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B.C. Reg. 157/87
O.C. 1080/87
Deposited June 9, 1987
This archived regulation consolidation is current to April 21, 2006 and includes changes enacted and in force by that date. For the most current information, click here.

Insurance (Captive Company) Act

Insurance (Captive Company) Act Regulation

[includes amendments up to B.C. Reg. 183/2005, March 31, 2005]

Contents
1 Interpretation
2 Sophisticated insured
3 Classes of insurance
4 Shareholders, equity and reserves
5 Registration requirements
6 Expiry of registration
6.1 Renewal of registration
6.2 Pengins International Corp. exemption
6.21 West Fraser Captive Inc. exemption
6.3 Exemption
6.4 Exemption — employee benefits
6.5 Exemption — manufacturer’s and retailer’s warranties
7 Fees
8 Information

Interpretation

1In this regulation:

"Act" means the Insurance (Captive Company) Act.

Sophisticated insured

2For purposes of paragraph (b) of the definition of sophisticated insured, the amount prescribed is $500 000.

Classes of insurance

3A captive insurance company may carry on any class of insurance within the meaning of the Insurance Act except

(a)surety insurance, other than reinsurance of surety insurance, and

(b)Repealed. [B.C. Reg. 221/2002, s. 1.]

(c)insurance of motor vehicles, other than fleet insurance by a corporation.

[am. B.C. Regs. 355/88, s. 1; 221/2002, s. 1.]

Shareholders, equity and reserves

4(1)  The amount of shareholders equity required by a captive insurance company before and after initial registration is $200 000.

(2)  The amount of reserves to be maintained by a captive insurance company after initial registration is $100 000.

(3)  The amounts referred to in subsections (1) and (2) shall be calculated in accordance with generally accepted accounting principles.

Registration requirements

5An applicant for registration under the Act must provide the superintendent with

(a)full particulars of all its directors, officers and managers,

(b)the name of every person owning shares in the organization of the applicant, the type and extent of ownership and the voting power exercised by that ownership,

(c)a statement projecting for a period of 2 years beyond the end of the last financial year of the applicant prior to application, the contemplated premium revenue from insurance and re-insurance and forecast of the types of risk insured, distinguishing income and types by projections for each class of insurance, and

(d)projections in the forms of balance sheets and income statements for a period of 2 years beyond the end of the last financial year of the applicant prior to the application showing the anticipated financial position of the applicant at the end of each of those years.

Expiry of registration

6Every registration under section 6 (1) of the Act expires 90 days after the end of the captive insurance company's fiscal year.

[en. B.C. Reg. 355/88, s. 2.]

Renewal of registration

6.1A captive insurance company applying to have its registration renewed shall provide any information requested by the superintendent.

[en. B.C. Reg. 355/88, s. 2.]

Pengins International Corp. exemption

6.2Section 5 (2) (a) and (b) of the Act does not apply to Pengins International Corp. in respect of its insuring

(a)any corporation in which its parent owns no less than 50% of the voting shares, and

(b)the officers, directors, employees, agents and independent contractors of a corporation described in paragraph (a), against losses incurred while acting on behalf of that corporation.

[en. B.C. Reg. 162/97.]

West Fraser Captive Inc. exemption

6.21(1)  The requirement under paragraphs (a) and (b) of section 5 (2) of the Act, that a pure captive company that undertakes prescribed classes of insurance do so only for the purpose of insuring the persons described in those paragraphs, does not apply to West Fraser Captive Inc. in respect of its insuring

(a)a corporation in which the parent of West Fraser Captive Inc. owns at least 50% of the voting shares,

(b)a joint venture in which the superintendent determines, on evidence satisfactory to him or her, that West Fraser Captive Inc.'s parent corporation holds an interest, as a participant in the joint venture, of at least 50%, subject to an auditor's report, submitted annually to the superintendent, confirming that fact for each year of the joint venture, or

(c)a person who is an officer, director, employee, agent or independent contractor

(i)of a corporation described in paragraph (a), against losses incurred by that person while acting on behalf of the corporation, or

(ii)of a joint venture described in paragraph (b) or of a participant in the joint venture, against losses incurred by that person while acting on behalf of the joint venture.

(2)  This section does not affect the application to West Fraser Captive Inc. of the requirement in section 5 (2) that a pure captive insurance company may undertake only prescribed classes of insurance.

[en. B.C. Reg. 58/2000.]

Exemption

6.3(1)  Section 5 (2) of the Act does not apply to a pure captive insurance company in respect of its insuring, under a contract of reinsurance, another insurer against all or part of the risk incurred by that other insurer arising out of a contract under which that other insurer undertakes one or more of the classes of insurance prescribed under section 5 (2) of the Act, but not any other class of insurance, and does so only for the purpose of insuring

(a)the parent of the pure captive insurance company,

(b)any affiliated corporation of that parent, or

(c)all or any of the officers, directors, employees, agents and independent contractors of the pure captive insurance company, the parent of the pure captive insurance company or any affiliated corporation of that parent, against losses incurred while acting on behalf of all or any of that pure captive company, parent or affiliated corporation.

(2)  Section 5 (3) of the Act does not apply to an association captive insurance company in respect of its insuring, under a contract of reinsurance, another insurer against all or part of the risk incurred by that other insurer arising out of a contract under which that other insurer undertakes one or more of the classes of insurance prescribed under section 5 (3) of the Act, but not any other class of insurance, and does so only for the purpose of insuring

(a)the member organizations of the association captive insurance company's association,

(b)any affiliated corporation of those member organizations, or

(c)all or any of the officers, directors, employees, agents and independent contractors of the association captive insurance company, the member organizations of the association captive insurance company or any affiliated corporation of those member organizations, against losses incurred while acting on behalf of all or any of that association captive company, those member organizations or that affiliated corporation.

(3)  Section 5 (4) of the Act does not apply to a sophisticated insured captive insurance company in respect of its insuring, under a contract of reinsurance, another insurer against all or part of the risk incurred by that other insurer arising out of a contract under which that other insurer undertakes one or more of the classes of insurance prescribed under section 5 (4) of the Act, but not any other class of insurance, and does so only for the purpose of insuring

(a)the sophisticated insureds that comprise the sophisticated insured captive insurance company's sophisticated insured group,

(b)any affiliated corporation of those sophisticated insureds, or

(c)all or any of the officers, directors, employees, agents and independent contractors of the sophisticated insured captive insurance company, the sophisticated insureds that comprise the sophisticated insured captive insurance company's sophisticated insured group or any affiliated corporation of those sophisticated insureds, against losses incurred while acting on behalf of all or any of that sophisticated insured captive insurance company, those sophisticated insureds or those affiliated corporations.

[en. B.C. Reg. 232/96.]

Exemption — employee benefits

6.4(1)  In this section:

"employee benefits" means one or more of the following that are provided to employees or their dependants:

(a)accident and sickness insurance;

(b)disability insurance;

(c)life insurance;

"employees" includes former employees, directors, former directors, officers and former officers.

(2)  Section 5 (2) of the Act does not apply to a pure captive insurance company providing employee benefits only for the purpose of insuring all or any of the employees, or their dependents, of the pure captive insurance company, the parent of the pure captive insurance company or any affiliated corporation of that parent.

(3)  Section 5 (3) of the Act does not apply to an association captive insurance company providing employee benefits only for the purpose of insuring all or any of the employees, or their dependents, of the association captive insurance company, the member organizations of the association captive insurance company or any affiliated corporation of those member organizations.

(4)  Section 5 (4) of the Act does not apply to a sophisticated insured captive insurance company providing employee benefits only for the purpose of insuring all or any of the employees, or their dependents, of the sophisticated insured captive insurance company, the sophisticated insureds that comprise the sophisticated insured captive insurance company's sophisticated insured group or any affiliated corporation of those sophisticated insureds.

[en. B.C. Reg. 221/2002, s. 2.]

Exemption — manufacturer’s and retailer’s warranties

6.5(1)  Section 5 (2) of the Act does not apply to a pure captive insurance company that provides vehicle warranty insurance or product warranty insurance which is solely incidental to the sale of the vehicle or product by its parent company or affiliated corporations of the parent company.

(2)  Section 5 (3) of the Act does not apply to an association captive insurance company that provides vehicle warranty insurance or product warranty insurance which is solely incidental to the sale of the vehicle or product by the member organizations of its association or their affiliated corporations.

[en. B.C. Reg. 183/2005.]

Fees

7(1)  The fee for application for registration under the Act is $500.

(2)  The fee for registration under the Act is $2 500.

(3)  The fee for renewal of a registration under the Act is $2 500.

Information

8(1)  The superintendent may, at any time, require information from a captive insurance company concerning the person who manages the company, including, without limiting the generality of the foregoing,

(a)the conduct of that person's business with respect to the management of the captive insurance company, and

(b)if that person is a corporation, particulars of its directors and officers.

(2)  A captive insurance company that is required to provide information under subsection (1) shall do so fully, promptly and in the manner required by the superintendent.

[en. B.C. Reg. 355/88, s. 3.]

[Provisions of the Insurance (Captive Company) Act, R.S.B.C. 1996, c. 227, relevant to the enactment of this regulation: section 13]