Investment Limits (Insurance Holding Companies) Regulations — 11
Certain indirect interests 11 (1) If an insurance holding company or a designated entity controlled by an insurance holding company makes a loan to, or beneficially owns or guarantees the debt obligation of, a third party, the loan or debt obligation is an interest of the insurance holding company in real property if it is secured by (a) real property beneficially owned by a third party in conjunction with (i) the insurance holding company, (ii) the designated entity, (iii) a related real property entity of the insurance holding company, (iv) a securities dealer or insurance company controlled by the insurance holding company, (v) an entity controlled by a securities dealer or insurance company referred to in subparagraph (iv), or (vi) a real property entity described in subparagraph 10(1)(c)(i) or (ii); or (b) shares or ownership interests beneficially owned by a third party in (i) an entity that beneficially owns real property in conjunction with the insurance holding company, a related real property entity of the insurance holding company or a designated entity controlled by the insurance holding company, or (ii) a related real property entity of the insurance holding company. Value of those interests (2) The value of the interests of an insurance holding company in real property is (a) in respect of a loan or debt obligation that is secured by real property referred to in paragraph (1)(a), the lesser of (i) the net realizable value of the third party’s interest in the real property at the time that the security interest was given, and (ii) the amount determined by the formula A - B where A is (A) if the loan was made by the insurance holding company or a designated entity controlled by the insurance holding company or the debt obligation is beneficially owned by the insurance holding company or a designated entity controlled by the insurance holding company, the book value of the loan or debt obligation, or (B) if the debt obligation is guaranteed by the insurance holding company or a designated entity controlled by the insurance holding company, the face value of the guarantee, and B is the total net realizable value of any other security interests that were given for the loan or debt obligation; (b) in respect of a loan or debt obligation that is secured by shares or ownership interests beneficially owned by a third party in an entity referred to in subparagraph (1)(b)(i), the lesser of (i) the net realizable value of the third party’s interest in those shares or ownership interests at the time that the security interest was given, and (ii) the amount determined by the formula A - (B - (C × D/E)) where A is (A) if the loan was made by the insurance holding company or a designated entity controlled by the insurance holding company or the debt obligation is beneficially owned by the insurance holding company or a designated entity controlled by the insurance holding company, the book value of the loan or debt obligation, or (B) if the debt obligation is guaranteed by the insurance holding company or a designated entity controlled by the insurance holding company, the face value of the guarantee, B is the total net realizable value of all security interests that were given for the loan or debt obligation, C is the net realizable value of the entity’s interest in the real property referred to in subparagraph (1)(b)(i), D is the value of the shares or ownership interests that are given as the security interest, and E is the total value of the outstanding shares or ownership interests in the entity; and (c) in respect of a loan or debt obligation that is secured by shares or ownership interests beneficially owned by a third party in a related real property entity referred to in subparagraph (1)(b)(ii), the lesser of (i) the net realizable value of the third party’s interest in those shares or ownership interests at the time that the security interest was given, and (ii) the amount determined by the formula A - B where A is (A)