Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to sections 494aa, 509a and 1021b of the Insurance Companies Actc, hereby makes the annexed Investment Limits (Insurance Companies) Regulations.S.C. 2001, c. 9, s. 426S.C. 2001, c. 9, s. 465S.C. 1991, c. 47InterpretationDefinitionsThe following definitions apply in these Regulations.Act means the Insurance Companies Act. (Loi)designated entity, in respect of a company, means an entity other thana joint venture;a financial institution;a bank holding company;an insurance holding company;a subsidiary of a financial institution, other than where the subsidiary is a subsidiary of a financial institution only because it is a subsidiary of the company; ora subsidiary of a bank holding company or insurance holding company. (entité désignée)insurance company means an insurance company incorporated by or under the laws of Canada or a province. (société d’assurances)joint venture means a real property entitythat was formed by a company, or by a designated entity controlled by a company, and one or more other persons for the purpose of a specific business undertaking;in which the company or designated entity has a substantial investment; andin respect of which the persons who formed it have agreed on joint control, regardless of the distribution of their equity. (coentreprise)minority interest means an equity interest, in an entity that is controlled by a company, that is held by a person other thanthe company; oran entity controlled by the company. (participation minoritaire)real property entity means an entity that is primarily engaged in holding, managing or otherwise dealing withreal property;shares of a body corporate that is primarily engaged in holding, managing or otherwise dealing with real property, including shares of a body corporate that is another real property entity; orownership interests in an unincorporated entity that is primarily engaged in holding, managing or otherwise dealing with real property, including ownership interests in an unincorporated entity that is another real property entity. (entité immobilière)related real property entity, in respect of a company, meansa real property entity, other than a designated entity controlled by the company, in which the company or a designated entity controlled by the company beneficially owns sufficient shares or ownership interests to cause the company or designated entity to have a substantial investment in the real property entity; ora real property entity that is controlled by a real property entity described in paragraph (a). (entité immobilière apparentée)securities dealer means an entity described in paragraph (g) of the definition financial institution in subsection 2(1) of the Act. (négociant en valeurs mobilières)third party, in respect of a company, means a person other thanthe company;a designated entity controlled by the company; ora related real property entity of the company. (tierce partie)total assets, in respect of a company, at a particular time, means the amount determined by the formulaA - BwhereAis the total of the assets that would be reported on the balance sheet of the company prepared as at that time in accordance with the accounting principles and specifications of the Superintendent referred to in subsection 331(4) of the Act; andBis the total of all amounts each of which is an amount included in the value of A that is in respect of an asset of a subsidiary of the company, if that subsidiary isa financial institution,a bank holding company,an insurance holding company,a subsidiary of a financial institution, other than where the subsidiary is a subsidiary of a financial institution only because it is a subsidiary of the company, ora subsidiary of a bank holding company or an insurance holding company. (actif total)Book value of interest in real propertyFor the purposes of sections 8 to 11, the book value of an asset that is an interest of a company in real property, at a particular time, isif the asset is real property, the gross book value of the real property, less any accumulated depreciation on the real property, that would be reported on a balance sheet of the company prepared as at that time in accordance with the accounting principles and specifications of the Superintendent referred to in subsection 331(4) of the Act; andif the asset is a security or loan, the book value of the security or loan that would be reported on a balance sheet of the company prepared as at that time in accordance with the accounting principles and specifications of the Superintendent referred to in subsection 331(4) of the Act.ExemptionsExempt companiesSections 506 to 508 of the Act do not apply toa mutual company having an aggregate of surplus and minority interests of five billion dollars or more; ora company, other than a mutual company, if itis widely held and has equity of five billion dollars or more, orhas equity of five billion dollars or more and is controlled bya widely held bank holding company,a widely held insurance holding company,an eligible financial institution, as defined in section 370 of the Bank Act, other than a foreign bank as defined in section 2 of that Act, ora foreign bank, as defined in section 2 of the Bank Act, that is widely held as defined in section 2.3 of that Act.Prescribed SubsidiaryPrescribed subsidiaryFor the purposes of sections 506 to 508 of the Act, a prescribed subsidiary of a company is any subsidiary of the company, except where that subsidiary isa financial institution;a bank holding company;an insurance holding company;a subsidiary of a financial institution, other than where the subsidiary is a subsidiary of a financial institution only because it is a subsidiary of the company; ora subsidiary of a bank holding company or insurance holding company.Amount DeterminedAmount determined — real propertyFor the purpose of section 506 of the Act, the amount determined in respect of a company referred to in that section isif the company is a life company, the total of70% of the amount determined under subsection (4),15% of the liabilities of the company in respect of life insurance policies that are not participating policies,25% of the liabilities of the company in respect of life insurance policies that are participating policies, and5% of the liabilities of the company in respect ofall life annuities, whether or not for a guaranteed term, in respect of which the company has contracted with the annuitant to make regular periodic payments of defined amounts,all annuities in respect of which the company has guaranteed a rate of interest for a term of more than 10 years after the date on which the contract is entered into,all group long-term disability annuities in respect of which the company has contracted with the annuitant to make regular periodic payments of defined amounts to retirement age, andall other disability annuities in respect of which the company has contracted with the annuitant to make regular periodic payments of defined amountswhile the disability of the annuitant continues, to age 65, orfor life; andif the company is a property and casualty company or a marine company, 10% of its total assets.Amount determined — equityFor the purpose of section 507 of the Act, the amount determined in respect of a company referred to in that section isif the company is a life company, the total of70% of the amount determined under subsection (4),15% of the liabilities of the company in respect of life insurance policies that are not participating policies,25% of the liabilities of the company in respect of life insurance policies that are participating policies, and5% of the liabilities of the company in respect ofall life annuities, whether or not for a guaranteed term, in respect of which the company has contracted with the annuitant to make regular periodic payments of defined amounts,all annuities in respect of which the company has guaranteed a rate of interest for a term of more than 10 years after the date on which the contract is entered into,all group long-term disability annuities in respect of which the company has contracted with the annuitant to make regular periodic payments of defined amounts to retirement age, andall other disability annuities in respect of which the company has contracted with the annuitant to make regular periodic payments of defined amountswhile the disability of the annuitant continues, to age 65, orfor life; andif the company is a property and casualty company or a marine company, 25% of its total assets.Amount determined — aggregate limitFor the purpose of section 508 of the Act, the amount determined in respect of a company referred to in that section isif the company is a life company, the total of100% of the amount determined under subsection (4),20% of the liabilities of the company in respect of life insurance policies that are not participating policies,40% of the liabilities of the company in respect of life insurance policies that are participating policies, and5% of the liabilities of the company in respect ofall life annuities, whether or not for a guaranteed term, in respect of which the company has contracted with the annuitant to make regular periodic payments of defined amounts,all annuities in respect of which the company has guaranteed a rate of interest for a term of more than 10 years after the date on which the contract is entered into,all group long-term disability annuities in respect of which the company has contracted with the annuitant to make regular periodic payments of defined amounts to retirement age, andall other disability annuities in respect of which the company has contracted with the annuitant to make regular periodic payments of defined amountswhile the disability of the annuitant continues, to age 65, orfor life; andif the company is a property and casualty company or a marine company, 35% of its total assets.Amount determined for subsections (1) to (3)For the purposes of subparagraphs (1)(a)(i), (2)(a)(i) and (3)(a)(i), the amount determined under this subsection in respect of a company is the amount determined under the formulaA - BwhereAis the regulatory capital of the company; andBis the total ofall amounts each of which is included in the regulatory capital of the company and isthe excess of the total assets of any financial institution, bank holding company or insurance holding company controlled by the company, or of any entity controlled by a financial institution, bank holding company or insurance holding company controlled by the company, over the total liabilities (including deferred taxes and subordinated indebtedness) of the financial institution, bank holding company, insurance holding company or entity,an amount equal to the total deferred realized capital gains less the total deferred realized capital losses from real estate and share transactions of a financial institution referred to in subparagraph (i) that is a life company, orthe amount of subordinated indebtedness issued by a financial institution, bank holding company, insurance holding company or entity referred to in subparagraph (i);all amounts each of which is the amount of a minority interest in a financial institution, bank holding company or insurance holding company controlled by the company, or in an entity controlled by a financial institution, bank holding company or insurance holding company controlled by the company, that is included in the regulatory capital of the company;all amounts each of which is the amount of an investment, other than subordinated indebtedness referred to in subparagraph (a)(iii), of the company or a designated entity controlled by the company in a financial institution, bank holding company or insurance holding company controlled by the company, or in an entity controlled by a financial institution, bank holding company or insurance holding company controlled by the company, if the investment is part ofthe regulatory capital of a company,the regulatory capital of a bank, within the meaning of the Regulatory Capital (Banks) Regulations,the regulatory capital, within the meaning of the Regulatory Capital (Trust and Loan Companies) Regulations, of a body corporate to which the Trust and Loan Companies Act applies,the amount that would be treated as the capital of any other financial institution, bank holding company or insurance holding company by a regulatory body that regulates it,the regulatory capital of a bank holding company, within the meaning of the Regulatory Capital (Bank Holding Companies) Regulations, orthe regulatory capital of an insurance holding company, within the meaning of the Regulatory Capital (Insurance Holding Companies) Regulations;all amounts each of which is the amount of a loan, other than subordinated indebtedness referred to in subparagraph (a)(iii), made by the company or by a designated entity controlled by the company to an insurance company or securities dealer controlled by the company, or to an entity controlled by an insurance company or securities dealer controlled by the company, if the loan is part ofthe regulatory capital, within the meaning of the Regulatory Capital (Insurance Companies) Regulations, of a company, orthe amount that would be treated as the capital of any other insurance company, or of a securities dealer, by a regulatory body that regulates the insurance company or securities dealer.SOR/2009-296, s. 30; SOR/2011-196, s. 23(F)Valuation of EquityEquity owned by companyFor the purposes of sections 507 and 508 of the Act, the value of the participating shares and ownership interests referred to in those sections that are beneficially owned by a company and its subsidiaries prescribed by subsection 4 is equal to their book value as reported on the consolidated balance sheet of the company.Interests of a Company in Real PropertyGeneralDefinition and value of interest in real propertyFor the purposes of Part IX of the Act, other than subsection 502(3) of the Act, sections 8 to 12 define the interests of a company in real property and set out how those interests are to be valued.ExceptionFor the purpose of subsection 502(3) of the Act, the interests of a company in real property means real property referred to in paragraph 11(1)(a) and shares and ownership interests referred to in paragraph 11(1)(b) that become beneficially owned by the company, or by a designated entity controlled by the company, as a result of the realization of a security interest on a loan or debt obligation referred to in subsection 11(1).Direct Interests — Real Property and Debt ObligationsDirect interestsThe following are interests of a company in real property:real property beneficially owned by the company or by a designated entity controlled by the company; anda debt obligation, for which the company or a designated entity controlled by the company is liable, that was issued for the purpose of acquiring or improving real property referred to in paragraph (a).Value of direct interestsThe value of the interests of a company in real property isin respect of real property referred to in paragraph (1)(a), the book value of the real property; andin respect of a debt obligation referred to in paragraph (1)(b), any amount by which the book value of the debt obligation exceeds the book value of the real property referred to in that paragraph.Indirect Interests — Real Property, Shares and Ownership InterestsCertain indirect interestsThe following are interests of a company in real property:at a particular time, real propertythat is beneficially owned bya related real property entity of the company that is a joint venture, oran entity in which an entity described in clause (A) has a substantial investment, andthat would be reported on a balance sheet of the company prepared as at that time in accordance with the accounting principles and specifications of the Superintendent referred to in subsection 331(4) of the Act; andshares and ownership interests beneficially owned by the company, or by a designated entity controlled by the company, in any related real property entity of the company other than a related real property entity referred to in paragraph (a).Value of those interestsThe value of the interests of a company in real property isin respect of real property referred to in paragraph (1)(a), the book value of the real property; andin respect of shares and ownership interests referred to in paragraph (1)(b), the book value of the shares and ownership interests.Indirect Interests — Loans and Debt ObligationsCertain indirect interestsThe following are interests of a company in real property:a debt obligation issued by a related real property entity of the company and beneficially owned by the company or by a designated entity controlled by the company;a loan made by the company, or by a designated entity controlled by the company, to a related real property entity of the company;a loan made by the company, or by a designated entity controlled by the company, toa real property entity in which a financial institution, bank holding company or insurance holding company controlled by the company has a substantial investment, ora real property entity that is controlled by a real property entity described in subparagraph (i);a debt obligation issued by a real property entity described in subparagraph (c)(i) or (ii) and beneficially owned by the company or by a designated entity controlled by the company;a debt obligation that isissued by a related real property entity of the company,beneficially owned by a third party, andguaranteed by the company or by a designated entity controlled by the company; anda loan made by a third party to a related real property entity of the company and guaranteed by the company or by a designated entity controlled by the company.Value of those interestsThe value of the interests of a company in real property isin respect of a debt obligation referred to in paragraph (1)(a) or (d), the book value of the debt obligation;in respect of a loan referred to in paragraph (1)(b) or (c), the book value of the loan; andin respect of a guaranteed debt obligation referred to in paragraph (1)(e) or a guaranteed loan referred to in paragraph (1)(f),if the debt obligation is issued by, or the loan is made to, an entity that is a related real property entity of the company and the entity beneficially owns real property that is an interest of the company in real property under paragraph 9(1)(a), any amount by which the face value of the guarantee exceeds the value of the real property determined in accordance with paragraph 9(2)(a), andin any other case, the face value of the guarantee.Indirect Interests — Secured Loans and Debt ObligationsCertain indirect interestsIf a company or a designated entity controlled by a company makes a loan to, or beneficially owns or guarantees the debt obligation of, a third party, the loan or debt obligation is an interest of the company in real property if it is secured byreal property beneficially owned by a third party in conjunction withthe company,the designated entity,a related real property entity of the company,a financial institution, bank holding company or insurance holding company controlled by the company,an entity controlled by a financial institution, bank holding company or insurance holding company referred to in subparagraph (iv), ora real property entity described in subparagraph 10(1)(c)(i) or (ii); orshares or ownership interests beneficially owned by a third party inan entity that beneficially owns real property in conjunction with the company, a related real property entity of the company or a designated entity controlled by the company, ora related real property entity of the company.Value of those assetsThe value of the interests of a company in real property isin respect of a loan or debt obligation that is secured by real property referred to in paragraph (1)(a), the lesser ofthe net realizable value of the third party’s interest in the real property at the time that the security interest was given, andthe amount determined by the formulaA - BwhereAisif the loan was made by the company or a designated entity controlled by the company or the debt obligation is beneficially owned by the company or a designated entity controlled by the company, the book value of the loan or debt obligation, orif the debt obligation is guaranteed by the company or a designated entity controlled by the company, the face value of the guarantee, andBis the total net realizable value of any other security interests that were given for the loan or debt obligation;in respect of a loan or debt obligation that is secured by shares or ownership interests beneficially owned by a third party in an entity referred to in subparagraph (1)(b)(i), the lesser ofthe net realizable value of the third party’s interest in those shares or ownership interests at the time that the security interest was given, andthe amount determined by the formulaA - (B - (C × D/E))whereAisif the loan was made by the company or a designated entity controlled by the company or the debt obligation is beneficially owned by the company or a designated entity controlled by the company, the book value of the loan or debt obligation, orif the debt obligation is guaranteed by the company or a designated entity controlled by the company, the face value of the guarantee,Bis the total net realizable value of all security interests that were given for the loan or debt obligation,Cis the net realizable value of the entity’s interest in the real property referred to in subparagraph (1)(b)(i),Dis the value of the shares or ownership interests that are given as the security interest, andEis the total value of the outstanding shares or ownership interests in the entity; andin respect of a loan or debt obligation that is secured by shares or ownership interests beneficially owned by a third party in a related real property entity referred to in subparagraph (1)(b)(ii), the lesser ofthe net realizable value of the third party’s interest in those shares or ownership interests at the time that the security interest was given, andthe amount determined by the formulaA - BwhereAisif the loan was made by the company or a designated entity controlled by the company or the debt obligation is beneficially owned by the company or a designated entity controlled by the company, the book value of the loan or debt obligation, orif the debt obligation is guaranteed by the company or a designated entity controlled by the company, the face value of the guarantee, andBis the total net realizable value of any other security interests that were given for the loan or debt obligation.Other InterestsOther interestsThe following are interests of a company in real property:a guarantee given by the company, or by a designated entity controlled by the company, to an entity other than the company or designated entity for the purpose of completing the development of real property that is beneficially owned bythe company,a designated entity controlled by the company, ora related real property entity of the company; andan agreement made by the company, or by a designated entity controlled by the company, to support a third party’s cost of operating or financing real property that is beneficially owned bythe company,a designated entity controlled by the company, ora related real property entity of the company.Value of those interestsThe value of the interests of a company in real property isin respect of a guarantee referred to in paragraph (1)(a), the estimated cost of completing the development of the real property; andin respect of an agreement referred to in paragraph (1)(b), the amount of any funds advanced by the company, or by a designated entity controlled by the company, under the agreement.RepealsRepeal[Repeal]Repeal[Repeal]Coming into ForceComing into forceThese Regulations come into force on the day on which sections 494 and 509 of the Insurance Companies Act, as enacted by section 426 of the Financial Consumer Agency of Canada Act, chapter 9 of the Statutes of Canada, 2001, come into force.[Note: Regulations in force October 24, 2001, see SI/2001-102.]