PART XVII.1 RELATED PARTY TRANSACTIONS
Transactions permitted with related parties
437.18 (1) Despite section 437.16 and subject to subsection (4), any of the following transactions between an insurer and a related party are not prohibited under this Part: 1.  A transaction between an insurer and a related party where the value of the transaction is, in accordance with the regulations, nominal or immaterial to the insurer. 2.  The reinsurance by a related party of an insurer against any risk undertaken by the insurer where, i.  the related party is an insurer within the meaning of section 1 that is licensed under this Act, or ii.  the reinsurance by the related party is approved by the Chief Executive Officer. 3.  The reinsurance by an insurer of a related party against any risk undertaken by the related party. 4.  A loan by an insurer to a related party, the acquisition by an insurer of a loan to a related party or the provision by an insurer of a guarantee of a loan to a related party if, i.  the related party is an individual and the loan is secured by a mortgage on the individual’s principal residence and any conditions prescribed by the regulations are satisfied, and ii.  in any case other than the one described in subparagraph i, the loan or guarantee satisfies the rules prescribed by the regulations. 5.  A loan to an insurer from a related party or the issue of debt obligations by an insurer to a related party. 6.  The issuing of policies by an insurer to a related party. 7.  The purchase by an insurer from a related party of goods or services for use in the ordinary course of the insurer’s business. 8.  Subject to section 435.14, the sale by an insurer of property to a related party if the consideration for the property is fully paid in money and there is an active market for the property. 9.  The purchase or sale of assets other than real property by an insurer in the normal course of business from or to a related party that is a financial institution, if the purchase or sale is pursuant to arrangements that have been approved by the Chief Executive Officer. 10.  The purchase or sale of assets by an insurer from or to a related party if the transaction is permitted under the regulations. 11.  The acquisition or disposition of property by an insurer from or to a related party as part of or in the course of a restructuring if the Chief Executive Officer has approved the acquisition or disposition. 12.  The provision by the insurer to a related party of services normally offered by the insurer to the public in the ordinary course of the insurer’s business, other than services that involve the making of loans or guarantees. 13.  The entering into of a written contract by an insurer and by a financial institution or other entity referred to in clause 141 (5) (a) of the Corporations Act that is a related party if the contract relates to, i.  the provision of services by the insurer or by the financial institution or other entity, or ii.  the referral by the insurer of a person to the financial institution or other entity or the referral by the financial institution or other entity of a person to the insurer. 14.  The entering into of a written contract by the insurer for a pension or benefit plan for directors or employees of the insurer or any subsidiary of the insurer or for the management or administration of the plan. 15.  The provision by the insurer of management, advisory, accounting, information processing or other services in relation to any business carried on by a related party. 16.  A transaction between an insurer and a related party that is permitted under section 437.19 or 437.20 or under the regulations.  2006, c. 33, Sched. O, s. 16; 2018, c. 8, Sched. 13, s. 22. Criteria (2) In determining whether to give an approval under subparagraph 2 ii, paragraph 9 or paragraph 11 of subsection (1), the Chief Executive Officer shall consider such criteria as are set out in the regulations.  2006, c. 33, Sched. O, s. 16; 2018, c. 8, Sched. 13, s. 22. Conditions (3) If the Chief Executive Officer gives an approval mentioned in subsection (2), he or she may specify that the approval is subject to any terms or conditions that he or she considers appropriate in the circumstances.  2006, c. 33, Sched. O, s. 16; 2018, c. 8, Sched. 13, s. 22. Market terms and conditions (4) Except as otherwise permitted under this Part or the regulations, every transaction between an insurer and a related party shall be on terms and conditions that are at least as favourable to the insurer as market terms and conditions.  2006, c. 33, Sched. O, s. 16. Same (5) For the purposes of this Part, a transaction is on terms and conditions that are at least as favourable to the insurer as market terms and conditions if the following conditions are satisfied: 1.  If the transaction involves the provision to the related party of a service or a loan facility normally offered by the insurer to the public in the ordinary course of business, the terms and conditions are no more or less favourable than the terms and conditions offered to the public by the insurer in the ordinary course of business. 2.  In any other case, i.  if the transaction is one that could reasonably be expected to occur in an open market, the terms and conditions of the transaction, including any applicable price, rent or interest rate, are comparable to the terms and conditions that can reasonably be expected to apply in a fair transaction between parties dealing at arm’s length who are acting prudently, knowledgeably and willingly, or ii.  if the transaction is not one that can reasonably be expected to occur in an open market or between parties dealing at arm’s length, the terms and conditions of the transaction, including any applicable price, rent or interest rate, can reasonably be expected to provide the insurer with fair value, having regard to all of the circumstances of the transaction, and are consistent with the parties to the transaction acting prudently, knowledgeably and willingly.  2006, c. 33, Sched. O, s. 16. Note: On a day to be named by proclamation of the Lieutenant Governor, section 437.18 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. 17) 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. 17 - not in force; 2018, c. 8, Sched. 13, s. 22 - 08/06/2019