.

Part 9 — Deposit Insurance and Stabilization of Credit Unions

Definitions and interpretation for Part

260   (1) In this Part:

"assessment" means an assessment under section 268 (1) or 271 (1) by the deposit insurance corporation;

"credit union" does not include a central credit union;

"debenture" means a debenture issued by the deposit insurance corporation under this Part;

"deposits", used as a noun in relation to a credit union, means the total of

(a) money on deposit,

(b) money invested in non-equity shares issued by the credit union before January 1, 2020, and

(c) declared but unpaid dividends on the non-equity shares referred to in paragraph (b);

"money on deposit" means the unpaid balance of the aggregate of money received by a credit union from or on behalf of a depositor in the course of carrying on deposit business for which the credit union

(a) has given or is obligated to give credit to the depositor's account or has issued or is obligated to issue a receipt, certificate or other instrument in respect of which the credit union is primarily liable, and

(b) is obligated to repay the money to the depositor on a fixed day, on demand by the depositor, within a specified period of time following demand by the depositor or at specified intervals for a specified period of time,

including any interest accrued or payable to the depositor.

(2) For the purpose of the definition of "money on deposit", if a credit union has deposited money into its own deposits on behalf of itself as trustee, it is deemed to be obligated to repay the money to the same extent as it would have been obligated to repay the money had the money been deposited by a trustee other than itself.

Division 1 — Credit Union Deposit Insurance Corporation of British Columbia

Credit Union Deposit Insurance Corporation of British Columbia

261   (1) The Credit Union Deposit Insurance Corporation of British Columbia continues as a corporation to administer and operate the fund.

(2) A person who is a director of the Authority is also a director of the deposit insurance corporation unless the Lieutenant Governor in Council orders that the person

(a) is not, or

(b) ceases to be

a director of the deposit insurance corporation.

(3) The directors of the deposit insurance corporation are its only members.

(4) Unless the regulations provide otherwise, the board of directors of the deposit insurance corporation must appoint the chief executive officer of the Authority as the chief executive officer of the deposit insurance corporation.

(5) The board of directors of the deposit insurance corporation may pass the resolutions and bylaws the board considers necessary or advisable for the management and conduct of the affairs of the corporation and for the exercise of the powers and the performance of the duties of the board, including resolutions and bylaws that define the duties of the corporation's officers and employees.

General powers of the deposit insurance corporation

262   For the purposes of operating and administering the fund, the deposit insurance corporation

(a) may draw, make, accept, endorse, execute and issue promissory notes, bills of exchange, warrants and other negotiable and transferable security instruments,

(b) may raise or borrow money and secure its obligations in amounts and in a manner it sees fit, with or without security, all of which money must be paid into the fund and forms part of the fund, and the deposit insurance corporation may charge the whole or any portion of the fund or of the assets of the fund as security,

(c) may acquire or dispose of property,

(d) may guarantee the obligations of a credit union,

(e) alone or jointly with any other corporation, may provide insurance or arrange for insurance

(i) for directors, committee members, officers and employees of credit unions and of subsidiaries of credit unions, and

(ii) that may be required under section 206, and may charge premiums for the insurance,

(f) may reinsure the liability of the fund with one or more insurers in an amount the Authority considers appropriate, and

(g) has the capacity to accept all powers, privileges and immunities that may be conferred on the deposit insurance corporation under the Canada Deposit Insurance Corporation Act, and to act as the agent of the Canada Deposit Insurance Corporation.

Accounting records

263   The deposit insurance corporation

(a) must maintain books of account in a form and in a manner that facilitates the preparation of its financial statements and other financial reports in accordance with generally accepted accounting principles, and

(b) must prepare its annual financial statements in accordance with generally accepted accounting principles and the regulations.

Appointment of auditor

264   The deposit insurance corporation must appoint an auditor annually.

Auditor's report

265   On receipt of the auditor's report, the deposit insurance corporation must deliver a copy to the Authority and to each credit union immediately.

Division 2 — Deposit Insurance

Guarantee of credit union deposits

266   (1) In this section:

"depositor" includes 2 or more depositors, considered together as a single unit, who own a separate deposit in a credit union;

"guarantee" means the guarantee of the deposit insurance corporation under subsection (2).

(2) In the event of a credit union failing, neglecting or refusing to pay to a depositor of the credit union all or part of any of the depositor's deposits in the credit union, as and when payable, redeemable or withdrawable, then payment out of the fund of the deposit is guaranteed, subject to and in accordance with this section and the regulations, by the deposit insurance corporation.

(3) In the event of failure, neglect or refusal described in subsection (2), a depositor of the credit union, by written notice that is in a form satisfactory to the Authority and is delivered to the deposit insurance corporation, may claim the deposit to the extent guaranteed under the guarantee.

(4) As soon as practical after receipt of notice in accordance with subsection (3) of a depositor's claim under the guarantee, if the Authority is satisfied as to the correctness of the amount claimed, the deposit insurance corporation must pay out of the fund to the depositor the amount to which the depositor is entitled under the guarantee.

(5) The deposit insurance corporation may deduct from an amount to which a depositor is entitled under the guarantee any indebtedness of the depositor to the defaulting credit union.

(6) On payment under subsection (4) by the deposit insurance corporation of the amount to which a depositor is entitled under the guarantee,

(a) neither the deposit insurance corporation nor the defaulting credit union is obliged to see to the proper application of the payment,

(b) the deposit insurance corporation and the fund are discharged from further liability to the depositor for the separate deposits for which payment is made, and

(c) the deposit insurance corporation is subrogated for the amount paid to all the rights and interests of the depositor as against the credit union in respect of the separate deposits for which payment is made.

Fund

267   (1) The fund constituted under section 139 of the Credit Union Act, R.S.B.C. 1979, c. 79, is continued under the administration of the deposit insurance corporation.

(1.1) The deposit insurance corporation must hold the fund in trust for the purposes of administering and operating the fund in accordance with this Part.

(2) The deposit insurance corporation must pay from the fund all

(a) payments, claims and advances required to be paid out of the fund under this Act,

(b) expenses incurred in the maintenance and operation of the fund, and

(c) of its and the Authority's expenses related to the administration, purposes and requirements of this Part.

Contributions to fund

268   (1) In each year, the Authority by order may assess each credit union an amount not exceeding 3/10 of 1% of the total of all deposits with the credit union as at the date of the credit union's immediately preceding financial year end.

(2) Assessments under subsection (1) must be determined on the basis of the annual returns filed by the credit union with the superintendent under this Act or if no returns or inadequate returns have been filed by a credit union the Authority may assess the credit union on an estimated basis, subject to adjustment on the filing of adequate actual returns.

(3) On grounds it considers proper, the Authority by order may waive an assessment under this section as the assessment applies to one or more credit unions named in the order, and in that case, the amount of the assessment that is waived constitutes financial assistance to the named credit union or named credit unions, as the case may be, for the purposes of section 280.

(4) Subject to an order under subsection (3), the amount assessed under subsection (1) against a credit union

(a) is recoverable as a debt owing by the credit union to the deposit insurance corporation,

(b) is payable in accordance with the order making the assessment,

(c) bears interest from the due date of the assessment at the rate, if any, ordered by the Authority, and

(d) may be charged as an expense of the credit union.

Issue of debentures

269   (1) In each year, instead of or in addition to making an assessment under section 268 (1), the Authority may order each credit union to purchase debentures issued by the deposit insurance corporation in an amount not exceeding 1/2 of 1% of the total of all deposits with the credit union as at the date of the credit union's immediately preceding financial year end, and section 268 (2) applies.

(2) The Authority may

(a) set the rate of interest and other terms and conditions of a debenture referred to in subsection (1) of the deposit insurance corporation, and

(b) order the deposit insurance corporation to secure payment of the debenture by a charge on the fund.

Redemption of debentures

270   (1) The Authority may order each credit union

(a) to tender for redemption by the deposit insurance corporation the debentures specified in the order that have been issued to the credit union by the deposit insurance corporation, and

(b) to purchase other debentures issued by the deposit insurance corporation in place of the debentures tendered for redemption under an order made under paragraph (a),

and, for the purposes of this section, a debenture is redeemable by the deposit insurance corporation before maturity of the debenture.

(2) If the deposit insurance corporation redeems debentures held by a credit union and the Authority orders that the credit union purchase other debentures, the deposit insurance corporation must issue debentures in an amount equal to all or a part of the debentures redeemed as the Authority may determine in the order, and the credit union must purchase the debentures.

(3) Section 269 (2) applies to debentures issued by the deposit insurance corporation under subsection (2) of this section.

Fund impaired

271   (1) If in the Authority's opinion the fund is impaired, or is about to be impaired, the Authority

(a) must so inform the minister by written notice, and

(b) by order may assess each credit union an amount not exceeding 1/12 of 1% of the total of all deposits with the credit union as at the date of the credit union's immediately preceding financial year end.

(2) An assessment ordered under this section is in addition to any assessment made under section 268 and must not be ordered more than once in any one calendar year.

(3) Section 268 (2) and (4) applies to an assessment ordered under subsection (1) of this section.

(4) If, at any time during the 12 months immediately after an assessment is ordered under subsection (1), the fund in the Authority's opinion is impaired, the Authority must report its opinion and the reasons for that opinion to the minister, who must refer the report to the Lieutenant Governor in Council.

(5) Despite section 72 of the Financial Administration Act or the regulations referred to in that section, the Lieutenant Governor in Council, if in concurrence with the Authority's opinion that the fund is impaired, may

(a) specify the amount that the Lieutenant Governor in Council considers necessary to repair the fund, and

(b) direct that the Minister of Finance on behalf of the government enter into a guarantee of indebtedness that the deposit insurance corporation incurs to repair the fund

(i) on terms approved by the Lieutenant Governor in Council, and

(ii) not exceeding the amount specified under paragraph (a).

(6) If the Minister of Finance receives a direction under subsection (5), the Minister of Finance must enter into the guarantee in accordance with the direction.

Investment by deposit insurance corporation

272   (1) The deposit insurance corporation may make investments

(a) [Repealed 2002-33-8.]

(b) in shares of a central credit union, if the investment does not exceed 3% of the fund's assets,

(c) in the form of deposits kept in a central credit union or a chartered bank, or

(d) of any prescribed type.

(2) The deposit insurance corporation must not

(a) make a deposit in or purchase non-equity shares of a credit union other than as authorized by subsection (1) (b) or (c), or

(b) purchase equity shares in a credit union,

except for the purpose of granting financial assistance to the credit union as permitted under section 280.

Acts not applicable

273   (1) The Securities Act does not apply to or in respect of the deposit insurance corporation.

(2) [Repealed 2011-29-115.]

(3) The Business Corporations Act, other than section 102 of that Act, does not apply to or in respect of the deposit insurance corporation.

Fund protection symbol

274   (1) The Authority may issue to each credit union a mark, sign or device, designating coverage under the fund, that may be displayed at the office of the credit union and reproduced on the credit union's stationery or advertising.

(2) A credit union must not represent, advertise or hold out that the credit union or any of its shares or deposits or money invested in or deposited with it is protected or insured under this Act otherwise than by the use of marks, signs, advertisements or other devices

(a) authorized by the Authority, or

(b) in accordance with prescribed standards of advertising.

(3) A credit union must not represent, advertise or hold out that its deposits or shares other than those guaranteed under section 266 are guaranteed or insured under this Act.

Division 3 — Stabilization

Supervision of credit union

275   In any of the following circumstances, the superintendent by order may declare a credit union to be subject to the supervision of the superintendent:

(a) the credit union requests and the Authority determines that financial assistance should be provided from the fund;

(b) the credit union has failed to pay its liabilities, or in the opinion of the superintendent, will not be able to pay its liabilities as they become due and payable;

(b.1) the assets of the credit union are not, in the opinion of the superintendent, sufficient to give adequate protection to the credit union's depositors and creditors;

(b.2) the liquidity or capital of the credit union has, in the opinion of the superintendent, reached a level or is eroding in a manner that may detrimentally affect its depositors or creditors;

(c) in the superintendent's opinion the credit union is conducting its affairs in a manner that

(i) might reasonably be expected to harm the interests of depositors, or the interests of persons for whom a credit union acts in a fiduciary capacity, or

(ii) tends to increase the risk of claims against the fund;

(d) the credit union or an officer of it does not file, submit or deliver a report or document required to be filed, submitted or delivered under this Act within the time limited under this Act;

(e) the credit union has failed to comply with the superintendent's order issued under section 244;

(f) the credit union requests in writing that it be subject to supervision;

(g) the credit union has contravened or is in contravention of a provision of Part 5;

(h) the credit union is not complying with its own investment and lending policy.

Duration of supervision

276   If

(a) immediately before September 15, 1990 a credit union is subject to supervision of the board under the Credit Union Act, R.S.B.C. 1979, c. 79, or

(b) the superintendent under section 275 declares a credit union to be subject to supervision,

the credit union remains subject to supervision by the superintendent until

(c) the credit union applies in writing to the superintendent to be released from supervision, stating reasons in support of its application, and the superintendent consents to the release,

(d) the credit union is wound up, or

(e) the superintendent orders that the credit union is released from its supervision.

Orders in relation to credit union that is subject to supervision

277   (1) If a credit union is subject to the supervision of the superintendent, the superintendent may make orders

(a) requiring the credit union to correct any practices that in the superintendent's opinion are contributing to the problem or situation that caused the credit union to be ordered subject to supervision,

(b) requiring a credit union and its directors, committee members, officers and employees to refrain from exercising, in whole or in part, the powers of the credit union or of its directors, committee members, officers and employees, or any of them, as may be specified in the order,

(c) establishing guidelines for the operation of the credit union, and

(d) requiring the credit union not to declare or pay a dividend or to restrict the amount of dividend to be paid to a rate or an amount set by the superintendent.

(e) to (g) [Repealed 2021-2-38.]

(2) If a credit union is subject to the supervision of the superintendent, the Authority may make orders

(a) appointing an individual, who may be an employee of the Authority, as the administrator of the credit union if the Authority considers that the credit union

(i) is not otherwise likely to be released from supervision within a reasonable period of time, or

(ii) has breached a term or condition imposed or a requirement of an order made by the superintendent while supervising the credit union,

(b) terminating the appointment of the administrator appointed under paragraph (a),

(c) if an administrator has been appointed under paragraph (a), terminating the appointment of and removing any or all of the directors and officers of the credit union and appointing directors and officers to fill any vacancy, and

(d) if an administrator has been appointed under paragraph (a) and the capital base of the credit union is less than the amount prescribed for the purposes of this paragraph, requiring

(i) the credit union to amalgamate with another credit union,

(ii) the credit union to dispose of all or substantially all of its assets and liabilities to another credit union, or

(iii) the credit union to be wound up.

Additional circumstances in which section 277 (2) orders may be made

277.1   (1) Subject to subsection (2), when a credit union is not subject to the supervision of the superintendent, the Authority may make an order under section 277 (2) with respect to the credit union as though that credit union were subject to the supervision of the superintendent.

(2) An order referred to in subsection (1) may be made if the Authority considers that

(a) one or more of the circumstances referred to in section 275 apply to the credit union, and

(b) supervision would not be adequate to ensure that a guarantee under section 266 would not need to be invoked.

Assistance to administrator in relation to section 277 (2) orders

277.2   The Authority may appoint one or more persons to assist the administrator in the management of a credit union that is subject to an order under section 277 (2).

Administrator's powers

278   If the Authority appoints an administrator of a credit union, the administrator has the following powers, and must report regularly to the Authority as to the exercise of them:

(a) to carry on, manage and conduct the operations of the credit union;

(b) in the name of the credit union to preserve, maintain, realize, dispose of and add to the property of the credit union;

(c) to receive the income and revenues of the credit union;

(d) to exercise all the powers of the credit union and of the directors, officers, credit officers and credit committees;

(e) to exclude the directors of the credit union and its officers, committee members, employees, servants and agents from the property and business of the credit union.

Administrator

279   (1) On being discharged from duties, an administrator appointed by the Authority must fully account to the Authority for the administration of the credit union.

(2) Unless the Authority otherwise orders within 30 days after completion of the accounting, the administrator is released from all claims by

(a) the credit union or a member, or

(b) a person claiming under the credit union or a member,

other than claims arising out of fraud or dishonesty.

(3) Unless the Authority approves payment of all or part of the remuneration out of the fund, the credit union must pay the administrator's remuneration in an amount established by the Authority.

Financial assistance

280   (1) The deposit insurance corporation may grant financial assistance to a credit union in any manner the Authority thinks fit

(a) whether directly from the fund or as a charge against the fund or otherwise, and

(b) whether conditionally or unconditionally.

(2) Without limiting subsection (1), the deposit insurance corporation may grant financial assistance to a credit union by purchasing equity shares of the credit union.

(3) Despite section 41 of the Credit Union Incorporation Act, if the deposit insurance corporation holds equity shares of a credit union, the deposit insurance corporation is a member of the credit union and has the rights and benefits of a member.

Division 4 — Stabilization Authority

Stabilization authority defined

281   In this Division, "stabilization authority" means the central credit union designated under section 282.

Designation

282   The Lieutenant Governor in Council may make orders

(a) designating a central credit union as the stabilization authority for the purposes of this Division, or

(b) revoking a designation made under paragraph (a).

Mandatory membership

283   It is a condition of every business authorization issued to or held by a credit union during the period

(a) after designation of a central credit union as the stabilization authority, and

(b) before revocation of that designation

that the credit union is a member of the stabilization authority.

Revocation of stabilization authority status and delegated powers

284   If a central credit union that is the stabilization authority resolves to be wound up voluntarily, or is ordered by the Supreme Court or the Authority to be wound up, then

(a) the central credit union's designation under section 282 as the stabilization authority and any delegation under section 285 is immediately revoked without the necessity of an order under either section,

(b) the central credit union must repay to the deposit insurance corporation the unused balance of advances made to it by the deposit insurance corporation under section 287, and

(c) the central credit union must deliver to the Authority

(i) a proper accounting for advances made to it by the deposit insurance corporation under section 287, and

(ii) a written report on its activities as the stabilization authority since the date of the last report submitted under section 288.

Superintendent may delegate to stabilization authority

285   (1) If

(a) a credit union is under the supervision of the superintendent, and

(b) the superintendent is satisfied that

(i) the stabilization authority, if any, is willing and able to undertake the supervision of that credit union, and

(ii) the delegation of powers to the stabilization authority is unlikely to increase the risk of claims against the fund,

the superintendent by order may delegate to the stabilization authority any of the superintendent's powers under section 277 (1) (a) to (d) in relation to that credit union.

(2) The superintendent may revoke a delegation made under subsection (1).

Repealed

286   [Repealed 2021-2-42.]

Advance from fund to stabilization authority

287   If the stabilization authority is authorized under a delegation made under section 285 (1) to exercise powers of the superintendent in relation to a credit union, the Authority may authorize the deposit insurance corporation to advance money from the fund to the stabilization authority for use in supervising or providing financial assistance to a credit union.

Annual report of stabilization authority

288   Not later than April 30 of each year, the stabilization authority must submit to the superintendent a report on the activities of the stabilization authority for the 12 month period ending the previous December 31.

Part 10 — Regulations and Transition

Division 1 — Regulations

Regulations

289   (1) The Lieutenant Governor in Council may make regulations referred to in section 41 of the Interpretation Act.

(2) Without limiting subsection (1), the Lieutenant Governor in Council may make regulations that the Lieutenant Governor in Council considers necessary or desirable governing the carrying on of trust business, deposit business and insurance business by financial institutions and others, including governing the carrying on by extraprovincial corporations of their business in British Columbia.

(3) Without limiting subsection (1) or (2), the Lieutenant Governor in Council may make regulations that the Lieutenant Governor in Council considers necessary or desirable

(a) prescribing forms whether or not specifically mentioned in this Act,

(a.1) authorizing the superintendent to establish forms for the purposes of a regulation,

(b) requiring the use of forms prescribed under paragraph (a) or established under paragraph (a.1),

(c) respecting information and additional information to be contained in or to accompany

(i) plans under section 13 (2) (b) or 22 (2) (a) (v), or

(ii) personal information returns under section 13 (2) (e), 22 (2) (c) or 105,

(d) prescribing fees to be paid in respect of matters connected with the administration of this Act,

(e) respecting the adequacy of liquid assets and the capital base of a financial institution or extraprovincial corporation for the purpose of section 67,

(f) for the purpose of section 67,

(i) prescribing the types of assets and types of liabilities that must be included in determining what constitutes a financial institution's or extraprovincial corporation's capital base,

(ii) establishing formulae or other methods of determining the value of those prescribed types of assets and types of liabilities, and

(iii) prescribing the proportion of the value of those prescribed types of assets, and the proportion of the extent of those prescribed types of liabilities, that constitutes an adequate capital base for a financial institution or extraprovincial corporation,

(f.1) for the purpose of section 67 (2.1), prescribing a percentage, or a range of percentages, of the calculated value of the risk weighted assets of a credit union or extraprovincial credit union,

(f.2) for the purpose of section 67 (2.2),

(i) prescribing activities, circumstances and consequences, and

(ii) establishing matters about which the superintendent must be satisfied before giving its consent,

(f.3) establishing formulae or other methods of determining the amount referred to in sections 64 (8) and 65 (3) (b) of the Credit Union Incorporation Act,

(g) imposing conditions respecting

(i) business authorizations,

(ii) licences issued under Division 2 of Part 6, or

(iii) permits issued under section 187 (1),

(g.1) for the purposes of section 76 (1) (c),

(i) establishing requirements or conditions that must be met by an insurance agent referred to in that section, and

(ii) establishing circumstances that must be present,

before, during or after negotiating or procuring a contract of insurance,

(g.2) for the purposes of section 76 (1) (e), exempting a person or insurer from the requirement to have a business authorization, unconditionally, on conditions or in specified circumstances,

(h) for the purpose of section 72,

(i) prescribing criteria for common trust accounts of trust companies and credit unions, and

(ii) governing the establishment and operation of common trust accounts by trust companies and credit unions,

(i) prescribing financial statements and interim financial statements required under this Act in addition to or instead of any financial statements required under the Business Corporations Act or the Credit Union Incorporation Act,

(i.1) for the purposes of section 178 (3), prescribing a person or class of persons to whom a commission or compensation may be paid, allowed to be paid, offered or promised,

(j) respecting the preparation of financial statements by a financial institution,

(k) prescribing information to be placed before the annual general meeting of a financial institution,

(l) respecting qualifications of auditors of financial institutions,

(m) prescribing responsibilities and duties for the audit committee, the investment and loan committee and the conduct review committee,

(m.1) for the purposes of section 126.26 (1), prescribing matters to be included in an actuary's report,

(n) requiring surety insurance coverage for directors, officers, agents and employees of financial institutions,

(o) governing the business relationships between financial institutions or extraprovincial corporations and others,

(p) for the purpose of section 77, establishing formulae or other methods and their use in valuing claims liabilities and determining what constitutes the adequate reserves,

(p.1) establishing and defining classes of insurance for any purpose of this Act,

(p.2) respecting the solicitation, sale, provision and administration of, or the process for settling claims in relation to, group insurance or creditor's group insurance, including, without limitation,

(i) respecting the amount and disclosure of compensation payable to a person responsible for arranging, enrolling persons into or administering a contract of group insurance or creditor's group insurance, and

(ii) respecting the duties and conduct of an insurer or a person referred to in subparagraph (i),

(p.3) requiring an insurer to be a member of a prescribed organization to deal with complaints that are not dealt with to the satisfaction of complainants under section 80.3,

(p.4) respecting the mediation of prescribed disputes in relation to contracts of insurance, including, without limitation,

(i) requiring an insurer or another party to a dispute to participate in a mediation procedure, and

(ii) prescribing mediation procedures,

(p.5) in respect of a society, as defined in section 1 of the Societies Act, that carries on insurance business,

(i) prescribing requirements in relation to the preparation of or distribution of financial statements of the society,

(ii) requiring the society to have auditors,

(iii) prescribing requirements in relation to the removal of auditors of the society,

(iv) requiring the society to adhere to prudent standards, as defined in section 136 (1) of this Act, in investing the society's funds, and

(v) providing that the society must not do any or all of the following without first obtaining the consent of the superintendent:

(A) sell, lease or otherwise dispose of all or substantially all of the society's undertaking, as described in section 92 of the Societies Act;

(B) propose an arrangement under section 99 of the Societies Act;

(C) voluntarily dissolve, or liquidate and dissolve, under the Societies Act,

(p.6) providing that a person must not apply to restore a dissolved society, as defined in section 1 of the Societies Act, that, before its dissolution, carried on insurance business, without first obtaining the consent of the superintendent,

(p.7) in respect of a society, as defined in section 1 of the Societies Act, that carries on insurance business and that is not an authorized society, as defined in section 197.1 (1) of this Act,

(i) providing that the society must not, under the Societies Act, alter its constitution or bylaws without first obtaining the consent of the superintendent, or

(ii) doing either of the following:

(A) providing that the society must not, under Division 1 of Part 7 of the Societies Act, amalgamate with one or more other corporations;

(B) providing that the society must not, under Division 1 of Part 7 of the Societies Act, amalgamate with one or more other corporations unless, before the amalgamation application is submitted to the registrar for filing under section 87 of that Act, the consent of the superintendent to the amalgamation is obtained,

(p.8) providing that a provision of this Act or the regulations that applies in relation to a consent referred to in section 197.1 applies in relation to a consent referred to in paragraph (p.5) (v), (p.6) or (p.7) (i) or (ii) (B) of this subsection, and doing any of the following:

(i) providing that, in applying the provision, in addition to any necessary changes, that provision is to be read with specified changes;

(ii) specifying circumstances in which the provision applies;

(iii) setting conditions of, or limitations on, the application of the provision,

(q) prescribing procedures related to the payment of inactive deposits to the Minister of Finance under section 85 and requiring financial institutions to give notice to depositors in relation to unclaimed deposits and to keep records of notices as are prescribed,

(r) respecting the operation of credit union offices,

(s) respecting disclosure by financial institutions and their agents to a customer of the details of a transaction, including the identity of the parties to the transaction and the time at which the disclosure must be made, and respecting similar disclosure by financial institutions to persons with whom a financial transaction is arranged by a third party in which the financial institution is to provide a service or product to the person,

(t) respecting disclosure by financial institutions and their agents to a customer in respect of whom the financial institution arranges a transaction in which a person other than the financial institution provides a service or product to the customer,

(u) exempting persons or classes of persons from the requirements of regulations made under paragraphs (s) and (t),

(u.01) respecting disclosure by insurers and their agents to an insurance policy holder of the insurer's intention not to renew the policy, including the time at which the disclosure must be made,

(u.1) respecting administrative penalties, including the following:

(i) prescribing provisions of this Act or the regulations for the purposes of section 253.1 (1) (a) or (b);

(ii) prescribing a schedule of penalties for the purposes of section 253.1;

(iii) prescribing the manner and method for paying an administrative penalty,

(v) prescribing the practices and procedures, including the fees for filing an appeal, respecting the tribunal,

(w) prescribing time limits respecting when the tribunal must commence and complete an appeal or processes related to the appeal, including summary procedures, and

(x) respecting costs that may be assessed by the Authority, superintendent or council under section 241.1, including but not limited to the maximum amounts of costs that may be assessed.

(4) Without limiting subsection (1) or (2), the Lieutenant Governor in Council may make regulations that the Lieutenant Governor in Council considers necessary or desirable

(a) prescribing for the purpose of section 140

(i) types of loans and investments and the circumstances and conditions under which a subsidiary of a financial institution may make them, or

(ii) types of business or activities carried on by a subsidiary of a financial institution,

(b) requiring financial institutions to keep records respecting persons who are related parties in relation to them and specifying the nature and extent of the information to be included in those records,

(c) [Repealed 2004-48-120.]

(d) respecting the replacement of a life insurance contract,

(e) prescribing the duties of insurers and agents in connection with the replacement of a life insurance contract,

(f) respecting the operation and finances of the council,

(f.1) governing the procedures that are to be followed by the council in making and repealing council rules including, but not limited to, publication of the rules,

(f.2) making, amending or repealing a council rule,

(g) subject to the maximum amount prescribed by the Lieutenant Governor in Council, authorizing the council, for the purpose of funding its expenses, to set by order and collect assessments from insurers authorized to carry on insurance business,

(h) prescribing additional responsibilities and duties of the council,

(i) respecting reinsurance under section 78, including, without limiting this power, restricting the extent to which an insurance company may cause itself, or prohibiting an insurance company from causing itself, to be reinsured against risks undertaken under its policies,

(j) [Repealed 2004-48-120.]

(k) prescribing circumstances and conditions for the purposes of section 266,

(l) [Repealed 2008-44-20.]

(m) despite the definition of "credit union" in section 260

(i) prescribing types of deposits with a central credit union and providing that Division 2 of Part 9 applies to and in respect of the prescribed types of deposit, and

(ii) for the purposes of Division 2 of Part 9 as it may be applied under subparagraph (i), exercising the powers set out in paragraph (k) in respect of central credit unions and their deposits,

(m.1) for the purposes of section 261 (4), providing that the board of directors of the deposit insurance corporation may appoint an individual, other than the chief executive officer of the Authority, as the chief executive officer of the deposit insurance corporation,

(n) defining a word or expression used but not defined in this Act,

(o) providing that any or all provisions of this Act or the regulations do not apply to or in respect of a person, entity, thing or transaction, and prescribing circumstances in which or conditions on which the provisions are disapplied under this paragraph,

(o.1) providing that a provision of the Business Corporations Act, or of the regulations under that Act, applicable to a trust company, an insurance company or an extraprovincial corporation does not apply to or in respect of a person, entity, thing or transaction, and prescribing circumstances in which or conditions on which the provision is disapplied under this paragraph,

(o.2) providing that any or all provisions of the Credit Union Incorporation Act, or of the regulations under that Act, do not apply to or in respect of a person, entity, thing or transaction, and prescribing circumstances in which or conditions on which the provisions are disapplied under this paragraph,

(o.3) providing that a provision of the Societies Act, or of the regulations under that Act, applicable to a society, as defined in section 1 of that Act, that carries on insurance business does not apply to or in respect of a person, entity, thing or transaction, and prescribing circumstances in which or conditions on which the provision is disapplied under this paragraph, and

(p) designating a company incorporated before September 15, 1990, to which all or part of the Mutual Fire Insurance Companies Act applies, as a mutual company for the purposes of that Division.

(4.1) A regulation under subsection (3) (p.1) for the purpose of business authorizations may establish and define a class of insurance comprising all types of insurance not otherwise included in a class established under that subsection for that purpose and, if such a class is established and defined, the regulation may delegate to the superintendent the authority to specify in the business authorization of a particular insurer the types of insurance business the insurer may carry on within that class.

(4.11) A regulation under subsection (3) (p.5), (p.6), (p.7) or (p.8) may provide for requirements respecting societies, as defined in section 1 of the Societies Act, that carry on insurance business, in addition to, or in substitution for, the requirements of this Act or the Societies Act that apply, or would otherwise apply, to those societies.

(4.2) A regulation made under subsection (4) (i) may do one or both of the following:

(a) delegate a matter to the superintendent;

(b) confer a discretion on the superintendent.

(5) Without limiting subsection (4) (k), a regulation under that provision may classify deposits in a credit union according to ownership, type or special characteristics.

(6) If a regulation is made for the purpose of a provision of this Act other than Divisions 1, 4 and 5 of Part 6, then, unless the regulation otherwise provides, the regulation also applies in respect of that provision as that provision applies for the purposes of Division 1, 4 or 5, as the case may be, of Part 6.

(7) A regulation made under this Act may

(a) be made applicable generally or to a specific person, entity, thing or transaction, or class of persons, entities, things or transactions,

(b) for the purpose of the regulation, define classes of financial institutions and of extraprovincial corporations, other persons or entities, including classes that may include only one financial institution, one person or one entity,

(c) for the purpose of the regulation, define classes of things or transactions, and

(d) provide differently for different persons, entities, things or transactions, or for different classes of persons, entities, things or transactions.

(8) Without limiting subsection (1) or (2), the Lieutenant Governor in Council may make regulations respecting any matter for which regulations of the Lieutenant Governor in Council are contemplated by this Act.

(9) A regulation made under this Act may adopt by reference, in whole or in part and with any changes the Lieutenant Governor in Council considers appropriate, the following:

(a) a law of another jurisdiction, including a foreign jurisdiction;

(b) a code, standard or rule enacted as or under a law of another jurisdiction, including a foreign jurisdiction;

(c) a code, standard or rule set by a provincial, national or international body or any other body that may make codes, standards or rules.

(10) A law, code, standard or rule referred to in subsection (9) may be adopted as it stands at a specific date or at the time of adoption, or as amended from time to time.

Transfer of disciplinary powers

290   (1) The Lieutenant Governor in Council may make regulations

(a) transferring from the council to the superintendent all of the powers granted to the council under sections 231 to 232.1 and 232.6,

(b) reversing a transfer of powers made under paragraph (a), and

(c) establishing transitional rules in relation to the transfer of powers under paragraph (a) or (b).

(2) A regulation made under this section must be effective on a date specified in the regulation that is at least 3 months after the date of deposit of the regulation under the Regulations Act.

Division 2 — Transitional Provisions

Validity of loans

291   A loan made contrary to this Act, the Credit Union Act, R.S.B.C. 1979, c. 79, a former Credit Unions Act, a rule or a regulation made under them must not be interpreted as having been, or as being, void, and a person who before now has borrowed or under this Act borrows any money from a credit union and any party to an instrument evidencing or securing such borrowing is liable to repay to the credit union the money so borrowed in accordance with the terms of the instrument and any security given for the loan must be construed as having been, and as being, valid and enforceable from the date of its execution and delivery.

Validity of credit union amalgamations before June 25, 1975

292   An amalgamation of credit unions and an incorporation of a new credit union as a result of the amalgamation before June 25, 1975, under B.C. Regs. 290/68 and 314/68, or under the authority of the Credit Unions Act, S.B.C. 1961, c. 14, is confirmed and validated as of the date of the amalgamation and incorporation, and everything done by a credit union so incorporated or its directors in the exercise of any power or authority granted to the credit union or its directors under its constitution or rules or under those regulations is declared to be done lawfully and with full authority.

Variation of agreements

293   The Lieutenant Governor in Council by regulation may modify, vary or terminate any agreement and regulations pertaining to it entered into under section 72B of the Credit Unions Act, S.B.C. 1961, c. 14.

Part 11 — Review of Act

Review of Act

294   Every 10 years, the government must initiate a review of this Act to determine what changes, if any, should be made.