Income Tax Regulations — (a)
Canadian investment fund of an insurer at the end of a taxation year means (a) in the case of a life insurer resident in Canada, the total of (i) the amount of the insurer’s Canadian reserve liabilities as at the end of the year (to the extent that the amount exceeds the amount of surplus appropriations included in that amount), and (ii) the greater of (A) the amount determined by the formula C + ((D - E + F) x (G / H)) where C is 8% of the amount determined under subparagraph (i), D is the total of all amounts each of which is the amount of a deferred realized net gain or an amount expressed as a negative number of a deferred realized net loss of the insurer as at the end of the year, E is the total of all amounts each of which is the amount of an item reported as an asset that is owned by the insurer at the end of the year and is a share of the capital stock of, or a debt owing to the insurer by, a financial institution affiliated with the insurer, F is the total of all amounts each of which is the amount as at the end of the year of a debt assumed or incurred by the insurer in respect of the acquisition of an asset described in E (or another property for which an asset described in E is a substituted property), G is the amount of the insurer’s weighted Canadian liabilities as at the end of the year, and H is the amount of the insurer’s weighted total liabilities as at the end of the year, and (B) the amount determined by the formula (I − (0.9 × I.1) − (J − (0.9 × J.1)) + K + L) × (M ÷ N) where I is the total of all amounts each of which is the amount of an item reported as an asset of the insurer as at the end of the year (other than an item that at no time in the year was used or held by the insurer in the course of carrying on an insurance business), I.1 is the total of all amounts each of which is the amount, in respect of a group of reinsurance contracts held by the insurer at the end of the year, that is (I) if no portion of the contractual service margin for the group is in respect of a risk under a segregated fund policy, the contractual service margin for the group, and (II) in any other case, the amount that would be the contractual service margin for the group if the contractual service margin were determined excluding any portion that is in respect of the reinsurance of a risk under a segregated fund policy, J is the total of all amounts each of which is the amount of an item reported as a liability of the insurer (other than policyholders’ liabilities or a liability that was at any time in the year connected with an asset that was not used or held by the insurer in the course of carrying on an insurance business at any time in the year) as at the end of the year in respect of an insurance business carried on by the insurer in the year, J.1 is the total of all amounts each of which is the contractual service margin for a group of insurance contracts of the insurer at the end of the year (other than a group of segregated fund policies), K is the total of all amounts each of which is an amount of a deferred realized net gain or an amount expressed as a negative number of a deferred realized net loss of the insurer as at the end of the year, L is the total of all amounts each of which is an amount of an item reported by the insurer as at the end of the year as a general provision or allowance for impairment in respect of investment property of the insurer for the year, M is the amount of the insurer’s weighted Canadian liabilities as at the end of the year, and N is the amount of the insurer’s weighted total liabilities as at the end of the year; and (b) in the case of a non-resident insurer, the total of (i) the amount of the insurer’s Canadian reserve liabilities as at the end of the year, and (ii) the greatest of (A) the total of (I) 8% of the amount determined under subparagraph (i), and (II) the total of all amounts each of which is an amount of a deferred realized net gain or an amount expressed as a negative