Permitted entities
 5. (1) For the purposes of the definition of “permitted entity” in subsection 432 (1) of the Act, each of the following entities is a permitted entity in relation to an insurer: 1. An investment counsel. 2. A portfolio manager. 3. An insurance broker or agent, if the entity is licensed under the Act or registered under the Registered Insurance Brokers Act or is registered or licensed under comparable legislation in another jurisdiction in Canada. 4. A mortgage broker or agent, if the entity is registered or licensed under the Mortgage Brokers Act, the Mortgage Brokerages, Lenders and Administrators Act, 2006 or comparable legislation in another jurisdiction in Canada. 5. A mutual fund dealer. 6. A mutual fund within the meaning of subsection 1 (1) of the Securities Act
whose activities are limited to the investment of the funds of the mutual fund for the purposes of providing investment diversification and professional investment management services to the holders of its securities. 7. A non-redeemable investment fund within the meaning of subsection 1 (1) of the Securities Act whose activities are limited to the investment of the funds of the fund for the purposes of providing investment diversification and professional investment management services to the holders of its securities, and whose securities are, i. fixed in number and distributed to the public in an offering under a preliminary prospectus, prospectus, short form prospectus or similar document in accordance with the laws of a Province of Canada or a foreign jurisdiction, ii. traded on a recognized and regulated market, and iii. liquidated on a fixed future termination date, with the proceeds allocated to the holders of the securities in accordance with their holdings. 8. A receiver, sequestrator or liquidator. 9. An entity, other than a financial institution, whose business activities are limited to one or more of the business activities prescribed by subsection (2) and who satisfies the conditions, if any, set out in that subsection relating to that business activity.  O. Reg. 122/08, s. 5 (1). (2) The following business activities are prescribed for the purposes of paragraph 9 of subsection (1): 1. Providing financial services. 2. Holding, managing or otherwise dealing with real property. 3. The business of a real estate broker or otherwise acting as an agent for vendors, purchasers, lessors or lessees of real property or providing consulting or appraisal services in respect of real property. 4. Promoting merchandise and services to the holders of any payment, credit or charge card issued by the insurer. 5. Providing in Canada data processing or other information processing services relating to financial institutions if, i. the insurer has developed the processing systems for its own use and the processing systems are an integral part of the insurer’s operations, and ii. the services are provided to entities in which the insurer has a substantial investment and that do not provide information processing services to other entities. 6. Collecting, manipulating and transmitting information, i. that is primarily financial or economic in nature, or ii. that relates to the business of an entity that is a permitted entity with respect to insurers to which this Regulation applies. 7. Providing advisory or other services in the design, development and implementation of information management services. 8. Designing, developing or marketing computer software. 9. Designing, developing, manufacturing or selling computer equipment integral to the provision of information services related to the business of financial institutions or to the provision of financial services, if it is an ancillary activity to any business referred to in paragraph 6, 7 or 8 in which the insurer is engaged. 10. Designing, developing, holding, managing, manufacturing, selling or otherwise dealing with data transmission systems, information sites, communication devices or information platforms or portals that are used, i. to provide information that is primarily financial or economic in nature, ii. to provide information that relates to the business of an entity that is a permitted entity in respect of an insurer to which this Regulation applies, or iii. for a purpose or in a circumstance that is materially related to the provision of financial products or services by the insurer, a subsidiary of the insurer or an entity in which the insurer has a substantial investment. 11. Designing, developing, holding, managing, manufacturing, selling or otherwise dealing with data transmission systems, information sites, communication devices or information platforms or portals that are used to provide information services. 12. Acting as a custodian of property. 13. Selling any of the following: i. tickets, including lottery tickets, on a non-profit public service basis, in connection with special, temporary and infrequent non-commercial celebrations or projects that are of local, municipal, provincial or national interest, ii. urban transit tickets, iii. tickets for a lottery sponsored by the federal government, a provincial or municipal government or an agency of any of those governments. 14. Providing services that are reasonably ancillary to the business of the insurer, including one or more of the following: i. providing safety and risk prevention services and services respecting risk management and claims adjustment, ii. providing and operating rehabilitation and training and development centres, iii. providing computer systems to insurance brokers and agents, iv. providing support to insurance brokers and agents, and v. operating repair and appraisal centres. 15. Providing services exclusively to, i. the insurer, a subsidiary of the insurer or an entity in which the insurer has a substantial investment that is permitted under the Act or this Regulation, or ii. one or more of the entities listed in subparagraph i and, A. a
financial services entity, or B. an entity that is a permitted entity in respect of the insurer and in which a financial services entity has a substantial investment. 16. Any other business activity not described in paragraphs 1 to 15 that relates to, i. the promotion, sale, delivery or distribution of a financial product or financial service that is provided by the insurer, a subsidiary of the insurer or an entity in which the insurer has a substantial investment that is permitted under the Act or this Regulation, or ii. if a significant portion of the business activity of the entity involves an activity described in subparagraph i, the promotion, sale, delivery or distribution of a financial product or service that is provided by a financial services entity. 17. Acquiring or holding shares of, or ownership interests in, entities in respect of which an insurer is permitted under the Act or this Regulation to hold a substantial investment.  O. Reg. 122/08, s. 5 (2). (3) Despite subsection (1), an entity that is a permitted entity under any of paragraphs 1 to 8 of subsection (1) does not cease to be a permitted entity by reason only that it carries on one or more business activities carried out by another entity listed in any of those paragraphs or one or more business activities prescribed by subsection (2), as long as it satisfies the conditions, if any, relating to the other entity or the business activity.  O. Reg. 122/08, s. 5 (3). (4) Despite subsections (1) and (2), the following entities are not permitted entities in respect of an insurer: 1. An entity whose activities are limited to acting as a factor in respect of accounts receivable, including the raising of money for the purposes of acting as a factor and lending money while acting as a factor. 2. An entity that carries on the business activities in Canada of financial leasing of personal property, including, i. the entering into and acceptance of assignments of conditional sales agreements in respect of personal property, ii. the administration of financial lease agreements and conditional sales agreements on behalf of any person, and iii. the raising of money for the purposes of financing the activities of the entity and the investment of that money pending its use for those activities. 3. An entity, other than a financial institution or an entity described in paragraph 1 or 2, that engages in a business that includes, i. issuing payment, credit or charge cards and, in co-operation with others, including financial institutions, operating a payment, credit or charge card plan, or ii. making or refinancing loans or entering into any other similar arrangements for advancing funds or credit. 4. An entity that is a specialized financing entity prescribed for the purposes of section 435.5 of the Act. 5. An entity in the business of providing specialized business management and advisory services. 6. An entity listed in subsection (1) whose business activities include the acceptance of deposit liabilities.  O. Reg. 122/08, s. 5 (4). (5) For the purposes of subsection 435.1 (1) of the Act and subject to subsections (6), (7) and (9) of this section, an insurer may, subject to section 435.7 of the Act, acquire, hold or increase a substantial investment in a permitted entity only if all of the applicable following conditions are satisfied: 1. The insurer may acquire, hold or increase a substantial investment in any of the following permitted entities only with the approval of the Chief Executive Officer: i. A financial institution. ii. An entity that is a permitted entity under paragraph 1, 2 or 5 of subsection (1) and, A. that is not registered under the Securities Act or comparable legislation of another jurisdiction in Canada, or B. that is exempt from registration requirements. iii. A permitted entity engaged in a business described in paragraph 1, 6, 7, 8, 9, 10, 11, 14 or 16 of subsection (2). iv. An entity that is a permitted entity under paragraph 6 or 7 of subsection (1) if it is not subject to regulation under the Securities Act or comparable legislation of another jurisdiction in Canada. v. A permitted entity engaged in a business described in paragraph 17 of subsection (2) unless, at the time of the investment or as a result of the investment, the permitted entity is a subsidiary of the insurer and does not hold an interest in any entity in which the insurer is not permitted to make a substantial investment without the consent of the Chief Executive Officer. 2. The insurer may acquire, hold or increase a substantial investment in any of the following permitted entities only if the insurer will control the permitted entity after the acquisition or the acquisition and holding of the substantial investment is permitted under paragraph 3 or 4: i. A financial institution. ii. A permitted entity engaged in the business described in paragraph 17 of subsection (2) if that business includes the acquisition of a substantial investment in one or more financial institutions. 3. The insurer may acquire, hold or increase a substantial investment in a permitted entity listed in subparagraph 2 i or ii, without controlling the permitted entity after the acquisition, only if, after the acquisition, the total value of the following investments and loans does not exceed 50 per cent of the insurer’s capital: i. All shares in corporations and ownership interests in unincorporated entities beneficially owned by the insurer or by permitted entities listed in subparagraph 2 i or ii in which the insurer has a substantial investment but which the insurer does not control. ii. All loans, each of which is held by the insurer or by permitted entities referred to in subparagraph i. iii. All outstanding guarantees by a permitted entity referred to in subparagraph i or on behalf of permitted entities referred to in subparagraph i. 4. If the insurer is a mutual insurance corporation that participates in the Fire Mutuals Guarantee Fund, the insurer may acquire, hold or increase a substantial investment in a permitted entity listed in subparagraph 2 i or ii, without itself controlling the permitted entity after the acquisition if, after the acquisition, two or more of the mutual insurance corporations that participate in the Fund control or, as a result of the acquisition, will acquire control of the permitted entity. 5. The insurer may acquire, hold or increase a substantial investment in an entity whose business is described in paragraph 11 of subsection (2) only if the sum of the following amounts does not exceed five per cent of the insurer’s capital: i. The total book value of the shares and ownership interests that the insurer and its subsidiaries, whether individually or jointly, would acquire in the permitted entity. ii. The total book value of the shares and ownership interests already held by the insurer and its subsidiaries, whether individually or jointly, in other entities engaged in a business described in paragraph 11 of subsection (2) in which the insurer has a substantial investment. iii. The total value of outstanding loans made by the insurer and its subsidiaries, whether individually or jointly, to entities engaged in a business described in paragraph 11 of subsection (2) in which the insurer has a substantial investment.  O. Reg. 122/08, s. 5 (5); O. Reg. 132/19, s. 3. (6) The insurer may acquire, hold or increase a substantial investment in a permitted entity whose activities include acquiring and holding substantial investments in other entities if, i. the permitted entity is a permitted entity by reason of subsection (1), and ii. the insurer would, but for paragraph 1, 2 or 3 of subsection (5), be permitted under section 435.1, 435.2, 435.3, 435.4, 435.5 or 435.6 of the Act to acquire a substantial investment in the other entity.  O. Reg. 122/08, s. 5 (6). (7) Paragraph 3 of subsection (5) does not apply if the permitted entity is incorporated or organized under the laws of a jurisdiction outside Canada and those laws or the customary business practices of the jurisdiction do not permit the insurer to control the entity.  O. Reg. 122/08, s. 5 (7). (8) If the insurer controls a permitted entity listed in subparagraph 2 i or ii of subsection (5), the insurer may, with the Chief Executive Officer’s approval, give up control while retaining a substantial investment in the permitted entity only if the total value of the insurer’s investments and loans listed in subparagraphs 3 i to iii of that subsection does not exceed 50 per cent of the insurer’s capital after the insurer gives up control.  O. Reg. 122/08, s. 5 (8); O. Reg. 132/19, s. 3. (9) The following rules apply for the purposes of determining the total value of investments and loans for the purposes of paragraphs 3 and 5 of subsection (5): 1. No amount shall be included in respect of shares or ownership interests acquired under circumstances in which subsection 435.3 (1), 435.4 (1) or 435.6 (1) of the Act applies. 2. The value of an ownership interest or loan held by an insurer at a particular time is the book value of the ownership interest or loan that would be reported on the balance sheet of the insurer prepared in accordance with section 104 of the Act as of that time. 3. The value of a guarantee is its face value.  O. Reg. 122/08, s. 5 (9).