Definitions2The following definitions apply in this Act.approved mortgage insurer means a mortgage insurer that is designated under section 4. (assureur hypothécaire agréé)company means the Canada Guaranty Mortgage Insurance Company, the Genworth Financial Mortgage Insurance Company Canada, the PMI Mortgage Insurance Company Canada or any successor to any of those companies. (société)court means(a)in Ontario, the Superior Court of Justice;(b)in Quebec, the Superior Court of the province;(c)in Nova Scotia and British Columbia, the Supreme Court of the province;(d)in New Brunswick, Manitoba, Saskatchewan and Alberta, the Court of Queen’s Bench for the province;(e)in Prince Edward Island and Newfoundland and Labrador, the trial division of the Supreme Court of the province; and(f)in Yukon and the Northwest Territories, the Supreme Court of the territory, and in Nunavut, the Nunavut Court of Justice. (tribunal)eligible mortgage loan means a mortgage or hypothecary loan that meets the criteria established by regulations made under subsection 42(1). (prêt hypothécaire admissible)Her Majesty means Her Majesty in right of Canada. (Sa Majesté)liquidator means a liquidator appointed under the Winding-up and Restructuring Act or a similar official appointed under any other Act of Parliament relating to insolvency or bankruptcy. (liquidateur)Minister means the Minister of Finance. (ministre)mortgage insurer means a corporation referred to in subsection 13(1) of the Insurance Companies Act and that is approved by the Superintendent to sell mortgage or hypothecary insurance in Canada. (assureur hypothécaire)policy means any written contract of insurance in respect of an eligible mortgage loan, whether contained in one or more documents, entered into by an approved mortgage insurer and a qualified mortgage lender that has been designated as such by the approved mortgage insurer. (police)prescribed means prescribed by regulations made under section 41. (Version anglaise seulement)qualified mortgage lender means a mortgage or hypothecary lender that has been designated under section 10. (prêteur hypothécaire qualifié)Superintendent means the Superintendent of Financial Institutions appointed under the Office of the Superintendent of Financial Institutions Act. (surintendant)winding-up order means a winding-up order made under the Winding-up and Restructuring Act or a similar order made under any other Act of Parliament relating to insolvency or bankruptcy. (ordonnance de mise en liquidation)

Suspension of designation5(1)After consulting with the Superintendent, the Minister may, by notice sent to an approved mortgage insurer, suspend the approved mortgage insurer’s designation if the Minister is of the opinion that the approved mortgage insurer has failed to comply with any provision of this Act or the regulations.Effective date and length(2)The notice must set out the effective date and the length of the suspension.Prohibition(3)An approved mortgage insurer that has had its designation suspended must not insure any new mortgage or hypothecary loans until the suspension expires or is cancelled by the Minister.Obligations during suspension(4)For as long as the designation of an approved mortgage insurer is suspended, the approved mortgage insurer remains subject to the provisions of this Act and the regulations and must meet any conditions imposed by the Minister and satisfy any undertakings required by him or her.Cancellation of suspension(5)The Minister may cancel a suspension if he or she considers it appropriate to do so.

Cancellation of designation6(1)After consulting with the Superintendent, the Minister may, by notice sent to an approved mortgage insurer, cancel the approved mortgage insurer’s designation if(a)the Minister is of the opinion that the approved mortgage insurer has failed to comply with any provision of this Act or the regulations;(b)a winding-up order is made in respect of the approved mortgage insurer;(c)the approved mortgage insurer ceases to be a mortgage insurer; or(d)the approved mortgage insurer requests in writing that its designation be cancelled.Effective date of cancellation(2)The notice must set out the effective date of the cancellation.Publication(3)As soon as feasible after sending the notice, the Minister must cause the name of the approved mortgage insurer whose designation is cancelled and the effective date of the cancellation to be published in the Canada Gazette.Obligations after cancellation(4)After the designation of a corporation as an approved mortgage insurer is cancelled and for as long as the Minister has any actual or potential obligations under section 16 in respect of the policies the corporation issued or the contracts of insurance it entered into that could be deemed to be policies under section 19, the corporation remains subject to sections 8 and 15 and the regulations related to those sections, as if it were still an approved mortgage insurer, and it must meet any conditions imposed by the Minister and satisfy any undertakings required by him or her.

Company never designated7(1)For the period referred to in subsection (2), a company that has never been designated as an approved mortgage insurer is subject to sections 8 and 15 and the regulations related to those sections, as if it were an approved mortgage insurer, and must meet any conditions imposed by the Minister and satisfy any undertakings required by him or her.Period(2)The period is the length of time that the Minister has any actual or potential obligations under section 16 in respect of the contracts of insurance the company entered into that could be deemed to be policies under section 19.

Designation of qualified mortgage lenders10(1)An approved mortgage insurer may designate as a qualified mortgage lender for the purposes of this Act any mortgage or hypothecary lender that meets prescribed criteria.Term of designation(2)The designation or its renewal are in effect for any period that the approved mortgage insurer specifies.Cancellation of designation(3)The approved mortgage insurer may, by notice sent to a qualified mortgage lender that it has designated as such, cancel the qualified mortgage lender’s designation.Effective date of cancellation(4)The notice must set out the effective date of the cancellation.

Insurance restricted11(1)Except as permitted by the regulations, an approved mortgage insurer must not insure any risk unless the risk is in respect of an eligible mortgage loan made by a qualified mortgage lender that has been designated as such by the approved mortgage insurer.Reinsurance restricted(2)Except as permitted by the regulations, an approved mortgage insurer must not cause itself to be reinsured against any risk that it has undertaken under its policies or reinsure any risk that another insurer has undertaken under that insurer’s contracts of insurance.

Conditions and undertakings — business with affiliates, etc.13(1)The Minister may impose conditions on and require undertakings from an approved mortgage insurer in respect of its business activities with a person or entity that is(a)an affiliate, as defined in subsection 2(1) of the Insurance Companies Act, of the approved mortgage insurer;(b)a related party, within the meaning of section 518 of that Act, of the approved mortgage insurer; or(c)in a prescribed relationship with the approved mortgage insurer.Conditions and undertakings — increased risks(2)The Minister may also impose conditions on and require undertakings from an approved mortgage insurer if the Minister is of the opinion that the activities of a person or entity referred to in subsection (1) could materially increase the risks to Her Majesty that arise from the provision of mortgage or hypothecary insurance protection under this Act.Obligation of approved mortgage insurer(3)An approved mortgage insurer must meet any conditions imposed on it and satisfy any undertakings required from it under subsection (1) or (2).

Obligation to retain information, books and records15(1)An approved mortgage insurer must keep and retain books and records and retain information in respect of its business that are relevant for the purposes of this Act or that are prescribed.Obligation to provide information or copies(2)At the request of the Minister or the Superintendent, an approved mortgage insurer must, without delay, provide the requester with any information or copies of any books or records that the approved mortgage insurer is required to retain.Disclosure of information(3)The Minister and the Superintendent may disclose to each other any information or copies of any books or records received under subsection (2) and may also disclose them to the Governor of the Bank of Canada, the Chief Executive Officer of the Canada Deposit Insurance Corporation and the Commissioner of the Financial Consumer Agency of Canada.Disclosure of conditions and undertakings(4)The Minister may disclose to the Superintendent any conditions imposed by the Minister and any undertakings required by him or her under this Act.Public information(5)An approved mortgage insurer must make available to the public prescribed books, records and information.2011, c. 15, s. 20 “15”; 2016, c. 7, s. 179

Minister’s obligations16(1)Subsections (2) to (4) apply if(a)a winding-up order is made in respect of a corporation that had, before the making of the order, issued a policy to a qualified mortgage lender in respect of an eligible mortgage loan;(b)the policyholder or a beneficiary under the policy has made a claim to the liquidator that is related to the policy; and(c)the liquidator has allowed the claim and determined that it will not be paid in whole.Event has occurred(2)If an event that is insured against under the policy has occurred before the conditions set out in subsection (1) are met, the Minister must make a payment out of the Consolidated Revenue Fund to the beneficiary under the policy in an amount equal to the amount calculated in accordance with section 22.Event has not occurred(3)If an event that is insured against under the policy has not occurred before the conditions set out in subsection (1) are met, the Minister must elect to either(a)make a payment out of the Consolidated Revenue Fund to an approved mortgage insurer or the Canada Mortgage and Housing Corporation, with the payee’s consent, in an amount sufficient to allow the payee to enter into, with the policyholder, a contract of insurance that replaces the policy in accordance with subsection 23(1), or(b)satisfy, as required by subsection 24(1), future claims arising from the occurrence, if any, of such an event.Other election(4)If the Minister makes an election under paragraph (3)(a), no further election is to be made, but the making of an election under paragraph (3)(b) does not preclude the making of an election under paragraph (3)(a).

Minister’s discretion17(1)Subsections (2) and (3) apply if a winding-up order is made in respect of a corporation that had, before the making of the order, issued a policy to a qualified mortgage lender in respect of an eligible mortgage loan.Event has occurred(2)If an event that is insured against under the policy has occurred before the condition set out in subsection (1) is met, the Minister may make a payment referred to in subsection 16(2).Event has not occurred(3)If an event that is insured against under the policy has not occurred before the condition set out in subsection (1) is met, the Minister may make a payment referred to in paragraph 16(3)(a) or satisfy future claims referred to in paragraph 16(3)(b).

Ineligible mortgage loan18A contract of insurance entered into by an approved mortgage insurer and a qualified mortgage lender — that has been designated as such by the approved mortgage insurer — in respect of a mortgage or hypothecary loan that is not an eligible mortgage loan is deemed, for the purposes of sections 16, 17 and 20 to 25 to be a policy in respect of an eligible mortgage loan if the Minister is satisfied that the approved mortgage insurer and the qualified mortgage lender believed the loan to be an eligible mortgage loan and that the ineligibility of the loan was not due to negligence or bad faith by either of them.

Pre-existing contracts19If a winding-up order is made in respect of a company, a contract of insurance that the company entered into before the coming into force of this Act is deemed, in respect of a mortgage or hypothecary loan that is the subject of the contract of insurance, to be a policy issued to a qualified mortgage lender in respect of an eligible mortgage loan for the purposes of sections 16, 17 and 20 to 25, if(a)Her Majesty would have been bound to make a payment in respect of the contract of insurance had section 44 not come into force; and(b)the mortgage or hypothecary loan meets the criteria established by regulations made under subsection 42(1) that relate to a guarantee of payment referred to in subsection 14(1) of the National Housing Act.2011, c. 15, s. 20 “19”; 2014, c. 20, s. 314

Subrogation — subsection 16(2)21(1)If the Minister is obligated, or decides under section 17, to make a payment referred to in subsection 16(2) in respect of a policy, Her Majesty is subrograted, once the payment is made, to(a)the rights that the policyholder or the beneficiary under the policy has to make a claim related to the policy;(b)a right to any proceeds payable in respect of the policy as a result of the making of the winding-up order; and(c)the lender’s rights under the loan covered by the policy.Subrogation — subsection 16(3)(2)If the Minister is obligated, or decides under section 17, to make a payment referred to in paragraph 16(3)(a) or satisfy future claims in accordance with paragraph 16(3)(b) in respect of a policy, Her Majesty is subrogated to(a)the rights that the policyholder has to make a claim related to the policy; and(b)a right to any proceeds paid or payable in respect of the policy as a result of the making of the winding-up order.Subrogation — subsection 24(1)(3)If the Minister makes a payment under subsection 24(1) in respect of a policy, Her Majesty is subrogated to the lender’s rights under the loan covered by the policy.

Calculation of amount — event has occurred22The amount for the purpose of subsection 16(2) is the amount determined by the formulaA – B – CwhereAis the total of the amounts payable to the beneficiary under the policy immediately before the winding-up order is made;Bis the amount of any proceeds the beneficiary has received in respect of the policy since the making of the winding-up order; andCis 10% of the original principal amount of the first eligible mortgage loan in respect of which the premium for the insurance was paid.

Replacement insurance23(1)The insurance referred to in paragraph 16(3)(a) must be sufficient to cover the amount of benefits determined by the formulaA – BwhereAis the amount of benefits payable under the replaced policy; andBis 10% of the original principal amount of the first eligible mortgage loan in respect of which the premium for the original insurance was paid.No liability — replaced policy(2)If the Minister makes a payment referred to in paragraph 16(3)(a), the Minister is not liable to make any other payment under this Act in respect of the replaced policy.Protection for replacement insurance contracts(3)If the payment is made to an approved mortgage insurer, the contract of insurance entered into as a result of the payment is a policy for the purposes of this Act.Regulations — replacement policy payments(4)Despite the formulas set out in section 22 and subsections 23(1) and 24(1), the Governor in Council may make regulations prescribing the manner of calculating the amount of any payment referred to in subsection 16(2), paragraph 16(3)(a) or subsection 24(1) in respect of the policy referred to in subsection (3).

Satisfaction of future claims24(1)If the Minister is obligated, or decides under section 17, to satisfy future claims in accordance with paragraph 16(3)(b) and a claim is subsequently made to the Minister by reason of the occurrence of an event that was insured against under the policy, the Minister must make a payment out of the Consolidated Revenue Fund to the beneficiary under the policy in an amount equal to the amount determined by the formulaA – BwhereAis the total of the amounts that would have been payable to the beneficiary under the policy; andBis 10% of the original principal amount of the first eligible mortgage loan in respect of which the premium for the insurance was paid.Conditions(2)The Minister is not obligated to pay the amount determined in accordance with the formula unless he or she is satisfied that the beneficiary would have been entitled to a payment under the policy and that the policyholder has discharged its obligations under the policy and the obligations it would have had under the policy had the winding-up order not been made.

Time of payment — subsection 16(2)26(1)A payment required to be made under subsection 16(2) must be made before the expiry of two years or of any other prescribed period beginning on the day on which the conditions referred to in paragraphs 16(1)(a) to (c) have been met.Time of payment — subsection 24(1)(2)A payment required to be made under subsection 24(1) must be made before the expiry of two years or of any other prescribed period beginning on the day on which the Minister is satisfied that the conditions referred to in subsection 24(2) have been met.

Limit27The aggregate outstanding principal amount of the following loans must not at any time exceed $300,000,000,000 or any other amount that is authorized for the purposes of this section under an appropriation Act:(a)all mortgage or hypothecary loans that are insured by corporations that are or were approved mortgage insurers; and(b)all mortgage or hypothecary loans that are insured under contracts of insurance that could be deemed to be policies under section 19 and that are entered into by companies that have never been designated as approved mortgage insurers.

Allocation of limit28(1)The Minister may, by notice in writing, at any time allocate any portion of the amount applicable under section 27 to any approved mortgage insurer in order to support the efficient functioning of the housing finance market and the stability of the financial system in Canada and to mitigate the risks to Her Majesty that arise from the provision of mortgage or hypothecary insurance protection under this Act.Prohibition(2)An approved mortgage insurer to whom an amount is allocated must not insure any new mortgage or hypothecary loans if doing so would cause the outstanding principal amount of all mortgage or hypothecary loans that are insured by it to exceed that allocated amount.

Notice to Minister30(1)If a corporation is not, or is not likely to remain, in compliance with any of sections 5 to 8, 10 to 15 and 28 or the regulations related to those sections, the Superintendent must notify the Minister.Notice to management and board of directors(2)If a corporation is not, or is not likely to remain, in compliance with any of sections 5 to 8, 10 to 15 and 28 or the regulations related to those sections, the Superintendent must notify the management or board of directors of the corporation.

Punishment35(1)Every person who is guilty of an offence under this Act is liable to(a)on conviction on indictment, a fine of not more than $5,000,000; or(b)on summary conviction, a fine of not more than $500,000.Order to comply(2)If a corporation has been convicted of an offence under this Act, the court may, in addition to any punishment it may otherwise impose, order it to comply with the provisions of this Act and the regulations.Additional fine(3)If a corporation has been convicted of an offence under this Act, the court may, if it is satisfied that as a result of the commission of the offence the corporation acquired any monetary benefits, order the corporation to pay, despite the maximum amount of any fine that may otherwise be imposed under this Act, an additional fine in an amount equal to three times the court’s estimation of the amount of those monetary benefits.

Liability of officers, directors, etc.36If a corporation commits an offence under this Act, any of its officers, directors, agents or mandataries who directed, authorized, assented to, acquiesced in or participated in the commission of the offence is a party to and guilty of the offence and liable, whether or not the corporation has been prosecuted or convicted, to(a)on conviction on indictment, a fine of not more than $1,000,000 or imprisonment for a term of not more than five years, or both; or(b)on summary conviction, a fine of not more than $100,000 or imprisonment for a term of not more than one year, or both.

Limitation period or prescription37(1)Proceedings by way of summary conviction in respect of an offence under this Act may be commenced at any time within, but not later than, two years after the day on which the subject matter of the proceedings became known to the Minister.Certificate of Minister(2)A document appearing to have been issued by the Minister certifying the day on which the subject matter of any proceedings became known to the Minister is admissible in evidence without proof of the signature or official character of the person appearing to have signed it and is, in the absence of evidence to the contrary, proof of the matter asserted in it.

Regulations41The Governor in Council may make regulations for carrying out the purposes and provisions of this Act, including regulations(a)imposing conditions on an approved mortgage insurer in order to mitigate the risks to Her Majesty that arise from the provision of mortgage or hypothecary insurance protection under this Act;(b)respecting the payment of fees under section 9, including the amount of those fees or the manner of calculating them;(c)respecting the designation, by approved mortgage insurers, of mortgage or hypothecary lenders as qualified mortgage lenders;(d)prescribing the exceptions to each of the requirements under section 11;(e)prescribing the exceptions to each of the prohibitions under section 14;(f)prescribing, for the purposes of subsection 15(1), the manner in which books and records are to be kept and retained and the manner in which information is to be retained;(g)prescribing, for the purposes of subsection 15(5), the manner in which the books, records and information are to be made available to the public; and(h)prescribing anything that is required or authorized by this Act to be prescribed.

Ministerial regulations42(1)The Minister may, after consulting with the Governor of the Bank of Canada and the Superintendent, make regulations establishing criteria that a mortgage or hypothecary loan must meet in order for it to be an eligible mortgage loan.Criterion — guarantee(1.1)Any criterion established by a regulation made under subsection (1) that relates to a guarantee of payment referred to in subsection 14(1) of the National Housing Act may apply to an existing insured mortgage or hypothecary loan.Ministerial regulations — agreements and undertakings(2)The Minister may make regulations specifying, for the purposes of paragraph 43(k), agreements entered into by Her Majesty and a company in respect of mortgage or hypothecary insurance, and undertakings given by a company under an agreement as defined in section 43.Coming into force(3)A regulation made under this section comes into force on the day on which it is published in the Canada Gazette or on any later day that is specified in the regulation unless the regulation provides otherwise and it gives effect to a budgetary or other public announcement, in which case the regulation must not come into force before the day on which the announcement was made.2011, c. 15, s. 20 “42”; 2014, c. 20, s. 315

Definition of agreement43In sections 44 to 48, agreement means(a)the agreement entered into by Her Majesty and The Mortgage Insurance Company of Canada that was made on January 1, 1991 and subsequently assigned to GE Capital Mortgage Insurance Company (Canada);(b)the Management Agreement entered into by Her Majesty, The Mortgage Insurance Company of Canada, Royal Bank Investment Management Inc., and Royal Trust Corporation of Canada that was made on November 1, 1991;(c)the agreement entered into by Her Majesty and AIG United Guaranty Mortgage Insurance Company Canada that was made on November 21, 2006;(d)the Custody and Security Agreement entered into by Her Majesty, AIG United Guaranty Mortgage Insurance Company Canada and RBC Dexia Investor Services Trust that was made on November 21, 2006;(e)the Management Agreement entered into by Her Majesty, AIG United Guaranty Mortgage Insurance Company Canada and RBC Dominion Securities Inc. that was made on November 21, 2006;(f)the agreement entered into by Her Majesty and PMI Mortgage Insurance Company Canada that was made on July 12, 2007;(g)the Custody and Security Agreement entered into by Her Majesty, PMI Mortgage Insurance Company Canada and Citibank Canada that was made on July 12, 2007;(h)the Management Agreement entered into by Her Majesty, PMI Mortgage Insurance Company Canada and TD Asset Management Inc. that was made on July 12, 2007;(i)the Management Agreement entered into by Her Majesty, Canada Guaranty Mortgage Insurance Company and Phillips, Hager & North Investment Management Ltd. that was made on May 5, 2010;(j)any reinsurance agreement to which Her Majesty and a company or a predecessor to a company are parties;(k)any agreement or undertaking specified in regulations made under subsection 42(2); or(l)any amendment to an agreement referred to in any of paragraphs (a) to (k).

No liability45No action or other proceeding, including any action or proceeding in restitution, or for damages of any kind, that is based on or is in relation to any agreement, lies or may be instituted by anyone against Her Majesty or any minister or any employee or agent of Her Majesty, or any person engaged to provide advice or services to Her Majesty in relation to any agreement, for anything done or omitted to be done or for anything purported to have been done or omitted to be done, in the exercise or performance of their powers, duties and functions.

Obligation to send statement47(1)Within 30 days after the day on which this Act comes into force or any longer period that the Minister allows, each company must send to the Minister a written statement indicating, as of the time immediately before this Act comes into force, the following amounts:(a)the amount of cash on deposit in any custodial account, trust account, guarantee fund or similar account or fund established under an agreement in respect of the company; and(b)the current market value of all securities held in those accounts or funds.Audit of statement(2)The Minister may cause the statement to be audited.