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

Section 92.19r3 Disposition versions

2021-06-02

92.19R3. For the purposes of this division, the following rules apply:

(a)   in the case of a life insurance policy issued before 1 January 2017, a separate exemption test policy is deemed, subject to section 92.19R6.1, to have been issued in respect of the life insurance policy

i.  on the date of issue of the life insurance policy, and

ii.  on each policy anniversary of the life insurance policy on which the amount of the death benefit under the life insurance policy exceeds 108% of the amount of the death benefit under the life insurance policy on the later of the life insurance policy’s date of issue and the date of the life insurance policy’s preceding policy anniversary, if any; and

(b)   in the case of a life insurance policy issued after 31 December 2016, a separate exemption test policy is deemed, subject to section 92.19R6.1, to be issued in respect of each coverage under the life insurance policy

i.  on any of the following dates:

ii.  on each policy anniversary of the life insurance policy on which the amount of the death benefit under the coverage on that policy anniversary exceeds 108% of the amount of the death benefit under the coverage, on the later of the coverage’s date of issue and the date of the life insurance policy’s preceding policy anniversary (or, if there is no preceding policy anniversary, the coverage’s date of issue), and

iii.  on each policy anniversary of the life insurance policy—except to the extent that another exemption test policy has been issued on that date under this subparagraph iii in respect of a coverage under the life insurance policy—on which an excess amount is determined by the formula

A − B.

In the formula in the first paragraph,

(a)  A is the amount by which the fund value benefit under the life insurance policy on the policy anniversary referred to in subparagraph iii of subparagraph b of the first paragraph exceeds the fund value benefit under the life insurance policy on the life insurance policy’s preceding policy anniversary (or, if there is no preceding policy anniversary, the date of issue of the policy); and

(b)  B is the amount by which 8% of the amount of the death benefit under the life insurance policy on the policy anniversary preceding the policy anniversary referred to in subparagraph iii of subparagraph b of the first paragraph (or, if there is no preceding policy anniversary, the date of issue of the policy) exceeds the aggregate of all amounts each of which is, in respect of a coverage under the policy, the lesser of

i.  the amount by which the amount of the death benefit under the coverage on the date of the policy anniversary referred to in that subparagraph iii exceeds the amount of the death benefit under the coverage on the later of the coverage’s date of issue and the date of the life insurance policy’s preceding policy anniversary (or, if there is no preceding policy anniversary, the coverage’s date of issue), and

ii.  8% of the amount of the death benefit under the coverage on the later of the coverage’s date of issue and the date of the policy anniversary preceding the policy anniversary referred to in that subparagraph iii (or, if there is no preceding policy anniversary, the coverage’s date of issue).

s. 92.19R4; O.C. 7-87, s. 2; Erratum, 1988 G.O. 2, 2689; O.C. 67-96, s. 14; O.C. 134-2009, s. 1; S.Q. 2019, c. 14, s. 632; S.Q. 2021, c. 14, s. 242.

2019-06-19

92.19R3. For the purposes of this division, the following rules apply:

(a)  in the case of a life insurance policy issued before 1 January 2017 or at a particular time determined under section 967.1 of the Act, a separate exemption test policy is deemed, subject to section 92.19R6.1, to have been issued in respect of the life insurance policy

i.  on the date of issue of the life insurance policy, and

ii.  on each policy anniversary (that ends before the particular time determined, if applicable, under section 967.1 of the Act in respect of the policy) of the life insurance policy on which the amount of the death benefit under the life insurance policy exceeds 108% of the amount of the death benefit under the life insurance policy on the later of the life insurance policy’s date of issue and the date of the life insurance policy’s preceding policy anniversary, if any; and

(b)  in the case of a life insurance policy issued after 31 December 2016 (including at a particular time determined under section 967.1 of the Act in respect of the policy), a separate exemption test policy is deemed, subject to section 92.19R6.1, to be issued in respect of each coverage under the life insurance policy

i.  unless the particular time when the policy is issued is determined under section 967.1 of the Act and the coverage was issued before the particular time, on

(1)  the date of issue of the life insurance policy, if the coverage is issued before the first policy anniversary of the life insurance policy,

(2)  the date of issue of the coverage, if the coverage is issued on a policy anniversary of the life insurance policy, or

(3)  the life insurance policy’s preceding policy anniversary, if the coverage is issued on any date that is after the policy’s first policy anniversary and that is not a policy anniversary,

ii.  on each policy anniversary of the life insurance policy (except that, if a particular time when the policy is issued has been determined under section 967.1 of the Act, only on a policy anniversary that ends at or after the particular time) on which the amount of the death benefit under the coverage on that policy anniversary exceeds 108% of the amount of the death benefit under the coverage, on the later of the coverage’s date of issue and the date of the life insurance policy’s preceding policy anniversary (or, if there is no preceding policy anniversary, the coverage’s date of issue), and

iii.  on each policy anniversary of the life insurance policy (except that, if a particular time when the policy is issued has been determined under section 967.1 of the Act, only on a policy anniversary that ends at or after the particular time)—except to the extent that another exemption test policy has been issued on that date under this subparagraph in respect of a coverage under the life insurance policy—on which an excess amount is determined by the formula

A − B.

In the formula in the first paragraph,

(a)  A is the amount by which the fund value benefit under the life insurance policy on the policy anniversary referred to in subparagraph iii of subparagraph b of the first paragraph exceeds the fund value benefit under the life insurance policy on the life insurance policy’s preceding policy anniversary (or, if there is no preceding policy anniversary, the date of issue of the policy); and

(b)  B is the amount by which 8% of the amount of the death benefit under the life insurance policy on the policy anniversary preceding the policy anniversary referred to in subparagraph iii of subparagraph b of the first paragraph (or, if there is no preceding policy anniversary, the date of issue of the policy) exceeds the aggregate of all amounts each of which is, in respect of a coverage under the policy, the lesser of

i.  the amount by which the amount of the death benefit under the coverage on the date of the policy anniversary referred to in that subparagraph iii exceeds the amount of the death benefit under the coverage on the later of the coverage’s date of issue and the date of the life insurance policy’s preceding policy anniversary (or, if there is no preceding policy anniversary, the coverage’s date of issue), and

ii.  8% of the amount of the death benefit under the coverage on the later of the coverage’s date of issue and the date of the policy anniversary preceding the policy anniversary referred to in that subparagraph iii (or, if there is no preceding policy anniversary, the coverage’s date of issue).

s. 92.19R4; O.C. 7-87, s. 2; Erratum, 1988 G.O. 2, 2689; O.C. 67-96, s. 14; O.C. 134-2009, s. 1; S.Q. 2019, c. 14, s. 632.

2012-09-01

92.19R3. For the purposes of this division, a standard policy for the purposes of separate exemption is deemed to have been issued to a policy holder in respect of a life insurance policy

(a)  at the date on which life insurance is issued; and

(b)  on each anniversary of the life insurance policy where the amount of the death benefit under it exceeds 108% of the amount of the death benefit under it on the date of its issue or, if that date is later, on the date of the preceding policy anniversary.

For the purpose of determining whether the accumulating fund of the life insurance policy, on a particular policy anniversary of the policy, meets the condition in subparagraph a of the first paragraph of section 92.19R1, each standard policy for purposes of exemption referred to in the first paragraph is deemed

(a)  to provide for a death benefit that is uniform throughout the term of the standard policy for purposes of exemption and is equal to the amount determined in section 92.19R4;

(b)  to provide for the payment of its death benefit on the date determined in section 92.19R5; and

(c)  to be a life insurance policy in Canada issued by a life insurer carrying on a life insurance business in Canada.

s. 92.19R4; O.C. 7-87, s. 2; Erratum, 1988 G.O. 2, 2689; O.C. 67-96, s. 14; O.C. 134-2009, s. 1.