PART XVII.1 RELATED PARTY TRANSACTIONS
Transactions with directors, senior officers, etc.
437.19 (1) Subject to subsection 437.18 (4) and to subsections (6) and (7), an insurer may enter into any transaction with, (a)  an individual who is a related party of the insurer only because the individual is, (i)  a director or senior officer of the insurer or of an entity that controls the insurer, (ii)  the spouse of a director or senior officer described in subclause (i), or (iii)  an individual under the age of 18 years who is the child of a director or senior officer described in subclause (i); or (b)  an entity that is a related party of the insurer only because the entity is controlled by an individual described in subclause (a) (i) or (ii).  2006, c. 33, Sched. O, s. 16. Exception, loan to full-time senior officer (2) Despite subsection (1), an insurer may, with respect to a related party referred to in subsection (1) who is a full-time senior officer of the insurer, make or acquire a qualifying loan to the related party only if the aggregate principal amount of all outstanding qualifying loans to the related party that are held by the insurer and its subsidiaries, together with the principal amount of the proposed qualifying loan, does not exceed an amount prescribed by the regulations or determined in a manner prescribed by the regulations.  2006, c. 33, Sched. O, s. 16. Qualifying loan (3) For the purposes of subsection (2), a qualifying loan is any loan other than, (a)  a loan on the security of a mortgage on a principal residence referred to in subparagraph 4 i of subsection 437.18 (1); and (b)  a margin loan.  2006, c. 33, Sched. O, s. 16. Preferred terms, loan to senior officer (4) Despite subsection 437.18 (4), an insurer may make any of the following loans on terms and conditions that are more favourable to the borrower than market terms and conditions if the terms and conditions have been approved by the insurer’s conduct review committee: 1.  A loan other than a margin loan to a senior officer of the insurer. 2.  A loan on the security of a mortgage on a principal residence referred to in subparagraph 4 i of subsection 437.18 (1) that is made to the spouse of a senior officer of the insurer.  2006, c. 33, Sched. O, s. 16. Preferred terms, other financial services (5) Despite subsection 437.18 (4), an insurer may offer financial services other than loans or guarantees to a senior officer of the insurer, to the spouse of a senior officer of the insurer or to a child of a senior officer who is less than 18 years of age on terms and conditions more favourable than market terms and conditions if, (a)  the financial services are offered by the insurer to employees of the insurer on the same favourable terms and conditions; and (b)  the insurer’s conduct review committee has approved the practice of making the financial services available on the favourable terms and conditions to senior officers of the insurer or to their spouses or children.  2006, c. 33, Sched. O, s. 16. Regulations may limit transactions (6) An insurer shall not enter into a transaction described in subsection (1) if, (a)  the transaction is of a type or class prescribed by the regulations for the purposes of this subsection; and (b)  immediately following the transaction, the total value as determined under the regulations of all transactions prescribed for the purposes of this subsection would exceed the amount determined under the regulations.  2006, c. 33, Sched. O, s. 16. Transactions requiring directors’ approval (7) An insurer shall not enter into a transaction described in subsection (1) if, (a)  the transaction is of a type or class prescribed by the regulations as requiring the approval of the directors of the insurer for the purposes of this subsection; (b)  immediately following the transaction, the total value as determined under the regulations of all transactions prescribed for the purposes of this subsection would exceed the amount determined under the regulations; and (c)  the directors have not approved the transaction in accordance with the regulations.  2006, c. 33, Sched. O, s. 16. Margin loans (8) The Chief Executive Officer may establish, and insurers shall comply with, terms and conditions with respect to the making of margin loans by an insurer or a subsidiary of an insurer to a director or senior officer of the insurer.  2006, c. 33, Sched. O, s. 16; 2018, c. 8, Sched. 13, s. 22. Note: On a day to be named by proclamation of the Lieutenant Governor, section 437.19 of the Act is amended by striking out “regulations” wherever it appears and substituting in each case “Authority rules”. (See: 2018, c. 8, Sched. 13, s. 18) Section Amendments with date in force (d/m/y) 2006, c. 33, Sched. O, s. 16 - 05/05/2008 2018, c. 8, Sched. 13, s. 18 - not in force; 2018, c. 8, Sched. 13, s. 22 - 08/06/2019