Service Corporation Shares
7. (1) The terms and conditions under which a life company may, under clause 433 (8) (b) or (f) of the Act, invest its funds in the fully paid shares of a service corporation are as follows, (a) the life company shall not make an investment in the shares of a service corporation unless it has control, or as a result of the investment will acquire control, of that corporation; (b) before an investment is made in the shares of a service corporation, the 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; (c) the life company shall deposit with the Superintendent, within two weeks after making an investment in the shares of a service corporation, an undertaking by that corporation that, while it is controlled by the life company, the corporation will, (i) provide the Superintendent with copies of its financial statements and such other information concerning its affairs as he or she may from time to time request, (ii) not make any investment that the life company is prohibited from making by section 436 of the Act, (iii) not acquire or hold, except with the approval of the Superintendent, more than 30 per cent of the common shares of any corporation, (iv) not provide any services other than services referred to in clause 433 (8) (f) of the Act, (v) provide the services referred to in clause 433 (8) (b) of the Act and such other services as may be necessarily incidental thereto only, (A) to the life company and to a foreign life corporation in the shares of which the life company has made an investment, or (B) with the approval of the Superintendent, to another life company or foreign life corporation for such period of time as the Superintendent may determine, and (vi) provide the services referred to in clause 433 (8) (f) of the Act and such other services as may be necessarily incidental thereto to one or more mutual fund corporations only where, (A) the investment portfolio of at least one of the mutual fund corporations is managed by a corporation controlled by the life company, or (B) the life company provides evidence satisfactory to the Superintendent that a corporation controlled by the life company will, within a period of time determined by the Superintendent, assume the management of a mutual fund corporation to which the service corporation provides its services; (d) the life company shall from time to time at the request of the Superintendent submit such information as he or she may require as evidence that the service corporation is complying with the undertaking referred to in clause (c); (e) the life company shall not at any time hold an investment in the shares of a service corporation under clause 433 (8) (b) or (f) of the Act unless at that time it controls the corporation; (f) the common shares of the service 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; and (g) the total book value of the investments held by a life company in the shares of service corporations under clause 433 (8) (b) or (g) of the Act shall not at any time exceed one-third of 1 per cent of the book value of the total assets of the life company. R.R.O. 1990, Reg. 671, s. 7 (1). (2) For the purposes of clause (1) (f), the assets of the service corporation shall not include any asset that if owned by a life company would not be admitted as an asset in its annual statement and the total value of any securities included in the assets shall not exceed the total of their market value. R.R.O. 1990, Reg. 671, s. 7 (2). Ancillary Business Corporation Shares