Real Estate Corporation Shares
5. (1) The terms and conditions under which a life company may, under clause 433 (8) (d) of the Act, invest its funds in the fully paid shares of a real estate corporation are as follows, (a) before an investment is made in the shares of a real estate corporation, a life company shall furnish the Superintendent with such information as he or she may require relating to the proposed investment and where that investment is in the shares of an existing corporation, the life company shall file with the Superintendent a certified copy of the instrument of incorporation, by-laws and most recent financial statement of that corporation; (b) the life company shall deposit with the Superintendent, within two weeks after making an investment in the shares of a real estate corporation, an undertaking by the corporation that, while the life company holds an investment in the shares of the corporation, the corporation will, (i) provide the Superintendent with copies of its financial statements and such other information concerning its financial condition and affairs as he or she may from time to time request and permit the Superintendent or an authorized member of his or her staff to visit its head office and other offices at any time and examine its books, vouchers, securities and documents, (ii) limit its activities to acquiring, holding, maintaining, improving, leasing or managing real estate or leaseholds, or to acting as agent or broker in the sale or purchase of real estate or leaseholds, (iii) not carry on, except with the approval of the Superintendent, the activities referred to in subclause (ii) in respect of any real estate or leaseholds other than real estate or leaseholds owned by or mortgaged to, (A) the life company, (B) the real estate corporation, (C) any other real estate corporation in which the life company has made an investment under clause 433 (8) (d) of the Act, or (D) any other real estate corporation of which more than 30 per cent of the common shares are owned by the corporation or by a real estate corporation referred to in sub-subclause (C), (iv) procure, at the request of the Superintendent and at its own expense, an appraisal by one or more competent valuators of any parcel of real estate or any leasehold owned by it, (v) not make any investment that the life company is prohibited from making by section 436 of the Act, (vi) restrict its investments and loans, other than, (A) investments in real estate or leaseholds, and (B) investments in the shares of other real estate corporations, to those it could make if it were a life company, and (vii) not make or hold an investment in more than 30 per cent of the common shares of any real estate corporation unless the life company deposits with the Superintendent an undertaking by that other real estate corporation to the same effect as the undertaking referred to hereunder except that that other real estate corporation shall further undertake not to make or hold an investment in the shares of any other real estate corporation; (c) the life company shall from time to time at the request of the Superintendent submit such information as the Superintendent may require as evidence that the real estate corporation is complying with the undertaking referred to in clause (b) and, where applicable, that any other real estate corporation described in subclause (b) (vii) is complying with the undertaking referred to in that clause; (d) the common shares of the real estate corporation owned by the life company shall be taken into account in the annual statement of the life company at a value not greater than the amount obtained by multiplying, (i) an amount equal to the excess of the assets of the corporation over the sum of its liabilities and its issued and paid in preferred capital shares, by, (ii) the proportion that the number of common shares of the corporation owned by the life company bears to the total number of the issued and outstanding common shares of the corporation; (e) in respect of any one parcel of real estate or any one leasehold owned by the real estate corporation or by any other real estate corporation of which more than 30 per cent of the common shares are owned by the corporation, the aggregate of the book values of, (i) the investments of the life company in mortgages or hypothecs, bonds, debentures or other evidences of indebtedness specifically secured by that parcel of real estate or leasehold, (ii) the loans by the life company specifically secured by that parcel of real estate or leasehold, and (iii) all other investments or loans that in the opinion of the Superintendent may reasonably be taken to represent an interest of the life company in that parcel of real estate or leasehold, shall not at any time exceed 2 per cent of the book value of the total assets of the life company; (f) where a life company has made an investment in the shares of a real estate corporation under clause 433 (8) (d) of the Act, the aggregate of the book values of investments made by the life company in the mortgages or hypothecs, bonds, debentures or other evidences of indebtedness or shares of, or by way of loans to, (i) real estate corporations in the shares of which the life company has made an investment under clause 433(8) (d) of the Act, and (ii) other real estate corporations described in subclause (b)(vii) of which more than 30 per cent of the common shares are owned by a real estate corporation referred to in subclause (i), shall not at any time exceed 10 per cent of the book value of the total assets of the life company; and (g) despite clause (e), the life company may make an investment in or a loan on the security of a parcel of real estate or leasehold referred to in clause (e) that causes the aggregate of the book values of the investments and loans described in subclauses (e) (i), (ii) and (iii) to exceed 2 per cent of the book value of the total assets of the life company where, (i) the Superintendent is satisfied that the repayment schedules relating to the mortgage loans, bonds or debentures secured by that parcel of real estate or leasehold are such that the said aggregate will be reduced to 2 per cent or less of the book value of the total assets of the life company not later than the end of the fourth calendar year following the calendar year in which that investment or loan is made, and (ii) that aggregate does not exceed 2¾ per cent of the book value of the total assets of the life company. R.R.O. 1990, Reg. 671, s. 5 (1). (2) For the purposes of clause (1) (d), (a) the assets of the real estate corporation shall not include any asset, other than an investment referred to in sub-subclause (1) (b) (vi) (A) or (B), that if owned by a life company would not be admitted as an asset in its annual statement; and (b) the total value of any securities included in the assets of the real estate corporation shall not exceed the total of the market values of the assets of the real estate corporation. R.R.O. 1990, Reg. 671, s. 5 (2). Mutual Fund Corporation Shares