Specialized Financing (Life Companies) Regulations — 8
Definition of non-controlling interest 8 (1) In this section, non-controlling interest means an equity interest, in a specialized financing entity of the life company controlled by a specialized financing entity, that is held by a person other than the life company or an entity controlled by the life company. Ownership restrictions (2) A life company shall not acquire or hold control of, or hold, acquire or increase a substantial investment in, a specialized financing entity if (a) the value of the outstanding debt obligations, other than those payable to the life company or to entities controlled by the life company, of the specialized financing entity and any specialized financing entity of the life company controlled by the specialized financing entity, as reported on their respective balance sheets on an unconsolidated basis, exceeds twice the value of the sum of the following, namely, (i) the value of the excess of assets over liabilities of the specialized financing entity as reported on its balance sheet on an unconsolidated basis, and (ii) the value of the non-controlling interests as reported on the balance sheet of the specialized financing entity on a consolidated basis; (b) the specialized financing entity controls or holds shares of, or ownership interests in, any of the entities referred to in paragraphs 3(a) to (d); (c) the aggregate balance sheet value of the shares and ownership interests, other than shares or ownership interests held by the specialized financing entity in a specialized financing entity of the life company that it controls, that the life company, the specialized financing entity, the subsidiaries of the life company and the other specialized financing entities of the life company hold, or would hold, in an entity that the specialized financing entity holds control of, or a substantial investment in, is more than $250 million; (d) the sum of the values under paragraphs 6(a) to (c) exceeds or would exceed 10% of the life company’s regulatory capital; or (e) the sum of the values under paragraphs 7(1)(a) and (b) exceeds or would exceed 25% of the life company’s regulatory capital. 13 year limit (3) A life company shall not hold control of, or a substantial investment in, a specialized financing entity of the life company if either the specialized financing entity of the life company or the specialized financing entity of the life company and one or more of the following entities, one after another, have held control of, or a substantial investment in, an entity, other than an entity described in subsection (4), for more than 13 consecutive years: (a) the life company; or (b) any other specialized financing entity of the life company. Exception (4) A specialized financing entity of the life company controlled by the specialized financing entity of the life company shall not be considered for the purpose of subsection (3). Prior periods not included (5) If a specialized financing entity of the life company held control of, or a substantial investment in, an entity for a period before becoming the specialized financing entity of the life company, that period shall not be considered for the purpose of subsection (3). SOR/2008-168, s. 16