Specialized Financing (Insurance Holding Companies) Regulations — 3
Definition of non-controlling interest 3 (1) In this section, non-controlling interest means an equity interest, in a specialized financing entity of the insurance holding company controlled by a specialized financing entity, that is held by a person other than the insurance holding company or an entity controlled by the insurance holding company. Ownership restrictions (2) An insurance holding 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 insurance holding company or to entities controlled by the insurance holding company, of the specialized financing entity and any specialized financing entity of the insurance holding 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, (i) an entity referred to in any of paragraphs 971(1)(a) to (j) of the Act, (ii) an entity that is primarily engaged in the leasing of motor vehicles in Canada for the purpose of extending credit to a customer or financing a customer’s acquisition of a motor vehicle, (iii) an entity that is primarily engaged in providing temporary possession of personal property, including motor vehicles, to customers in Canada for a purpose other than to finance the customer’s acquisition of the property, or (iv) an entity that acts as an insurance broker or agent in Canada; (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 insurance holding company that it controls, that the insurance holding company, the specialized financing entity, the subsidiaries of the insurance holding company and the other specialized financing entities of the insurance holding 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 following exceeds 10% of the insurance holding company’s regulatory capital, namely, (i) the aggregate balance sheet value of the shares and ownership interests that the insurance holding company and its subsidiaries, whether individually or jointly, would acquire in the specialized financing entity, (ii) the aggregate balance sheet value of the shares and ownership interests held by the insurance holding company and its subsidiaries, whether individually or jointly, in the specialized financing entities of the insurance holding company, and (iii) the aggregate value of outstanding loans made by the insurance holding company and its subsidiaries, whether individually or jointly, to the specialized financing entities of the insurance holding company; or (e) the sum of the following exceeds or would exceed 25% of the insurance holding company’s regulatory capital, namely, (i) the aggregate balance sheet value of the shares and ownership interests held by the insurance holding company and its subsidiaries, whether individually or jointly, in the specialized financing entity, in the entities controlled by the specialized financing entity and in the entities in which that specialized financing entity holds a substantial investment, and (ii) the aggregate value of outstanding loans that the insurance holding company and its subsidiaries, whether individually or jointly, have made to the specialized financing entity, to t