# An Act respecting Insurance Companies

Schedules:
CAP. XLVIII.
An Act respecting Insurance Companies.
[Assented to 22nd May, 1868.]
Preamble.Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
Interpretation clause.1. The following terms and expressions whenever used in this Act, unless it be otherwise specially provided, or there be something in the context repugnant to, or inconsistent with such construction, shall be construed and interpreted as hereinafter mentioned, that is to say:
Company."Company," means and includes any Corporation, and any Society or Association, incorporated or unincorporated, and any partnership carrying on the business of Insurance other than that of Marine Insurance only;
Agent."Agent," means the principal Agent of the Company in Canada, named as such in the power of Attorney hereinafter referred to, by whatever name he may be designated;
Chief agency."Chief Agency," means the principal Office or place of business of the Company in Canada.
No company to act without a license, unless transacting exclusively Ocean Marine Insurance.2. Except Companies transacting in Canada Ocean Marine Insurance business exclusively, it shall not be lawful for any Insurance Company, to issue any Policy of Insurance, or take any risk, or receive any premium or transact any business of Insurance in Canada, or to prosecute or maintain any suit, ​action or proceeding either at Law or in Equitj, or to file any claim in Insolvency, without first obtaining a License from the Minister of Finance to carry on business in Canada; Proviso: as to existing policiesbut the premiums to become due on policies actually issued previous to this date, may continue to be received, and the losses arising thereon may be paid as if this Act had not been passed.
Minister of Finance to grant license, and when.3. The Minister of Finance shall issne such License as aforesaid, so soon as the Company applying for the same has deposited through him in the hands of the Receiver General, the sums of money or securities hereinafter mentioned and required, and such Licence shall specify the business to be carried on by the Company.
Deposit to be previously made by companies obtaining licenses.4. The deposit to be so made, as aforesaid, shall be as follows, to wit: by every Life, Fire, Inland Marine, Guarantee or Accident Insurance Company, a sum of not less than Fifty thousand Dollars, and such sum shall be deposited before the License is issued, Exception in favor of certain companies, who may deposit by instalments.except only in the case of Companies incorporated before the passing of this Act, by Act of the Parliament of Canada, or of the Legislature of any of the late Provinces of Canada, Lower Canada or Upper Canada, or of Nova Scotia or New Brunswick, or which may have been or may hereafter be incorporated by the Parliament of Canada or by the Legislature of any Province of the Dominion, and carrying on the business of Life or Fire Insurance or of Inland Marine Insurance or both the latter, but no other, which Companies may make such deposit in three equal annual instalments, the first of which shall be paid before the issue of the License, on or before the first day of August, one thousand eight hundred and sixty-nine.
Deposit for each branch of business.5. When any Company carries on more than one description of Insurance business, it shall make a separate deposit as aforesaid, for each Branch of its business; Proviso: as to combination of certain branches.Provided that a Company combining Life and Accident Insurance or Fire and Inland Marine Insurance shall only be required to make one deposit for each such combination of two branches of business; and with respect to any Insurance business other than those hereinbefore specified, the Minister of Finance may prescribe the amount of deposit which shall be required.
Additional obligation of a Company whose deposit is less than $100,000: to deposit certain moneys received from premiums.6. Except only as regards Companies entitled to make their deposits by instalments as aforesaid, whenever and so long as the deposit of any Company, under this Act, shall be less than one hundred thousand dollars, the Agent of such Company shall Send in yearly to the Minister of Finance, within one month after the first day of January of each year, returns under oath, of the amount of premiums received by the Company on risks in Canada, and after deducting twenty-five per cent, therefrom, and the net amount of losses or claims actually paid, shall deposit in the hands of the Receiver General for the purposes of this Act, and subject to its provisions, the balance of such ​premiums, until the deposit of such Company shall be equal to one hundred thousand dollars; and so long as such deposit is under one hundred thousand dollars^ no interest or dividends shall be paid on the actual deposit, but such interest or dividend shall be added to the principal every half year until, with the premiums hereinbefore mentioned, the deposit shall amount to one hundred thousand dollars; Proviso.Provided, that any Company combining the business of Fire and Life Insurance, shall be required to make such additional deposit only as regards the premiums received for Life Insurance; Proviso.and provided also that any Life Insurance Company incorporated in Canada since the Union which shall deposit all the balance of the premiums received by it, after the deductions above provided for, until such deposit amounts to one hundred thousand dollars, and that any Fire Insurance Company so incorporated, Proviso.which shall deposit all its receipts from payments on its shares, and the balance of premiums as aforesaid, shall not be subject to any provision of this Act requiring any other deposit.
Investment of deposit.7. It shall be the duty of the Receiver General forthwith to invest the amount of any such deposit made in cash, in Canada Dominion Stock, in Trust for the Company making such deposit, for the purposes of this Act; Not to be diminished except as hereinafter provided.and except as hereinafter provided, in case of the Insolvency of the Company, such Stock or the amount of such deposit, shall not be lessened, disposed of or surrendered to the Company without the order of the Governor in Council.
Interest on investment: how to be dealt with.8. Except in the cases with respect to which it is otherwise provided, so long as the amount of the deposit which any Company is required to have then made is unimpaired, and no notice of any judgment or order to the contrary is served upon the Minister of Finance and the Receiver General, the interest upon the Stock or securities representing or forming part of such deposit shall be payable to the Company.
Certain documents to be filed in the Courts by Companies licensed.9. £very Company obtaining such License as aforesaid, shall, before the transaction of any business of Insurance, in the Office of either of the Superior Courts of Law or Equity in that one of the Provinces of Ontario, Nova Scotia, or New Brunswick, in which it has its Chief Agency, (if such Chief Agency be in one of those Provinces) or if the Chief Agency be in the Province of Quebec, with the Prothonotary of the Superior Court of the district wherein such Chief Agency is established, a certified copy of the Charter, Act of Incorporation or Articles of Association of the Company, and also a Power of Attorney from the Company to its Agent in Canada, under the Seal of the Company, (if it have a Seal) and signed by the President and Secretary qr other proper officer thereof, and verified as to its authenticity by the oath of the Agent of such Company in Canada, or of some person cognizant of the facts necessary to its verification, which power of Attorney must declare at what place in Canada, the Chief ​Agency of the Company is, or is to be, established Must authorize agent to receive service of process.and must expressly authorize such Agent to receive process in all suits and proceedings against such Company in Canada, for any liabilities incurred by the Company therein, and must declare that service of process for or in respect of such liabilities, at such Chief Agency or personally on such Agent at the place where such Chief Agency is established, shall be legal and binding on the Company to all intents and purposes whatever.
Service of process on Companies according to such documents to be valid.10. After the certified copies referred to in the next preceding section, and such Power of Attorney are filed as aforesaid, any process in any suit or proceeding against such Company, for any liabilities incurred in Canada, may be served on the Company at its Chief Agency, in the same manner as process may be served upon any Company incorporated in Canada, and all proceedings may be had thereupon to judgment and execution in the same manner and with the same force and effect as in proceedings in any Civil suit in Canada.
Company to give public notice of its being licensed.11. Every Company obtaining such License as aforesaid, shall forthwith give due notice thereof in the Canada Gazette, and in at least one Newspaper in the County, City, or place where the Chief Agency is established, and shall continue the publication thereof for the space of one calendar month, and the like notice shall be given when such Company shall cease, or notify that they intend to cease, to carry on business in Canada.
Every Foreign Stock Company must have at least $100,000 unimpaired capital.12. No Foreign Stock Company shall transact any business of Insurance in Canada, unless such Company is possessed of at least one hundred thousand dollars of paid up and unimpaired Capital, or accumulated surplus Funds invested in good and sufficient securities, nor shall any License be issued in favour of such Company, until a statement under oath to that effect is filed with the Minister of Finance sworn to by some one whose duty it is to know and who is personally cognisant of the fact sworn to; Proviso: deposit to be reckoned as part.Provided that the unimpaired amount of the deposit of any Company then in the hands of the Receiver General shall be reckoned as part of its capital.
Penalty for issuing policy, &c., without license.13. Any person who shall deliver any Policy of Insurance or collect any premium, or transact any business of Insurance on behalf of any such Company as aforesaid, without such License as aforesaid, or if such License has been withdrawn, without the renewal thereof, or without filing the copy of the Charter, Act of Incorporation, or Articles of Association of the Company, and a Power of Attorney as hereinbefore provided, shall be liable to a penalty of one thousand dollars for each such contravention of this Act, How recoverable, &c.which penalty may be sued for and recovered on information filed in the name of the Attorney General for Canada, and shall be paid to the Crown, and in case of non-payment of such penalty in one month after such judgment, the person so offending shall be liable to imprisonment ​in any gaol or prison in the jurisdiction where he is convicted, for the space ot three months.
Annual statements to be transmitted to the Minister of Finance in the forms given in the schedule14. Subject to the exception in the next following section, every Company so licensed shall transmit annually, to the Office of the Minister of Finance, a statement in duplicate, verified by the oath of the President, Manager, or Agent of such Company, or of any person cognizant of the facts, containing the particulars mentioned in the form in the Schedule to this Act, applicable to the case, such statement to be made up to the First day of July next preceding, or to the usual balancing day of the Company, provided such balancing day be not more than twelve months in the case of Life Assurance Companies and six months in the case of other Companies before the filing of such statement, and a copy of such statement shall be published in the Canada Gazette; Analysis to be laid before Parliament.and the Minister of Finance shall cause the statements or an analysis thereof to be laid before Parliament, within thirty days after the commencement of each Session thereof, and any Company failing to comply with the provisions of this section shall forfeit and pay to the Crown, the sum of one thousand dollars to be recovered on information to be filed in the name of the Attorney General for Canada, in that behalf; Form of statement in cases not provided for: Minister to prescribe.and with respect to any kind of business not provided for in the said schedules, the Minister of Finance may prescribe the form of return which shall be made, under the like penalty, and recoverable in the like manner, and the Minister of Finance may from time to time vary the forms in the said schedules, as far as regards the business done by any Company in Canada, or grant an extension of time for filing the same according as experience or the special constitution of any Company may require.
Exception as to statements by certain Companies in the United Kingdom.15. No Insurance Company established in the United Kingdom, and which is not bound by the laws in force there to furnish or publish statements of its affairs, shall be liable to the obligation, or to the penalty mentioned in the next preceding section, provided such Company, if a Fire Insurance Company only, has deposited not less than one hundred thousand dollars, if a Life, or Fire and Life Insurance one hundred and fifty thousand dollars, in the hands of the Receiver General, for the purposes of this Act, and subject to all the provisions thereof, but every such Company shall publish and file with the Minister of Finance on or before the thirty-first day of January in each year, a general statement under oath of the Agent in Canada, containing the particulars mentioned in the form D, in the Schedule annexed to this Act.
Application of deposit to pay claims in case of Insolvency of a Company.16. In case of the Insolvency of any Company, the stock representing the deposit of such Company shall be applied pro rata towards the payment of all claims duly authenticated against such Company, upon or in respect of policies issued in Canada; When to be deemed insolvent.and any such Company shall be deemed Insolvent upon failure to pay any undisputed claim arising or loss insured against in Canada for the space of thirty days after being due, ​or, if disputed, after final judgment and tender of a legal valid discharge and (in either case) after notice thereof to the Minister of Finance; Distribution of proceeds of deposit.and the distribation of the proceeds of such stock may, if applied for in the Province of Ontario, or of Nova Scotia, or of New Brunswick, be made by order in Chancery, or in Equity, or if applied for in the Province of Quebec, may be made, by judgment or order of distribution of the Superior Court within the district where the Chief Agency is situated; Proviso.Provided that in any case when a claim for loss is by the terms of the policy payable on proof of such loss, without any stipulated delay, the notice to the Minister of Finance under this section shall not be given until after the lapse of sixty days from the time when the claim becomes due.
Order of the Court in cases of distribution17. For the purposes of such distribution the Court may order that the stock of the Company so Insolvent be transferred to and inscribed in the Government stock books, at or nearest to the place of the Chief Agency, and within the jurisdiction of the Court, if such stock be not already inscribed there, and may order that no further interest on such stock be thereafter paid to the Company, and that such stock or any part thereof be sold in such manner and after such notice and formalities as the Court may appoint.
License to be null on failure to pay deposits or balance of premiums; and in the case of insolvency.18. Whenever any Company entitled to make the deposits required by this Act by instalments, fails to pay any such instalment when due,—or if any Company fails to pay to the Receiver General the proper balance of its premiums as required by this Act, and at the time required by it,—or whenever notice has been given to the Minister of Finance under the next preceding section but one, so that the amount of the stock representing the deposit of such Company is liable to be reduced by sale of any portion thereof, the license of such Company shall ipso facto be null and void and shall be deemed to be withdrawn; Renewal in certain cases.but such License may, in the case last mentioned, be renewed and the Company may again transact business, if within sixty days after notice to the Minister of Finance of the Company's failure to pay any undisputed claim, or the amount of any final judgment, as provided in the said section, undisputed claims or final judgments upon or against the Company in Canada, are paid and satisfied and the Company's deposit is restored to the amount required by this Act.
Provision in case of the Company ceasing to do business in Canada19. After any Company has ceased to transact business in Canada, and given the notice required by this Act to that effect, it shall be lawful for the Governor in Council on the report of the Treasury Board, to authorize the whole or any portion of the stock or other securities so held in deposit for any Company as aforesaid, to he released and transferred to the Company upon being satisfied that it has no liabilities upon policies issued in Canada, and that no suit or legal proceedings are penditig against the Company therein, or on proper proof on oath of the state of its affairs being given, that such Company has ample assets to meet all its liabilities; and ​Return of deposit.upon such authority being given, by the Governor in Council, the Company shall be entitled to receive, instead of any Dominion stock so held, the amount thereof in money at par.
Mutual insurance Companies to be subject to this Act in certain cases only except as to returns.20. Mutual Fire Insurance Companies having their head office in any part of Canada, shall register their names with the Minister of Finance, and shall make annual returns in such form as may be prescribed by him; Any such Mutual Fire Insurance Company receiving cash or part cash premiums in lieu of premium notes, or accepting risks other than from its own members, shall deposit in the hands of the Receiver General one third of the cash premiums received by it, but the total amount of such deposit need never exceed the average annual amount of the cash premiums received by the Company during the three years next preceding the date of its then last Return, or the average annual amount of losses sustained during the same period; and if such Mutual Fire Insurance Company receive no cash premiums whatever in lieu of premium notes, and act wholly and exclusively on the Mutual Principle, it shall not be bound to make such deposit.
As to Companies in Ontario and Queec, licesned under Acts of the late Province of Canada, 23 V. c. 33; 26 V. c. 43.21. As regards Fire Insurance Companies in the Provinces of Ontario and Quebec, licensed under the Acts of the Legislature of the late Province of Canada, twenty-third Victoria, chapter thirty-three, and twenty-sixth Victoria, chapter forty-three, the securities given under those Acts by any such Company complying with the requirements of this Act, may be delivered up to them respectively on the warrant of the Minister of Finance, who shall grant such warrant on the conditions herein specified, on being satisfied that there is no claim for which such securities are liable under the provisions of the said Acts, or he may grant such warrant for the delivery of part thereof, provided he is satisfied that the remaining part is sufficient to satisfy any such claim; Provision as to deposit under this Act.provided always, that any sum deposited under this Act, shall stand as security for the payment of any claim against the Company depositing it, if licensed under the said Acts, whether such claim accrued before or after the coming into force of this Act; And as to deposits under the Acts cited.but any Company which has deposited securities of the late Province of Canada under the Acts last mentioned may have the same accepted as so much of the deposit required under this Act, and as respects other securities given under the said Acts it shall be lawful for the Minister of Finance to allow such securities to remain for a period of two years, during which they may be reckoned as part of the deposit required by this Act, and subject to its provisions, and during which the interest of such securities shall be taken by the Receiver General and remain in his hands as part of the deposit; but at the lapse of such time, the said Company shall be bound to make the deposits in cash in the fourth and sixth sections of this Act specified; As to power of Attorney, &c., filed by such companies.And the deposit already made by any such Company of the Power of Attorney And other ​documents specified in the ninth section of this Act, shall, if the same fulfil the requirements of this Act, be construed as made under its provisions.
As to British or Foreign companies which cannot by law invest in Canadian securites.22. And as regards British and other Foreign Insurance Companics actually doing business in Canada at the time of the passing of this Act, which cannot by the terms of their constitutions or charters or by law, invest in Canadian securities, it shall be lawful for the Minister of Finance, with the approval of the Governor in Council, to receive the amount of the deposit required of them under this Act, in British or Foreign Government securities, including Stock of any one or more of the United States, at their then market value, but with power to him to require from time to time, if such market value should decline, additional security equivalent to their diminution in value;—and the portion of the premiums received by any such Company required to be deposited under this Act, may be invested by the Company in any such British or Foreign Stock as aforesaid, and such Stock may be deposited with the Receiver General subject to the provision above made as to value, and diminution in value;—Proviso.but all such Stock shall be replaced by cash or investment to the amount aforesaid within three years from the issue of the license to the Company, otherwise such license shall be void; Provision as to any such company acting on the mutual principle.And as regards any such Company acting on the mutual principle in such wise as to be unable legally to make a deposit under this Act, for the security of policy holders resident in Canada the deposit may be for the general benefit of all its members, but the Company shall specify the fact when making the deposit and in all returns made or published by them.
Lists of companies licensed to be published.23. The Minister of Finance shall publish quarterly in the Canada Gazette, a list of Companies licensed under this Act with the amount of deposits made by each, stating whether such deposit is for the security of the Canadian policy holders, exclusively, or for the general security of ail policy holders.
Commencement of this Act.24. This Act shall come into force on the first day of August next, Repeal of former Acts.from and after which day the Acts mentioned in the twenty-first section shall be repealed, subject to the provision made in the said section; and chapter forty-five of the Acts of the Legislature of New Brunswick, passed in the nineteenth year of Her Majesty's Reign, and intituled: "An Act relating to Insurance Companies not incorporated by Act of Assembly in this Province," shall be repealed on and after the said day, Exception.except as regards penalties or liabilities theretofore incurred under it.
Act not to apply to companies incorporated by Legislatures in any Province, and doing business therein only.25. The Provisions of this Act as to deposit and issue of liceuse shall not apply to any Insurance Company incorporated by any Act of the Legislature of the late Province of Canada or incorporated or to be incorporated under any Act of any one of the Provinces of Ontario, Quebec, Nova Scotia or New ​Brunswick, so long as it shall not carry on business in the Dominion beyond the limits of that Province by the Legislature or Government of which it was incorporated, but it shall be lawful for any such company to avail itself of the provisions of this Act.
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