National Housing Act — N-11 32
Life insurance companies investment 32 (1) Any life insurance company subject to the jurisdiction of Parliament may, notwithstanding any restriction on the power of the company to lend or invest money contained in any other statute or law, (a) subject to the conditions set out in subsection (2), invest its funds, to an aggregate amount not exceeding five per cent of its total assets in Canada, as shown in its most recent annual return filed under section 665 of the Insurance Companies Act , in the purchase of land and the construction thereon of a low cost or moderate cost rental housing project, including such buildings or such accommodation for retail stores, shops, offices and other community services, but not including hotels, as the company may deem proper and suitable for the convenience of the tenants of that rental housing project; and (b) after investing its funds pursuant to paragraph (a), hold, maintain, repair, alter, demolish, reconstruct, manage, collect or receive income from, sell or convey, in whole or in part, land acquired by means of the investment and the improvements on the land. Conditions of investment under subsection (1) (2) The conditions under which an investment referred to in subsection (1) may be made are as follows: (a) the project shall, in the discretion of the Corporation, be constructed in accordance or in harmony with an official community plan satisfactory to it; (b) the project shall be designed to provide housing accommodation for families of low income or moderate income and the Corporation may prescribe a maximum average cost per room or per family housing unit provided thereby, or per person to be accommodated; (c) the company shall submit to the Corporation an application in a form to be prescribed by it and accompanied by the following: (i) a map showing the location of the land and any structures thereon, the purchase of which is deemed by the company to be necessary to the project, (ii) a plan and specifications prepared by an architect showing the buildings or improvements to be constructed thereon pursuant to the project, (iii) an estimate of the cost of the entire project prepared by an architect or engineer and approved by the company, (iv) an estimate of such rentals of the family housing units and the other facilities to be provided as are necessary to assure a minimum return of six per cent per annum on the cost of the entire project after payment of all taxes, insurance, costs of operation and maintenance and an annual amount sufficient to amortize the cost of construction of the project, less the cost of the land, within a period representing the estimated useful life of the project but not in any case exceeding fifty years after the date of completion of the project, and (v) such other information or material as the Corporation may require; and (d) the investment is approved by the Corporation. Guarantee to life insurance company (3) Where a life insurance company agrees with the Corporation (a) to maintain, in relation to a rental housing project in which the company invests under this section, separate books and records satisfactory to the Corporation and open to its inspection at any time, (b) to establish, on account of the project, a reserve comprising all net earnings in any year after completion of the project that are in excess of seven per cent per annum on the cost of the project, and (c) to repay out of the reserve any advances made by the Corporation under the guarantee given pursuant to this subsection, the Corporation shall guarantee to the company, for as long as it retains ownership of the whole or any part of the project, a net return in any year after the completion of the project of three per cent per annum of the cost of the project for a period not exceeding the estimated useful life of the project and in any case not exceeding fifty years. Definition of net return in any year (4) In this section, net return in any year means an amount equal to annua