I-3, r. 1 - Regulation respecting the Taxation Act

Section 818r53.1 Disposition versions

2023-09-26

818R53.1. Weighted Canadian liabilities of an insurer as at the end of a taxation year means the amount determined by the formula

(3 × A) + B.

In the formula in the first paragraph,

(a)  A is the amount determined by the formula

C – (0.9 × D) – [E – (0.9 × F)]; and

(b)  B is the amount determined by the formula

G – (0.9 × H) – [I – (0.9 × J)].

In the formulas in subparagraphs a and b of the second paragraph,

(a)  C is the aggregate of all amounts each of which is an amount that is in respect of an insurance business carried on by the insurer in Canada and that is reported as a liability of the insurer (other than policyholders’ liabilities or a liability in respect of an obligation to pay a benefit under a segregated fund policy in respect of which subparagraphs i and ii of paragraph b of section 840R12 apply) as at the end of the year in respect of

i.  a life insurance policy in Canada, other than an annuity, or

ii.  an accident and sickness insurance policy;

(b)  D is the aggregate of all amounts each of which is an amount, in respect of a group of insurance contracts of the insurer at the end of the year, that is

i.  the contractual service margin for the group, if no portion of the contractual service margin is in respect of a policy other than a policy that

(1)  is referred to in subparagraph i or ii of subparagraph a,

(2)  is a life insurance policy or a non-cancellable or guaranteed renewable accident and sickness policy in respect of accident and sickness insurance, within the meaning of section 152R1,

(3)  is not a segregated fund policy, and

(4)  is in respect of an insurance business carried on by the insurer in Canada, or

ii.  in any other case, the amount that would be the contractual service margin for the group if the contractual service margin were determined without taking into account any portion that is in respect of a policy other than a policy that meets the conditions in subparagraphs 1 to 4 of subparagraph i;

(c)  E is the aggregate of all amounts each of which is an amount, in respect of a group of reinsurance contracts held by the insurer at the end of the year, that is

i.  the reinsurance contract held amount for the group, if no portion of the reinsurance contract held amount for the group is in respect of the reinsurance of

(1)  a risk under a policy other than a policy that meets the conditions in subparagraphs 1 to 4 of subparagraph i of subparagraph b, or

(2)  an obligation to pay a benefit under a segregated fund policy in respect of which subparagraphs i and ii of paragraph b of section 840R12 apply, or

ii.  in any other case, the amount that would be the reinsurance contract held amount for the group if the amount were determined without taking into account any portion that is in respect of the reinsurance of

(1)  a risk under a policy other than a policy that meets the conditions in subparagraphs 1 to 4 of subparagraph i of subparagraph b, or

(2)  an obligation to pay a benefit under a segregated fund policy in respect of which subparagraphs i and ii of paragraph b of section 840R12 apply;

(d)  F is the aggregate of all amounts each of which is an amount, in respect of a group of reinsurance contracts held by the insurer at the end of the year, that is

i.  if no portion of the contractual service margin for the group is in respect of the reinsurance of a risk under a policy other than a policy that meets the conditions in subparagraphs 1 to 4 of subparagraph i of subparagraph b, the contractual service margin for the group, or

ii.  in any other case, the amount that would be the contractual service margin for the group if the contractual service margin were determined without taking into account any portion that is in respect of the reinsurance of a risk under a policy other than a policy that meets the conditions in subparagraphs 1 to 4 of subparagraph i of subparagraph b;

(e)  G is the aggregate of all amounts each of which is an amount that is in respect of an insurance business carried on by the insurer in Canada and that is reported as a liability of the insurer (other than policyholders’ liabilities or a liability in respect of an obligation to pay a benefit under a segregated fund policy in respect of which subparagraphs i and ii of paragraph b of section 840R12 apply) as at the end of the year except to the extent the liability is in respect of

i.  an insurance policy referred to in subparagraph i or ii of subparagraph a, or

ii.  a debt incurred or assumed by the insurer to acquire a property of the insurer;

(f)  H is the aggregate of all amounts each of which is an amount, in respect of a group of insurance contracts of the insurer at the end of the year, that is

i.  the contractual service margin for the group, if no portion of the contractual service margin is in respect of a policy other than a policy that

(1)  is not referred to in subparagraph i or ii of subparagraph a,

(2)  is a life insurance policy, a policy in respect of mortgage or hypothecary insurance within the meaning of section 152R1, or a policy in respect of title insurance within the meaning of that section,

(3)  is not a segregated fund policy, and

(4)  is in respect of an insurance business carried on by the insurer in Canada, or

ii.  in any other case, the amount that would be the contractual service margin for the group if the contractual service margin were determined without taking into account any portion that is in respect of a policy other than a policy that meets the conditions in subparagraphs 1 to 4 of subparagraph i;

(g)  I is the aggregate of all amounts each of which is an amount, in respect of a group of reinsurance contracts held by the insurer at the end of the year, that is

i.  the reinsurance contract held amount for the group, if no portion of the reinsurance contract held amount for the group is in respect of the reinsurance of

(1)  a risk under a policy other than a policy that meets the conditions in subparagraphs 1 to 4 of subparagraph i of subparagraph f, or

(2)  an obligation to pay a benefit under a segregated fund policy in respect of which subparagraphs i and ii of paragraph b of section 840R12 apply, or

ii.  in any other case, the amount that would be the reinsurance contract held amount for the group if the amount were determined without taking into account any portion that is in respect of the reinsurance of

(1)  a risk under a policy other than a policy that meets the conditions in subparagraphs 1 to 4 of subparagraph i of subparagraph f, or

(2)  an obligation to pay a benefit under a segregated fund policy in respect of which subparagraphs i and ii of paragraph b of section 840R12 apply; and

(h)  J is the aggregate of all amounts each of which is an amount, in respect of a group of reinsurance contracts held by the insurer at the end of the year, that is

i.  if no portion of the contractual service margin for the group is in respect of a risk under a policy other than a policy that meets the conditions in subparagraphs 1 to 4 of subparagraph i of subparagraph f, the contractual service margin for the group, or

ii.  in any other case, the amount that would be the contractual service margin for the group if the contractual service margin were determined without taking into account any portion that is in respect of the reinsurance of a risk under a policy other than a policy that meets the conditions in subparagraphs 1 to 4 of subparagraph i of subparagraph f.

O.C. 701-2013, s. 31; S.Q. 2023, c. 19, s. 150.

2013-07-03

818R53.1. Weighted Canadian liabilities of an insurer at the end of a taxation year means the aggregate of

(a)  300% of the excess amount determined by the following formula:

A - B; and

(b)  the amount determined by the following formula:

C - D.

In the formulas in the first paragraph,

(a)  A is the aggregate of all amounts each of which is an amount that is in respect of an insurance business carried on by the insurer in Canada and that is reported as a liability of the insurer at the end of the year, other than a liability in respect of an amount payable out of a segregated fund, in respect of a life insurance policy in Canada, other than an annuity, or an accident and sickness insurance policy;

(b)  B is the aggregate of the insurer’s policy loans at the end of the year, other than policy loans in respect of annuities, and the reinsurance recoverable reported by the insurer at the end of the year relating to its liabilities described in subparagraph a;

(c)  C is the aggregate of all amounts each of which an amount in respect of an insurance business carried on by the insurer in Canada that is reported as a liability of the insurer at the end of the year, except to the extent that the amount is

i.  in respect of an insurance policy described in subparagraph a,

ii.  a liability in respect of an amount payable out of a segregated fund, or

iii.  a debt incurred or assumed by the insurer to acquire a property of the insurer; and

(d)  D is the aggregate of the insurer’s policy loans in respect of annuities at the end of the year and the reinsurance recoverable, reported by the insurer at the end of the year relating to its liabilities described in subparagraph c.

O.C. 701-2013, s. 31.