A-32 - Act respecting insurance

Updated to 1 July 2008

This document has official status.

chapter A-32

Act respecting insurance

TITLE I INTERPRETATION

1. In this Act and in the regulations, unless the context indicates a different meaning, the following expressions mean:

(a)  “insurer” : any person who directly or indirectly advertises or acts as an insurer, issues or undertakes to issue an insurance contract, receives premiums, assessments or other amounts under such a contract or to pay mutual benefits, or undertakes to pay insurance benefits or mutual benefits, excluding any professional syndicate authorized to exercise the powers provided in subparagraph 1 of section 9 of the Professional Syndicates Act (chapter S‐40) or any person who, in the field of insurance, offers or enters into only contracts of additional warranty under which he binds himself towards another person to assume directly or indirectly, wholly or partly, the cost of repair or replacement of property or part of any property in case of defect or malfunction;

(b)  “company” or “insurance company” : a joint stock company constituted to transact insurance business and a mutual insurance company;

(c)  “mutual insurance company” : a mutual life‐insurance company and a mutual damage‐insurance company;

(d)  “mutual insurance association” : a legal person constituted under Chapter III.1 of Title III or a legal person resulting from a continuance provided for in the Act to amend the Act respecting insurance and other legislation (1985, chapter 17);

(e)  (paragraph repealed);

(f)  “mutual benefit association” : a mutual benefit association constituted under this Act or Division VIII of the Insurance Act (Revised Statutes, 1964, chapter 295) replaced by chapter 70 of the statutes of 1974, and a legal person transacting mutual benefits under a special Act of Québec;

(g)  “mutual benefits” : amounts paid to or benefits conferred upon persons who are members of a group or to or upon members of their families in case of misfortune, sickness, accident or death, out of the premiums, assessments, gifts or subscriptions from persons who are members of that group;

(h)  “mutual association” : a mutual insurance association and a mutual benefit association;

(i)  “insurance representative” : an insurance representative within the meaning of the Act respecting the distribution of financial products and services (chapter D‐9.2);

(j)  “claims adjuster” : a claims adjuster within the meaning of the Act respecting the distribution of financial products and services;

(k)  (paragraph repealed);

(l)  “officer” : the president, vice-president, treasurer and secretary of a legal person, or the chairman, vice-chairman, treasurer and secretary of its board of directors, their assistants, the managing director and general manager, and any person holding a similar function;

(m)  “actuary” : a Fellow of the Canadian Institute of Actuaries;

(n)  “Authority” : the Autorité des marchés financiers;

(o)  (paragraph repealed);

(p)  “licence” : every licence issued under this Act;

(q)  (paragraph repealed);

(r)  “annual statement” : the statement contemplated in section 305;

(s)  “regulations” : the regulations made under this Act by the Government;

(t)  (paragraph repealed);

(u)  “insurance fund” : a professional liability insurance fund set up by a professional order governed by the Professional Code (chapter C‐26);

(v)  “spouse” : a person who is married to, or in a civil union with, and cohabits with another person, or a person who lives with another person of the opposite or the same sex in a conjugal relationship and has been living with that person for at least one year;

(w)  “register” : the register instituted under the Act respecting the legal publicity of sole proprietorships, partnerships and legal persons (chapter P‐45).

1974, c. 70, s. 1 (part); 1975, c. 76, s. 11; 1981, c. 9, s. 24; 1982, c. 52, s. 56; 1984, c. 22, s. 1; 1984, c. 47, s. 22; 1985, c. 17, s. 1; 1987, c. 54, s. 1; 1990, c. 86, s. 1; 1989, c. 48, s. 225; 1993, c. 48, s. 113; 1994, c. 40, s. 457; 1996, c. 63, s. 80; 1999, c. 14, s. 7; 1998, c. 37, s. 497; 1999, c. 40, s. 33; 2002, c. 6, s. 86; 2002, c. 45, s. 200; 2004, c. 37, s. 90.

1.1. A legal person is controlled by another person where the latter person holds, directly or through legal persons controlled by the latter person, more than 50% of the voting rights attached to the shares of the former or is in a position to elect a majority of its directors.

A partnership is controlled by a person where the latter holds, directly or through legal persons controlled by the person, more than 50% of the interests in the partnership. A limited partnership is controlled by a person where the person or a legal person controlled by the person is the general partner of the partnership.

A legal person is controlled by a federation of mutual insurance associations where the federation holds, by itself or jointly with the legal persons of its group, directly or through legal persons it controls, more than 50% of the voting rights attached to the shares of that legal person or is in a position to elect a majority of its directors.

A legal person is controlled by a mutual insurance association where the association holds, by itself or jointly with other mutual insurance associations of its group, directly or through legal persons it controls, more than 50% of the voting rights attached to the shares of that legal person or is in a position to elect a majority of its directors.

1990, c. 86, s. 2; 1996, c. 63, s. 80; 2002, c. 70, s. 1; 2003, c. 1, s. 1.

1.2. A legal person is a subsidiary of another legal person if it is controlled directly by that legal person.

1990, c. 86, s. 2; 1996, c. 63, s. 80.

1.3. A legal person is affiliated with another legal person if one is a subsidiary of the other or if both are controlled by the same person or group.

1990, c. 86, s. 2; 1996, c. 63, s. 80.

1.4. A legal person affiliated with another legal person is deemed to be affiliated with every legal person affiliated with that other legal person.

1990, c. 86, s. 2; 1996, c. 63, s. 80.

1.5. A federation and the mutual insurance associations that are members thereof, the guarantee fund of which the mutual insurance associations are members, and any other legal person or partnership controlled by one or more of the mutual insurance associations or the federation constitute a group.

1990, c. 86, s. 2; 1996, c. 63, s. 80; 2002, c. 70, s. 2.

1.6. The following persons are associates of a director, officer or any other mandatary:

(1)  his spouse, minor child or the minor child of his spouse;

(2)  his partner, or a partnership in which he is a partner;

(3)  a legal person controlled individually or jointly by him or by his spouse, his minor child or the minor child of his spouse;

(4)  a legal person in which he holds 10% or more of the voting rights attached to the shares issued by it, or 10% or more of such shares;

(5)  a legal person of which he is a director or officer.

1990, c. 86, s. 2; 1996, c. 63, s. 80.

TITLE II GENERAL PROVISIONS

1982, c. 52, s. 57.

2. (Repealed).

1974, c. 70, s. 3 (part); 1975, c. 76, s. 11; 1977, c. 5, s. 14; 1981, c. 9, s. 24; 1982, c. 52, s. 58.

3. (Repealed).

1974, c. 70, s. 3 (part); 1977, c. 5, s. 14; 1982, c. 52, s. 58.

4. (Repealed).

1974, c. 70, s. 4; 1977, c. 5, s. 14; 1978, c. 15, s. 140; 1982, c. 52, s. 58.

5. The Authority shall have supervision of the insurance business in Québec and exercise the duties and powers assigned to or vested in it by law.

1974, c. 70, s. 5; 1982, c. 52, s. 80; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

6. (Repealed).

1974, c. 70, s. 6; 1982, c. 52, s. 59.

7. (Repealed).

1974, c. 70, s. 7; 1982, c. 52, s. 59.

8. (Repealed).

1974, c. 70, s. 8; 1979, c. 37, s. 43; 1982, c. 52, s. 59.

9. (Repealed).

1974, c. 70, s. 9; 1979, c. 33, s. 1; 1982, c. 52, s. 59.

10. The Authority or the representative designated by the Authority in writing may, for the purposes of an inspection,

(1)  enter, at any reasonable time, the establishment of a person who acts in Québec as an insurer, the establishment of a holding company directly controlling an insurance company or controlled by an insurance company, or the establishment of a professional syndicate authorized to exercise the powers provided for in subparagraph 1 of the second paragraph of section 9 of the Professional Syndicates Act (chapter S‐40) relating to the establishment and administration of special indemnity funds, special funds for assistance and other funds of the same nature;

(2)  examine and make copies of the books, registers, accounts, records and other documents relating to the activities of an insurer or those of a holding company directly controlling an insurance company or controlled by an insurance company;

(3)  require any information relating to the administration of this Act and the production of any document relating thereto.

Every person having the custody, possession or control of such books, registers, accounts, records and other documents must, if so required, give communication thereof to the Authority or its representative and facilitate his examination of the same.

1974, c. 70, s. 10; 1982, c. 52, s. 60, s. 80; 1986, c. 95, s. 23; 1989, c. 48, s. 226; 1998, c. 37, s. 498; 2002, c. 70, s. 3; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

11. The Authority may also exercise the powers conferred upon it by section 10 with respect to any person who proposes or enters into a contract or matter which, without being an insurance contract or a matter of insurance, is presented to the public as offering advantages similar to those offered by insurance or having characteristics suggesting that it is a contract of insurance.

1974, c. 70, s. 11; 1982, c. 52, s. 80; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

12. The Authority or the representative designated by the Authority in writing may, in exercising powers of inspection and if the Authority or representative believes, on reasonable grounds, that an offence has been committed against this Act or any other Act the administration of which is entrusted to the Authority, seize any document relating to the offence, provided that a copy is left with the person from whom such document was seized; the Authority shall have custody of the seized document.

The Authority shall not keep the document in question for more than 90 days unless proceedings are instituted before the expiry of that period; the chief judge of the Court of Québec or the judge he designates may however order that the period of custody be reduced or extended for another period of 90 days.

1974, c. 70, s. 12; 1982, c. 52, s. 61, s. 80; 1986, c. 95, s. 24; 1988, c. 21, s. 66; 1992, c. 61, s. 71; 1995, c. 42, s. 48; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

12.1. The Authority or the representative designated by the Authority in writing shall, if so requested when exercising the powers referred to in sections 10 to 12, identify himself and produce a certificate of his capacity.

1986, c. 95, s. 25; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

13. Any document which has been the object of an examination by the Authority or the person designated by the Authority, or of which the Authority or person has taken possession or received the filing may be copied or photographed and any copy or photograph of such document, certified true, is admissible in evidence as prima facie proof of the original.

1974, c. 70, s. 13; 1982, c. 52, s. 62; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

14. It is forbidden to hinder the work of a person in the exercise of the powers conferred upon him by section 10, or to mislead him or attempt to mislead him.

1974, c. 70, s. 14.

15. The Authority may, when it believes the public interest requires it, order a special inquiry to be held into any matter within its competence.

The person whom the Authority has authorized to conduct an inquiry shall have the powers and immunity granted to commissioners appointed under the Act respecting public inquiry commissions (chapter C‐37), except the power to order imprisonment.

1974, c. 70, s. 15; 1982, c. 52, s. 80; 1992, c. 61, s. 72; 2002, c. 45, s. 201; 2004, c. 37, s. 90.

16. No person employed by the Government or the Authority or authorized by the Authority to exercise the powers conferred by sections 10 to 12 or to make an inquiry shall communicate or allow to be communicated to anyone information obtained under this Act, or allow the examination of a document filed under this Act, unless the person is authorized to do so by the Authority. The same applies to any information or document relating to the application of guidelines and provided voluntarily to the Authority.

Notwithstanding sections 9, 23, 24 and 59 of the Act respecting Access to documents held by public bodies and the Protection of personal information (chapter A‐2.1), only a person generally or specially authorized by the Authority may have access to such information or such a document.

No person shall be prosecuted on information he has given in good faith to the Authority in accordance with this Act.

1974, c. 70, s. 16; 1977, c. 5, s. 14; 1982, c. 52, s. 80; 1987, c. 68, s. 22; 2002, c. 45, s. 202; 2002, c. 70, s. 4; 2004, c. 37, s. 90.

17. The expenses incurred for the application of this Act, determined each year by the Government, shall be borne by the insurers who are licence holders.

Such expenses shall be collected from each insurer as follows:

(a)  a minimum share fixed each year by the Government;

(b)  the remainder in the proportion that the insurer’s total direct premium income for the preceding year in Québec bears to the aggregate of the similar income of all the insurers.

1974, c. 70, s. 17; 1985, c. 17, s. 2; 2002, c. 70, s. 5.

18. For the purposes of section 17, “total direct premium income” means,

(1)  in insurance of persons, the total direct premium income received from insured persons or members resident in Québec, less all participation in the profits or rebates paid to them;

(2)  in damage insurance, the total direct premium income received in respect of property situated in Québec, less all participation in the profits and related rebates.

1974, c. 70, s. 18; 1982, c. 52, s. 79; 2002, c. 70, s. 6.

19. The Authority must:

(a)  keep a register of all licences issued to insurers under this Act, in which must be entered the name of each insurer, the address of its head office in Canada and in Québec, the name and address of its attorney in Canada and in Québec, the name and address of its chief representative in Québec, the kind and classes of insurance which it is authorized to transact in Québec, and any other necessary information;

(b)  keep a register of the securities deposited by insurers with the Minister of Finance, with mention of their designation, par value, date of maturity and market value on the date of deposit;

(c)  keep a register of the activities authorized under section 33.2.2 or section 93.162;

(d)  keep a duplicate of every licence issued by it;

(e)  keep a duplicate of every power of attorney filed under section 206.

The information contained in the registers and duplicates is public information.

1974, c. 70, s. 19; 1982, c. 52, s. 80; 1987, c. 68, s. 23; 1996, c. 63, s. 1, s. 83; 2002, c. 70, s. 7; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

TITLE III INSURANCE BUSINESSES

CHAPTER I FORMATION OF INSURANCE COMPANIES

20. Seven persons or more may constitute an insurance company.

No insurance company may be constituted after 11 February 2003 otherwise than under Part IA of the Companies Act (chapter C‐38).

1974, c. 70, s. 20; 1999, c. 40, s. 33; 2002, c. 70, s. 8.

21. The founders shall transmit to the enterprise registrar a notice signed by them indicating their wish to be constituted as a legal person, together with the fees prescribed by regulation of the Government under the Act respecting the legal publicity of sole proprietorships, partnerships and legal persons (chapter P‐45). The founders shall transmit a copy of the notice to the Authority. The enterprise registrar shall deposit the notice in the register. The application for constitution as an insurance company must be presented to the Minister within six months following the date of the deposit.

The notice must mention:

(1)  the name of the company;

(2)  the name and address of each founder;

(3)  the proposed classes of insurance;

(4)  the place in Québec where the company will have its head office;

(5)  the proposed capital stock and the projected contributed surplus.

1974, c. 70, s. 21; 1982, c. 52, s. 80; 1984, c. 22, s. 2; 1999, c. 40, s. 33; 2002, c. 70, s. 8; 2004, c. 37, s. 90.

22. The application for constitution as an insurance company shall be signed by each founder and filed with the Minister.

The application shall be filed together with the information prescribed by regulation, the proposed articles and the other documents prescribed by regulation. The Minister may also request any document or information the Minister considers relevant for the evaluation of the application.

The founders shall transmit a copy of the application and other documents referred to in the second paragraph to the Authority.

1974, c. 70, s. 22; 1984, c. 22, s. 3; 1999, c. 40, s. 33; 2002, c. 70, s. 8; 2004, c. 37, s. 90.

23. The Minister may, if the Minister considers it advisable and after obtaining the advice of the Authority, authorize the filing of the articles in the register in accordance with Part IA of the Companies Act (chapter C‐38).

If the authorization is granted, the founders may transmit the articles, the required documents and the prescribed fees to the enterprise registrar. On receiving the articles, documents and fees, the entreprise registrar shall complete the formalities required by section 123.15 of that Act for the constitution of the company and transmit a certified copy of the articles and the certificate to the Authority.

If the Authority refuses to issue a licence to the company, its registration is cancelled by the enterprise registrar on his or her own initiative, and the fees paid for the constitution of the company are refunded.

1974, c. 70, s. 23; 1982, c. 52, s. 80; 1984, c. 22, s. 4; 2002, c. 70, s. 8; 2004, c. 37, s. 90.

24. The articles specify the classes of insurance the company is authorized to transact.

In addition, the articles are deemed to include a provision limiting the activities of the company to those insurance companies are permitted to carry on.

1974, c. 70, s. 24; 1984, c. 22, s. 5; 1993, c. 48, s. 114; 1996, c. 63, s. 83; 1999, c. 40, s. 33; 2002, c. 70, s. 8.

25. (Repealed).

1974, c. 70, s. 25; 1984, c. 22, s. 6.

26. (Repealed).

1974, c. 70, s. 26; 1984, c. 22, s. 7.

27. The paid-up capital combined, where applicable, with the contributed surplus of an insurance company must be at least $3,000,000.

A government regulation, applicable to insurance companies constituted after 11 February 2003 or after any later date indicated in the regulation, may however prescribe a different amount.

1974, c. 70, s. 27; 1984, c. 22, s. 8; 1999, c. 40, s. 33; 2002, c. 70, s. 9.

28. The capital stock and the surplus capital shall be paid in currency.

1974, c. 70, s. 28; 1984, c. 22, s. 9.

29. Every subscription to the capital stock of an insurance company made before a licence is issued to it must be made with the stipulation that no amount shall be used for commission, organization or constitution expenses in excess of a determined percentage which must not exceed 15% of the amount paid.

The remainder of the amounts so paid must be deposited in a bank appearing in Schedules I and II to the Bank Act (Statutes of Canada, 1991, chapter 46) and registered with the Canada Deposit Insurance Corporation or trust company in Québec, or in a financial services cooperative that is a registered institution within the meaning of the Deposit Insurance Act (chapter A‐26), for as long as the Authority has not issued the licence sought.

1974, c. 70, s. 29; 1982, c. 52, s. 80; 1999, c. 40, s. 33; 2000, c. 29, s. 625; 2002, c. 70, s. 11; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

30. Every subscription for shares made before a licence has been issued to the company must be made with the stipulation that in case of refusal of a licence the full amounts paid by the subscribers other than the founders must be returned to them.

1974, c. 70, s. 30; 2002, c. 70, s. 12.

31. Unless authorized by the Authority, no person is entitled to solicit or accept a subscription to the capital stock of a company or instalments relating thereto for as long as such company has not obtained a licence.

Any person soliciting subscriptions to the capital stock of a company being formed must be in possession of a certificate issued by at least two of the founders, attesting that he is authorized to do so; a certified copy of such certificate must be sent to the Authority.

This section shall not have the effect of withdrawing solicitation for subscriptions to the capital stock from the pertinent provisions of the Securities Act (chapter V‐1.1).

1974, c. 70, s. 31; 1982, c. 52, s. 80; 2002, c. 70, s. 13; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

32. If the Authority becomes aware that a person has contravened any of sections 29 to 31, the Authority may, after having given him the opportunity to present observations, suspend his right to receive subscriptions to the capital of the company being formed or subscriptions relating thereto.

1974, c. 70, s. 32; 1982, c. 52, s. 80; 1997, c. 43, s. 72; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

33. The expenses of commission, organization and constitution of an insurance company must be charged to the shareholders and not to the insured persons.

1974, c. 70, s. 33; 1999, c. 40, s. 33.

CHAPTER I.1 OBJECTS AND POWERS

1984, c. 22, s. 10; 2002, c. 70, s. 14.

DIVISION I GENERAL PROVISIONS

2005, c. 51, s. 1.

33.1. In addition to carrying on insurance activities, the object of an insurance company is to offer financial products and services in accordance with the law.

An insurance company may receive deposits of money from a minor or a person who does not have legal capacity to contract, without the authorization or intervention of any other person.

The provisions of this section prevail over any provision of an insurance company’s charter, letters patent or articles.

1984, c. 22, s. 10; 1987, c. 95, s. 402; 1999, c. 40, s. 33; 2002, c. 70, s. 15; 2008, c. 7, s. 18.

33.2. For the purposes of section 33.1, credit includes all forms of financing or suretyship.

1984, c. 22, s. 10; 1996, c. 63, s. 2; 2002, c. 70, s. 15.

33.2.1. An insurance company may also carry on the activities that only a trust company may carry on under the Act respecting trust companies and savings companies (chapter S‐29.01) that are authorized by a government regulation.

The regulation may also determine the cases and conditions in and on which the activities may be carried on.

2002, c. 70, s. 15.

33.2.2. The Government may authorize an insurance company to carry on an activity not related to the pursuit of its objects that the company is not prohibited by law from carrying on and that the Government considers in the interest of the public.

The Government may prohibit an insurance company from carrying on an activity related to the pursuit of its objects but not expressly authorized by law.

2002, c. 70, s. 15.

33.3. Where an activity other than insurance generates more than two per cent of the gross revenues of a company, the Minister may require the latter to establish a subsidiary to undertake the activity.

1984, c. 22, s. 10.

DIVISION II SPECIAL PROVISIONS RESPECTING ANNUITIES

2005, c. 51, s. 2.

33.4. In an annuity contract, the fact that an insurance company offers a choice of investments does not preclude the company from having control of the capital accumulated for the payment of the annuity.

The right to withdraw all or part of the capital accumulated for the payment of an annuity may be stipulated, but the exercise of that right reduces the insurance company’s obligations correlatively.

In addition, the amount of the annuity to be paid periodically must, at the time the contract is entered into, be determinate, or at least determinable according to variables and a computation method specified in the contract.

2005, c. 51, s. 2.

33.5. For the capital accumulated for the payment of an annuity to be exempt from seizure, a person must be designated, in accordance with article 2457 or 2458 of the Civil Code, as qualified to receive the capital or the related annuity following the death of the annuitant or the person who furnishes the capital.

2005, c. 51, s. 2.

CHAPTER II ADMINISTRATION OF INSURANCE COMPANIES

DIVISION I GENERAL PROVISIONS

34. This chapter applies to insurance companies constituted under the statutes of Québec.

Sections 43 to 50.5 also apply to legal persons which control such insurance companies.

1974, c. 70, s. 34; 1990, c. 86, s. 3; 1996, c. 63, s. 80; 1999, c. 40, s. 33.

35. Part I of the Companies Act (chapter C‐38) remains applicable, with the necessary modifications, to any insurance company to which this Part applied before 12 February 2003, subject to the contrary provisions of this Act.

In the absence of corresponding provisions in the special Act governing an insurance company, section 88, paragraph 3 of section 89 and sections 89.1 to 89.4 of Part I and the provisions of Part II of the Companies Act, except section 181 and paragraph 3 of section 182, apply, with the necessary modifications, to that company, subject to the contrary provisions of this Act.

1974, c. 70, s. 35; 1984, c. 22, s. 11; 1985, c. 17, s. 3; 1999, c. 40, s. 33; 2002, c. 70, s. 16.

35.1. Part IA of the Companies Act (chapter C‐38) applies, subject to the provisions of this Act and with the necessary modifications, to any insurance company constituted after 11 February 2003 or continued, converted or amalgamated after that date.

2002, c. 70, s. 17.

35.2. The directors of an insurance company who have adopted a by-law to amend the articles of the insurance company in accordance with the provisions of Part IA of the Companies Act (chapter C‐38) must apply for the authorization of the Authority to file the articles of amendment with the enterprise registrar.

The application shall be filed together with the information prescribed by regulation, the proposed articles of amendment and the other documents prescribed by regulation. The Authority may also request any document or information it considers relevant for the examination of the application.

If the Authority considers it advisable, it may, grant the authorization.

When the articles of amendment are filed in the register, the enterprise registrar shall transmit a certified copy thereof to the Authority.

2002, c. 70, s. 17; 2004, c. 37, s. 90; 2008, c. 7, s. 19.

35.3. Where it relates to a mutual insurance company, the word “shareholder” used in this Act or Part I, IA or II of the Companies Act (chapter C‐38) means “member”. In addition, where a provision of one of those Acts requires the vote of shareholders representing a fixed proportion of the capital stock of a company, the provision is considered to require the vote of a number of members equal to the proportion determined in value.

2002, c. 70, s. 17.

36. In respect of an insurance company constituted under a special Act, the Authority is substituted for the Government for the application of sections 18 to 20 of the Act respecting the special powers of legal persons (chapter P‐16).

1974, c. 70, s. 36; 1984, c. 22, s. 12; 2002, c. 70, s. 18; 2008, c. 7, s. 20.

37. Any insurance company constituted by a special Act and subject to Part IA or Part II of the Companies Act (chapter C‐38) may apply to the Authority for authorization to file articles of amendment for the following purposes:

(1)  to replace the provisions of its charter by corresponding provisions of this Act;

(2)  to replace the provisions of its charter by provisions of Part IA of the Companies Act, to the extent that those provisions are not contrary to the provisions of this Act;

(3)  to strike from its charter any provision for which there is no corresponding provision in this Act or in Part IA of the Companies Act.

The articles of amendment must indicate the classes of insurance that the company is authorized to transact.

1974, c. 70, s. 37; 1982, c. 52, s. 63; 1984, c. 22, s. 13; 1999, c. 40, s. 33; 2002, c. 70, s. 19; 2004, c. 37, s. 90; 2008, c. 7, s. 21.

38. The application for authorization addressed to the Authority must be signed by the president or vice-president and by the secretary of the company. The application may not be presented unless

(1)  it is supported by a by-law approved by the vote of at least two-thirds in value of the shares represented by the shareholders present at a special meeting and by two-thirds of the insured participating in the profits and who are present;

(2)  a notice summarizing the contents of the by-law has been transmitted to the enterprise registrar for deposit in the register, accompanied with the fees prescribed by regulation of the Government.

1974, c. 70, s. 38; 1982, c. 52, s. 79; 1993, c. 48, s. 115; 2002, c. 70, s. 20; 2008, c. 7, s. 22.

39. The enterprise registrar shall draw up a certificate of amendment in accordance with the procedure provided for in section 123.15 of the Companies Act (chapter C‐38).

The certificate of amendment attests the amendments authorized as at the date indicated. It specifies any legislative amendments repealed by the articles of amendment.

The Québec Official Publisher must insert in each annual volume of the Statutes of Québec a table indicating the date of the coming into force of the articles of amendment deposited in the register prior to the printing of the volume and the legislative provisions they repeal.

The amendments contained in the articles have the same effect as if they had been made by special Act. The enterprise registrar shall transmit a certified copy of the certificate of amendment to the Authority.

1974, c. 70, s. 39; 1982, c. 52, s. 79; 1993, c. 48, s. 116; 2002, c. 70, s. 21; 2004, c. 37, s. 90.

40. (Repealed).

1974, c. 70, s. 40; 1982, c. 52, s. 80; 1984, c. 22, s. 14.

41. Subject to the other applicable legislative provisions, the charter or articles of an insurance company may be annulled:

(a)  by failure to actually transact insurance for two years from the date of constitution;

(b)  if, after having transacted insurance, the company has ceased to act as such for one year or more;

(c)  if its licence remains suspended for one year or more or if, in case of cancellation, a new licence is not issued within three months.

The Authority shall, before dissolving a company, give it at least 60 days’ notice of the omission and the penalty provided. The Authority shall transmit the notice to the enterprise registrar who shall deposit it in the register.

He shall transmit a copy by registered mail to the last directors of the company mentioned in the register, at the last address mentioned therein.

The Authority shall dissolve an insurance company by drawing up an act of dissolution which it shall transmit to the enterprise registrar who shall deposit it in the register. The company is dissolved from the date of the deposit.

However, upon the application of any interested person, the Authority may, on the conditions it determines, retroactively revoke the dissolution of the company by drawing up an order to that effect. The Authority shall transmit the order to the enterprise registrar who shall deposit it in the register. Revocation of the dissolution of the company shall cause the company to resume existence on the date of deposit of the order. Subject to the rights acquired by any person, the company is deemed never to have been dissolved.

1974, c. 70, s. 41; 1993, c. 48, s. 117; 1999, c. 40, s. 33; 2002, c. 70, s. 22; 2002, c. 45, s. 206; 2004, c. 37, s. 90.

42. (Repealed).

1974, c. 70, s. 42; 1982, c. 52, s. 80; 1984, c. 22, s. 14.

43. Except with the written authorization of the Minister, no insurance company may allot its voting shares or register a transfer of its voting shares where the allotment or transfer would

(1)  directly or indirectly give to a person and his associates 10% or more of the voting rights attached to the shares if they do not already control the company;

(2)  directly or indirectly increase the voting rights attached to the shares already held by a person and his associates to at least 10% or at least a multiple of 10% if they do not already control the company;

(3)  give to a person and his associates control of the company.

Where an allotment of voting shares or registration of a transfer of shares by a legal person that controls an insurance company has, in respect of such shares, an effect described in subparagraphs 1 to 3 of the first paragraph, the legal person shall cease to be entitled to exercise the voting rights attached to the shares of the insurance company, unless it obtains written authorization from the Minister.

However, the authorization of the Minister is not required where the voting shares of the insurance company or of the legal person that controls it, as the case may be, are listed on a recognized stock exchange and the allotment or transfer would not give control to a person and his associates.

1974, c. 70, s. 43; 1982, c. 52, s. 80; 1984, c. 22, s. 15; 1990, c. 86, s. 4; 1996, c. 63, s. 80; 2003, c. 1, s. 2.

44. (Repealed).

1974, c. 70, s. 44; 1982, c. 52, s. 80; 1984, c. 22, s. 15; 1990, c. 86, s. 4; 1996, c. 63, s. 80; 1999, c. 40, s. 33; 2002, c. 70, s. 23.

45. Every application for authorization made to the Minister must indicate

(1)  the names, occupations and places of residence, where the persons concerned are natural persons;

(2)  the names, places of constitution or continuance and the name of the shareholder holding a controlling interest, where the persons concerned are legal persons;

(3)  the number and characteristics of the shares in the insurance company or the legal person that controls it held by each person concerned;

(4)  the number and characteristics of the shares being allotted or transferred, together with the name of the acquirer of the shares and, where applicable, the name of the seller.

1974, c. 70, s. 45; 1984, c. 22, s. 15; 1990, c. 86, s. 4; 1996, c. 63, s. 80, s. 83, s. 88; 1999, c. 40, s. 33.

46. The Minister may grant the authorization referred to in section 43 if he considers it expedient, in particular, in the interest of the insurance company and its development, and in the interest of the insured. The Minister must be satisfied that the financial resources of the persons concerned are sufficient to provide continuous financial support to the insurance company in its operations and development. The Minister must also take account of the effect of the transaction on the insurance industry in Québec.

The Minister shall render his decision following a report from the Authority. He may impose any conditions he considers appropriate.

1974, c. 70, s. 46; 1984, c. 22, s. 16; 1990, c. 86, s. 4; 1996, c. 63, s. 80; 1999, c. 40, s. 33; 2002, c. 70, s. 24; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

46.1. (Replaced).

1984, c. 22, s. 17; 1990, c. 86, s. 4.

47. (Repealed).

1974, c. 70, s. 47; 1984, c. 22, s. 18; 1990, c. 4, s. 85; 1990, c. 86, s. 4; 1996, c. 63, s. 80; 1999, c. 40, s. 33; 2002, c. 70, s. 25.

48. For the purposes of section 43, the Authority, after having given the persons concerned an opportunity to present observations, may decree that a person holds voting rights attached to shares in an insurance company or a legal person that controls it if, in the Authority’s opinion, that person, alone or with an associate, is in a position to influence the vote of persons holding shares in the insurance company or the legal person that controls it.

1974, c. 70, s. 48; 1984, c. 22, s. 19; 1990, c. 86, s. 4; 1996, c. 63, s. 80; 1997, c. 43, s. 73; 1999, c. 40, s. 33; 2002, c. 70, s. 26; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

49. For the purposes of sections 43 and 48, persons are associates where

(1)  one person is the spouse of the other, or is the minor child of either;

(2)  one person is a legal person and the other is a director or officer thereof, or the spouse or minor child of that director, officer or spouse;

(3)  one person is a legal person and the other person, or the spouse or a minor child of the other person or his spouse, or a group consisting of that other person, the spouse of that person or such a child or, in the case of a legal person, a director or officer thereof, holds 10% or more of the voting rights of that legal person;

(4)  one person is a partnership and the other is one of the partners;

(5)  they are affiliated legal persons;

(6)  they are parties to an agreement with a view to exercising voting rights attached to shares in the same legal person;

(7)  they are associates, within the meaning of paragraphs 1 to 6, of the same person;

(8)  they are controlled by associates within the meaning of paragraphs 1 to 7.

1974, c. 70, s. 49; 1982, c. 17, s. 38; 1984, c. 22, s. 20; 1990, c. 86, s. 4; 1996, c. 63, s. 80; 2002, c. 70, s. 27.

50. Where an agreement is made with a view to exercising, through a nominee, voting rights attached to shares in an insurance company or in the legal person that controls it, section 50.1 applies. The said section also applies to any changes made to such an agreement.

1974, c. 70, s. 50; 1984, c. 22, s. 21; 1990, c. 86, s. 4; 1996, c. 63, s. 80.

50.1. Where an agreement referred to in section 50 is made with a view to exercising voting rights attached to shares in an insurance company, the nominee shall not be entitled to exercise the voting rights covered by such an agreement except with the written authorization of the Authority.

Where an agreement referred to in section 50 is made with a view to exercising voting rights attached to shares in the legal person that controls an insurance company, the legal person shall no longer be entitled to exercise the voting rights attached to the shares in the insurance company except with the written authorization of the Authority.

The Authority may give its authorization if the Authority considers it expedient in the interest of the insurance company and the persons insured by it. The Authority may impose any conditions it considers appropriate.

1990, c. 86, s. 4; 1996, c. 63, s. 80; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

50.2. The application for authorization made to the Authority must, in addition to the information required under paragraphs 1 to 3 of section 45, indicate the number and characteristics of the shares to which the agreement applies, and the name of the holder of such shares.

1990, c. 86, s. 4; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

50.3. The Authority may require any relevant information or document for the purposes of sections 43 and 50.1.

Every person who is requested to furnish information shall comply with the request.

1990, c. 86, s. 4; 2002, c. 70, s. 28; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

50.4. Where shares in an insurance company are allotted or the transfer thereof is registered contrary to section 43, each person to or in favour of whom such shares are allotted or transferred shall not be entitled to exercise a number of voting rights attached to shares in the insurance company equivalent to the number of voting rights attached to the shares that were allotted or transferred and registered unlawfully.

1990, c. 86, s. 4; 2002, c. 70, s. 29.

50.5. Where the authorization referred to in section 43 has not been obtained, the voting right may again be exercised if the Minister grants his authorization. Such authorization shall have effect on any date, even a prior date, determined by the Minister.

Such authorization may be granted for any allotment or transfer of shares effected before 15 March 1991 contrary to section 43 of the Act as it read before 15 March 1991.

Section 46 applies, adapted as required, to the exercise of the power of authorization.

1990, c. 86, s. 4; 2002, c. 70, s. 30.

DIVISION I.1 NAME OF THE COMPANY

2002, c. 70, s. 31.

50.6. The name of an insurance company constituted or continued under the laws of Québec must include the word “insurance”, “insurer”, “reinsurance” or “reinsurer”.

2002, c. 70, s. 31.

50.7. Only an insurance company may include the word or expression “insurance company”, “reinsurance company”, “insurer” or “reinsurer” in its name.

No other legal person may use those words or expressions in a way that could lead the public to believe that the legal person is an insurance company.

2002, c. 70, s. 31.

50.8. The first paragraph of section 50.7 does not apply to a legal person whose name includes the words “insurance company”, “reinsurance company”, “insurer” or “reinsurer” on 12 February 2003.

2002, c. 70, s. 31.

50.9. Notwithstanding sections 50.7 and 50.8, the name of a holding company that controls an insurance company and the name of the subsidiary of an insurance company may include all or part of the name of that company.

2002, c. 70, s. 31.

50.10. The enterprise registrar shall refuse to file in the register articles containing a name that does not comply with the provisions of sections 50.6 to 50.9.

The enterprise registrar shall inform the person concerned of the reasons for the refusal.

2002, c. 70, s. 31.

50.11. The provisions of this division shall apply without prejudice to the provisions of the Act respecting the legal publicity of sole proprietorships, partnerships and legal persons (chapter P‐45).

2002, c. 70, s. 31.

DIVISION II CAPITAL STOCK

51. (Repealed).

1974, c. 70, s. 51; 1982, c. 52, s. 64; 1984, c. 22, s. 22.

52. (Repealed).

1974, c. 70, s. 52; 1979, c. 33, s. 2; 1984, c. 22, s. 22.

52.1. Insurance companies are prohibited from issuing any bearer share certificate.

1990, c. 86, s. 5.

52.2. An application for letters patent or, as the case may be, an application for authorization to file articles which affects the voting rights held by shareholders in an insurance company shall be accompanied with a list indicating

(1)  the name, occupation and place of residence of every natural person who, if the letters patent were granted or, as the case may be, the certificate were issued, would hold, alone or with his associates within the meaning of section 49, 10% or more of the voting rights attached to the shares of the insurance company;

(2)  the name and the place of constitution or continuance of every legal person which, if the letters patent were granted or, as the case may be, the certificate were issued, would hold, alone or with its associates within the meaning of section 49, 10% or more of the voting rights attached to the shares of the insurance company, and the name of the shareholder holding a controlling interest in the legal person.

1990, c. 86, s. 5; 1996, c. 63, s. 80, s. 83, s. 88; 1999, c. 40, s. 33; 2002, c. 70, s. 32.

53. The shares of insurance companies shall be issued only when they are fully paid up.

1974, c. 70, s. 53.

DIVISION III DIRECTORS

54. The company may, by by-law, determine the minimum and maximum number of directors. In no case, however, may the minimum number of directors be less than seven.

The by-law must be approved by the vote of not less than two-thirds in value of the shares represented by the shareholders present at a special meeting.

A majority of directors must be resident in Québec.

1974, c. 70, s. 54; 1984, c. 22, s. 23; 2002, c. 70, s. 33.

55. In a life insurance company that transacts insurance with participation in the profits, at least one-third of the members of the board of directors must be elected, each person having one vote, by the participating policyholders present at the general meeting for election of the directors.

Notwithstanding any other provision of law, this section applies to every insurance company transacting insurance with participation in profits on 20 October 1976.

1974, c. 70, s. 55.

56. An insurance company shall assume the defence of its directors or officers prosecuted by a third person for an act done in the exercise of their duties and shall pay any damages awarded as compensation for any injury resulting from that act, unless they have committed a grievous offence or a personal offence separable from the exercise of their duties.

Notwithstanding the foregoing, in a penal or criminal proceeding the company shall assume only the payment of the expenses of its directors or officers if they had reasonable grounds to believe that their conduct was in conformity with the law, or the payment of the expenses of its directors or officers if they have been freed or acquitted.

A company shall assume the expenses of its directors and officers if, having prosecuted them for an act done in the exercise of their duties, it loses its case and the court so decides.

If the company wins its case only in part, the court may determine the amount of the expenses it shall assume.

A company shall assume the obligations contemplated in this section in respect of any person who acted at its request as director or officer for a legal person of which it is a shareholder or creditor.

1974, c. 70, s. 56; 1984, c. 22, s. 24; 1996, c. 63, s. 80, s. 86.

56.1. Every insurance company shall adopt a by-law to fix the aggregate amount of remuneration which may be paid to directors for a given period. No director may receive any remuneration as such before the by-law is adopted.

The by-law must be approved by the vote of not less than two-thirds in value of the shares represented by the shareholders present at a special meeting.

1984, c. 22, s. 25.

57. Insurance representatives and claims adjusters dealing as such with an insurance company and directors or officers of a legal person dealing as such with an insurance company are ineligible to the office of director of such company.

Natural persons to whom or in favour of whom shares have been allotted or a registration of transfer has been made without obtaining the authorization provided for in section 43, and directors or officials of a legal person which is in the same situation, and natural persons bound by an agreement without obtaining the authorization provided for in section 50.1, and directors or officials of a legal person which is bound in this way, are also ineligible. Ineligibility lasts as long as the sanctions provided for in sections 43, 50.1 and 50.4 remain applicable.

1974, c. 70, s. 57; 1990, c. 86, s. 6; 1989, c. 48, s. 227; 1996, c. 63, s. 80; 1998, c. 37, s. 499; 2002, c. 70, s. 34.

58. (Repealed).

1974, c. 70, s. 58; 1984, c. 22, s. 26; 1990, c. 86, s. 7.

59. Not more than one-third of the board of directors of an insurance company may be composed of remunerated officers and employees of that company or of a legal person with which it is affiliated, including persons who have been employed by either the company or the legal person in the preceding two years.

1974, c. 70, s. 59; 1990, c. 86, s. 8; 1996, c. 63, s. 80; 2002, c. 70, s. 35.

60. The presence of the majority of the directors constitutes a quorum at meetings of the board.

1974, c. 70, s. 60.

61. (Repealed).

1974, c. 70, s. 61; 1990, c. 86, s. 9.

62. No insurer may grant a hypothec or other security on its property, except

(1)  to secure a loan contracted to meet short term requirements for liquid funds;

(2)  on an immovable;

(3)  if the insurer is a registered institution within the meaning of the Deposit Insurance Act (chapter A-26), to obtain an advance of money under section 40 of that Act, or if the insurer receives deposits outside Québec, to obtain an advance of money from a federal or provincial body that guarantees or insures deposits;

(4)  to subscribe for savings bonds in favour of the Government of Québec or of Canada;

(5)  to become a member of a securities clearing-house recognized by the Autorité des marchés financiers as a self-regulatory organization or of any association the object of which is to organize a clearing and settlement system for instruments of payment or securities transactions, and to provide the necessary guarantees; or

(6)  for any other purpose provided for in a policy adopted by the board of directors of the insurer and approved by the Authority.

1974, c. 70, s. 62; 1979, c. 33, s. 3; 1984, c. 22, s. 27; 1999, c. 40, s. 33; 2002, c. 70, s. 36; 2004, c. 37, s. 90.

62.1. Except in the case of a short-term loan to meet its liquidity needs, no insurer may issue bonds or other evidences of indebtedness unless

(1)  they are unsecured;

(2)  following such issue, the insurer’s total bonds and other evidences of indebtedness do not exceed the limits determined by regulation;

(3)  they comply with the terms and conditions prescribed by regulation.

1984, c. 22, s. 27; 2003, c. 1, s. 3.

62.2. No insurer may borrow by the acceptance of subordinated loans unless

(1)  they are granted for a fixed term;

(2)  the evidence of indebtedness stipulates that the loan will, in the event of the insolvency or winding-up of the insurer, rank with the other similar loans but after all the other debts;

(3)  the evidence of indebtedness complies with the terms and conditions prescribed by regulation.

1984, c. 22, s. 27; 2003, c. 1, s. 4.

DIVISION IV SHAREHOLDERS AND PARTICIPATING POLICYHOLDERS

63. A notice of every general meeting of the shareholders of a company must be sent at least fifteen days before the date fixed for the meeting to each shareholder and each participating policyholder. If the number of shareholders of the insurance company is greater than 25, the notice is also published in three daily newspapers at least one of which is circulated in the locality where the company has its head office.

The notice shall indicate the place, date and time of the meeting.

1974, c. 70, s. 63; 1984, c. 22, s. 28; 2002, c. 70, s. 37.

64. Notices of annual meetings to be sent to participating policyholders may be replaced by an indication in prominent and conspicuous type on the premium notices and premium receipts, specifying the date, time and place of the meetings.

1974, c. 70, s. 64.

65. Every power of attorney naming a proxy to vote at a general meeting of the shareholders of an insurance company must, to be valid, be given within one year preceding the meeting and delivered to the secretary of the company at least two days before the meeting.

Such power of attorney shall be used only at the meeting in question or in the case of adjournment.

1974, c. 70, s. 65; 2005, c. 51, s. 3.

66. Participating policyholders are entitled to attend all general meetings of the company.

The holders of participating policies issued by a company transacting life insurance are entitled to share in that portion of the profits set apart that has been distinguished as having been derived from such class of policies to the extent of at least:

(a)  90% of such profits in any year in which the average of the participating fund does not exceed $250,000,000;

(b)  92 1/2% of such profits in any year in which the average of the participating fund exceeds $250,000,000 but does not exceed $500,000,000;

(c)  95% of such profits in any year in which the average of the participating fund exceeds $500,000,000 but does not exceed $1,000,000,000; and

(d)  97 1/2% of such profits in any year in which the average of the participating fund exceeds $1,000,000,000.

1974, c. 70, s. 66.

66.1. An insurance company that issues participating policies must establish a policy for determining the dividend and the bonuses payable to the holders of such policies.

The company may distribute any form of benefit to such policyholders, including a dividend or a bonus, in compliance with the policy established in that regard.

In so doing, the company must take into account the opinion of its actuary, set out in a report to the board of directors, on the compliance of the distribution with the policy established in that regard.

2002, c. 70, s. 38.

CHAPTER II.1 RESTRUCTURING INTO A HOLDING COMPANY

2002, c. 70, s. 38.

66.2. The transfer of all the shares of an insurance company constituted under the laws of Québec to a holding company, in return for shares of the holding company, must be ordered by way of a by-law approved by 2/3 of the votes cast by the shareholders of the insurance company at a special meeting, pursuant to the procedure provided for in the by-law.

To achieve such restructuring, the holding company must be constituted under the Companies Act (chapter C‐38) for the sole purposes of

(1)  holding all the shares of the insurance company;

(2)  holding all or part of the shares of subsidiaries that are legal persons the control of which by an insurer is authorized under this Act;

(3)  holding all or part of the interests in a partnership which an insurer may control pursuant to section 244.1; or

(4)  holding all or part of the shares of subsidiaries that provide services to the insurance company and to other subsidiaries.

The transfer of shares must, on pain of nullity, be authorized by the Minister, who shall obtain the opinion of the Authority on the restructuring.

The application for authorization must be filed with the documents and information prescribed by government regulation.

2002, c. 70, s. 38; 2003, c. 1, s. 5; 2004, c. 37, s. 90.

66.3. Notwithstanding any contrary legislative provision, where the Minister has authorized the transfer of the shares of an insurance company for the purposes of a restructuring, the transfer does not require authorization under section 43 and the transfer of the shares of any legal person affiliated with the insurance company to the holding company requires no authorization provided for by law, if the shares are transferred as part of the restructuring.

2002, c. 70, s. 38.

CHAPTER III MUTUAL INSURANCE COMPANIES

1985, c. 17, s. 4.

DIVISION I APPLICATION

67. Notwithstanding any contrary provision, this chapter applies to the conversion into a mutual company of life insurance companies constituted under the statutes of Québec and to the administration of the companies of such kind constituted or converted under the provisions of this chapter or a special Act of Québec.

Division III of this chapter also applies to the administration of mutual damage-insurance companies.

Subject to the provisions of this chapter, the other provisions of this Act apply to such companies.

1974, c. 70, s. 67; 1985, c. 17, s. 5; 1999, c. 40, s. 33.

DIVISION II CONVERSION INTO A MUTUAL COMPANY

68. Every insurance company constituted under the statutes of Québec transacting life insurance may with the authorization of the Minister convert itself into a mutual life-insurance company by redeeming its shares in accordance with this chapter. Before giving its approval, the Minister shall obtain the opinion of the Authority.

1974, c. 70, s. 68; 1982, c. 52, s. 65; 1984, c. 22, s. 29; 1999, c. 40, s. 33; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

69. Conversion into a mutual company shall be ordered by a by-law that must be approved by the vote of at least the majority in value of the shares represented by the shareholders present at a meeting called for that purpose and by the vote of the majority of the participating policyholders attending such meeting.

Such by-law must establish the terms and conditions of the conversion and in particular indicate the price the company offers its shareholders for the purchase of their shares.

1974, c. 70, s. 69.

70. Conversion into a mutual company shall be authorized by the Minister only if:

(a)  the paid-up capital of the company is no longer required to protect the insured, having regard to the financial condition of the company and its volume of business;

(b)  the shareholders have offered to sell to the company at least 50 per cent of its issued and allotted shares at the price fixed by the by-law;

(c)  the offer contemplated in paragraph b is irrevocable for a period of at least six months;

(d)  the company has at its disposal the sums required to purchase at least 25 per cent of all its issued and allotted shares immediately upon the authorization of the Minister contemplated in section 68;

(e)  the price fixed for the purchase of the shares is reasonable in the opinion of the Minister.

1974, c. 70, s. 70; 1984, c. 22, s. 29.

71. The sums that the company may apply to the purchase of its shares for the purposes of conversion into a mutual company shall not exceed the excess of its assets over its liabilities less the sums already paid to purchase shares under the by-law contemplated in section 69 and 10 per cent of the assets of the company, or a lesser percentage established by the Minister.

1974, c. 70, s. 71; 1984, c. 22, s. 29.

72. The company shall within ninety days of the authorization contemplated in section 68, purchase and pay for all the shares offered for sale to it up to the date of the authorization.

It shall thereafter purchase and pay for shares offered for sale to it within ten days of the offer.

1974, c. 70, s. 72.

73. If by reason of the application of section 71 the company cannot pay for all the shares offered to it, it shall, notwithstanding section 72, apportion its purchases pro rata to the shares offered, excluding any fraction of a share; it must thereafter purchase other shares in the same manner as soon as it has at its disposal the sums contemplated in section 71.

1974, c. 70, s. 73.

74. Immediately upon the authorization contemplated in section 68, every previous or subsequent offer of shares is irrevocable notwithstanding any stipulation of time.

1974, c. 70, s. 74; 1999, c. 40, s. 33.

75. When a company purchases shares in accordance with this chapter it must annually pay dividends to its shareholders for as long as its capital stock has not been cancelled, at a rate equal to at least that paid in the three years preceding the authorization of the Minister, unless its financial condition prevents it and the Authority authorizes a lower rate.

1974, c. 70, s. 75; 1982, c. 52, s. 80; 1984, c. 22, s. 29; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

76. As soon as the company has received offers for sale of at least 75% of its issued and allotted shares, has purchased all those offered to it for sale and has at its disposal the sums required to purchase the remainder, it must give notice in writing to the Authority and each registered holder of the remaining shares and reserve the sums required to purchase them, and such purchase must be effected upon receipt of the corresponding certificates.

1974, c. 70, s. 76; 1982, c. 52, s. 80; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

77. The Authority shall, if the company has complied with this Act, transmit a notice setting forth the facts notified to it in accordance with section 76 to the enterprise registrar who shall deposit it in the register.

From the date of deposit of the notice, the capital stock of the company is cancelled and the company is converted into a mutual life insurance company governed by Division III of this chapter.

1974, c. 70, s. 77; 1982, c. 52, s. 80; 1993, c. 48, s. 118; 2002, c. 45, s. 207; 2004, c. 37, s. 90.

78. The company shall keep a register indicating:

(a)  the names and addresses of all shareholders who have offered it shares for sale and, for each offer, the date when it was received and the number of shares;

(b)  for each shareholder, the date and price of purchase.

1974, c. 70, s. 78.

79. So long as its capital stock is not cancelled under section 77, the company shall, in the annual statement it must file with the Authority, enter under assets an amount equal to the par value of each share purchased.

1974, c. 70, s. 79; 1977, c. 5, s. 14; 1982, c. 52, s. 78; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

80. In the annual statement it must file with the Authority, the company may enter under assets an amount equal to the excess of the price of each share purchased over its par value, less however, each year, at least 1/5 of the said excess for each full year from purchase.

The shares respecting which the reserve provided for in section 76 has been made are deemed to have been purchased.

1974, c. 70, s. 80; 1977, c. 5, s. 14; 1982, c. 52, s. 78; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

81. At each annual meeting following the authorization of the Minister contemplated in section 68, the insured are entitled to elect that proportion of the directors that equals the ratio between the number of shares redeemed by the company and the total shares issued at that date, any fractional remainder counting for the insured, or at least one-third of the directors.

1974, c. 70, s. 81; 1984, c. 22, s. 29.

82. At any annual or special general meeting held in the course of the purchase of shares and before the cancellation of the capital stock, the directors elected by the insured are entitled, in addition to their votes as shareholders, to a number of additional votes equal to the number of shares purchased by the company; these additional votes shall be apportioned as equally as possible among these directors, and any remainder shall be allotted to that director among them designated by the board of directors.

1974, c. 70, s. 82.

83. Upon the authorization provided for in section 68, the company shall lose all rights to issue new shares.

1974, c. 70, s. 83.

84. The purchase by the company of shares of its capital stock shall prohibit it from reissuing or otherwise disposing of them.

1974, c. 70, s. 84.

85. So long as its capital stock is not cancelled under section 77 and subject to any contrary provision of this Act, the company shall remain governed by its charter.

1974, c. 70, s. 85.

86. The amounts paid by the company for the purchase of the issued and allotted shares of its capital stock in accordance with this Act shall not be a distribution of surplus earnings contemplated by any fiscal law within the meaning of the Act respecting the Ministère du Revenu (chapter M-31).

1974, c. 70, s. 86.

DIVISION III ADMINISTRATION

87. The members of a company to which this division applies are the persons who own insurance contracts it has made.

Only the following are deemed owners:

(a)  in a contract designating several insured, the insured first named;

(b)  in a group contract, the policyholder and the participants if so stipulated in the contract.

1974, c. 70, s. 87.

88. Subject to the regulations made to that effect by the Government, all members, except those who are not of full age, are qualified to vote at the general meetings.

1974, c. 70, s. 88.

88.1. Subject to the regulations contemplated in section 88, any group of not less than 100 members is entitled to bring forward proposals for discussion at a general meeting; one per cent of the members or 500 members, whichever is less, may request the convening of a special meeting.

1984, c. 22, s. 30.

88.2. One per cent of the total number of members or 500 members, whichever is the lesser, may requisition the calling of a special meeting.

2002, c. 70, s. 39.

89. A member may vote in person or, if the charter of the company so provides, by proxy; he is entitled to only one vote, regardless of the number or amount of the contracts he owns.

Every power of attorney authorizing a proxy to vote at a general meeting must, to be valid, be given within the year preceding the meeting in question and be deposited with the secretary of the company at least ten days before the meeting. The company shall make blank power of attorney forms available to the members.

Such power of attorney shall be used only at that meeting or at its adjournments.

1974, c. 70, s. 89; 1984, c. 22, s. 31.

90. Notice of every general or special meeting of the company shall be given to the members at least fifteen days before that fixed for the meeting, by an advertisement in three daily newspapers at least one of which circulates in the locality where the company has its head office.

1974, c. 70, s. 90; 1984, c. 22, s. 32.

90.1. There is no quorum at an annual general meeting or special meeting if more than one-half of the members and proxies present are directors, other mandataries or employees of the company.

1990, c. 86, s. 10.

91. The company may, by by-law, determine the minimum or maximum number of directors. In no case, however, may the minimum number of directors be less than seven.

The by-law must be approved by the vote of not less than two-thirds of the members present at a special meeting.

A majority of directors must be resident in Québec.

1974, c. 70, s. 91; 1984, c. 22, s. 33; 2002, c. 70, s. 40.

92. The directors shall be elected at the annual general meeting for a term of office not exceeding three years fixed by by-law.

If the terms of office are of two or three years, the by-laws must provide the procedures necessary to obtain that the number of those expiring annually is as constant as possible.

1974, c. 70, s. 92.

93. The directors shall remain in office after the expiry of their terms, until replaced or reelected.

1974, c. 70, s. 93.

93.1. The board of directors may, if so authorized by a by-law of the company and with the prior approval of the Authority, issue preferred equity shares to the amount by which the assets exceed the liabilities of the company.

The by-law must indicate the number of shares that the company is authorized to issue, the amount of the issue and the privileges, rights and restrictions applicable to the shares.

The by-law must be approved by the vote of not less than 2/3 of the members present at a special meeting and be subsequently ratified by the Authority.

No preferred equity share may be reimbursed or redeemed before the expiry of a five-year period from its issuance nor may it entitle its holder to be present or vote at meetings.

Sections 146, 156 and 157 of the Companies Act (chapter C-38) apply, with the necessary changes, to preferred equity shares, to the extent to which those sections are consistent with this section.

1984, c. 22, s. 34; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

CHAPTER III.1 MUTUAL INSURANCE ASSOCIATIONS

1985, c. 17, s. 6.

DIVISION I APPLICATION

1985, c. 17, s. 6.

93.2. Sections 62 and 62.1 apply to mutual insurance associations as does section 145, adapted as required.

1985, c. 17, s. 6.

DIVISION II OBJECTS AND POWERS

1985, c. 17, s. 6; 2002, c. 70, s. 41.

93.3. The object of a mutual insurance association is to transact damage insurance business for its members.

1985, c. 17, s. 6.

93.4. A further object of a mutual insurance association is to provide other financial products and services to its members according to law. However, it may carry on such activities only with the authorization of its federation.

1985, c. 17, s. 6; 2002, c. 70, s. 42.

93.4.1. A mutual insurance association may, with the authorization of its federation, carry on activities that only a trust company may carry on pursuant to the Act respecting trust companies and savings companies (chapter S‐29.01) and that are authorized by a government regulation.

The regulation may also determine the cases and conditions in and on which the activities may be carried on.

2002, c. 70, s. 44.

93.4.2. For the purposes of section 93.4, credit includes all forms of financing or suretyship.

2002, c. 70, s. 44.

DIVISION III AFFILIATION WITH A FEDERATION

1985, c. 17, s. 6.

93.5. Every mutual insurance association shall be a member of a federation of mutual insurance associations.

1985, c. 17, s. 6.

93.6. No mutual insurance association may be constituted unless a federation undertakes to admit it as a member.

1985, c. 17, s. 6; 1999, c. 40, s. 33.

93.7. The decision to cease to be a member of a federation shall be made by way of a resolution of the board of directors of the mutual insurance association, confirmed by the vote of not less than 2/3 of the members present at a special meeting held for that purpose.

The mutual insurance association shall transmit as soon as possible to the Authority a certified copy of the resolution of the board of directors and proof of the confirmation thereof.

1985, c. 17, s. 6; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.8. A mutual insurance association which voluntarily ceases to be a member of a federation or is expelled by the federation shall, within sixty days following the confirmation of the resolution or following its expulsion by the federation, pass a by-law or resolution, as the case may be, to affiliate with another federation, apply for the constitution of a new federation, amalgamate with a mutual insurance association, convert into a mutual damage-insurance company or wind up.

1985, c. 17, s. 6; 1999, c. 40, s. 33.

93.9. Where a federation is wound up or dissolved, every mutual insurance association that is a member of the federation shall, within 60 days of the deposit of the notice of winding-up or dissolution in the register, pass a by-law or resolution, as the case may be, to affiliate with another federation, apply for the constitution of a new federation, amalgamate with a mutual insurance association, convert into a mutual damage-insurance company or wind up.

1985, c. 17, s. 6; 1993, c. 48, s. 119; 1999, c. 40, s. 33.

93.10. A mutual insurance association shall remain a member of a federation

(1)  until another federation has undertaken to admit it as a member and the association has furnished proof thereof to the Authority or until the constitution of the new federation whose constitution it is seeking;

(2)  until it has amalgamated with a mutual insurance association;

(3)  until it has converted into a mutual damage-insurance company;

(4)  until it is dissolved.

1985, c. 17, s. 6; 1999, c. 40, s. 33; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

DIVISION IV REPRESENTATION OF THE MUTUAL INSURANCE ASSOCIATION BEFORE ITS CONSTITUTION

1985, c. 17, s. 6; 1999, c. 40, s. 33.

93.11. Every mutual insurance association is bound by any deed performed in its interest before its constitution if it confirms the deed within ninety days of its constitution.

The confirmation transfers to the association the rights and obligations of the person who performed the deed but does not of itself effect novation. The person who performed the deed has the same rights and is bound by the same obligations as a mandatary of the association.

1985, c. 17, s. 6; 1999, c. 40, s. 33.

93.12. The person who performs a deed in the interest of a mutual insurance association before its constitution is bound by that deed unless the contract entered into for the association includes a clause excluding or limiting his liability and a statement to the effect that the association might not be constituted or might not assume its obligations.

1985, c. 17, s. 6; 1999, c. 40, s. 33.

DIVISION V CONSTITUTION

1985, c. 17, s. 6; 1999, c. 40, s. 33.

93.13. A minimum of 200 founders is required to apply for the constitution of a mutual insurance association.

1985, c. 17, s. 6; 1999, c. 40, s. 33.

93.14. Any natural person may be a founder of a mutual insurance association, except

(1)  a minor;

(2)  a person of full age under protective supervision or a person deprived wholly or in part of the right to exercise his civil rights by a court of another jurisdiction;

(3)  an undischarged bankrupt;

(4)  a person not included in the group described in the articles of the mutual insurance association, where such is the case.

1985, c. 17, s. 6; 1989, c. 54, s. 156; 1996, c. 63, s. 3.

93.15. The articles of the mutual insurance association shall set out

(1)  its name;

(2)  the judicial district in which its head office in Québec is located;

(3)  the classes of damage insurance contemplated;

(4)  where such is the case, the group from which it may recruit members;

(5)  the surnames, names and addresses of the founders.

1985, c. 17, s. 6; 1993, c. 48, s. 120; 1996, c. 63, s. 83, s. 88.

93.16. The articles may set out, in addition to the provisions that may be included therein under this Act, any other provision this Act permits a mutual insurance association to pass by by-law.

1985, c. 17, s. 6.

93.17. The articles of the mutual insurance association, signed by each founder, shall be transmitted in duplicate to the Authority.

1985, c. 17, s. 6; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.18. The following documents shall accompany the articles:

(1)  an application, signed by two founders, requesting the Minister to order the constitution of the mutual insurance association;

(2)  a notice of the surname, name and address of the person designated as provisional secretary of the mutual insurance association;

(3)  a notice of the mode of and time limit for calling the organizing meeting;

(4)  a notice of the address of the head office;

(5)  a certified copy of the resolution of the federation that has undertaken to admit the mutual insurance association as a member;

(6)  an affidavit from the applicants establishing

(a)  the capital needed to finance the operations of the association and maintain an excess amount of assets over liabilities equal to or greater than the minimum amount required under section 275;

(b)  the amount subscribed and paid for common shares by the founders;

(c)  the amount that the guarantee fund related to the federation of which the association is to be a member has undertaken, for the association’s first three years of operation, to pay if necessary to make up the difference between the capital contemplated in subparagraph a and the amount contemplated in subparagraph b;

(7)  a certified copy of the resolution of the guarantee fund setting out the undertaking contemplated in paragraph 6, where such is the case;

(8)  the budgeted statements of the assets and liabilities and the earnings forecasts for the first three years of operation of the mutual insurance association;

(9)  any other document required by regulation of the Government.

1985, c. 17, s. 6; 1996, c. 63, s. 82, s. 88; 1999, c. 40, s. 33.

93.19. On receiving the articles, the documents accompanying them and the fees prescribed by regulation of the Government, the Authority shall present a report and submit its advice to the Minister.

1985, c. 17, s. 6; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.20. The Minister may, if he considers it expedient and after obtaining the advice of the Authority, order it to constitute the mutual insurance association.

To constitute the association, the Authority shall

(1)  enter, on each duplicate of the articles, the words “constituted mutual insurance association”;

(2)  draw up in duplicate a certificate attesting the constitution of the mutual insurance association and indicating the date of constitution, and attach to each duplicate of the certificate a duplicate of the articles;

(3)  transmit a copy of the certificate and of the articles as well as the accompanying documents referred to in paragraphs 2 to 4 of section 93.18 to the enterprise registrar who shall deposit them in the register;

(4)  send the other duplicate of the certificate and articles to the mutual insurance association or to its representative;

(5)  send a copy of the certificate, articles and required accompanying documents to the federation that has undertaken to accept the mutual insurance association as a member;

(6)  (subparagraph repealed).

The Minister shall refuse to order the constitution of an association where the articles of the association contain a name not in conformity with the requirements of sections 93.23 and 93.24 or the requirements of any of paragraphs 1 to 6 of section 93.22.

1985, c. 17, s. 6; 1993, c. 48, s. 121; 1996, c. 63, s. 83; 1999, c. 40, s. 33; 2002, c. 45, s. 208; 2004, c. 37, s. 90.

93.21. From the date appearing on the certificate of constitution, the mutual insurance association is a legal person.

1985, c. 17, s. 6; 1996, c. 63, s. 80; 1999, c. 40, s. 33.

DIVISION VI NAME

1985, c. 17, s. 6; 1996, c. 63, s. 83.

93.22. The name of a mutual insurance association shall not

(1)  contravene the Charter of the French language (chapter C-11);

(2)  include an expression which the law or the regulations reserve for another person or prohibit the association from using;

(3)  include an expression that evokes an immoral, obscene or offensive notion;

(4)  incorrectly indicate the association’s juridical form or fail to indicate such form where so required by law;

(5)  falsely suggest that the association is a non-profit group;

(6)  falsely suggest that the association is, or is related to, a public authority mentioned in the regulation;

(7)  falsely suggest that the association is related to another person, partnership or group, in particular in the cases and taking into account the criteria determined by regulation;

(8)  lead to confusion with a name used by another person, partnership or group in Québec, taking into account, in particular, the criteria determined by regulation;

(9)  be liable, in whatever manner, to mislead third persons.

1985, c. 17, s. 6; 1993, c. 48, s. 122; 1996, c. 63, s. 83.

93.23. The name of a mutual insurance association shall include the words “mutual insurance association” as well as a term identical to that used by the federation of which it is a member, chosen among the following: “damage”, “general”, “fire” or “I.A.R.D.”.

No name of a mutual insurance association may include the word “company”.

1985, c. 17, s. 6; 1996, c. 63, s. 83.

93.24. Only a mutual insurance association, a federation of mutual insurance associations, a guarantee fund or a mutual damage-insurance company, may include in its name the word “mutual” in combination with the words “damage insurance”, “general insurance”, “fire” or “I.A.R.D.”.

1985, c. 17, s. 6; 1996, c. 63, s. 82, s. 83.

93.25. Any interested person may, upon payment of the fees prescribed by regulation, petition the Authority to order a mutual insurance association to change its name if the name is not in conformity with section 93.22.

1985, c. 17, s. 6; 1993, c. 48, s. 123; 1996, c. 63, s. 83; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.26. Before rendering a decision, the Authority shall allow all interested parties to submit their observations.

1985, c. 17, s. 6; 1993, c. 48, s. 123; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.27. The decision of the Authority shall be in writing, give reasons and be signed. The Authority shall transmit the decision to the enterprise registrar who shall deposit it in the register. A copy of the decision shall be transmitted without delay to each of the parties.

The decision is executory on the expiry of the time limit for bringing a proceeding that is set out in section 123.145 of the Companies Act (chapter C‐38).

1985, c. 17, s. 6; 1993, c. 48, s. 123; 1997, c. 43, s. 74; 2002, c. 45, s. 209; 2004, c. 37, s. 90.

93.27.1. On the expiry of the time limit for bringing a proceeding, the Authority may, at the request of an interested party, change the name of a mutual insurance association that does not respect the order.

The Authority may also, of its own initiative, change the name of a mutual insurance association that does not respect the order issued by the Authority, on the ground that the association’s name is not in conformity with any of paragraphs 1 to 6 of section 93.22.

1993, c. 48, s. 123; 1996, c. 63, s. 83; 1997, c. 43, s. 75; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.27.2. Where the Authority assigns a name to the association, it shall issue a certificate in duplicate establishing the change and send one duplicate to the enterprise registrar who shall deposit it in the register.

The Authority shall transmit the other duplicate of the certificate to the mutual insurance association and send a copy to the federation of which it is a member.

The change takes effect from the date appearing on the certificate.

1993, c. 48, s. 123; 1996, c. 63, s. 83; 2002, c. 45, s. 210; 2004, c. 37, s. 90.

93.27.3. The Authority may delegate to a member of its personnel the powers conferred upon it by this chapter.

1993, c. 48, s. 123; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.27.4. Any person aggrieved by a decision of the Authority rendered under section 93.27 may, within 30 days of notification of the decision, contest the decision before the Administrative Tribunal of Québec.

1993, c. 48, s. 123; 1997, c. 43, s. 76; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.28. (Repealed).

1985, c. 17, s. 6; 1996, c. 63, s. 4.

93.29. A change in the name of a mutual insurance association does not affect its rights and obligations and it may pursue any action to which it is a party under its new name without continuance of suit.

1985, c. 17, s. 6; 1996, c. 63, s. 83.

DIVISION VII GENERAL ORGANIZING MEETING

1985, c. 17, s. 6.

93.30. Within 60 days of the constitution of the mutual insurance association, the founders shall hold a general organizing meeting.

The Authority may grant an extension or, if it has expired, set a new time limit.

1985, c. 17, s. 6; 1999, c. 40, s. 33; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.31. The meeting shall be called by the provisional secretary.

If the provisional secretary is absent or unable to act, the meeting may be called by two founders.

1985, c. 17, s. 6; 1996, c. 63, s. 5.

93.32. In addition to the founders whose names are mentioned in the articles, every natural person who, on the date of calling of the general organizing meeting, has subscribed and paid an amount as membership share is deemed to be a founder.

1985, c. 17, s. 6; 1996, c. 63, s. 6.

93.33. At the meeting, the founders shall

(1)  pass the internal management by-laws;

(2)  elect the directors;

(3)  issue common shares for the amount subscribed and paid for that purpose;

(4)  pass a resolution confirming the affiliation of the mutual insurance association with the federation that has undertaken to accept it as a member.

In addition, the founders may pass any other by-law or take any measure relating to the affairs of the mutual insurance association.

1985, c. 17, s. 6.

93.34. Within 30 days after the meeting, the mutual insurance association shall transmit to the Authority

(1)  a list of its directors containing their surnames, names, addresses and occupations;

(2)  a certified copy of the resolution provided for in subparagraph 4 of the first paragraph of section 93.33.

1985, c. 17, s. 6; 1996, c. 63, s. 88; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

DIVISION VIII HEAD OFFICE

1985, c. 17, s. 6.

93.35. The head office of a mutual insurance association shall be located in the judicial district specified in its articles.

1985, c. 17, s. 6.

93.35.1. From 11 September 1985, the indication, in the articles of a mutual insurance association, of Laval or Longueuil as the judicial district in which it establishes its head office in Québec is valid.

1987, c. 4, s. 1.

93.36. A mutual insurance association may, by resolution of the board of directors, change the address of its head office within the same locality.

The association shall, within 10 days of the adoption of the resolution, give notice of the change to the Authority and file a declaration to that effect in accordance with the Act respecting the legal publicity of sole proprietorships, partnerships and legal persons (chapter P‐45).

1985, c. 17, s. 6; 1993, c. 48, s. 124; 2002, c. 70, s. 43; 2004, c. 37, s. 90.

93.37. A mutual insurance association may transfer its head office to another locality by a by-law approved by not less than two-thirds of the members present.

A notice of the new address shall accompany every application for an amendment to the articles for the purpose of transferring the head office.

1985, c. 17, s. 6.

93.38. (Repealed).

1985, c. 17, s. 6; 1993, c. 48, s. 125.

DIVISION IX CAPITAL STOCK

1985, c. 17, s. 6.

§ 1 . — General provisions

1985, c. 17, s. 6.

93.39. The capital stock of a mutual insurance association shall consist of common shares and preferred shares.

The capital stock is variable.

1985, c. 17, s. 6.

93.40. The shares shall be paid in cash. Only those shares that are fully paid up may be issued, except in the case of shares issued in accordance with an amalgamation agreement.

1985, c. 17, s. 6.

§ 2 . — Common shares

1985, c. 17, s. 6.

93.41. The common shares are registered and may be issued only to the members. No common share may be transferred except in accordance with the conditions and modalities prescribed in the by-laws of the mutual insurance association.

1985, c. 17, s. 6; 1996, c. 63, s. 7.

93.42. (Repealed).

1985, c. 17, s. 6; 1996, c. 63, s. 8.

93.43. The mutual insurance association shall determine by by-law the price of a membership share which shall not be less than $5. The interest that may be paid on such shares and the number of shares that may be issued must be limited by the by-laws.

1985, c. 17, s. 6; 1996, c. 63, s. 9.

93.44. A mutual insurance association shall issue certificates attesting the issue of membership shares.

1985, c. 17, s. 6; 1996, c. 63, s. 10.

93.45. In case of the death or expulsion of a member, a mutual insurance association shall repay the sums that have been paid to obtain common shares to his name.

At the request of a member, and on the conditions prescribed in the by-laws of the association, a mutual insurance association may repay to the member the sums paid to obtain common shares to his name.

1985, c. 17, s. 6; 1996, c. 63, s. 11.

93.46. No mutual insurance association may repay a common share if the repayment would, contrary to section 275 or 275.3, cause its capital base or liquid assets to become inadequate.

The directors who authorize the repayment of a common share contrary to the first paragraph are jointly and severally liable for the sums thus repaid and not recovered.

1985, c. 17, s. 6; 2002, c. 70, s. 45.

93.47. A mutual insurance association may by by-law determine the order in which common shares are to be repaid.

1985, c. 17, s. 6.

§ 3 . — Preferred shares

1985, c. 17, s. 6.

93.48. The board of directors, if so authorized by a by-law of the mutual insurance association, may issue preferred shares.

The by-law shall provide for the amount of and the preferences, rights and restrictions attached to the shares and the conditions of their redemption or repayment. The interest payable on preferred shares shall be limited by the by-law.

The mutual insurance association shall transmit a copy of the by-law to the Authority.

1985, c. 17, s. 6; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.49. Subject to section 93.244, no mutual insurance association may issue preferred shares if the excess amount of assets over liabilities is not equal to or greater than the minimum amount required under section 275.

1985, c. 17, s. 6.

93.50. A mutual insurance association shall issue certificates establishing the issue of preferred shares. They shall indicate the amount of, the interest payable on and the preferences, rights and restrictions attached to the shares and the conditions of their redemption or repayment.

1985, c. 17, s. 6.

93.51. No preferred share may entitle its holder to be repaid, in the event of the winding-up or dissolution of the mutual insurance association before the debts of the association are repaid. However, preferred shares take precedence over common shares.

1985, c. 17, s. 6.

93.52. No preferred share may entitle its holder to a repayment before the expiry of five years after its issue.

1985, c. 17, s. 6.

93.53. No mutual insurance association may redeem or repay a preferred share if the redemption or repayment would, contrary to section 275 or 275.3, cause its capital base or liquid assets to become inadequate.

The directors who authorize the redemption or repayment of a preferred share contrary to the first paragraph are jointly and severally liable for the sums involved and not recovered.

1985, c. 17, s. 6; 2002, c. 70, s. 46.

93.54. The preferred shares shall be registered. No preferred share may be transferred except in accordance with the conditions and modalities prescribed in the by-laws of the mutual insurance association.

1985, c. 17, s. 6.

93.55. No preferred share may entitle its holder to receive notice of a general meeting, to attend such a meeting, to vote thereat or to be eligible for any office in the mutual insurance association.

1985, c. 17, s. 6.

DIVISION X MEMBERS

1985, c. 17, s. 6.

§ 1 . — General provisions

1985, c. 17, s. 6.

93.56. To be a member of a mutual insurance association, a person, partnership or association shall meet the following conditions:

(1)  (subparagraph repealed);

(2)  belong to the group described in the articles, where such is the case;

(3)  undertake insurance with the mutual insurance association;

(4)  undertake to comply with the by-laws of the mutual insurance association;

(5)  (subparagraph repealed).

Subparagraph 3 of the first paragraph applies with respect to a founder only after the expiry of one year after the date on which the licence is issued to the association by the Authority. The founder is, during that period, a member in good standing of the mutual insurance association.

1985, c. 17, s. 6; 1996, c. 63, s. 12; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

§ 2 . — Suspension and expulsion

1985, c. 17, s. 6; 1996, c. 63, s. 13.

93.57. Any member who ceases to be a policyholder under a valid insurance contract undertaken with the mutual insurance association shall be excluded from the association.

The same applies in the case of a founder who fails to undertake an insurance contract with the mutual insurance association within one year after the date on which the licence of the association is issued.

1985, c. 17, s. 6; 1996, c. 63, s. 14.

93.58. The board of directors, after informing a member in writing of the reasons invoked for his suspension or expulsion and giving him the opportunity to present his submissions, may suspend or expel him for either of the following reasons:

(1)  his failure to comply with the by-laws of the mutual insurance association;

(2)  his failure to discharge his undertakings toward the mutual insurance association.

1985, c. 17, s. 6.

93.59. The minutes of the meeting of the board of directors at which a member is suspended or expelled shall set out the facts that gave rise to the decision.

Within fifteen days of the decision, the mutual insurance association shall send to the member a notice setting out the reasons for the suspension or expulsion, by registered or certified mail.

1985, c. 17, s. 6.

93.60. No member may be suspended for more than six months.

1985, c. 17, s. 6.

93.61. A member who has been suspended or excluded loses the right to receive notice of the meetings of the mutual insurance association, to attend such meetings and to vote thereat, as well as the right to hold any office in the association.

No insurance policy of a member is cancelled by reason only of his suspension or exclusion.

Notwithstanding the foregoing, in the case of exclusion, no insurance policy may be renewed and no notice of non-renewal is required.

1985, c. 17, s. 6; 1996, c. 63, s. 15.

93.62. The suspension or expulsion of a member shall take effect from the passing of the resolution of the board of directors.

1985, c. 17, s. 6.

DIVISION XI MEETING OF THE MEMBERS

1985, c. 17, s. 6.

§ 1 . — General meeting

1985, c. 17, s. 6.

93.63. The members of a mutual insurance association, whether convened at an annual or special meeting, shall constitute the general meeting of the association.

1985, c. 17, s. 6.

93.64. Unless the internal management by-laws provide for a greater number, twenty-five members are a quorum at a general meeting.

There is no quorum at a meeting where more than one-half of the members and representatives present are directors, other mandataries or paid members of the staff of the mutual insurance association.

Any meeting that has been called twice and which has not been held due to a lack of quorum may be called again.

On that occasion, the members present shall constitute the quorum.

1985, c. 17, s. 6.

93.65. Every notice calling a general meeting shall be given at least fifteen and not more than forty-five days before it is held, by regular mail, or in a daily or weekly newspaper circulated in the territory of the mutual insurance association. Where the members of a mutual insurance association constitute a group that is specified in its articles, the notice shall be given by regular mail.

The notice shall indicate the place, date and time of the meeting and, where such is the case, give a summary of any draft by-law submitted for adoption or of any amendment proposed to the by-laws of the mutual insurance association.

The mutual insurance association shall also indicate the formalities mentioned above for calling a meeting in prominent and conspicuous type on all premium notices it sends its members.

1985, c. 17, s. 6.

93.66. A member may waive a notice calling a meeting of the members. His mere presence at a meeting is a waiver except where he attends a meeting for the express purpose of objecting to the holding of the meeting on the ground of irregularity in the calling.

1985, c. 17, s. 6.

93.67. A member shall have only one vote.

If the internal management by-laws of the mutual insurance association so provide, a member’s vote may be cast by a representative holding a power of attorney, whether or not he is a member of the association. To be valid, the power of attorney must have been given in the year preceding the meeting and presented to the secretary at least 10 days before the meeting. The power of attorney may be used only at that meeting or its adjournments.

1985, c. 17, s. 6; 1996, c. 63, s. 16.

93.68. A legal person, partnership or association that is a member of a mutual insurance association may be represented at a general meeting.

No person may, however, represent more than one legal person, partnership or association.

1985, c. 17, s. 6; 1996, c. 63, s. 80.

93.69. No member having been a member for less than ninety days is eligible to any office in a mutual insurance association, unless he is a founder, nor may he vote at a general meeting of the mutual insurance association, except at the general organizing meeting.

1985, c. 17, s. 6.

93.70. Decisions shall be made by a majority of the votes cast by the members or representatives present.

In case of a tie, the chairman of the meeting has a casting vote.

1985, c. 17, s. 6.

§ 2 . — Annual meeting

1985, c. 17, s. 6.

93.71. The annual meeting of a mutual insurance association shall be held within three months after the end of its fiscal year. The members shall be convened to

(1)  examine the annual report;

(2)  (paragraph repealed);

(3)  elect the directors;

(4)  make any other decision reserved to the general meeting.

1985, c. 17, s. 6; 1996, c. 63, s. 17.

§ 3 . — Special meeting

1985, c. 17, s. 6.

93.72. The board of directors, the president or vice-president of a mutual insurance association or the board of directors of the federation of which the mutual insurance association is a member, may order that a special meeting be held whenever he or it considers it necessary.

1985, c. 17, s. 6.

93.73. The board of directors of a mutual insurance association shall order that a special meeting be held to make any decision requiring the vote of not less than two-thirds of the members present.

Any amendment to the internal management by-laws requires confirmation by the vote of not less than two-thirds of the members present.

1985, c. 17, s. 6.

93.74. The board of directors shall order that a special meeting be held at the request of 300 members if the mutual insurance association has 3,000 members or more, or of not less than one-tenth of the members, if the association has fewer than 3,000 members.

1985, c. 17, s. 6.

93.75. The secretary of a mutual insurance association shall call every special meeting.

If the secretary fails to act, the president of the mutual insurance association shall call the meeting.

1985, c. 17, s. 6.

93.76. If the meeting is not held within thirty days of the request made by the federation or the members, the federation or two signatories of the request, as the case may be, may call the meeting.

The mutual insurance association shall reimburse the persons who called the meeting for any reasonable expenses they incurred to hold the meeting, unless the members object thereto by resolution at the meeting thus called.

1985, c. 17, s. 6.

93.77. At a special meeting, nothing may be considered or decided except the matters mentioned in the notice calling the meeting.

1985, c. 17, s. 6.

DIVISION XII DIRECTORS

1985, c. 17, s. 6.

§ 1 . — General provisions

1985, c. 17, s. 6.

93.78. The board of directors of a mutual insurance association shall consist of not fewer than seven directors.

The number of directors is determined by the internal management by-laws of the mutual insurance association.

1985, c. 17, s. 6; 2002, c. 70, s. 47.

93.79. The following persons may be directors of a mutual insurance association:

(1)  any natural person who is a member of the mutual insurance association and the holder of an insurance policy with the association for a minimum amount determined by the internal management by-laws;

(2)  any natural person who represents a legal person or an association which is a member of the mutual insurance association and the holder of an insurance policy with the association for a minimum amount determined by the internal management by-laws.

In no case may the following persons be directors of a mutual insurance association:

(1)  an employee of the mutual insurance association or of another mutual insurance association, or an employee of the federation with which the mutual insurance association is affiliated, of the guarantee fund associated with the federation or of a legal person belonging to the same group as the federation;

(2)  an insurance representative, a claims adjuster, and, a director or officer of another legal person dealing as such with the mutual insurance association;

(3)  an undischarged bankrupt;

(4)  a minor;

(5)  a person of full age under protective supervision or who has been totally or partially deprived of the right to exercise his civil rights by a court of another jurisdiction.

1985, c. 17, s. 6; 1989, c. 54, s. 156; 1990, c. 86, s. 11; 1989, c. 48, s. 228; 1996, c. 63, s. 80, s. 82, s. 87; 1998, c. 37, s. 500.

93.80. The term of office of a director shall be three years.

A mode of rotation providing that one-third of the directors, to the nearest whole number, be replaced each year shall be provided in the internal management by-laws.

For that purpose, the mutual insurance association may shorten the term of office of the directors elected at the general organizing meeting or elected following an increase in the number of directors.

1985, c. 17, s. 6.

93.81. In case of vacancy, the directors may appoint a member for the unexpired portion of the term of office. If they fail to act before the next general meeting, the general meeting may fill the vacancy.

Where the directors remaining in office do not constitute a quorum, one member of the board of directors or two members of the mutual insurance association, or the board of directors of the federation of which the association is a member, may order the secretary to call a special meeting to fill the vacancy. If the secretary fails to act, those who may order that the meeting be held may call it.

The mutual insurance association shall reimburse the persons who called the meeting for any reasonable expenses they incurred to hold the meeting, unless the members object thereto by resolution at the meeting thus called.

1985, c. 17, s. 6.

93.82. Notwithstanding the expiry of his term of office, every director shall remain in office until he is re-elected or replaced.

1985, c. 17, s. 6.

93.83. The board of directors of a mutual insurance association shall pass a by-law to determine the total amount of remuneration that may be paid to the directors for a specified period. No director may receive any remuneration in his capacity before the by-law is passed.

The by-law must be approved by a vote of at least two-thirds of the members present at a meeting called for that purpose.

1985, c. 17, s. 6; 1996, c. 63, s. 18.

93.84. (Repealed).

1985, c. 17, s. 6; 1990, c. 86, s. 12.

93.85. A mutual insurance association shall assume the defence of its directors or officers prosecuted by a third person for an act done in the performance of their duties and shall pay any damages awarded as compensation for any injury resulting from that act, unless they have committed a grievous offence or a personal offence separable from the performance of their duties.

Notwithstanding the foregoing, in a penal or criminal proceeding the association shall assume only the payment of the expenses of its directors or officers if they had reasonable grounds to believe that their conduct was in conformity with the law or if they have been freed or acquitted.

An association shall assume the expenses of its directors and officers if, having prosecuted them for an act done in the performance of their duties, it loses its case and the court so decides.

If the association wins its case only in part, the court may determine the amount of the expenses it shall assume.

1985, c. 17, s. 6; 1996, c. 63, s. 86.

93.86. No mutual insurance association may hire or maintain in its employ a general manager having a direct or indirect interest in a firm or independent partnership, within the meaning of the Act respecting the distribution of financial products and services (chapter D-9.2), registered to act in a sector of insurance with which it does or proposes to do business.

1985, c. 17, s. 6; 1989, c. 48, s. 229; 1998, c. 37, s. 501.

§ 2 . — Powers and duties

1985, c. 17, s. 6.

93.87. The board of directors shall administer the affairs of the mutual insurance association.

The board shall exercise all the powers of the association, except those the general meeting reserves to itself by by-law.

1985, c. 17, s. 6.

93.88. The board of directors shall in particular

(1)  comply with the by-laws and standards adopted by the federation of which the mutual insurance association is a member and see that they are complied with;

(2)  furnish the Authority, at its request, with a certified copy of the by-laws of the mutual insurance association;

(3)  see to it that the registers are kept and preserved;

(4)  determine the rate of interest on membership shares and on preferred shares within the limit prescribed by by-law of the mutual insurance association;

(5)  see to it that the investments of the mutual insurance association are made in accordance with its investment policy;

(6)  rule annually on the distribution of the yearly surplus among the members;

(7)  designate the persons authorized to sign contracts or other documents on behalf of the mutual insurance association;

(8)  at the annual meeting, give an account of its management and submit the annual report;

(9)  facilitate the work of the persons in charge of inspecting the mutual insurance association, supervising its operations or auditing its books and accounts.

1985, c. 17, s. 6; 1996, c. 63, s. 19; 2002, c. 70, s. 48; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.89. The board of directors shall reinsure risks assumed by the mutual insurance association only with an insurer who is the holder of a licence issued by the Authority and is designated by the federation.

1985, c. 17, s. 6; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

§ 3 . — Meetings

1985, c. 17, s. 6.

93.90. Subject to the internal management by-laws, the meetings of the board of directors shall be called on at least five days’ notice.

The board of directors of the federation of which the mutual insurance association is a member may call a meeting of the board of directors of the mutual insurance association. A representative of the federation may attend the meeting and be heard.

1985, c. 17, s. 6.

93.91. The general manager of the mutual insurance association may attend the meetings of the board of directors and be heard.

1985, c. 17, s. 6.

93.92. A director may in writing waive a notice calling a meeting of the board of directors.

His mere presence at a meeting is a waiver except where he attends a meeting for the express purpose of objecting to the holding of the meeting on the ground of irregularity in the calling.

1985, c. 17, s. 6.

93.93. A majority of the directors are a quorum at meetings of the board of directors.

1985, c. 17, s. 6.

93.94. The decisions of the board of directors are made by a majority of the directors present. In case of a tie, the chairman of the meeting has a casting vote.

1985, c. 17, s. 6.

93.95. Subject to the internal management by-laws, the directors may, if all agree, participate in a meeting of the board by using means enabling all participants to communicate with one another orally, particularly by telephone. They are then deemed to have attended the meeting.

1985, c. 17, s. 6.

93.96. A resolution in writing signed by all the directors is as valid as if it had been passed at a meeting of the board.

A duplicate of the resolution is kept with the minutes of the proceedings of the board.

1985, c. 17, s. 6.

93.97. A director present at a meeting of the board is deemed to have acquiesced in every resolution passed or in every measure taken while he is present at the meeting, except

(1)  if at the meeting he requests that his dissent be recorded in the minutes;

(2)  if, before the adjournment or closing of the meeting, he informs the secretary of the meeting in writing of his dissent.

1985, c. 17, s. 6.

93.98. A director absent from a meeting of the board is presumed not to have approved any resolution or participated in any measure taken in his absence.

1985, c. 17, s. 6; 1999, c. 40, s. 33.

§ 4 . — Dismissal of a director

1985, c. 17, s. 6.

93.99. A director may be dismissed at a special meeting called for that purpose.

1985, c. 17, s. 6.

93.100. A vacancy resulting from the dismissal of a director may be filled at the meeting where the dismissal takes place.

1985, c. 17, s. 6.

93.101. In no case may a director be dismissed at the meeting unless he has been informed in writing of the grounds invoked for his dismissal and of the place, date and time of the meeting within the same time limit as that prescribed for calling the meeting.

The director may be heard at the meeting or, in a written statement read by the chairman of the meeting, state the grounds on which he opposes his dismissal.

1985, c. 17, s. 6.

93.102. The minutes of the meeting at which a director is dismissed shall record the facts on which the decision is based.

The mutual insurance association shall transmit to the director a substantiated notice of his dismissal, by registered or certified mail, within fifteen days of the decision.

The association shall also transmit, as soon as possible, a notice of the dismissal by filing a declaration to that effect in accordance with the Act respecting the legal publicity of sole proprietorships, partnerships and legal persons (chapter P-45).

1985, c. 17, s. 6; 1993, c. 48, s. 126.

DIVISION XIII EXECUTIVE COMMITTEE

1985, c. 17, s. 6.

93.103. If the board of directors of a mutual insurance association consists of more than six directors it may, if so authorized by the internal management by-laws, establish an executive committee consisting of not fewer than three directors including the chairman and vice-chairman.

In no case may the number of members of the executive committee exceed one-half of the number of directors.

1985, c. 17, s. 6.

93.104. The executive committee shall exercise the powers of the board of directors to the extent provided in the internal management by-laws.

1985, c. 17, s. 6.

93.105. The board of directors may replace any member of the executive committee.

1985, c. 17, s. 6.

93.106. Sections 93.90 to 93.98, adapted as required, apply to the executive committee.

1985, c. 17, s. 6; 1996, c. 63, s. 20.

DIVISION XIV AMENDMENTS TO ARTICLES

1985, c. 17, s. 6.

93.107. The articles of a mutual insurance association shall only be amended by by-law passed by the vote of not less than two-thirds of the members present at a special meeting called for that purpose.

If the proposed amendment concerns the group from which the mutual insurance association may recruit members, the calling of a special meeting for that purpose shall first be authorized by a resolution of the federation of which the association is a member.

Every by-law to amend the articles shall authorize one of the directors to sign the articles of amendment.

1985, c. 17, s. 6.

93.108. The articles of amendment, signed by the authorized director, shall be transmitted in duplicate to the Authority.

1985, c. 17, s. 6; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.109. The following documents shall accompany the articles of amendment:

(1)  an application for the amendment of the articles, signed by the director authorized to sign the articles of amendment;

(2)  a certified copy of the by-law approving the amendments to the articles;

(3)  a certified copy of the resolution of the federation authorizing the calling of a special meeting for the adoption of a by-law to change the group from which the mutual insurance association may recruit its members, where such is the case;

(4)  any other document prescribed by regulation of the Government.

1985, c. 17, s. 6.

93.110. On receiving the articles of amendment, the accompanying documents and the fees prescribed by regulation of the Government, the Authority may, if it considers it advisable, amend the articles.

For that purpose, the Authority shall, in addition to following the procedure provided for in subparagraphs 3 to 5 of the second paragraph of section 93.20, enter on each duplicate of the articles of amendment the words “amended articles” and draw up in duplicate a certificate setting out the amendment and indicating the date on which it was made.

The amendment takes effect on the date indicated in the certificate of amendment.

1985, c. 17, s. 6; 1993, c. 48, s. 127; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

DIVISION XV UPDATING OF ARTICLES

1985, c. 17, s. 6.

93.111. The Authority may issue updated articles to any mutual insurance association applying therefor.

For that purpose, the Authority shall, in addition to following the procedure provided for in subparagraphs 3 to 5 of the second paragraph of section 93.20, enter on each duplicate of the articles the words “updated articles” and draw up in duplicate a certificate evidencing the updating of the articles and indicating the date of issue.

1985, c. 17, s. 6; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.112. From the date indicated in the certificate, the updated articles shall replace the initial articles of the mutual insurance association and any amendment thereto.

1985, c. 17, s. 6.

93.113. In case of discrepancy between the updated and the replaced articles, the updated articles prevail over the replaced articles for any event having occurred from the date indicated in the certificate but the replaced articles prevail over the updated articles for any event having occurred before that date.

1985, c. 17, s. 6.

DIVISION XVI DISSOLUTION

1985, c. 17, s. 6.

93.114. The Minister may, if he considers it advisable and after obtaining the advice of the Authority, order it to dissolve a mutual insurance association if

(1)  the number of members is reduced to less than 200;

(2)  the organizing meeting is not held within the time limit specified in section 93.30;

(3)  the association is not dissolved within one year following the passing of the resolution requiring its winding-up contemplated in section 93.8.

1985, c. 17, s. 6; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.115. The Minister may order the Authority to dissolve a mutual insurance association if

(1)  within 60 days of the confirmation of the resolution provided for in section 93.7 or of its expulsion from a federation, the association has failed to pass a resolution or by-law, as the case may be, to affiliate with another federation, apply for the constitution of a new federation, amalgamate with a mutual insurance association, convert into a mutual damage-insurance company or wind up;

(2)  within 120 days of the confirmation of the resolution provided for in section 93.7 or of its expulsion from a federation, the association has failed to affiliate with another federation, constitute a new federation, submit to the Minister an amalgamation agreement with a mutual insurance association or a by-law providing for its conversion into a mutual damage-insurance company or, failing that, to pass a resolution for its winding-up;

(3)  within 60 days of the deposit in the register of the notice of winding-up or dissolution of the federation of which it is a member, the association has failed to pass a by-law or resolution, as the case may be, to affiliate with another federation, apply for the constitution of a new federation, amalgamate with a mutual insurance association, convert into a mutual damage-insurance company, or wind up;

(4)  within 120 days of the deposit in the register of the notice of winding-up or dissolution of the federation of which it is a member, the association has failed to affiliate with another federation, obtain the constitution of a new federation, amalgamate with a mutual insurance association, convert into a mutual damage-insurance company or, if it has failed to pass a resolution for its winding-up.

1985, c. 17, s. 6; 1993, c. 48, s. 128; 1999, c. 40, s. 33; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.116. The Minister shall, before ordering the Authority to dissolve a mutual insurance association, give the association or its liquidator, as the case may be, notice of the alleged default and of the penalty to which the association is liable and give him or it the opportunity to present written submissions within 30 days of the date of the notice.

If, after examining the submissions, the Minister maintains the notice of default, and the default is not remedied within 30 days after the expiry of the time limit provided in the first paragraph, the Minister shall order the Authority to dissolve the mutual insurance association.

1985, c. 17, s. 6; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.117. The Authority shall dissolve the association by drawing up a notice to that effect which it shall transmit to the enterprise registrar who shall deposit it in the register. The association is dissolved from the date of the deposit.

1985, c. 17, s. 6; 1993, c. 48, s. 129; 2002, c. 45, s. 211; 2004, c. 37, s. 90.

93.118. The Minister of Revenue is, ex officio, the curator to property of the dissolved mutual insurance association. He shall be accountable to the Authority.

1985, c. 17, s. 6; 2002, c. 45, s. 243; 2004, c. 37, s. 90; 2005, c. 44, s. 54.

93.119. Sections 399 to 401, 404 and 405 apply to the liquidation of the property of a mutual insurance association dissolved under this division.

1985, c. 17, s. 6.

93.120. Any interested person may, within three years of the dissolution, apply to the Minister for the revocation of the dissolution.

The Minister may, if the Minister considers it advisable and after obtaining the advice of the Authority, order the Authority to revoke the dissolution retroactively to the date on which it took effect. The Authority shall revoke the dissolution by drawing up an order to that effect which it shall transmit to the enterprise registrar who shall deposit it in the register.

The Minister shall determine the conditions of the revocation of the dissolution. However, in no case may the revocation of a dissolution impair the rights acquired by any person after the dissolution.

1985, c. 17, s. 6; 1993, c. 48, s. 130; 2002, c. 45, s. 212; 2004, c. 37, s. 90.

CHAPTER III.2 FEDERATIONS OF MUTUAL INSURANCE ASSOCIATIONS

1985, c. 17, s. 6.

DIVISION I SCOPE

1985, c. 17, s. 6.

93.121. The following provisions, adapted as required, apply to federations of mutual insurance associations: sections 93.11 and 93.12, subparagraphs 1, 2 and 5 of the first paragraph of section 93.15, sections 93.16 and 93.17, subparagraphs 1, 2, 3, 4 and 9 of the first paragraph of section 93.18, section 93.19, the first paragraph and subparagraphs 1, 2, 3 and 4 of the second paragraph of section 93.20, sections 93.21 and 93.25 to 93.32, subparagraphs 1 and 2 of the first paragraph and the second paragraph of section 93.33, paragraph 1 of section 93.34 and sections 93.35 to 93.37, the first paragraph of section 93.90 and sections 93.92, 93.94 to 93.102, 93.107 to 93.113 and 298.1.

1985, c. 17, s. 6; 1993, c. 48, s. 131; 2008, c. 7, s. 23.

DIVISION II OBJECTS

1985, c. 17, s. 6.

93.122. The objects of a federation are

(1)  to protect the interests of its members, foster the attainment of their objects and promote their development;

(2)  to act as a control and supervisory body over its members and over partnerships and legal persons controlled by its members, to the extent provided for in this Act;

(3)  to provide services to mutual insurance associations that are members of the federation, members of the mutual insurance associations, members of the group and, as an ancillary activity, to any other person or partnership;

(4)  to define common objectives for the group and to coordinate its activities; and

(5)  to propagate and promote the principles of mutualism in insurance.

1985, c. 17, s. 6; 2002, c. 70, s. 49.

DIVISION III CONSTITUTION AND NAME

1985, c. 17, s. 6; 1996, c. 63, s. 83; 1999, c. 40, s. 33.

93.123. Only a mutual insurance association may be a founder of a federation.

A minimum of 12 mutual insurance associations is required to apply for the constitution of a federation.

In no case may a federation be constituted unless a guarantee fund is constituted at the same time.

1985, c. 17, s. 6; 1996, c. 63, s. 82; 1999, c. 40, s. 33.

93.124. To be a founder, a mutual insurance association requires prior authorization by way of a resolution of its board of directors indicating the name of its representative for the purposes of the constitution of the federation. The resolution requires confirmation by the vote of not less than two-thirds of the members present at a special meeting called for that purpose.

The mutual insurance association shall notify the federation of which it is a member of the holding of the meeting. A representative of the federation may attend and be heard at the meeting.

1985, c. 17, s. 6; 1999, c. 40, s. 33.

93.125. On receiving the articles, the accompanying documents and the fees prescribed by regulation of the Government, the Authority shall, as soon as possible, send to the federation of which the petitioning mutual insurance associations are members and to the associations, a notice of the time within which they may present written submissions to the Minister.

After the submissions are presented or after the expiry of the time prescribed in the first paragraph, the Minister may, if he considers it advisable and after obtaining the advice of the Authority, order the Authority to constitute the federation.

1985, c. 17, s. 6; 1999, c. 40, s. 33; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.126. The name of a federation shall include the words “federation of mutual insurance associations” accompanied with one of the following terms: “damage”, “general”, “fire” or “I.A.R.D.”.

The name shall be in conformity with section 93.22.

The Authority may, if it considers it necessary, change the name of a federation.

1985, c. 17, s. 6; 1993, c. 48, s. 132; 1996, c. 63, s. 83; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

DIVISION IV MEMBERS

1985, c. 17, s. 6.

93.127. Only a mutual insurance association may be a member of a federation.

1985, c. 17, s. 6.

93.128. To be a member of a federation, a mutual insurance association shall

(1)  apply for membership, except in the case of a founding mutual insurance association;

(2)  undertake to comply with the by-laws of the federation;

(3)  be admitted by the board of directors of the federation, except in the case of a founding mutual insurance association.

The application for membership of a mutual insurance association requires the authorization by way of a resolution of its board of directors indicating the name of its representative who is authorized to sign the application, and confirmation by the general meeting in accordance with the terms and conditions set out in section 93.124.

1985, c. 17, s. 6.

93.129. A federation may accept a membership application submitted by the founding members of a mutual insurance association.

Admission is effective as soon as the mutual insurance association is constituted.

1985, c. 17, s. 6; 1999, c. 40, s. 33.

93.130. A federation may, by a by-law approved by the Authority, establish membership requirements, define the rights and obligations of members and determine the conditions governing the dismissal or expulsion of members.

1985, c. 17, s. 6; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.131. Every decision of a federation regarding the admission or expulsion of a mutual insurance association shall be sent to it by registered or certified mail. The federation shall send a copy of the decision to the Authority as soon as possible.

1985, c. 17, s. 6; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.132. Every mutual insurance association which believes itself wronged by a decision of the federation regarding its admission or its expulsion may, within 15 days of the sending of the decision, request in writing the Authority to review the decision.

The mutual insurance association and the federation shall have access to the file relating to the request for review.

A request for review made by the association shall suspend the decision of the federation.

1985, c. 17, s. 6; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.133. The decision of the Authority shall be substantiated and sent to the mutual insurance association and to the federation by registered or certified mail. The decision of the Authority is final.

1985, c. 17, s. 6; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

DIVISION V MEETING OF THE MEMBERS

1985, c. 17, s. 6.

§ 1 . — General meeting

1985, c. 17, s. 6.

93.134. The general meeting of a federation shall consist of the directors who represent the mutual insurance associations that are members thereof.

The general organizing meeting shall, however, consist of the persons who have signed the articles in their capacity as representatives. At that meeting the representatives shall appoint the first auditor of the federation.

1985, c. 17, s. 6.

93.135. All mutual insurance associations represented at the general meeting shall have an equal number of representatives in accordance with the internal management by-laws of the federation.

Each representative shall have only one vote.

Decisions shall be made by a majority of the votes cast by the representatives present.

1985, c. 17, s. 6.

93.136. Every notice calling a meeting shall be given in the manner prescribed by the internal management by-laws of the federation.

Subject to the internal management by-laws, every notice calling a meeting shall be given to the members not less than fifteen nor more than forty-five days before the date fixed for the meeting.

The notice shall indicate the place, date and time of the meeting and, where such is the case, give a summary of any draft by-law submitted for adoption or of any proposed amendment to the by-laws of the federation.

1985, c. 17, s. 6.

93.137. A representative of a mutual insurance association may waive the calling notice. His mere presence at the meeting is a waiver except where he attends for the sole purpose of objecting to the holding of the meeting on the ground of irregularity in the calling.

1985, c. 17, s. 6.

93.138. Unless the internal management by-laws provide for a greater number, 20% of the representatives of the mutual insurance associations that are members of the federation are a quorum.

There is no quorum at a meeting where more than one-half of the representatives present are directors, other mandataries or paid members of the staff of the federation.

Any meeting that has been called twice and which has not been held due to a lack of quorum may be called again. On that occasion, the members present shall constitute the quorum.

1985, c. 17, s. 6.

93.139. The general meeting shall pass a by-law to fix the total remuneration that may be paid to the directors for a specified period. No director may receive any remuneration as such before such a by-law is passed.

1985, c. 17, s. 6.

§ 2 . — Annual meeting

1985, c. 17, s. 6.

93.140. The annual meeting of a federation shall be held within four months from the end of its fiscal year. The members shall be convened to

(1)  examine the annual report of the federation and that of the guarantee fund which is related to it;

(2)  appoint the auditor;

(3)  elect the directors;

(4)  make any other decision reserved to the general meeting.

1985, c. 17, s. 6; 1996, c. 63, s. 21, s. 82.

§ 3 . — Special meeting

1985, c. 17, s. 6.

93.141. The board of directors, the president or, if the president is absent or unable to act, the vice-president of a federation may order that a special meeting be held whenever it or he considers it necessary.

1985, c. 17, s. 6; 1996, c. 63, s. 22.

93.142. The board of directors of a federation shall order a special meeting to make any decision requiring the vote of not less than two-thirds of the members present.

Every amendment to the internal management by-laws requires confirmation by the vote of not less than two-thirds of the members present.

1985, c. 17, s. 6.

93.143. The board of directors shall order that a special meeting be held if requested by not less than one-third of the members.

1985, c. 17, s. 6.

93.144. The secretary of a federation shall call every special meeting.

If the secretary fails to act, the president of the federation shall call the meeting.

1985, c. 17, s. 6.

93.145. If the meeting is not held within 30 days of the request made by the members, two members who have signed the request may call the meeting.

The federation shall reimburse the persons who have called the meeting for any reasonable expenses they have incurred to hold the meeting unless the members object thereto by resolution at the meeting thus called.

1985, c. 17, s. 6.

93.146. At a special meeting, nothing may be considered or decided except the matters mentioned in the notice calling the meeting.

1985, c. 17, s. 6.

DIVISION VI DIRECTORS AND SENIOR OFFICERS

1985, c. 17, s. 6.

93.147. The directors of a federation shall be elected from among the directors of member mutual insurance associations unless the internal management by-laws allow the election of paid members of the staff of the federation or of mutual insurance associations that are members thereof.

However, in no case may more than one-third of the board of directors be composed of employees of the federation and of the mutual insurance associations that are members of it, employees of the guarantee fund associated with the federation and of a legal person belonging to the same group as the federation.

In no case may an undischarged bankrupt, a minor, a person of full age under protective supervision or who has been totally or partially deprived of the right to exercise his civil rights by a court of another jurisdiction, act as a director of a federation.

1985, c. 17, s. 6; 1989, c. 54, s. 156; 1990, c. 86, s. 13; 1996, c. 63, s. 80, s. 82, s. 87.

93.148. The internal management by-laws of a federation shall establish, in particular,

(1)  the number of directors, which shall not be less than seven;

(2)  the mode of election of the directors at the annual meeting;

(3)  the quorum of the board of directors and of the executive committee, where such is the case.

1985, c. 17, s. 6.

93.149. The chairman, the vice-chairman and the secretary of the board of directors shall be the president, the vice-president and the secretary of the federation, respectively.

The internal management by-laws of a federation may provide, however, that the chairman and the secretary of its board of directors are not the president and the secretary of the federation. In that case, the president shall be chosen by the general meeting from among the other directors and the secretary of the federation who may, however, not be a director shall be appointed by the board of directors.

The internal management by-laws also provide that the president of the federation remain in office until the expiry of his term as director.

1985, c. 17, s. 6.

93.150. The term of office of a director is three years.

A mode of rotation providing that one-third of the directors, to the nearest whole number, be replaced each year shall be provided in the internal management by-laws.

For that purpose, the federation may shorten the term of office of the directors elected at the general organizing meeting or elected following an increase in the number of directors.

1985, c. 17, s. 6.

93.151. In case of vacancy, the directors may appoint a member for the unexpired portion of the term of office. If they fail to act before the next general meeting, the vacancy may be filled by the general meeting.

Where the directors remaining in office do not constitute a quorum, one member of the board of directors of the federation or two members of the federation may order the secretary to call a special meeting to fill the vacancy. If the secretary fails to act, those who may order that the meeting be held may call it.

The federation shall reimburse the persons who have called the meeting for any reasonable expense they incurred to hold the meeting, unless the members object thereto by resolution at the meeting thus called.

1985, c. 17, s. 6.

93.152. Notwithstanding the expiry of his term of office, every director shall remain in office until he is re-elected or replaced.

1985, c. 17, s. 6.

93.153. In no case may the general manager of a federation or of a mutual insurance association that is a member thereof be the president or the vice-president of the federation or the chairman of its board of directors.

1985, c. 17, s. 6.

93.154. Every director who has an interest that is in conflict with the interest of the federation must, on pain of removal from office, disclose his interest, abstain from voting on any matter connected with it and avoid influencing any decision relating to it. He must also withdraw from the meeting while any such matter is being discussed or voted upon.

Any other person carrying on the duties of an officer and who has such an interest shall, on pain of removal from office, disclose his interest in writing to the federation. He shall in no way attempt to influence the decision of the directors.

1985, c. 17, s. 6; 1990, c. 86, s. 14.

93.154.1. A director or officer is deemed to have the same interest as a person associated with him.

1990, c. 86, s. 14.

93.154.2. Any person who is removed from office for having contravened section 93.154 or who resigns after having contravened that section is disqualified from sitting as a director of any federation for a period of five years from his removal or resignation.

1990, c. 86, s. 14.

93.154.3. The court, at the request of the federation or of a mutual insurance association that is a member of the federation or at the request of the Authority may, among other measures, order a director or officer who has contravened section 93.154 to render account and, where applicable, to remit any profit gained to the federation.

1990, c. 86, s. 14; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.154.4. Every director or officer of a federation must, within three months of his appointment or election and, subsequently, every year, disclose in writing and under oath to the board of directors of the federation any interest held by him in any undertaking.

No director or officer may discharge the duties of his office until he has fulfilled his obligations under this section. The vote of a director who discharges his duties in contravention of this section shall not be decisive.

However, no disclosure of interest is required where the holding amounts to less than 10% of the shares issued by a legal person or of the voting rights attached to such shares.

1990, c. 86, s. 14; 1996, c. 63, s. 80.

93.155. A federation shall assume the defence of its directors or officers prosecuted by a third person for an act done in the performance of their duties and shall pay any damages awarded as compensation for any injury resulting from that act, unless they have committed a grievous offence or a personal offence separable from the performance of their duties.

Notwithstanding the foregoing, in a penal or criminal proceeding the federation shall assume only the payment of the expenses of its directors or officers if they had reasonable grounds to believe that their conduct was in conformity with the law or if they have been freed or acquitted.

A federation shall assume the expenses of its directors and officers if, having prosecuted them for an act done in the performance of their duties, it loses its case and the court so decides.

If the federation wins its case only in part, the court may determine the amount of the expenses it shall assume.

1985, c. 17, s. 6; 1996, c. 63, s. 86.

DIVISION VII EXECUTIVE COMMITTEE

1985, c. 17, s. 6.

93.156. If the board of directors of a federation consists of 10 or more directors, it may, if so authorized by the internal management by-laws, establish an executive committee consisting of not fewer than five directors, including the chairman and the vice-chairman.

In no case may the number of members of the executive committee exceed one-half of the number of directors.

Not more than one-third of the executive committee may be composed of persons referred to in the second paragraph of section 93.147.

1985, c. 17, s. 6; 1990, c. 86, s. 15; 1996, c. 63, s. 23.

93.157. The executive committee shall exercise the powers of the board of directors to the extent provided in the internal management by-laws.

1985, c. 17, s. 6.

93.158. The board of directors may replace any member of the executive committee.

1985, c. 17, s. 6.

93.159. Sections 93.90 to 93.98, adapted as required, apply to this division.

1985, c. 17, s. 6.

DIVISION VIII POWERS AND DUTIES

1985, c. 17, s. 6.

93.159.1. A federation must adhere to sound and prudent management practices.

2002, c. 70, s. 50.

93.159.2. A federation must adhere to sound commercial practices. These practices include properly informing persons being offered a product or service and acting fairly in dealings with them.

2008, c. 7, s. 24.

93.160. A federation may, in particular,

(1)  devise policies on any matter conducive to the attainment of the objects of its members;

(2)  examine the books and accounts of its members;

(3)  require from its members that they submit to it an annual report and periodical financial statements, and a copy of their by-laws or any other pertinent information;

(4)  make conventions with its members for the supervision, administration or management of their affairs for a specified period;

(5)  favour the creation and establishment of mutual insurance associations;

(6)  provide interested persons with services in view of the constitution of a mutual insurance association;

(7)  designate, from among insurers holding a licence issued by the Authority, those with whom its members may make contracts of reinsurance;

(8)  negotiate, on behalf of its members, reinsurance agreements with insurers holding a licence issued by the Authority;

(9)  act as receiver in accordance with Chapter III.1 of Title I of the Act respecting the Autorité des marchés financiers (chapter A-33.2);

(10)  act as the liquidator or sequestrator of a member;

(11)  act as the auditor of its members.

1985, c. 17, s. 6; 1999, c. 40, s. 33; 2002, c. 45, s. 243; 2004, c. 37, s. 90; 2008, c. 7, s. 25.

93.160.1. A federation may register one of its members as a firm for an insurance sector in accordance with the Act respecting the distribution of financial products and services (chapter D‐9.2).

At the request of the member, the federation may also register it for any other sector.

1998, c. 37, s. 502.

93.161. A federation may, by a resolution of its board of directors, designate from among its members those who may

(1)  provide financial products and services other than insurance to their members;

(2)  carry on any other activity authorized by the Government in accordance with section 93.162.

A federation shall also determine the terms and conditions governing the exercise of the powers provided for in the first paragraph.

1985, c. 17, s. 6; 2002, c. 70, s. 51.

93.161.1. A federation may, alone or jointly with a partnership or a legal person of its group, control a legal person or a partnership carrying on activities that may be carried on by a mutual insurance association pursuant to this Act or pursuant to an order in council made by the Government under section 93.162.

However, a federation may not, alone or jointly with a partnership or a legal person of its group, control a legal person that carries on damage insurance activities, except if that legal person is a reinsurer.

2002, c. 70, s. 52.

93.161.2. A federation may also acquire all or part of the shares of a legal person in the cases determined by government regulation.

2002, c. 70, s. 52.

93.162. The Government may give a federation the power to authorize a mutual insurance association that is a member of the federation to carry on an activity not related to the pursuit of its objects that the association is not prohibited by law from carrying on and that the Government considers in the interest of the public.

The Government may prohibit a mutual association from carrying on an activity relating to the pursuit of its objects that is not expressly authorized by law.

1985, c. 17, s. 6; 1996, c. 63, s. 24; 2002, c. 70, s. 53.

93.163. Every federation shall establish, by a by-law approved by the vote of not less than three-quarters of the members present, the territory in which each of its members carries on its activities.

However, no change in the territory of a mutual insurance association shall affect the status of a member.

1985, c. 17, s. 6.

93.164. A federation may, by by-law, adopt norms applicable to its members in respect of

(1)  their accounting system;

(2)  the risks and the retention limit;

(3)  any financial or administrative matter.

1985, c. 17, s. 6.

93.165. Every federation shall, every year, audit the books and accounts of its members. The audit may be carried out by employees of the federation or by a person appointed for that purpose by the federation.

1985, c. 17, s. 6.

93.165.1. A federation may, by agreement with the Authority, inspect in accordance with the terms of the agreement those of its members that are registered as firms under the Act respecting the distribution of financial products and services (chapter D‐9.2).

Sections 107 and 113 of that Act apply, with the necessary modifications, to inspections performed under this section.

An agreement may specify

(1)  the manner in which the federation is required to report to the Authority;

(2)  the powers of inspection that the Authority may exercise in respect of the federation;

(3)  any other measure that the Authority considers appropriate.

1998, c. 37, s. 503; 2002, c. 45, s. 213; 2004, c. 37, s. 90.

93.166. Every federation shall carry out or commission the inspection of the affairs of its members once every other year or whenever it considers that an inspection is necessary for the protection of the insured.

1985, c. 17, s. 6.

93.167. The inspection of a mutual insurance association is carried out for the purposes, in particular, of evaluating its administrative structure and the measures taken by its board of directors in view of ensuring the orderly and efficient conduct of its affairs, the protection of its property, the reliability of its books and accounting records, the availability of reliable financial information and the compliance with this Act, the regulations hereunder and the guidelines and written instructions of the Authority.

1985, c. 17, s. 6; 2002, c. 70, s. 54; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.168. The federation shall account for its inspection to the Authority. It shall also account for its inspection to the board of directors of the mutual insurance association and, for that purpose, it may convene the members of the board to submit and explain its inspection report.

1985, c. 17, s. 6; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.169. The federation may, following an inspection of a mutual insurance association, order that a special meeting of the members of the association be called to communicate to them any information considered to be relevant.

1985, c. 17, s. 6.

93.170. A federation shall have access, at all times, to the books, registers, accounts and other records of its members and every person having custody of them shall facilitate its examination thereof. It may make a copy of all the documents.

A federation may also require from the directors and employees of its members any information and explanation necessary for the carrying out of its duties.

1985, c. 17, s. 6.

93.171. A federation may fix, for each fiscal year, a basic assessment and any other assessment it considers necessary.

Every mutual insurance association that is a member of the federation is bound to pay the assessments.

1985, c. 17, s. 6.

93.172. A federation may also fix an assessment in respect of a member who agrees to avail himself of special services offered by the federation.

1985, c. 17, s. 6.

93.173. The federation may require from its members the reports that are necessary to fix the amount of the assessments.

The form and tenor of the reports and the time when they are to be made and transmitted shall be determined by the federation.

1985, c. 17, s. 6.

DIVISION IX INVESTMENT FUND

1985, c. 17, s. 6.

93.174. Every federation may establish and manage an investment fund.

1985, c. 17, s. 6.

93.175. The fund shall be made up of the sums entrusted to the federation by its members for investment purposes.

The sums entrusted to the federation under this section shall constitute, for each mutual insurance association, a participation in the net asset and net income of the fund and the participating association shall share the net income thereof pro rata to their participation on the dates determined by the by-laws of the federation.

1985, c. 17, s. 6.

93.176. The federation shall also determine by by-law the terms and conditions governing the participation of a member in the fund.

1985, c. 17, s. 6.

93.177. The assets of the fund shall be separate from those of the federation.

The participation of a member shall constitute against the federation a claim for the net value of the participation.

No other creditor of the federation has any right to the assets of the fund.

1985, c. 17, s. 6.

93.178. The assets of the fund shall be reported as separate items in the books, registers and accounts of the federation.

1985, c. 17, s. 6.

93.179. The Government shall determine by regulation the investments that may be made out of the investment fund, the intervals and mode of valuation of the fund and the norms governing financial disclosure to participating members.

1985, c. 17, s. 6.

DIVISION X BOOKS, AUDIT AND ANNUAL REPORT

1985, c. 17, s. 6.

93.180. A federation shall keep and maintain at its head office

(1)  its articles and the accompanying certificates of the Authority;

(2)  its by-laws;

(3)  the minutes of the meetings of its members;

(4)  the minutes of the meetings of the board of directors and of the executive committee, where that is the case;

(5)  a register of the surnames, names, addresses and occupations of the directors.

The members of the federation may consult the register and the documents referred to in subparagraphs 1 to 3 and 5 of the first paragraph at the head office of the federation during regular office hours.

1985, c. 17, s. 6; 1996, c. 63, s. 88; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.181. A federation shall keep the books recording the nature of its operations in accordance with generally accepted accounting principles.

1985, c. 17, s. 6.

93.182. The accounts of a federation shall be cut off at the close of the fiscal year and, within the two ensuing months, the board of directors shall prepare an annual report containing, in particular,

(1)  the surnames, names, addresses and occupations of the directors;

(2)  the balance sheet, the income statement and the statement of changes in financial position;

(3)  the auditor’s report.

The federation shall, within 90 days after the close of its fiscal year, forward a copy of its annual report to its members.

1985, c. 17, s. 6; 1996, c. 63, s. 88.

93.183. A federation shall cause its books and accounts to be audited every year by an external auditor.

1985, c. 17, s. 6.

93.184. If a federation fails to cause its books and accounts to be audited, the Authority may appoint an auditor and fix the remuneration that the federation is required to pay to the appointed auditor.

1985, c. 17, s. 6; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.185. The auditor shall have access to all the books, registers, accounts and other records of a federation and any person having custody thereof shall facilitate his examination of them.

The auditor may also require from the directors and employees any information and explanation necessary for the carrying out of his duties.

1985, c. 17, s. 6.

DIVISION XI INCOME STATEMENT AND INSPECTION

1985, c. 17, s. 6; 2002, c. 70, s. 153.

93.186. Every federation shall, before 1 March each year or on any other date the Authority may determine, file with the Authority, in such form as the Authority may determine, an income statement for the last fiscal year.

1985, c. 17, s. 6; 2002, c. 70, s. 153; 2002, c. 45, s. 243; 2002, c. 70, s. 55; 2004, c. 37, s. 90.

93.187. The income statement shall show the financial position of the federation and include the information and documents that must appear in the annual report and any information required by the Authority.

The income statement shall also contain any other information required by the Act respecting the legal publicity of sole proprietorships, partnerships and legal persons (chapter P‐45) for the annual updating of information relating to a registered legal person.

1985, c. 17, s. 6; 1993, c. 48, s. 133; 2002, c. 70, s. 153; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.188. The income statement shall be certified under oath by at least two directors of the federation and be accompanied with the report of the auditor to the Authority indicating the scope of his audit and stating his opinion on the financial position of the federation.

1985, c. 17, s. 6; 2002, c. 70, s. 153; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.189. The Authority shall inspect or commission the inspection of the affairs of a federation at least once every three years or whenever the Authority considers such an inspection to be necessary for the protection of its members.

1985, c. 17, s. 6; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.190. Every person carrying out the inspection of a federation shall have access, at all times, to all its books, registers, accounts and other records, and every person having the custody thereof shall facilitate his examination of the documents. He may make a copy of all the documents.

The person is also entitled to require from the directors and employees the information and explanations necessary for the carrying out of his duties.

1985, c. 17, s. 6.

93.191. The Authority may require, at all times, the filing of any report or statement from a federation.

1985, c. 17, s. 6; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

DIVISION XII WINDING-UP

1985, c. 17, s. 6; 2008, c. 7, s. 26.

§ 1 . —

Repealed, 2008, c. 7, s. 27.

1985, c. 17, s. 6; 2008, c. 7, s. 27.

93.192. (Repealed).

1985, c. 17, s. 6; 1996, c. 63, s. 25; 2002, c. 45, s. 214; 2004, c. 37, s. 90; 2008, c. 7, s. 27.

93.193. (Repealed).

1985, c. 17, s. 6; 1996, c. 63, s. 82; 2008, c. 7, s. 27.

93.194. (Repealed).

1985, c. 17, s. 6; 1996, c. 63, s. 82; 2008, c. 7, s. 27.

93.195. (Repealed).

1985, c. 17, s. 6; 2008, c. 7, s. 27.

93.196. (Repealed).

1985, c. 17, s. 6; 1996, c. 63, s. 82; 2008, c. 7, s. 27.

93.197. (Repealed).

1985, c. 17, s. 6; 1993, c. 48, s. 134; 2002, c. 45, s. 215; 2004, c. 37, s. 90; 2008, c. 7, s. 27.

93.198. (Repealed).

1985, c. 17, s. 6; 1993, c. 48, s. 135; 2008, c. 7, s. 27.

§ 2 . —

Heading repealed, 2008, c. 7, s. 28.

1985, c. 17, s. 6; 2008, c. 7, s. 28.

93.199. Subject to this Act, Divisions II and III of the Winding-up Act (chapter L-4), adapted as required, apply to a federation and to the guarantee fund related to it.

1985, c. 17, s. 6; 1996, c. 63, s. 82.

93.200. A federation may decide to wind up its affairs and to dissolve by a resolution passed by at least three-fourths of the votes cast by the members present at a special meeting called for that purpose.

The meeting shall, by a resolution passed by the majority of the votes cast by the members present, appoint one or more liquidators empowered to take possession of the property of the federation when the winding-up is in effect.

1985, c. 17, s. 6.

93.201. Once the winding-up is in effect, every action or suit against the property of the federation in particular, by seizure by garnishment, seizure before judgment or seizure in execution, shall be suspended.

The costs incurred by a creditor, after he has become aware of the winding-up, personally or through his attorney, shall not be collocated out of the proceeds of the property of the federation which are distributed in consequence of the winding-up.

A judge of the Superior Court for the district in which the head office of the federation is situated may, however, on the conditions that he considers suitable, authorize the instituting of an action or the continuance of any suit commenced.

1985, c. 17, s. 6; 1996, c. 63, s. 26.

93.202. Every federation shall, within 10 days, give notice of the winding-up to the Authority which shall transmit it to the enterprise registrar who shall deposit it in the register. The federation shall also forward the notice to the Authority a certified copy of the winding-up resolution passed in accordance with section 93.200. A similar notice shall also be sent, within 10 days, by registered or certified mail, to each member and published in a daily newspaper circulating in the locality where the federation has its head office.

The notice shall indicate that the winding-up of the federation entails that of the guarantee fund related to it; it also indicates the name and address of the liquidator or liquidators and the postal address where interested persons may send their claims.

1985, c. 17, s. 6; 1993, c. 48, s. 136; 1996, c. 63, s. 82; 2002, c. 45, s. 216; 2004, c. 37, s. 90.

93.203. The winding-up of the federation takes effect 60 days from the date of the deposit of the winding-up notice in the register. The federation exists and operates thenceforth only with a view to winding up its affairs.

1985, c. 17, s. 6; 1993, c. 48, s. 137.

93.204. Before taking possession of the property of the federation, the liquidator shall give sufficient security to guarantee performance of his duties. At the request of the Authority or of any other interested person, the judge of the Superior Court may determine the amount and nature of that security and increase it according to circumstances.

1985, c. 17, s. 6; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.205. The liquidator shall act under the control and direction of the Authority who may, even if it alleges no particular interest, act before the courts in all matters respecting the winding-up and exercise, on behalf of any member or creditor of the federation, the rights that they have against the federation.

1985, c. 17, s. 6; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.206. The assets of the investment fund shall be distributed to the participating members pro rata to their participation.

1985, c. 17, s. 6.

93.207. The following claims shall have, by preference over the other claims, priority in the following order:

(1)  costs and charges of winding-up;

(2)  salaries and wages of the paid members of the staff of the federation, up to three months of unpaid salary.

1985, c. 17, s. 6.

93.208. The liquidator shall, within seven days after the end of every three-month period, make to the Authority a summary report of his activities for that period. The report shall indicate the receipts and expenses of the winding-up and a statement of its assets and liabilities at the end of that period.

1985, c. 17, s. 6; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.209. The voluntary winding-up of a federation entails the winding-up of its investment fund and of the guarantee fund to which it is related.

The guarantee fund shall be in the process of winding up 60 days from the date of the deposit of the winding-up notice of the federation in the register. It exists and operates thenceforth only with a view to winding up its affairs.

The liquidator of a federation shall also proceed to the winding-up of the investment fund and of the guarantee fund.

Sections 93.201, 93.204, 93.205, 93.207 and 93.208, adapted as required, apply to the winding-up of the guarantee fund.

1985, c. 17, s. 6; 1993, c. 48, s. 138; 1996, c. 63, s. 81, s. 82.

DIVISION XIII DISSOLUTION

1985, c. 17, s. 6.

93.210. The Minister may, if he considers it advisable and after obtaining the advice of the Authority, order the dissolution of a federation in the following cases:

(1)  if the number of its members is reduced to fewer than 12;

(2)  if the organizing meeting is not held within the time limits provided in section 93.30;

(3)  if, for two consecutive years, it failed to hold an annual meeting.

1985, c. 17, s. 6; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.211. Before ordering the Authority to dissolve a federation, the Minister shall give the federation a notice of its alleged default and of the penalty to which it is liable and give it an opportunity to present written submissions within 30 days of the date of the notice.

If, after examining the submissions, the Minister maintains the notice of default and it is not remedied within 30 days following the time limit prescribed in the first paragraph, the Minister may order the Authority to dissolve the federation.

1985, c. 17, s. 6; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.212. The notice of default contemplated in the first paragraph of section 93.211 shall be transmitted to the Authority which shall then transmit it to the enterprise registrar who shall deposit it in the register.

1985, c. 17, s. 6; 1993, c. 48, s. 139; 2002, c. 45, s. 217; 2004, c. 37, s. 90.

93.213. The dissolution of a federation entails the dissolution of the guarantee fund to which it is related.

1985, c. 17, s. 6; 1996, c. 63, s. 82.

93.214. The Authority shall dissolve the federation and the guarantee fund related to it by drawing up an act of dissolution to that effect which it shall transmit to the enterprise registrar who shall deposit in the register; the federation and the guarantee fund are dissolved 60 days after the date of the deposit.

1985, c. 17, s. 6; 1993, c. 48, s. 140; 1996, c. 63, s. 82; 1998, c. 37, s. 504; 2002, c. 45, s. 218; 2004, c. 37, s. 90.

93.215. The Minister of Revenue is ex officio, the curator to property of the federation and investment fund and of the guarantee fund. He shall render account to the Authority.

1985, c. 17, s. 6; 1996, c. 63, s. 82; 2002, c. 45, s. 243; 2004, c. 37, s. 90; 2005, c. 44, s. 54.

93.216. The balance of the assets of the dissolved federation and that of the dissolved guarantee fund shall devolve to their members.

The assets of the investment fund shall devolve to the participating members, pro rata to their participation.

1985, c. 17, s. 6; 1996, c. 63, s. 82.

93.217. Any interested person may, within three years of a dissolution, apply to the Minister for a revocation.

The Minister may, if the Minister considers it advisable and after obtaining the advice of the Authority, order the Authority to revoke the dissolution, retroactively to the date on which it took effect. The Authority shall revoke the dissolution by drawing up an order to that effect which it shall transmit to the enterprise registrar who shall deposit it in the register.

The Minister shall establish the conditions of the revocation of the dissolution. In no case, however, may such a revocation impair the rights acquired by any person after the dissolution.

1985, c. 17, s. 6; 1993, c. 48, s. 141; 2002, c. 45, s. 219; 2004, c. 37, s. 90.

CHAPTER III.3 GUARANTEE FUND

1985, c. 17, s. 6; 1996, c. 63, s. 27.

DIVISION I APPLICATION

1985, c. 17, s. 6.

93.218. The following provisions, adapted as required, apply to the guarantee fund: sections 93.11 and 93.12, subparagraphs 1, 2 and 5 of the first paragraph of section 93.15, sections 93.16 and 93.17, subparagraphs 1, 2, 4 and 9 of the first paragraph of section 93.18, section 93.19, the first paragraph and subparagraphs 1 to 4 of the second paragraph of section 93.20 and sections 93.21, 93.22, 93.25 to 93.27.4, 93.35 to 93.37, 93.92 to 93.98, 93.108 to 93.113 and 93.156 to 93.159.

1985, c. 17, s. 6; 1993, c. 48, s. 142; 1996, c. 63, s. 82; 2008, c. 7, s. 29.

DIVISION II CONSTITUTION, NAME AND ARTICLES

1985, c. 17, s. 6; 1996, c. 63, s. 83; 1999, c. 40, s. 33.

93.219. The mutual insurance associations that are the founders of a federation shall apply for the constitution of a guarantee fund having the following objects:

(1)  establishing and managing a guarantee fund, a cash reserve fund, or a mutual aid fund for the benefit of its members;

(2)  providing financial assistance with regard to losses sustained by the members of a mutual insurance association that is a member of the guarantee fund, on the winding-up or dissolution of the association.

1985, c. 17, s. 6; 1996, c. 63, s. 82; 1999, c. 40, s. 33.

93.220. No guarantee fund may be constituted unless the mutual insurance associations that are the founders of the federation have subscribed and paid an amount determined by the Authority to establish its capital.

1985, c. 17, s. 6; 1996, c. 63, s. 81; 1999, c. 40, s. 33; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.221. The name of a guarantee fund shall include the words “guarantee fund”; it shall also include the name of the federation to which its members are affiliated or a sign identifying the federation.

1985, c. 17, s. 6; 1996, c. 63, s. 82, s. 83.

93.222. No legal person other than a legal person constituted under this division may include the expression “guarantee fund” in its name.

1985, c. 17, s. 6; 1996, c. 63, s. 28.

93.223. In no case may the articles of a guarantee fund be amended except by a resolution passed by two-thirds of the votes cast by the directors present at a meeting called for that purpose. The resolution must authorize one of the directors to sign the articles of amendment.

1985, c. 17, s. 6; 1996, c. 63, s. 82.

DIVISION III CAPITAL

1985, c. 17, s. 6.

93.224. The capital of a guarantee fund shall consist of the amounts paid by each member as its participation in the capital.

The capital shall be equal to or greater than the amount determined by the Authority at the time of constitution of the guarantee fund or any other amount determined by the Authority whenever considered necessary.

In no case may the amount of the capital determined by the Authority be touched except in case of the winding-up or dissolution of a member of the guarantee fund.

1985, c. 17, s. 6; 1996, c. 63, s. 81; 1999, c. 40, s. 33; 2002, c. 70, s. 56; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.225. A guarantee fund shall, where its capital is reduced below the amount determined by the Authority, require any other additional amount from its members which is payable by them to bring the capital of the guarantee fund to an amount at least equal to the amount determined by the Authority.

The directors shall determine, by resolution, the criteria for fixing the amount of any such additional sum and the terms and conditions of its payment.

The resolution requires the approval of the Authority.

1985, c. 17, s. 6; 1996, c. 63, s. 81; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.226. Every guarantee fund shall transmit to each member, each year, a certificate indicating the total amounts paid as participation since becoming a member thereof and the percentage of his participation in the capital.

1985, c. 17, s. 6; 1996, c. 63, s. 81; 1998, c. 37, s. 505.

93.227. In the case of the winding-up, dissolution, resignation of a member or of its expulsion from the federation to which the guarantee fund is related, the member may apply for the reimbursement of his participation in the capital.

Except in the case of the winding-up or dissolution of a guarantee fund, the reimbursement of the participation of a member in the capital shall correspond to the lesser of the following amounts:

(1)  the total amount paid as participation;

(2)  the amount obtained by multiplying the surplus of the assets of the guarantee fund over its liabilities by the percentage of the participation of the member in the capital.

The application for the reimbursement of a member shall be made by means of a written notice transmitted to the guarantee fund not later than 90 days before the end of the current fiscal year.

No reimbursement may be made before the beginning of the following fiscal year.

1985, c. 17, s. 6; 1996, c. 63, s. 81; 2002, c. 70, s. 57.

DIVISION IV MEMBERS

1985, c. 17, s. 6.

93.228. The mutual insurance associations that are members of a federation are members of the guarantee fund to which the federation is related. They shall remain members of the guarantee fund as long as they remain members of the federation.

1985, c. 17, s. 6; 1996, c. 63, s. 81, s. 82.

DIVISION V BOARD OF DIRECTORS

1985, c. 17, s. 6.

93.229. A guarantee fund shall be administered by a board of directors consisting of not fewer than seven persons appointed by the board of directors of the federation to which the guarantee fund is related.

In no case may the following persons act as directors:

(1)  a minor;

(2)  a person of full age under protective supervision or who has been totally or partially deprived of the right to exercise his civil rights by a court of another jurisdiction;

(3)  an undischarged bankrupt.

1985, c. 17, s. 6; 1989, c. 54, s. 156; 1996, c. 63, s. 82, s. 87; 1998, c. 37, s. 506.

93.230. The first directors shall be appointed at the first meeting of the first board of directors of the federation.

Within 30 days of the meeting, the federation shall transmit to the Authority a list of the appointed directors containing their surnames, names, addresses and occupations.

1985, c. 17, s. 6; 1996, c. 63, s. 88; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.231. The president of the federation shall fix the date of the first meeting of the board of directors.

At its first meeting, the board of directors shall adopt the internal management by-laws of the guarantee fund and shall appoint the first auditor.

Within 30 days of the meeting, the guarantee fund shall transmit the name and address of the auditor to the Authority.

1985, c. 17, s. 6; 1996, c. 63, s. 81; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.232. The directors shall elect the president and vice-president of the guarantee fund and any other senior officer whose election is provided for in the internal management by-laws.

1985, c. 17, s. 6; 1996, c. 63, s. 81.

93.233. The board of directors shall meet at such intervals and according to such modalities as may be provided in the internal management by-laws of the guarantee fund. Subject to the internal management by-laws, every meeting shall be called by a notice given at least five days before the date fixed for the holding of the meeting.

1985, c. 17, s. 6; 1996, c. 63, s. 81.

93.234. The term of office of a director is three years unless he is replaced before the expiry of his term by the board of directors of the federation.

1985, c. 17, s. 6.

93.235. Notwithstanding the expiry of his term, a director shall remain in office until he is reappointed or replaced by the board of directors of the federation.

1985, c. 17, s. 6.

93.236. Any vacancy occurring during the term of office of a director shall be filled by the board of directors of the federation for the remainder of his term.

1985, c. 17, s. 6.

93.237. The total amount of remuneration that may be paid to the directors for a specified period shall be fixed by the board of directors of the federation. No director may be remunerated as such before a resolution to that effect is passed by the board.

1985, c. 17, s. 6.

93.238. Every director who has an interest that is in conflict with the interest of the guarantee fund must, on pain of removal from office, disclose his interest, abstain from voting on any matter connected with it and avoid influencing any decision relating to it. He must also withdraw from the meeting while any such matter is being discussed or voted upon.

Any other person discharging the duties of an officer and who has such an interest shall, on pain of removal from office, disclose his interest to the guarantee fund. In addition, he shall in no way attempt to influence the decision of the directors.

1985, c. 17, s. 6; 1990, c. 86, s. 16; 1996, c. 63, s. 81.

93.238.1. A director or officer is deemed to have the same interest as a person associated with him.

1990, c. 86, s. 16.

93.238.2. Any person who is removed from office for having contravened section 93.238 or who resigns after having contravened that section is disqualified from sitting as a director of any guarantee fund for a period of five years from his removal or resignation.

1990, c. 86, s. 16; 1996, c. 63, s. 82.

93.238.3. The court, at the request of the guarantee fund, of a federation associated with the guarantee fund or of a mutual insurance association that is a member of the federation or at the request of the Authority, may, among other measures, order a director or officer who has contravened section 93.238 to render account and, where applicable, to remit any profit gained to the guarantee fund.

1990, c. 86, s. 16; 1996, c. 63, s. 81; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.238.4. Every director or officer of a guarantee fund must, within three months of his appointment or election and, subsequently, every year, disclose in writing and under oath to the board of directors of the guarantee fund any interest held by him in any undertaking.

No director or officer may discharge the duties of his office until he has fulfilled his obligations under this section. The vote of a director who discharges his duties in contravention of this section shall not be decisive.

However, no disclosure of interest is required where the holding amounts to less than 10% of the shares issued by a legal person or of the voting rights attached to such shares.

1990, c. 86, s. 16; 1996, c. 63, s. 80, s. 81, s. 82.

93.239. A guarantee fund shall assume the defence of its directors or officers prosecuted by a third person for an act done in the performance of their duties and shall pay any damages awarded as compensation for any injury resulting from that act, unless they have committed a grievous offence or a personal offence separable from the performance of their duties.

Notwithstanding the foregoing, in a penal or criminal proceeding the guarantee fund shall assume only the payment of the expenses of its directors or officers if they had reasonable grounds to believe that their conduct was in conformity with the law or if they have been freed or acquitted.

A guarantee fund shall assume the expenses of its directors and officers if, having prosecuted them for an act done in the performance of their duties, it loses its case and the court so decides.

If the guarantee fund wins its case only in part, the court may determine the amount of the expenses it shall assume.

1985, c. 17, s. 6; 1996, c. 63, s. 81, s. 82.

DIVISION VI ASSESSMENT

1985, c. 17, s. 6.

93.240. A guarantee fund may, for each fiscal year, fix and collect from its members an assessment which the members are required to pay.

1985, c. 17, s. 6; 1996, c. 63, s. 81.

93.241. The amount of the assessment shall be established for each member on the basis of reports that each of them is required to submit to the guarantee fund in the form and tenor and at the intervals that the guarantee fund may determine by by-law.

A guarantee fund may also provide by by-law the terms and conditions governing the payment of the assessment.

1985, c. 17, s. 6; 1996, c. 63, s. 81.

DIVISION VII POWERS AND DUTIES

1985, c. 17, s. 6.

93.242. A guarantee fund may, in the pursuit of its objects,

(1)  make loans and grants to its members;

(2)  guarantee the repayment of an advance or a loan granted to a member;

(3)  enter into an agreement with a member to manage its affairs during a specified period;

(4)  act as the provisional administrator of a member for the purposes of Chapter X of Title IV;

(5)  acquire the assets of a member;

(6)  act as the liquidator or sequestrator of a member;

(7)  pay rebates to the members out of its accumulated surplus, in proportion to their participation in the capital.

1985, c. 17, s. 6; 1996, c. 63, s. 81.

93.243. Every guarantee fund shall guarantee to the insured persons of a mutual insurance association which is a member thereof and the assets of which have been liquidated the payment, on presentation of the proper documents, of the balance

(1)  on any debt dependent upon the realization, before the winding-up or dissolution, of the risk assumed by the member;

(2)  on any debt of the insured person for the recovery of the value of its policies or for the repayment of premiums paid in respect of risks no longer covered following the winding-up or dissolution of the member.

The guarantee fund is bound by that obligation only towards an insured person who has filed a valid claim with the liquidator or, as the case may be, the Minister of Revenue.

Every claim by an insured person shall be filed within three years after the liquidation of the assets of a member.

1985, c. 17, s. 6; 1996, c. 63, s. 81; 2005, c. 44, s. 54.

93.244. A guarantee fund may, to provide assistance to a member, acquire from the latter preferred shares that the mutual insurance association may redeem. Notwithstanding section 93.52, the guarantee fund may at all times, obtain the repayment of its preferred shares.

The amount of the shares so repaid or redeemed in a year shall, however, be limited to one of the following amounts, whichever is less:

(1)  the balance of the non-redeemed preferred shares;

(2)  50% of the net profit of the member in the fiscal year;

(3)  the amount greater than the amount by which the assets of the member exceeds its liabilities, required under section 275.

1985, c. 17, s. 6; 1996, c. 63, s. 81.

93.245. A guarantee fund may, when making a loan or grant to a member or when purchasing the preferred shares of a member, determine the measures that the member will be required to take to correct certain of its management practices.

1985, c. 17, s. 6; 1996, c. 63, s. 81; 2002, c. 45, s. 220.

DIVISION VIII INVESTMENTS

1985, c. 17, s. 6.

93.246. Subject to section 93.244, no guarantee fund may make investments other than those contemplated in this division.

1985, c. 17, s. 6; 1996, c. 63, s. 81.

93.247. A guarantee fund may acquire and hold bonds or other evidences of indebtedness

(1)  issued or guaranteed by Québec or Canada;

(2)  issued by a legal person, commission or association of which at least 90% of the shares, capital or property are owned by Québec;

(3)  issued by a municipality, by a school board of Québec or by the Comité de gestion de la taxe scolaire de l’île de Montréal;

(4)  secured by the assignment to a trustee of an undertaking of Québec to pay sufficient annual subsidies for the payment of interest and capital on their respective maturity dates;

(5)  issued by a public authority having as its object the operation of a public service and empowered to impose a tariff for the service.

1985, c. 17, s. 6; 1988, c. 84, s. 545; 1996, c. 2, s. 78; 1996, c. 63, s. 29, s. 80, s. 81; 2002, c. 75, s. 33.

93.248. A guarantee fund may acquire and hold bonds or other evidences of indebtedness issued by a legal person constituted in Canada and carrying on business in Québec

(1)  if they are secured by first hypothec on landed property or equipment or by hypothec on evidences of indebtedness admissible as investments under this division;

(2)  if they are secured by first hypothec on equipment and if the legal person has paid in full the interest on its other debts during the 10 years preceding the acquisition; or

(3)  if the common shares of the legal person are listed on a recognized Canadian Stock Exchange and if the legal person, during each of the five years preceding the acquisition, has earned and paid on its common shares a dividend at least equal to 4% of their book value.

1985, c. 17, s. 6; 1992, c. 57, s. 439; 1996, c. 63, s. 80, s. 81; 1999, c. 40, s. 33.

93.249. A guarantee fund may acquire and hold fully paid preferred shares issued by a legal person constituted in Canada and carrying on business in Québec

(1)  if the legal person which issued the shares has, in each of the five years preceding the acquisition, earned and paid on the issued and non-redeemed preferred shares a dividend at least equal to the rate specified for the shares;

(2)  if the legal person has, in each of the five years preceding the acquisition, earned and paid on its common shares a dividend of at least 4% of their book value; and

(3)  if the preferred shares are listed on a recognized Canadian Stock Exchange.

1985, c. 17, s. 6; 1996, c. 63, s. 80, s. 81; 1999, c. 40, s. 33.

93.250. A guarantee fund may acquire and hold fully paid common shares issued by a legal person constituted in Canada and carrying on business in Québec if the shares are listed on a recognized Canadian Stock Exchange and if the legal person which issued the shares has, in each of the five years preceding the acquisition, earned and paid on its common shares a dividend of at least 4% of their book value.

1985, c. 17, s. 6; 1996, c. 63, s. 80, s. 81; 1999, c. 40, s. 33.

93.251. A guarantee fund may acquire claims secured by hypothec or grant a hypothecary loan on landed property situated in Québec

(1)  if payment of the capital and interest on the claims is guaranteed or insured by Québec or Canada;

(2)  if the hypothec is a first hypothec and if the amount of the claim does not exceed 80% of the value of the landed property which secures payment thereof; or

(3)  if the hypothec is a first hypothec and if the amount by which the value of the landed property securing the payment of the claim exceeds 80% of such value, is guaranteed or insured by Québec, Canada, the Canada Mortgage and Housing Corporation, the Société d’habitation du Québec or a hypothecary insurance policy issued by an insurance company holding a licence issued under this Act.

It may also grant a loan that causes the amount of the hypothec on an immovable referred to in subparagraph 2 of the first paragraph to exceed 80% of the value of the immovable if the corresponding hypothecary claim is endangered or if the immovable has been repossessed.

1985, c. 17, s. 6; 1996, c. 63, s. 30, s. 81; 1999, c. 40, s. 33; 2007, c. 16, s. 1.

93.252. A guarantee fund may, to secure payment in whole or in part of any sum payable to it, acquire the landed property securing the payment thereof. However, the guarantee fund shall dispose of the landed property so acquired within seven years unless the Authority grants it an extension.

1985, c. 17, s. 6; 1996, c. 63, s. 81; 1999, c. 40, s. 33; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.253. A guarantee fund may make deposits with a bank specified in Schedules I and II of the Bank Act (Statutes of Canada, 1991, chapter 46) and registered with the Canada Deposit Insurance Corporation or a registered institution within the meaning of the Deposit Insurance Act (chapter A‐26).

1985, c. 17, s. 6; 1996, c. 63, s. 81; 2002, c. 70, s. 58.

93.254. No guarantee fund may, in exercising the powers conferred on it by this division,

(1)  invest more than 25% of its assets in investments contemplated in sections 93.249 and 93.250;

(2)  acquire more than 5% of the shares of the same legal person.

Furthermore, no guarantee fund may acquire shares, bonds or other evidences of indebtedness of a legal person which has failed to pay the prescribed dividends on its shares or the interest on its bonds or other evidences of indebtedness except in the case of preferred shares issued by one of its members.

1985, c. 17, s. 6; 1996, c. 63, s. 80, s. 81.

DIVISION IX BOOKS, AUDIT AND ANNUAL REPORT

1985, c. 17, s. 6.

93.255. A guarantee fund shall keep and maintain at its head office

(1)  its articles and by-laws;

(2)  the minutes of the meetings of the board of directors and of the executive committee, where such is the case; and

(3)  a register containing the surnames, names, addresses and occupations of the directors.

The members of the guarantee fund may consult the articles and by-laws of the guarantee fund and the register at the head office of the guarantee fund during regular business hours.

1985, c. 17, s. 6; 1996, c. 63, s. 81, s. 84, s. 88.

93.256. Every guarantee fund shall keep the books recording the nature of its operations in accordance with generally recognized accounting principles.

1985, c. 17, s. 6; 1996, c. 63, s. 81.

93.257. The fiscal year of a guarantee fund shall correspond to that of the federation to which it is related.

1985, c. 17, s. 6; 1996, c. 63, s. 81.

93.258. Every guarantee fund shall cause its books and accounts to be audited every year by an external auditor.

1985, c. 17, s. 6; 1996, c. 63, s. 81.

93.259. If a guarantee fund fails to cause its books and accounts to be audited, the Authority may appoint an auditor and fix the remuneration that the guarantee fund is required to pay to the appointed auditor.

1985, c. 17, s. 6; 1996, c. 63, s. 81; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.260. The auditor shall have access to all the books, registers, accounts and other records of the guarantee fund, and every person having the custody thereof shall facilitate his examination of them.

He may also require from the directors and employees the information and explanations necessary for the carrying out of his duties.

1985, c. 17, s. 6; 1996, c. 63, s. 81.

93.261. The accounts of a guarantee fund shall be cut off at the close of the fiscal year and the board of directors shall prepare, within the two ensuing months, an annual report showing, in particular,

(1)  the participation of each member in the capital;

(2)  the surnames, names, addresses and occupations of the directors;

(3)  the balance sheet, the income statement, the statement of changes in financial position and the statement of surplus;

(4)  the auditor’s report.

The guarantee fund shall, within 90 days after the close of its fiscal year, transmit to its members a copy of the annual report.

1985, c. 17, s. 6; 1996, c. 63, s. 81, s. 88.

93.262. The guarantee fund shall, within 90 days after the close of its fiscal year, transmit a copy of its annual report to the federation to which it is related.

1985, c. 17, s. 6; 1996, c. 63, s. 81.

DIVISION X INCOME STATEMENT AND INSPECTIONS

1985, c. 17, s. 6; 2002, c. 70, s. 153.

93.263. Every guarantee fund shall, before 1 March each year or on any other date the Authority may determine, file with the Authority, in such form as it may determine, an income statement for the last fiscal year.

1985, c. 17, s. 6; 1996, c. 63, s. 81; 2002, c. 70, s. 153; 2002, c. 45, s. 243; 2002, c. 70, s. 59; 2004, c. 37, s. 90.

93.264. The income statement shall show the financial position of the guarantee fund and include the information and documents which must accompany the annual report and any information required by the Authority.

The income statement shall also contain any other information required by the Act respecting the legal publicity of sole proprietorships, partnerships and legal persons (chapter P‐45) for the annual updating of information relating to a registered legal person.

1985, c. 17, s. 6; 1993, c. 48, s. 143; 1996, c. 63, s. 81; 2002, c. 70, s. 153; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.265. The income statement shall be certified under oath by at least two directors of the guarantee fund and be accompanied with the report of the auditor to the Authority indicating the scope of his audit and stating his opinion on the financial position of the guarantee fund.

1985, c. 17, s. 6; 1996, c. 63, s. 81; 2002, c. 70, s. 153; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.266. The Authority shall inspect or cause to be inspected the affairs of a guarantee fund at least once every three years or whenever it considers such an inspection necessary for the protection of the members.

1985, c. 17, s. 6; 1996, c. 63, s. 81; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

93.267. Every person who inspects the affairs of a guarantee fund shall, at any reasonable time, have access to its books, registers, accounts and other records, and every person having the custody thereof shall facilitate his examination of them. The person may make copies of all the documents.

He may also require from the directors and the employees the information and explanations necessary for the carrying out of his duties.

1985, c. 17, s. 6; 1986, c. 95, s. 26; 1996, c. 63, s. 81.

93.268. The Authority may, at all times, require the filing by the guarantee fund of any report or statement.

1985, c. 17, s. 6; 1996, c. 63, s. 81; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

DIVISION XI

Repealed, 2008, c. 7, s. 30.

1985, c. 17, s. 6; 2008, c. 7, s. 30.

93.269. (Repealed).

1985, c. 17, s. 6; 1996, c. 63, s. 31, s. 81; 2002, c. 45, s. 221; 2004, c. 37, s. 90; 2008, c. 7, s. 30.

93.270. (Repealed).

1985, c. 17, s. 6; 1996, c. 63, s. 81; 2008, c. 7, s. 30.

93.271. (Repealed).

1985, c. 17, s. 6; 1993, c. 48, s. 144; 1996, c. 63, s. 81, s. 82; 2002, c. 45, s. 222; 2004, c. 37, s. 90; 2008, c. 7, s. 30.

93.272. (Repealed).

1985, c. 17, s. 6; 1996, c. 63, s. 81; 2008, c. 7, s. 30.

93.273. (Repealed).

1985, c. 17, s. 6; 1996, c. 63, s. 81; 2008, c. 7, s. 30.

CHAPTER IV CONSTITUTION AND ADMINISTRATION OF MUTUAL BENEFIT ASSOCIATIONS

1985, c. 17, s. 7; 1999, c. 40, s. 33.

DIVISION I CONSTITUTION

1985, c. 17, s. 8; 1999, c. 40, s. 33.

94. No legal person may, after 6 June 2002, be constituted in Québec to engage in mutual benefit insurance activities.

1974, c. 70, s. 94; 1996, c. 63, s. 80; 1999, c. 40, s. 33; 2002, c. 70, s. 60.

95. (Repealed).

1974, c. 70, s. 95; 1982, c. 52, s. 80; 1985, c. 17, s. 9; 1999, c. 40, s. 33; 2002, c. 70, s. 61.

96. (Repealed).

1974, c. 70, s. 96; 1985, c. 17, s. 9; 1999, c. 40, s. 33; 2002, c. 70, s. 61.

97. (Repealed).

1974, c. 70, s. 97; 1985, c. 17, s. 10.

98. (Repealed).

1974, c. 70, s. 98; 1982, c. 52, s. 79; 1985, c. 17, s. 11; 1996, c. 63, s. 83, s. 88; 1999, c. 40, s. 33; 2002, c. 70, s. 61.

99. (Repealed).

1974, c. 70, s. 99; 1982, c. 52, s. 79; 1993, c. 48, s. 145; 1999, c. 40, s. 33; 2002, c. 70, s. 61.

100. (Repealed).

1974, c. 70, s. 100; 2002, c. 70, s. 61.

100.1. (Repealed).

1993, c. 48, s. 146; 1996, c. 63, s. 83; 2002, c. 70, s. 61.

101. (Repealed).

1974, c. 70, s. 101; 1982, c. 52, s. 79; 1985, c. 17, s. 12; 1993, c. 48, s. 147; 1999, c. 40, s. 33; 2002, c. 70, s. 61.

102. (Repealed).

1974, c. 70, s. 102; 1975, c. 76, s. 11; 1977, c. 5, s. 14; 1981, c. 9, s. 24; 1982, c. 52, s. 66; 1985, c. 17, s. 13; 1993, c. 48, s. 148; 1996, c. 63, s. 80; 2002, c. 70, s. 61.

103. (Repealed).

1974, c. 70, s. 103; 1985, c. 17, s. 14; 1993, c. 48, s. 149; 1999, c. 40, s. 33; 2002, c. 70, s. 61.

DIVISION II

Repealed, 2002, c. 70, s. 61.

2002, c. 70, s. 61.

104. (Repealed).

1974, c. 70, s. 104; 1999, c. 40, s. 33; 2002, c. 70, s. 61.

105. (Repealed).

1974, c. 70, s. 105; 1999, c. 40, s. 33; 2002, c. 70, s. 61.

DIVISION III NAME

1996, c. 63, s. 83.

106. The name of a mutual benefit association must be in conformity with section 93.22.

It must always include the words “mutual benefit association”.

Paragraphs 7 and 8 of section 93.22 do not apply to legal persons constituted before 20 October 1976.

1974, c. 70, s. 106; 1985, c. 17, s. 15; 1993, c. 48, s. 150; 1996, c. 63, s. 80, s. 83; 1999, c. 40, s. 33.

107. Only mutual benefit associations may use in their names or in carrying on their activities the words “mutual benefit association”, except to the extent determined by regulation of the Government.

1974, c. 70, s. 107; 1985, c. 17, s. 15; 1996, c. 63, s. 83.

108. (Repealed).

1974, c. 70, s. 108; 1985, c. 17, s. 15; 1996, c. 63, s. 33.

109. After requesting the advice of the Authority, the Minister may change any name in accordance with sections 93.25 to 93.27.4, adapted as required.

1974, c. 70, s. 109; 1982, c. 52, s. 79, s. 80; 1983, c. 54, s. 11; 1993, c. 48, s. 151; 1996, c. 63, s. 83; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

DIVISION IV MEMBERS

110. (Repealed).

1974, c. 70, s. 110; 1985, c. 17, s. 16.

111. The members of a mutual benefit association are the founders and any other person who:

(a)  signs an application for membership;

(b)  subscribes to the premiums, assessments or gifts provided for by the by-laws of the association; and

(c)  undertakes to comply with the by-laws of the association.

1974, c. 70, s. 111.

112. (Repealed).

1974, c. 70, s. 112; 1985, c. 17, s. 16.

DIVISION V GENERAL MEETING

113. The members of the association shall constitute its general meeting when convened at an annual or special meeting.

1974, c. 70, s. 113.

114. At a general meeting no member shall be entitled to more than one vote.

Such vote may be given by a proxy holding a power of attorney whether or not he is a member of the association.

1974, c. 70, s. 114.

115. To be valid, the power of attorney must have been given within the three months preceding the meeting and presented to the secretary at least ten days before such meeting.

The power of attorney shall be valid only for the meeting contemplated and any resumptions of such meeting.

1974, c. 70, s. 115.

116. Any power of attorney may be revoked before the contemplated meeting is held.

1974, c. 70, s. 116.

117. Every member whose assessments are in arrears is forbidden to vote.

1974, c. 70, s. 117.

118. (Repealed).

1974, c. 70, s. 118; 1990, c. 86, s. 17.

119. Unless otherwise provided by by-law, 25 members in good standing shall be a quorum.

There is no quorum if more than one-half of the members or proxies present are directors, other mandataries or employees of the association.

1974, c. 70, s. 119; 1990, c. 86, s. 18.

120. The general meeting may amend the internal by-laws.

1974, c. 70, s. 120.

121. The general meeting may, by special by-law, change the head office or the name of the association.

Such by-law shall not come into force until the Authority approves it and sends a notice to that effect to the enterprise registrar who shall deposit it in the register.

1974, c. 70, s. 121; 1982, c. 52, s. 67; 1993, c. 48, s. 152; 1996, c. 63, s. 83; 2002, c. 45, s. 225; 2004, c. 37, s. 90.

122. Decisions at a general meeting are taken by a majority vote of the members or delegates present, the chairman having a casting vote.

However, a special by-law must, to be adopted, receive the approval of at least two-thirds of the votes.

1974, c. 70, s. 122.

123. The members must meet for the annual meeting before 31 March each year to approve the annual report, elect the directors, ratify the remuneration fixed for the secretary, appoint the auditor and pronounce upon the assessments and any other matter concerning the association.

1974, c. 70, s. 123.

124. The board of directors as well as the chairman or the vice-chairman may order the holding of a special meeting when they consider it expedient.

Furthermore, the board of directors must order the holding of a special meeting if one-fifth of the members so request.

1974, c. 70, s. 124.

125. Every notice calling a general meeting shall be given at least seven days before it is held, by regular mail, or, at least fifteen days before it is held, in a daily newspaper circulating in the locality where the association has its head office.

The notice must indicate the place, date and time of the meeting and, where such is the case, give a summary of any amendment proposed to the by-laws of the association.

The association shall also indicate the date, time and place of its annual meeting in prominent and conspicuous type on all premium or assessment notices it sends its members.

1974, c. 70, s. 125; 1985, c. 17, s. 17.

126. Any meeting requested in accordance with the second paragraph of section 124 that has not been held within twenty-one days of the request may be called by two signatories thereof.

1974, c. 70, s. 126.

127. A special meeting may make decisions only in regard to the matters mentioned in the notice calling the meeting.

Any special meeting called for that purpose may remove a director from office provided that the prior approval of the Authority has been received.

1974, c. 70, s. 127; 1982, c. 52, s. 80; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

DIVISION VI BOARD OF DIRECTORS

128. The board of directors of any association shall be composed of five directors chosen from among the members at the annual meeting.

The by-laws, however, may provide for a greater number of directors, not to exceed fifteen.

1974, c. 70, s. 128.

129. (Repealed).

1974, c. 70, s. 129; 1985, c. 17, s. 18.

130. The following persons shall not be directors of the association:

(1)  employees of the association;

(2)  insurance representatives, claims adjusters and directors or officers of another legal person dealing in a similar capacity with the association.

1974, c. 70, s. 130; 1990, c. 86, s. 19; 1990, c. 86, s. 62; 1996, c. 63, s. 80; 1998, c. 37, s. 507.

131. The directors shall remain in office until their successors are elected and they shall be re-eligible.

1974, c. 70, s. 131.

132. The term of office of the directors is one year; it may be extended to two years or three years by a special by-law. In that case, a certain number of directors shall be replaced each year in the order of rotation the by-law shall fix. The by-law must provide for replacement of as constant a number of directors as possible each year.

1974, c. 70, s. 132.

133. No member shall be eligible for the office of director while any assessment he owes the association remains unpaid.

1974, c. 70, s. 133.

134. The board of directors shall manage the affairs of the association and shall exercise, in accordance with the by-laws, the powers generally or specially delegated to it by the general meeting.

1974, c. 70, s. 134.

135. The board of directors shall in particular:

(a)  require of any person entrusted with the management or safekeeping of funds of the association a deposit of an amount of at least $5,000 and determine the nature of it;

(b)  fix the insurance rates or, as the case may be, the amount of assessments and the amounts for which insurance may be contracted or benefits granted;

(c)  at the annual meeting, give an account of its operations and submit the annual report;

(d)  forward a certified copy of the annual statement according to the requirements of section 305.

1974, c. 70, s. 135.

136. An absolute majority of the directors shall constitute a quorum of the board of directors.

Decisions of the board of directors shall be taken by a majority vote of the directors present. The chairman shall have a casting vote.

1974, c. 70, s. 136.

137. The board of directors shall meet at least once quarterly and whenever convened in writing by the president, the vice-president or two directors. Notice of this meeting must be given to the directors at least two days before it is to be held or within the time provided for by by-law.

The meeting shall be held at the place indicated in the notice of meeting or specified at adjournment.

1974, c. 70, s. 137; 1999, c. 40, s. 33.

138. In accordance with the by-laws of the association, the directors may be remunerated and are entitled to the reimbursement of justifiable expenses incurred by them in the performance of their duties.

1974, c. 70, s. 138; 1979, c. 33, s. 4.

139. Vacancies occurring on the board of directors during term shall not entail elections, but the directors shall provisionally appoint qualified members to fill the vacancies; however, where a vacancy results in the want of a quorum, one director or two members may order the secretary to call a special meeting of the members to fill it.

1974, c. 70, s. 139.

DIVISION VII MANAGEMENT

140. At its first meeting following the organizing meeting or annual meeting, the board of directors shall choose a chairman and a vice-chairman from among the directors. Provided there is a quorum, such meeting may be held without prior notice, during or immediately after the organizing meeting or annual meeting.

1974, c. 70, s. 140.

141. The chairman and vice-chairman of the board of directors shall be the president and vice-president respectively of the association.

The vice-chairman shall exercise the duties of the chairman if the latter is absent or unable to act.

1974, c. 70, s. 141.

142. The board of directors shall appoint a secretary and, subject to section 123, shall fix his remuneration.

1974, c. 70, s. 142.

143. The by-laws shall determine the powers and duties of the president, the vice-president, the secretary and any other staff member of the association.

1974, c. 70, s. 143.

DIVISION VIII REGISTERS AND CONTRACTS

144. The board of directors may designate the persons authorized to sign any contract, policy or other document on behalf of the association.

1974, c. 70, s. 144.

145. Each association must keep at its head office:

(a)  a register containing its by-laws and the minutes of the general meetings and meetings of the board of directors;

(b)  a register of all the policies issued by the association including the surname, name, address and age of each member;

(c)  (subparagraph replaced).

The members of the association may examine the registers at the head office of the association on working days during regular office hours.

1974, c. 70, s. 145; 1985, c. 17, s. 19; 1996, c. 63, s. 88.

DIVISION IX

Repealed, 1985, c. 17, s. 20.

1985, c. 17, s. 20.

146. (Repealed).

1974, c. 70, s. 146; 1979, c. 33, s. 5; 1985, c. 17, s. 20.

147. (Repealed).

1974, c. 70, s. 147; 1985, c. 17, s. 20.

148. (Repealed).

1974, c. 70, s. 148; 1985, c. 17, s. 20.

149. (Repealed).

1974, c. 70, s. 149; 1979, c. 33, s. 6; 1985, c. 17, s. 20.

150. (Repealed).

1974, c. 70, s. 150; 1985, c. 17, s. 20.

151. (Repealed).

1974, c. 70, s. 151; 1985, c. 17, s. 20.

152. (Repealed).

1974, c. 70, s. 152; 1985, c. 17, s. 20.

153. (Repealed).

1974, c. 70, s. 153; 1985, c. 17, s. 20.

154. (Repealed).

1974, c. 70, s. 154; 1985, c. 17, s. 20.

155. (Repealed).

1974, c. 70, s. 155; 1985, c. 17, s. 20.

156. (Repealed).

1974, c. 70, s. 156; 1985, c. 17, s. 20.

157. (Repealed).

1974, c. 70, s. 157; 1985, c. 17, s. 20.

158. (Repealed).

1974, c. 70, s. 158; 1985, c. 17, s. 20.

159. (Repealed).

1974, c. 70, s. 159; 1985, c. 17, s. 20.

160. (Repealed).

1974, c. 70, s. 160; 1985, c. 17, s. 20.

161. (Repealed).

1974, c. 70, s. 161; 1985, c. 17, s. 20.

162. (Repealed).

1974, c. 70, s. 162; 1985, c. 17, s. 20.

163. (Repealed).

1974, c. 70, s. 163; 1985, c. 17, s. 20.

DIVISION X OPERATION OF A MUTUAL BENEFIT ASSOCIATION

164. In this division “mutual benefit association” also means any legal person transacting mutual benefits and constituted under an Act other than an Act of Québec, but only in respect of its activities in Québec.

1974, c. 70, s. 164; 1996, c. 63, s. 80; 1999, c. 40, s. 33.

165. Amounts paid or benefits conferred by a mutual benefit association must not exceed the amount levied for that purpose less the administrative costs incurred in that respect according to the standards prescribed by the regulations made by the Government, and must also exceed the amounts authorized by the regulations for the classes of benefits contemplated.

1974, c. 70, s. 165.

166. Every association shall set up its accounts so that each kind of benefit or indemnity paid to the members may be separately managed and be the object of a separate fund.

1974, c. 70, s. 166.

167. In addition to the benefit or indemnity funds, a fund for general expenditures shall be established; all such funds must be self-sufficient by way of premiums or assessments collected for that purpose without ever drawing from other funds.

1974, c. 70, s. 167; 1979, c. 33, s. 7.

168. Whenever a separate fund ceases to be adequate to the purposes for which it was established, the association may liquidate it.

1974, c. 70, s. 168.

169. The by-laws of the association may allow its members to subscribe to any, several or all of the special funds contemplated by section 166, and subscribe to any given fund without thereby being deprived of their vested rights.

1974, c. 70, s. 169.

170. With respect to and between the members, each fund is liable for only its own debts, except in the case of a general winding-up, in which case all the funds are liable for the general debts after payment by each fund of its own debts.

1974, c. 70, s. 170.

171. The association may, with prior authorization of the Authority, pay into a separate fund any amount from another fund, or return to the fund from which it came any amount that has been so paid.

1974, c. 70, s. 171; 1982, c. 52, s. 80; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

172. The directors of the association are held jointly and severally liable for any payment made in contravention of section 165. If the association fails to take against them the necessary measures, any member of the association is deemed to have a sufficient interest to sue, on behalf and at the expense of the association, for reimbursement of the amounts so paid.

1974, c. 70, s. 172.

173. The fiscal year of the associations corresponds to the calendar year.

1974, c. 70, s. 173.

DIVISION XI ANNULMENT OF CHARTER

174. Subject to the other applicable provisions, the charter of a mutual association may be annulled in accordance with the formalities provided in section 41, after

(a)  two years of non-user dating from constitution;

(b)  one year of non-user following a period of activity;

(c)  its licence has been suspended for one year or has remained cancelled for three months, without issue of a new licence.

1974, c. 70, s. 174; 1993, c. 48, s. 153; 1999, c. 40, s. 33.

CHAPTER IV.1 PROFESSIONAL ORDER

1987, c. 54, s. 2; 1994, c. 40, s. 457.

DIVISION I AUTHORIZATION TO INSURE THE MEMBERS OF THE ORDER

1987, c. 54, s. 2; 1994, c. 40, s. 457.

174.1. A professional order governed by the Professional Code (chapter C‐26) may, if authorized by the Minister and if the holder of a licence issued by the Authority, insure its members in respect of professional liability. In addition, it may insure the risks referred to in the second paragraph of section 220 provided it is authorized by the licence.

The professional liability insurance shall be valid whether claims are brought against the insured personally or against the partnership of which the insured is or was a member.

A professional order may also, subject to the same conditions and for the purposes specified in paragraph g of section 93 of the Professional Code, provide liability insurance to a partnership or company within which members of the order are authorized to carry on their professional activities in accordance with section 187.11 of that Code.

1987, c. 54, s. 2; 1994, c. 40, s. 457; 1996, c. 63, s. 35; 2001, c. 34, s. 11; 2003, c. 1, s. 6; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

174.2. To obtain the Minister’s authorization, the professional order shall transmit to the Authority an application signed by its president and stating

(1)  that a by-law was passed to impose on its members, certain classes of them and, where applicable, those who carry on their professional activities within a partnership or company in accordance with section 187.11 of the Professional Code (chapter C‐26) the obligation to contribute to a professional liability insurance fund;

(2)  that it has passed a resolution for the creation of such an insurance fund;

(3)  that the sums which will be payable by its members will be sufficient to provide for the financing of its insurance transactions and to maintain a surplus of assets over liabilities equal to or greater than the minimum amount required pursuant to section 275.

However, if the professional order is already authorized to insure its members in respect of professional liability, the order shall, before it may provide liability insurance to a partnership or company within which members of the order are authorized to carry on their professional activities in accordance with section 187.11 of the Professional Code, transmit to the Authority an application signed by its president and stating

(1)  that a by-law was passed to impose on the members of the order who carry on their professional activities within such a partnership or company the obligation to contribute to a professional liability insurance fund for the purposes specified in paragraph g of section 93 of that Code;

(2)   that the sums which will be payable by its members will be sufficient to provide for the financing of its insurance transactions and to maintain a surplus of assets over liabilities equal to or greater than the minimum amount required pursuant to section 275.

1987, c. 54, s. 2; 1994, c. 40, s. 457; 2001, c. 34, s. 12; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

174.3. The application referred to in the first paragraph of section 174.2 must be accompanied with the following documents:

(1)  a development plan supported by financial statements over a period of not less than three years, showing the calculation assumptions used;

(2)  a plan of operation stating the name and address of the administrator, if any, who will be entrusted with the administration of the insurance fund;

(3)  a certified true copy of the resolution of the Bureau of the professional order creating the insurance fund.

The application referred to in the second paragraph of section 174.2 must be accompanied with the documents specified in subparagraph 1 of the first paragraph.

1987, c. 54, s. 2; 1994, c. 40, s. 457; 2001, c. 34, s. 13; 2002, c. 70, s. 62.

174.4. The Authority may require any additional information and document it deems necessary for the consideration of the application.

1987, c. 54, s. 2; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

174.5. The Minister may, if he considers it expedient and after obtaining the opinion of the Authority, grant to the professional order the authorization to insure its members in respect of professional liability and, for the purposes specified in paragraph g of section 93 of the Professional Code (chapter C‐26), to provide liability insurance to a partnership or company within which members of the order are authorized to carry on their professional activities in accordance with section 187.11 of that Code.

1987, c. 54, s. 2; 1994, c. 40, s. 457; 2001, c. 34, s. 14; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

DIVISION II ADMINISTRATION OF THE INSURANCE FUND

1987, c. 54, s. 2.

174.6. The insurance fund shall be administered by a board of directors consisting of not less than seven members appointed by the Bureau of the professional order.

A reference to the directors and officers of an insurer is, for the purposes of the application of this Act and the regulations thereunder to a professional order, a reference to the directors and officers of its insurance fund. A reference to the officers of an insurer is also a reference to the administrators of an insurance fund and, where the administrators are legal persons, to the directors thereof.

1987, c. 54, s. 2; 1990, c. 86, s. 20; 1994, c. 40, s. 457; 1996, c. 63, s. 80; 2002, c. 70, s. 63.

174.7. A member of the board of directors of the insurance fund of a professional order need not be a member of that professional order.

1987, c. 54, s. 2; 1994, c. 40, s. 457.

174.8. The following persons are disqualified from office as director of the insurance fund:

(1)  an insurance representative, a claims adjuster and a director or an officer of another legal person dealing as such with the professional order;

(2)  an undischarged bankrupt;

(3)  a minor;

(4)  a person of full age under protective supervision or who has been totally or partially deprived of the right to exercise his civil rights by a court of another jurisdiction;

(5)  an employee of a professional order whose main duty is concerned with the administration of the insurance fund;

(6)  a director, officer or employee of the administrator entrusted with the day-to-day operation of the fund.

1987, c. 54, s. 2; 1989, c. 54, s. 156; 1990, c. 86, s. 21; 1989, c. 48, s. 230; 1994, c. 40, s. 457; 1996, c. 63, s. 80, s. 87; 1998, c. 37, s. 508.

174.9. The total remuneration that may be paid to the directors for a given period must be determined by the Bureau of the professional order. No director may receive any remuneration in his capacity as such before a resolution to that effect is passed.

1987, c. 54, s. 2; 1994, c. 40, s. 457.

174.10. The professional order shall assume the defence of its directors who are prosecuted by a third person for an act done in the performance of their duties and shall pay any damages awarded as compensation for any injury resulting from that act, unless they have committed a grievous offence or a personal offence separable from their duties.

Notwithstanding the foregoing, in a penal or criminal proceeding the professional order shall assume only the payment of the expenses of its directors if they had reasonable grounds to believe that their conduct was in conformity with the law or if they have been freed or acquitted.

The professional order shall assume the expenses of its directors if, having prosecuted them for an act done in the performance of their duties, it loses its case and the court so decides.

If the professional order wins its case only in part, the court may determine the amount of the expenses it shall assume.

1987, c. 54, s. 2; 1994, c. 40, s. 457; 1996, c. 63, s. 86.

174.11. The board of directors of the insurance fund may entrust an administrator with the current operations of the insurance fund of the professional order, which include the collection of premiums, the issuance of policies, the payment of indemnities, the ceded reinsurance and the investment of the assets of the insurance fund.

1987, c. 54, s. 2; 1994, c. 40, s. 457.

DIVISION III ASSETS OF THE INSURANCE FUND

1987, c. 54, s. 2.

174.12. The insurance fund shall be made up of the premiums and the other sums fixed pursuant to subparagraph p of the first paragraph of section 86 of the Professional Code (chapter C-26), and of the income generated thereby.

1987, c. 54, s. 2.

174.13. The assets of the insurance fund shall constitute a patrimony separate from the other assets of the professional order and shall be appropriated exclusively to its liability insurance transactions and, where applicable, to transactions referred to in the second paragraph of section 220.

The assets of the fund shall be reported as separate items in the books, registers and accounts of the professional order.

1987, c. 54, s. 2; 1994, c. 40, s. 457; 2001, c. 34, s. 15; 2003, c. 1, s. 7.

174.14. The fiscal year of the insurance fund is the calendar year.

1987, c. 54, s. 2.

174.15. No creditor of the professional order has any right in the assets of the insurance fund unless his claim results from the insurance transactions of the order.

Similarly, no creditor of the insurance fund has any right in the other assets of the professional order.

1987, c. 54, s. 2; 1994, c. 40, s. 457; 2001, c. 34, s. 16; 2003, c. 1, s. 8.

174.16. All costs relating to the operations of the insurance fund shall be paid out of its assets.

1987, c. 54, s. 2.

174.17. If the Authority is of opinion that the sums which the members or certain classes of members of a professional order are required to pay into its insurance fund are no longer sufficient, in view of its obligations, to maintain an excess amount of assets over liabilities equal to or greater than the minimum amount required under section 275, the Authority may order the professional order, after giving it the opportunity to present observations, to increase such sums up to the amount and for the period it determines, so as to cover operating costs of the insurance fund.

1987, c. 54, s. 2; 1994, c. 40, s. 457; 1997, c. 43, s. 77; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

174.18. If the professional order fails to comply with the order of the Authority, the Authority may apply by motion to a judge of the Superior Court for an injunction enjoining it to comply.

The motion for injunction institutes the proceedings.

The procedure provided in the Code of Civil Procedure (chapter C‐25) applies. However, the Authority is not required to give security.

1987, c. 54, s. 2; 1994, c. 40, s. 457; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

CHAPTER V AMALGAMATION, CONVERSION AND DEMUTUALIZATION

2002, c. 70, s. 64.

DIVISION I PREREQUISITES

175. The following may amalgamate with an insurance company constituted under this Act:

(a)  any other company so constituted;

(b)  any insurance company constituted by an Act of Québec;

(c)  any insurance company constituted under Division I of the Insurance Act (Revised Statutes, 1964, chapter 295) replaced by chapter 70 of the statutes of 1974.

1974, c. 70, s. 175; 1999, c. 40, s. 33.

176. Every insurance company contemplated in paragraphs b and c of section 175 may be converted into an insurance company governed by this Act.

Several insurance companies contemplated in paragraphs b and c of section 175 may also amalgamate if they are at the same time converted into an insurance company governed by this Act.

1974, c. 70, s. 176; 1984, c. 22, s. 35; 2002, c. 70, s. 65.

177. An insurance company resulting from amalgamation or conversion shall fulfil the same conditions as those prescribed by this Act for constitution of an insurance company.

1974, c. 70, s. 177; 1999, c. 40, s. 33.

178. Mutual insurance associations may amalgamate. The same applies to mutual damage-insurance companies.

1974, c. 70, s. 178; 1985, c. 17, s. 21.

178.1. A mutual damage-insurance company may be converted into a mutual insurance association.

2002, c. 70, s. 66.

179. A mutual insurance association may, with the authorization of its federation and of the Minister, be converted into a mutual damage-insurance company.

The company resulting from the conversion may be converted into a capital stock company transacting damage insurance.

Before granting an authorization referred to under this section, the Minister shall obtain the advice of the Authority.

1974, c. 70, s. 179; 1985, c. 17, s. 21; 2002, c. 70, s. 67; 2004, c. 37, s. 90.

180. (Repealed).

1974, c. 70, s. 180; 1985, c. 17, s. 22.

181. The following may amalgamate with a mutual benefit association governed by this Act:

(a)  any other association so constituted;

(b)  any mutual benefit association constituted under Division VIII of the Insurance Act (Revised Statutes, 1964, chapter 295) replaced by chapter 70 of the statutes of 1974;

(c)  any other legal person transacting mutual benefits.

1974, c. 70, s. 181; 1996, c. 63, s. 80; 1999, c. 40, s. 33.

182. Every mutual benefit association contemplated in paragraphs b and c of section 181 may also be converted into a mutual benefit association governed by this Act.

1974, c. 70, s. 182.

183. Several mutual benefit associations contemplated in paragraphs b and c of section 181 may also amalgamate if they are converted at the same time into a mutual benefit association governed by this Act.

1974, c. 70, s. 183.

184. Every mutual benefit association resulting from an amalgamation must comply with the conditions of constitution prescribed by this Act for mutual benefit associations.

1974, c. 70, s. 184; 1999, c. 40, s. 33; 2002, c. 70, s. 68.

DIVISION II AMALGAMATION

184.1. Insurance companies, governed by Part I, IA or II of the Companies Act (chapter C‐38), may amalgamate.

Subject to the provisions of this division, sections 123.116 to 123.130 of the Companies Act apply to the amalgamation of insurance companies.

Amalgamation effects continuance under Part IA of the aid Act without it being necessary for an insurance company to be continued in accordance with sections 123.131 to 123.139 of that Act.

2002, c. 70, s. 69.

185. Legal persons amalgamating under this Act may make the contracts and agreements necessary for that purpose.

1974, c. 70, s. 185; 1996, c. 63, s. 80.

186. Legal persons proposing to amalgamate shall draw up an agreement in duplicate prescribing:

(a)  the conditions of the amalgamation and the mode of carrying it out;

(b)  the name of the legal person resulting from the amalgamation;

(c)  the head office of the legal person resulting from the amalgamation;

(d)  the classes of insurance to be transacted;

(e)  the names, occupations and domiciles of its first directors;

(f)  the mode of election of its directors;

(g)  in the case of joint stock companies, the number of shares constituting the capital of each amalgamating company, the par value of each share, and the mode of conversion of the capital stock;

(g.1)  in the case of joint stock companies, the name, occupation and place of residence of every natural person who, from amalgamation, would hold, alone or with his associates within the meaning of section 49, 10% or more of the voting rights attached to the shares in the company, and the name and place of constitution or continuance of every legal person that, from amalgamation, would hold, alone or with its associates within the meaning of section 49, 10% or more of the voting rights attached to the shares in the company, and the name of the shareholder who holds a controlling interest in the legal person;

(h)  in the case of mutual insurance companies and mutual benefit associations, the number of members of each and the amounts and kind of insurance they have contracted with each or, as the case may be, the payments or other guaranteed benefits;

(h.1)  in the case of mutual insurance associations, the name of the federation with which the mutual insurance association resulting from the amalgamation shall be affiliated, the number of common shares subscribed in each amalgamating mutual insurance association, the price of each share and the modalities of their conversion into common shares of the mutual insurance association resulting from the amalgamation;

(i)  any other measure necessary to the amalgamation and to the administration and operation of the new legal person.

Each interested legal person shall call its general meeting and submit the agreement to it for approval.

1974, c. 70, s. 186; 1985, c. 17, s. 23; 1990, c. 86, s. 22; 1996, c. 63, s. 80, s. 83, s. 88; 1999, c. 40, s. 33.

187. The agreement must be approved by the general meeting of each party, by a two-thirds majority of the votes recorded, and the secretaries of the legal persons shall thereupon certify such approval on the duplicates of the agreement.

In the case of a company, the majority required by the first paragraph must be expressed in terms of the value of the shares represented by the shareholders present.

1974, c. 70, s. 187; 1996, c. 63, s. 80.

188. A notice of the agreement, accompanied with the fees prescribed by regulation of the Government under the Act respecting the legal publicity of sole proprietorships, partnerships and legal persons (chapter P‐45), shall be transmitted to the Authority which shall transmit it to the enterprise registrar who shall deposit it in the register. The notice shall be published in a daily newspaper circulating in every locality in which the head office of any of the legal persons is situated, for four consecutive weeks.

1974, c. 70, s. 188; 1993, c. 48, s. 154; 1996, c. 63, s. 80; 2002, c. 45, s. 226; 2004, c. 37, s. 90.

189. The amalgamating legal persons shall file a joint application requesting the Minister to confirm the agreement and, in the case of companies, to confirm the agreement and authorize the enterprise registrar to draw up a certificate of amalgamation and deposit a copy of the articles of amalgamation in the register.

The legal persons shall transmit one copy of the amalgamation agreement to the Minister and two copies to the Authority.

1974, c. 70, s. 189; 1984, c. 22, s. 36; 1993, c. 48, s. 155; 1996, c. 63, s. 80; 2002, c. 70, s. 70; 2004, c. 37, s. 90.

190. The Minister shall accept the application only after obtaining the advice of the Authority, and if he considers it not contrary to the interests of the insured or the public.

1974, c. 70, s. 190; 1982, c. 52, s. 80; 1984, c. 22, s. 37; 2002, c. 70, s. 71; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

191. If the Minister accepts the application, the Authority shall confirm such acceptance on the copies of the amalgamation agreement.

If the applicant is a company, the Authority shall transmit a copy of the amalgamation agreement to the enterprise registrar, who shall deposit it in the register. The enterprise registrar shall then draw up the certificate of amalgamation and deposit it in the register with a copy of the articles of amalgamation. The enterprise registrar shall transmit a certified copy of the articles of amalgamation and certificate of amalgamation to the Authority.

The articles of amalgamation must specify the classes of insurance the company is authorized to transact.

If the applicant is not a company, the Authority shall transmit a copy of the amalgamation agreement to the enterprise registrar, who shall deposit it in the register.

1974, c. 70, s. 191; 1982, c. 52, s. 79; 1984, c. 22, s. 38; 1993, c. 48, s. 156; 2002, c. 70, s. 72; 2003, c. 1, s. 9; 2004, c. 37, s. 90.

192. In the case of mutual associations, one of the copies of the amalgamation agreement shall be sent after the deposit in the register referred to in section 191 to the secretary of the legal person formed by the amalgamation, who shall keep it in the records of the latter.

Upon the date of deposit in the register referred to in section 191 or, in the case of companies, on the date shown on the certificate of amalgamation, the amalgamation shall be effected and the legal persons subject thereto shall form one legal person, recognized by the name established by the agreement.

1974, c. 70, s. 192; 1975, c. 76, s. 11; 1977, c. 5, s. 14; 1981, c. 9, s. 24; 1982, c. 52, s. 68; 1993, c. 48, s. 157; 1996, c. 63, s. 80, s. 83; 2002, c. 70, s. 73.

193. The legal person resulting from the amalgamation shall enjoy all the rights and assume all the obligations of the original legal persons and suits to which they are party may be continued by or against it without continuance of suit.

1974, c. 70, s. 193; 1996, c. 63, s. 80.

DIVISION III CONVERSION

194. A legal person may be converted in accordance with this Act into another legal person by by-law of the legal person seeking the conversion.

Such by-law shall set forth:

(a)  the name of the new legal person;

(b)  the head office of the new legal person;

(c)  the classes of insurance to be transacted;

(d)  the names, occupations and domiciles of its first directors;

(e)  the mode of election of subsequent directors;

(f)  if the new legal person is to be a joint stock company, the number of shares constituting its capital, the par value of each share, where such is the case, and the mode of conversion of the capital stock;

(f.1)  where the new legal person is to be a joint stock company, the name, occupation and place of residence of every natural person who, from conversion, would hold, alone or with his associates within the meaning of section 49, 10% or more of the voting rights attached to the shares in the company, and the name and place of constitution or continuance of every legal person that, from conversion, would hold, alone or with its associates within the meaning of section 49, 10% or more of the voting rights attached to the shares in the company, and the name of the shareholder who holds a controlling interest in the legal person;

(g)  if the new legal person is to be a mutual insurance company, the number of members of the legal person and the amount of insurance they are to subscribe to the legal person or, as the case may be, the payments or other guaranteed benefits;

(h)  if the new legal person is to be a mutual insurance association, the number of members, the amount of the capital stock necessary to finance the operations of the association and to maintain an excess amount of assets over liabilities equal to or greater than the amount required under section 275, and the name of the federation that has undertaken to admit the association as a member.

No legal person may be converted into a mutual benefit association.

1974, c. 70, s. 194; 1985, c. 17, s. 24; 1990, c. 86, s. 23; 1996, c. 63, s. 80, s. 83, s. 88; 1999, c. 40, s. 33; 2002, c. 70, s. 74.

195. The conversion by-law must be submitted for approval to a special meeting of the interested legal person.

1974, c. 70, s. 195; 1996, c. 63, s. 80; 2002, c. 70, s. 75.

196. The by-law must be approved by the general meeting by a two-thirds majority of the votes recorded.

1974, c. 70, s. 196; 1985, c. 17, s. 25; 2002, c. 70, s. 76.

197. A notice of the by-law, accompanied with the fees prescribed by regulation of the Government under the Act respecting the legal publicity of sole proprietorships, partnerships and legal persons (chapter P‐45), shall be transmitted to the Authority which shall transmit it to the enterprise registrar who shall deposit it in the register. The notice shall be published in a daily newspaper circulating in the locality in which the legal person has its head office, for four consecutive weeks.

1974, c. 70, s. 197; 1993, c. 48, s. 158; 1996, c. 63, s. 80; 2002, c. 45, s. 228; 2004, c. 37, s. 90.

198. The legal person shall file an application requesting the Minister to confirm the conversion by-law and, in the case of companies, to confirm the by-law and authorize the enterprise registrar to draw up a certificate evidencing the conversion.

The application must be filed with the conversion by-law.

Before confirming the by-law, the Minister shall obtain the advice of the Authority.

1974, c. 70, s. 198; 1982, c. 52, s. 80; 1984, c. 22, s. 39; 1993, c. 48, s. 159; 1996, c. 63, s. 80; 2002, c. 70, s. 77; 2004, c. 37, s. 90.

199. If the Minister accepts the application, the Minister shall transmit the conversion by-law to the Authority. The Authority shall transmit the conversion by-law to the enterprise registrar, who shall deposit it in the register.

1974, c. 70, s. 199; 1982, c. 52, s. 79; 1984, c. 22, s. 40; 1993, c. 48, s. 160; 2002, c. 70, s. 78; 2004, c. 37, s. 90.

200. Unless the applicant is a company, the legal person that applied for conversion shall cease to exist on the date the conversion by-law referred to in section 199 is deposited in the register.

The rights, obligations and acts of the legal person shall not be affected by the conversion.

1974, c. 70, s. 200; 1993, c. 48, s. 161; 1996, c. 63, s. 80, s. 83; 2002, c. 70, s. 79.

200.0.1. If the legal person resulting from the conversion is a company, two copies of the articles of conversion signed by a director shall be filed with the enterprise registrar.

The articles of conversion must specify the classes of insurance the company is authorized to transact.

2002, c. 70, s. 79.

200.0.2. If the Minister accepts the application filed by a company under section 198, the enterprise registrar shall, on receiving the articles of conversion, the accompanying documents and the fees prescribed by government regulation, draw up a certificate evidencing the conversion in accordance with the procedure set out in section 123.15 of the Companies Act (chapter C‐38). The enterprise registrar shall transmit a certified copy of the articles and certificate of conversion to the Authority.

2002, c. 70, s. 79; 2004, c. 37, s. 90.

200.0.3. The legal person that applied for conversion shall cease to exist on the date appearing on the certificate of conversion.

The company resulting from the conversion shall have the rights and assume the obligations of the legal person that applied for conversion.

2002, c. 70, s. 79.

Not in force

DIVISION III.1 DEMUTUALIZATION

2002, c. 70, s. 79.

Not in force

200.0.4. Notwithstanding any special Act that is applicable to it, a mutual insurance company may, with the authorization of the Minister, be converted into a capital stock insurance company in accordance with the regulations of the Government and be continued under Part IA of the Companies Act (chapter C‐38).

A mutual insurance company wishing to be so authorized shall submit to the Minister a proposal for its conversion into a capital stock company. The proposal must be consistent with the regulations of the Government.

Before granting an authorization, the Minister shall obtain the advice of the Authority.

2002, c. 70, s. 79; 2004, c. 37, s. 90.

Not in force

200.0.5. After a decision in favour of demutualization is made by the board of directors, a demutualization plan must be approved by at least two-thirds of the votes cast by the members and at least two-thirds of the votes cast by participating policyholders, at a special meeting pertaining to

(1)  the demutualization proposal to be submitted to the Minister;

(2)  the articles of demutualization;

(3)  the proposed by-laws of the company resulting from the demutualization.

2002, c. 70, s. 79.

Not in force

200.0.6. The company must send to the members

(1)  a document explaining the demutualization plan in sufficient detail to permit a member to form an informed judgment on the terms of the proposal and its impact;

(2)  the information prescribed by regulation of the Government.

2002, c. 70, s. 79.

Not in force

200.0.7. Demutualization is effected, subject to the authorization of the Minister, by a by-law of the company.

The by-law must authorize one of the directors to sign the articles of demutualization, which must specify the classes of insurance the company is authorized to transact.

The board of directors may, before the certificate is drawn up, revoke the by-law if the by-law gives the board of directors the power to do so.

2002, c. 70, s. 79.

Not in force

200.0.8. The board of directors of the company deciding to apply for the authorization referred to in section 200.0.4 shall adopt the first by-laws of the converted company.

2002, c. 70, s. 79.

Not in force

200.0.9. The articles of demutualization shall include the provisions of section 123.12 of the Companies Act (chapter C‐38) except paragraph 3, as well as those allowed by section 123.13 of that Act.

The articles of demutualization must be filed with the documents prescribed by regulation of the Government and the other documents provided for in section 123.14 of that Act.

2002, c. 70, s. 79.

Not in force

200.0.10. Two copies of the articles of demutualization signed by the director authorized under the by-law referred to in section 200.0.7 must be filed with the enterprise registrar.

2002, c. 70, s. 79.

Not in force

200.0.11. If the Minister authorizes the demutualization, the enterprise registrar shall, on receiving the articles of demutualization, the accompanying documents and the fees prescribed by government regulation, draw up a certificate evidencing the demutualization of the company and its continuance in accordance with the procedure set out in section 123.15 of the Companies Act (chapter C‐38). The enterprise registrar shall transmit a certified copy of the certificate and articles of demutualization to the Authority.

2002, c. 70, s. 79; 2004, c. 37, s. 90.

Not in force

200.0.12. As of the date appearing on the certificate of demutualization,

(1)  the certificate of demutualization attests the existence of the mutual insurance company and its continuance as a company governed by Part IA of the Companies Act (chapter C‐38) and subject to this Act;

(2)  the articles of demutualization are deemed to be the articles of the continued company.

From that date, the company is converted into a capital stock company.

2002, c. 70, s. 79.

Not in force

200.0.13. Subject to the provisions of this division and the regulations of the Government, the rights and obligations of the mutual insurance company and those of its members shall not be affected by the demutualization.

2002, c. 70, s. 79.

CHAPTER V.1 CONTINUANCE

1984, c. 22, s. 41.

DIVISION I CONTINUANCE OF COMPANIES CONSTITUTED UNDER THE LAWS OF QUÉBEC

2002, c. 70, s. 80; 2003, c. 1, s. 10.

200.0.14. The directors of an insurance company to which Part I of the Companies Act (chapter C‐38) applies may adopt a by-law authorizing the company to be continued under Part IA of that Act.

The by-law must be ratified by a two-thirds majority of the votes cast by the shareholders at a special meeting.

2002, c. 70, s. 80.

200.0.15. Subject to the provisions of this Act, sections 123.133 to 123.139 of the Companies Act (chapter C-38) apply to the continuance.

The company shall request the Minister to confirm the continuance by-law if it makes amendments to its constituting act in accordance with section 123.134 of the Companies Act.

The Minister shall confirm the by-law only after obtaining the advice of the Authority.

The articles of continuance must specify the classes of insurance the company is authorized to transact.

2002, c. 70, s. 80; 2003, c. 1, s. 11; 2004, c. 37, s. 90.

200.0.16. At the request of a company constituted by special Act, the enterprise registrar shall, with the authorization of the Minister, draw up a certificate of continuance so that the provisions of Part IA of the Companies Act (chapter C‐38) may apply to it, to the extent that they are not inconsistent with the provisions of this Act or of its charter. Before granting the authorization, the Minister shall obtain the advice of the Authority.

The articles of amendment must specify the classes of insurance the company is authorized to transact.

The enterprise registrar shall transmit a certified copy of the articles and certificate of continuance to the Authority.

2002, c. 70, s. 80; 2004, c. 37, s. 90.

DIVISION II CONTINUANCE OF OTHER COMPANIES CONSTITUTED OUTSIDE QUÉBEC

2002, c. 70, s. 81.

200.1. Every insurance company constituted under an Act of the Parliament of Canada or of another province may be continued as an insurance company governed by this Act if so authorized under the Act that governs it.

1984, c. 22, s. 41; 1999, c. 40, s. 33.

200.2. An insurance company that has been continued must meet the same conditions as those imposed by this Act for the constitution of an insurance company.

1984, c. 22, s. 41; 1999, c. 40, s. 33.

200.3. Every insurance company wishing to continue its existence must pass a by-law to that effect.

The continuance by-law shall indicate

(a)  the name of the company continued;

(b)  its head office;

(c)  the classes of insurance to be transacted;

(d)  the surname, name, occupation and domicile of each of the members of its board of directors;

(e)  the mode of election of the directors;

(f)  in the case of a joint-stock company, the number of shares composing its capital, the par value of each share, where such is the case, and the mode of conversion of the capital stock;

(f.1)  in the case of a joint stock company, the name occupation and place of residence of every natural person who, from continuance, would hold, alone or with his associates within the meaning of section 49, 10% or more of the voting rights attached to the shares in the company, and the name and place of constitution or continuance of every legal person that, from continuance, would hold, alone or with its associates within the meaning of section 49, 10% or more of the voting rights attached to the shares in the company, and the name of the shareholder who holds a controlling interest in the legal person;

(g)  in the case of a mutual insurance company, the number of members of the company and the amount of insurance, payments or other guaranteed benefits.

1984, c. 22, s. 41; 1985, c. 17, s. 26; 1990, c. 86, s. 24; 1996, c. 63, s. 80, s. 83; 1999, c. 40, s. 33.

200.4. Sections 195, 196 and 197 apply, with the necessary changes, to the continuance by-law.

1984, c. 22, s. 41.

200.5. The company shall request the Minister to confirm the continuance by-law.

Before confirming the by-law, the Minister shall obtain the advice of the Authority.

1984, c. 22, s. 41; 2002, c. 70, s. 82; 2004, c. 37, s. 90.

200.6. If the Minister confirms the by-law, the enterprise registrar shall, on receiving the articles of continuance, the accompanying documents and the fees prescribed by government regulation, draw up a certificate evidencing the continuance of the company in accordance with the procedure set out in section 123.15 of the Companies Act (chapter C‐38).

The articles of continuance must specify the classes of insurance the company is authorized to transact.

The enterprise registrar shall transmit a certified copy of the articles and certificate of continuance to the Authority.

1984, c. 22, s. 41; 1993, c. 48, s. 162; 2002, c. 70, s. 83; 2004, c. 37, s. 90.

200.7. As of the date appearing on the certificate of continuance,

(1)  the certificate of continuance attests the existence of the company and its continuance under this Act;

(2)  the articles of continuance are deemed to be the articles of the continued company;

(3)  the continued insurance company is deemed to be an insurance company constituted under the statutes of Québec.

1984, c. 22, s. 41; 1999, c. 40, s. 33; 2002, c. 70, s. 84.

200.8. Subject to the deposit in the register prescribed in section 200.6, this Act applies to a company that has been continued from the date of its letters patent.

1984, c. 22, s. 41; 1993, c. 48, s. 163.

200.9. No rights, obligations or acts of a company or of its shareholders or members are affected by continuance.

1984, c. 22, s. 41.

TITLE IV CONTROL OF PRIVATE INSURANCE

CHAPTER I INSURER’S LICENCE

201. Only the legal persons authorized for that purpose by law and holding licences issued by the Authority shall act as insurers in Québec.

Lloyd’s may obtain such a licence; this Act applies to them with the necessary modifications as if they were constituted as an insurance company. The same applies to insurers issuing reciprocal insurance contracts who are constituted under laws other than those of Québec.

1974, c. 70, s. 201; 1982, c. 52, s. 80; 1996, c. 63, s. 80; 1999, c. 40, s. 33; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

202. Every licence must mention the classes of insurance in which it authorizes transacting.

1974, c. 70, s. 202.

203. (Repealed).

1974, c. 70, s. 203; 1979, c. 33, s. 8; 1999, c. 40, s. 33; 2002, c. 70, s. 85.

204. Damage insurers having no establishment in Québec may nevertheless issue insurance contracts there without a licence, provided such contracts are issued through a firm acting through a special broker referred to in the Act respecting the distribution of financial products and services (chapter D-9.2).

Such insurers may not, however, advertise or publicize their business in Québec.

1974, c. 70, s. 204; 1989, c. 48, s. 231; 1996, c. 63, s. 85; 1998, c. 37, s. 509.

205. Every legal person applying for a licence shall deliver to or furnish the Authority with the following documents and information:

(a)  the name and head office of the legal person;

(b)  the names, domiciles and occupations of the directors and officers of the legal person;

(c)  the classes of insurance that the legal person proposes to transact;

(d)  the place in Québec where the legal person is to have its head office or chief place of business;

(e)  the amount of the capital stock of the legal person, if any, the number of shares constituting it and their par value, where such is the case, the number of shares subscribed and the calls paid on these shares;

(f)  a copy of the constituting act of the legal person and of its by-laws, except if it is a professional order;

(g)  copies of its policies, endorsements and tariffs in accordance with the regulations;

(h)  to the extent provided for by the regulations, copies of the certificates of registration, licences or other certificates issued to the legal person by the superintendents, insurance commissioners or other competent federal, provincial or foreign authorities of the province, state or country in which the legal person was constituted;

(i)  to the extent and in the manner prescribed by regulation, the financial statements of the legal person or, where applicable, of its insurance fund, as they stood at the close of the last fiscal year preceding its application for a licence; if the legal person is required to file financial statements with a superintendent, insurance commissioner or other federal, provincial or foreign authority of a province, state or country in which it was constituted, it shall, to the same extent and in the same manner, file a copy of those financial statements;

(j)  (paragraph repealed) ;

(k)  (paragraph repealed) ;

(l)  the amount and number of subscribed and paid common shares and preferred shares, if any;

(m)  if it is a professional order, its plan of operation and, where such is the case, the name and address of the administrator to whom it has entrusted the management of its insurance fund and a copy of the management contract;

(n)  the name of the actuary designated to carry out the duties referred to in the second paragraph of section 309.

However, when an insurer that is not constituted under an Act applicable in Canada, does not hold a licence under an Act of the Parliament of Canada relating to insurance and intends to act only in surety insurance in Québec, requests an exemption from the Authority under section 211.1, the request must be accompanied by any document or information proving that the insurer qualifies for the exemption. The Authority may also require the insurer to provide any other document or information.

The legal person shall subsequently keep up to date the documents and information it is required to furnish under the first paragraph. In addition, every legal person not subject to Chapter IV of Title IV must transmit without delay any written statement of the actuary designated to carry out the duties referred to in the second paragraph of section 309 concerning his resignation or the revocation of his appointment together with the resolution ordering the revocation of the actuary’s appointment.

1974, c. 70, s. 205; 1982, c. 52, s. 69; 1984, c. 22, s. 42; 1985, c. 17, s. 27; 1987, c. 54, s. 3; 1994, c. 40, s. 457; 1996, c. 63, s. 36, s. 80, s. 83; 1999, c. 40, s. 33; 2002, c. 70, s. 86; 2002, c. 45, s. 243; 2004, c. 37, s. 90; 2008, c. 7, s. 31.

206. Every legal person not constituted under an Act of Québec has, in respect of the activities it carries on in Québec, the rights and obligations of an insurance company or mutual association constituted under Acts of Québec as the case may be. It is also bound to comply with its constituting Act if it is more restrictive.

1974, c. 70, s. 206; 1982, c. 52, s. 80; 1984, c. 22, s. 43; 1996, c. 63, s. 80; 1999, c. 40, s. 33.

206.1. No legal person constituted as or converted into a mutual benefit association after 6 June 2002 under any Act or statute other than an Act or statute of Québec may obtain a licence.

2002, c. 70, s. 87.

207. Every legal person not constituted under an Act of Québec which does not have its head office in Québec shall, when applying for a licence, appoint a chief representative in Québec.

The representative must be a person in authority who is resident in Québec.

The legal person must facilitate access, at its head office and each of its establishments, to any information and documents the representative considers necessary for the carrying out of his or her functions.

The representative shall also act as the attorney authorized to be served with the proceedings addressed to the legal person. However, where the representative is a legal person, any individual holding a managerial position with the legal person may be designated as attorney.

1974, c. 70, s. 207; 1984, c. 22, s. 43; 1996, c. 63, s. 80; 1999, c. 40, s. 33; 2002, c. 70, s. 88.

208. The power of attorney designating the chief representative shall

(1)  indicate his powers and their extent, in particular in respect of the other mandataries and intermediaries of the legal person in Québec;

(2)  mention the address of his establishment in Québec where proceedings addressed to the legal person may be served.

The power of attorney shall be conferred pursuant to a resolution of the board of directors of the legal person.

1974, c. 70, s. 208; 1984, c. 22, s. 43; 1996, c. 63, s. 80, s. 85.

209. Every legal person shall transmit to the Authority a copy of the power of attorney and of the amendments to it, if any.

1974, c. 70, s. 209; 1984, c. 22, s. 43; 1996, c. 63, s. 80; 2002, c. 70, s. 89; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

210. Every legal person, other than a mutual insurance association or a professional order, that applies for a licence shall meet the requirements for the constitution of an insurance company in Québec.

Notwithstanding the first paragraph, minimum capitalization requirements are exigible only from legal persons applying for their first licence after 20 June 1984.

1974, c. 70, s. 210; 1982, c. 52, s. 70, s. 80; 1984, c. 22, s. 43; 1985, c. 17, s. 28; 1987, c. 54, s. 4; 1994, c. 40, s. 457; 1996, c. 63, s. 80; 1999, c. 40, s. 33.

211. The Authority shall issue the licence if the legal person

(a)  furnishes all required documents and information;

(b)  meets the conditions prescribed under this Act and the regulations thereunder;

(c)  has complied with this Act and any Act of another province or of the Parliament of Canada or any other Act governing the activities of the legal person, and the regulations thereunder;

(d)  adheres to sound and prudent management practices;

(d.1)  adheres to sound commercial practices;

(e)  has sufficient assets;

(f)  has directors and officers who possess the administrative and technical knowledge and competence required to administer the legal person or, where such is the case, its insurance fund in a manner to command public confidence in transacting the classes of insurance contemplated;

(g)  deposits an undertaking made by the holding company directly controlling the legal person and by any holding company controlled by the legal person, enabling the Authority or the representative designated by the Authority to enter, at any reasonable time, the head office of the legal person and its other establishments situated outside Québec and permitting the application of subparagraphs 2 and 3 of the first and second paragraphs of section 10, for the purposes of the inspection of the legal person’s internal affairs and activities;

(h)  causes any holding company controlled by the legal person to furnish all the documents and information enabling the Authority to ensure that the legal person adheres to sound and prudent management practices.

1974, c. 70, s. 211; 1982, c. 52, s. 80; 1984, c. 22, s. 43; 1987, c. 54, s. 5; 1996, c. 63, s. 80; 2002, c. 45, s. 231; 2002, c. 70, s. 90; 2002, c. 45, s. 231; 2004, c. 37, s. 90; 2008, c. 7, s. 32.

211.1. When issuing a licence to an insurer described in the second paragraph of section 205, the Authority may, on the conditions it determines, exempt the insurer from any provision of this Act, except section 201, if the Authority considers that such an exemption does not undermine the protection of the insured.

A decision under the first paragraph must be published in the Authority’s bulletin and in the Gazette officielle du Québec.

2008, c. 7, s. 33.

212. The licence may include such restrictions or conditions as the Authority may consider necessary to give effect to this Act.

1974, c. 70, s. 212; 1982, c. 52, s. 80; 1984, c. 22, s. 43; 2002, c. 70, s. 91; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

213. (Repealed).

1974, c. 70, s. 213; 1982, c. 52, s. 80; 1984, c. 22, s. 44.

214. (Repealed).

1974, c. 70, s. 214; 1982, c. 52, s. 80; 1984, c. 22, s. 44.

215. (Repealed).

1974, c. 70, s. 215; 1982, c. 52, s. 80; 1984, c. 22, s. 44.

216. (Repealed).

1974, c. 70, s. 216; 1975, c. 83, s. 84; 1982, c. 52, s. 80; 1984, c. 22, s. 44.

217. (Repealed).

1974, c. 70, s. 217; 1982, c. 52, s. 80; 1984, c. 22, s. 44.

218. The Authority may refuse to issue a licence to a legal person having a name identical to that of another legal person transacting in Québec or that so resembles that of another that there is a danger of confusing or misleading the public as to the nature of the business transacted.

1974, c. 70, s. 218; 1982, c. 52, s. 80; 1996, c. 63, s. 80, s. 83; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

219. The Authority shall on refusing to issue a licence give notice of it in writing to the applicant specifying the reasons for refusal.

1974, c. 70, s. 219; 1982, c. 52, s. 80; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

219.1. The Authority may, at any time after the issuance of a licence,

(a)  (subparagraph repealed);

(b)  impose, in relation to the operations of the legal person, such conditions or restrictions as the Authority may consider necessary to give effect to this Act;

(c)  change or cancel the conditions or restrictions to which the licence is subject.

Before exercising the powers provided under this section, the Authority shall, however, notify the legal person in writing as prescribed by section 5 of the Act respecting administrative justice (chapter J‐3) and allow the legal person at least 10 days to present observations.

The Authority shall also notify its substantiated decision to the legal person.

1984, c. 22, s. 45; 1987, c. 54, s. 6; 1996, c. 63, s. 80; 1997, c. 43, s. 78; 2002, c. 70, s. 92; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

220. The Authority may, at the request of any legal person holding a licence other than a professional order, modify the licence to extend its authorized activities to other classes of insurance.

The Authority may, at the request of a professional order that holds a licence authorizing it to insure its members in respect of professional liability, modify the licence to extend its authorized activities to insuring members against misappropriations of funds required to be deposited in trust committed without complicity on the part of the insured and to insuring the legal costs resulting from such misappropriations.

The professional liability insurance fund established by a professional order covers all risks that the professional order is authorized to insure under its licence.

1974, c. 70, s. 220; 1982, c. 52, s. 80; 1987, c. 54, s. 7; 1994, c. 40, s. 457; 1996, c. 63, s. 80; 2002, c. 70, s. 93; 2003, c. 1, s. 12; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

221. Licences are issued for an indeterminate period.

1974, c. 70, s. 221; 1982, c. 52, s. 80; 1984, c. 22, s. 46; 2002, c. 70, s. 94.

222. The Authority shall, on issuing a licence, publish a notice in the Gazette officielle du Québec indicating the name and address of the head office or chief establishment of the legal person to which the licence is issued and the classes of insurance covered by the licence.

The Authority shall also publish, each year, in the Gazette officielle du Québec, a list of the insurers holding a licence and the address of their head offices or business establishments.

1974, c. 70, s. 222; 1982, c. 52, s. 80; 1996, c. 63, s. 80, s. 83; 1998, c. 37, s. 510; 2002, c. 70, s. 95; 2004, c. 37, s. 90.

CHAPTER I.1 MANAGEMENT PRACTICES AND COMMERCIAL PRACTICES

2002, c. 70, s. 96; 2008, c. 7, s. 34.

222.1. Every insurer and every holding company controlled by an insurer must adhere to sound and prudent management practices.

2002, c. 70, s. 96.

222.2. Every insurer and every holding company controlled by an insurer must adhere to sound commercial practices. These practices include properly informing persons being offered a product or service and acting fairly in dealings with them.

2008, c. 7, s. 35.

223. (Repealed).

1974, c. 70, s. 223; 1985, c. 17, s. 29; 2002, c. 70, s. 97.

CHAPTER II

Repealed, 2002, c. 70, s. 97.

2002, c. 70, s. 97.

224. (Repealed).

1974, c. 70, s. 224; 1985, c. 17, s. 30; 1987, c. 54, s. 8; 1994, c. 40, s. 457; 2002, c. 70, s. 97.

225. (Repealed).

1974, c. 70, s. 225; 1984, c. 22, s. 47; 1988, c. 84, s. 701; 1996, c. 2, s. 79; 2002, c. 70, s. 97.

226. (Repealed).

1974, c. 70, s. 226; 1982, c. 52, s. 80; 2002, c. 70, s. 97.

227. (Repealed).

1974, c. 70, s. 227; 2002, c. 70, s. 97.

228. (Repealed).

1974, c. 70, s. 228; 1979, c. 33, s. 9; 1985, c. 17, s. 31.

229. (Repealed).

1974, c. 70, s. 229; 1999, c. 40, s. 33; 2002, c. 70, s. 97.

230. (Repealed).

1974, c. 70, s. 230; 1982, c. 52, s. 80; 2002, c. 70, s. 97.

231. (Repealed).

1974, c. 70, s. 231; 1982, c. 52, s. 80; 2002, c. 70, s. 97.

232. (Repealed).

1974, c. 70, s. 232; 2002, c. 70, s. 97.

233. (Repealed).

1974, c. 70, s. 233; 1982, c. 52, s. 80; 2002, c. 70, s. 97.

234. (Repealed).

1974, c. 70, s. 234; 1982, c. 52, s. 80; 2002, c. 70, s. 97.

235. (Repealed).

1974, c. 70, s. 235; 1982, c. 52, s. 80; 2002, c. 70, s. 97.

236. (Repealed).

1974, c. 70, s. 236; 2002, c. 70, s. 97.

237. (Repealed).

1974, c. 70, s. 237; 1982, c. 52, s. 80; 2002, c. 70, s. 97.

238. (Repealed).

1974, c. 70, s. 238; 1982, c. 52, s. 80; 1999, c. 40, s. 33; 2002, c. 70, s. 97.

239. (Repealed).

1974, c. 70, s. 239; 1982, c. 52, s. 80; 1999, c. 40, s. 33; 2002, c. 70, s. 97.

240. (Repealed).

1974, c. 70, s. 240; 2002, c. 70, s. 97.

241. (Repealed).

1974, c. 70, s. 241; 2002, c. 70, s. 97.

242. (Repealed).

1974, c. 70, s. 242; 1982, c. 52, s. 80; 2002, c. 70, s. 97.

CHAPTER III INVESTMENTS, ASSETS, PROVISIONS, RESERVES AND SEPARATE FUNDS

1996, c. 63, s. 37.

DIVISION I APPLICATION

243. This chapter applies to each insurer constituted under an Act of Québec; sections 244 to 272 apply to such an insurer notwithstanding any provision of its charter inconsistent herewith.

1974, c. 70, s. 243; 1996, c. 63, s. 38; 1999, c. 40, s. 33.

DIVISION II INVESTMENTS

244. Every insurer must exercise its investment powers with prudence and care and in accordance with any government regulation.

Every insurer must adhere to sound and prudent investment management practices.

In addition, every insurer must act with honesty and loyalty in the best interests of its insureds, shareholders or members.

1974, c. 70, s. 244; 1976, c. 39, s. 14; 1977, c. 5, s. 14; 1984, c. 22, s. 48; 1987, c. 54, s. 9; 2002, c. 70, s. 98.

244.1. An insurer other than a mutual insurance association may not acquire directly or through a partnership or legal person it controls more than 30% of the assets or the voting rights attached to the shares of a legal person, or more than 30% of the assets or the voting rights attached to the shares of a cooperative or other similar legal person whose head office is situated outside Québec. The voting rights may not enable the insurer to elect more than one-third of the directors of the legal person.

A mutual insurance association may not acquire directly or through a partnership or legal person it controls, alone or jointly with a legal person of its group, more than 30% of the assets or the voting rights attached to the shares of a legal person, or more than 30% of the assets or the voting rights attached to the shares of a cooperative or other similar legal person whose head office is situated outside Québec. The voting rights attached to the shares may not enable the association to elect more than one-third of the directors of the legal person.

2002, c. 70, s. 99.

244.2. Notwithstanding section 244.1, an insurer may

(1)  acquire directly all or part of the shares of a legal person that only carries on activities similar to those the insurer is authorized to carry on; and

(2)  acquire all or part of the shares of a legal person in such cases as are determined by government regulation.

Except in the case of a professional order, an insurer may acquire shares of a legal person through a holding company.

2002, c. 70, s. 99.

244.3. A mutual insurance association must obtain the authorization of its federation before acquiring directly or through a holding company all or part of the shares of a legal person pursuant to section 244.2.

2002, c. 70, s. 99.

245. The provisions of section 244.2 allow the acquisition of shares of a legal person only where the legal person is or becomes, as a result of that acquisition, a legal person controlled by the acquirer.

The first paragraph does not apply in the cases determined by regulation of the Government.

1974, c. 70, s. 245; 1984, c. 22, s. 48; 1985, c. 17, s. 32; 1987, c. 54, s. 10; 1987, c. 95, s. 402; 1988, c. 64, s. 554; 1990, c. 86, s. 25; 1994, c. 40, s. 457; 1996, c. 63, s. 39; 2002, c. 70, s. 100.

245.0.1. No voting right may be exercised in relation to any investment or, as the case may be, the portion of any investment that exceeds the limits authorized under this Act or the regulations.

1990, c. 86, s. 26; 1996, c. 2, s. 80; 1996, c. 63, s. 40; 2002, c. 70, s. 101.

245.1. A mutual insurance association may invest in an investment fund of the federation of which it is a member. In addition, the mutual insurance association may invest in the capital of a mutual reinsurance association of which the law provides it is a member.

The participation of a mutual insurance association in a guarantee fund constitutes an investment for an amount equal to the lesser of the two amounts contemplated in subparagraphs 1 and 2 of the second paragraph of section 93.227.

1985, c. 17, s. 33; 1996, c. 63, s. 41, s. 82; 2002, c. 70, s. 102.

246. No insurer may acquire claims secured by hypothec or grant a hypothecary loan of an amount exceeding 80% of the value of the immovable which secures payment thereof, less any other claims secured thereby and ranking equally with or ahead of the insurer’s claim except where the excess amount is guaranteed or assured by the government of Québec, of a Canadian province, of Canada or of a country where the insurer carries on business, by the Canada Mortgage and Housing Corporation, the Société d’habitation du Québec or an hypothecary insurance policy issued by an insurance company holding a licence issued under this Act.

However, the said amount may be exceeded in respect of an immovable on which the insurer holds security if the corresponding hypothecary claim is endangered or in respect of an immovable that has been repossessed.

1974, c. 70, s. 246; 1979, c. 33, s. 10; 1982, c. 26, s. 284; 1984, c. 22, s. 48; 1987, c. 54, s. 11; 1994, c. 40, s. 457; 1996, c. 63, s. 42; 2007, c. 16, s. 2.

246.1. This Act shall not operate to limit the powers of an insurer to realize on a security by acquiring property or otherwise. The insurer must, where the case arises, take the measures required to comply with the provisions that govern such investments, within a reasonable time having regard to market conditions.

2002, c. 70, s. 103.

247. (Repealed).

1974, c. 70, s. 247; 1979, c. 33, s. 11; 1982, c. 26, s. 285; 1984, c. 22, s. 48; 1987, c. 54, s. 12; 1990, c. 86, s. 27; 1994, c. 40, s. 457; 1996, c. 63, s. 43; 2002, c. 70, s. 104.

247.1. Every insurer, other than a mutual association or a professional order, shall, within 15 days following the date of an investment, file with the Authority an engagement signed by the newly-acquired subsidiary to comply with the conditions prescribed by regulation for as long as the insurer holds its shares.

1984, c. 22, s. 48; 1987, c. 54, s. 13; 1994, c. 40, s. 457; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

248. Every insurer shall adopt an investment policy approved by its board of directors. The policy must include, in particular, the matching of the maturities of its investments with its financial commitments, the diversification of investments and a precise description of the types of investments that may be made in the form of hypothecary loans and the limits applicable thereto.

Every insurer shall state in its annual report the name of each legal person in which it holds 10% or more of the voting shares.

1974, c. 70, s. 248; 1979, c. 33, s. 12; 1982, c. 26, s. 286; 1984, c. 22, s. 48; 1990, c. 86, s. 28; 1996, c. 63, s. 44, s. 80, s. 83.

249. (Repealed).

1974, c. 70, s. 249; 1979, c. 33, s. 13; 1982, c. 52, s. 80; 1984, c. 22, s. 48; 1990, c. 86, s. 29.

249.1. Any insurer that transacts insurance other than life insurance may contribute to the development fund of the Groupement des assureurs automobiles established by the Automobile Insurance Act (chapter A-25).

1977, c. 68, s. 223; 1996, c. 63, s. 45.

250. (Repealed).

1974, c. 70, s. 250; 1982, c. 52, s. 80; 1984, c. 22, s. 49.

251. (Repealed).

1974, c. 70, s. 251; 1984, c. 22, s. 49.

252. (Repealed).

1974, c. 70, s. 252; 1977, c. 5, s. 14; 1979, c. 33, s. 14; S. C. 1978-79, c. 16, s. 12; 1984, c. 22, s. 49.

253. (Repealed).

1974, c. 70, s. 253; 1979, c. 33, s. 15; 1984, c. 22, s. 49.

254. (Repealed).

1974, c. 70, s. 254; 1982, c. 52, s. 80; 1984, c. 22, s. 49.

255. (Repealed).

1974, c. 70, s. 255; 1979, c. 33, s. 16; 1982, c. 26, s. 287; 1984, c. 22, s. 49.

256. (Repealed).

1974, c. 70, s. 256; 1984, c. 22, s. 49.

257. (Repealed).

1974, c. 70, s. 257; 1984, c. 22, s. 50; 2002, c. 70, s. 104.

258. (Repealed).

1974, c. 70, s. 258; 1979, c. 33, s. 17; 1982, c. 26, s. 288; 1984, c. 22, s. 51.

259. (Repealed).

1974, c. 70, s. 259; 1979, c. 33, s. 18; 1984, c. 22, s. 52; 1987, c. 54, s. 14; 1990, c. 86, s. 30.

260. (Repealed).

1974, c. 70, s. 260; 1990, c. 86, s. 30.

261. (Repealed).

1974, c. 70, s. 261; 1990, c. 86, s. 30.

262. (Repealed).

1974, c. 70, s. 262; 1979, c. 33, s. 19; 1982, c. 52, s. 80; 1990, c. 86, s. 30.

263. (Repealed).

1974, c. 70, s. 263; 1979, c. 33, s. 20; 1984, c. 22, s. 53; 1990, c. 86, s. 30.

264. (Repealed).

1974, c. 70, s. 264; 1990, c. 86, s. 30.

265. (Repealed).

1974, c. 70, s. 265; 1990, c. 86, s. 30.

266. (Repealed).

1974, c. 70, s. 266; 1984, c. 22, s. 54.

267. (Repealed).

1974, c. 70, s. 267; 1984, c. 22, s. 54.

268. If, following the reorganization or winding-up of a legal person or the amalgamation of legal persons, securities held by an insurer are replaced by other securities, the insurer is required to comply with the investment rules prescribed by this Act within five years from the date of reorganization, winding-up or amalgamation.

1974, c. 70, s. 268; 1984, c. 22, s. 55; 1990, c. 86, s. 31; 1996, c. 63, s. 80.

269. Every insurer shall at all times keep in Canada and under its own control assets of a value equal to at least the real value of its liabilities to its insured in Canada; such assets, up to at least two-thirds of the real value of such liabilities, shall be invested in Canada.

Every insurer shall invest in Québec part of its assets in the proportion determined by the regulations.

1974, c. 70, s. 269.

270. An insurer shall effect its deposits, loans and investments in its name, unless it does so through a clearing house recognized by the Authority or unless, at the request of the insurer, the Authority exempts it from the obligation to do so in such cases and on such conditions as it may determine according to the circumstances.

1974, c. 70, s. 270; 1984, c. 22, s. 56; 1990, c. 86, s. 32; 1996, c. 63, s. 83; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

271. The directors or officers of an insurer who agree to a loan or investment which contravenes this Act shall be held jointly and severally liable for any losses resulting therefrom for the insurer.

1974, c. 70, s. 271; 1990, c. 86, s. 33.

272. The sole fact that the loans or investments made by an insurer comply with this Act does not exempt the directors and officers of that insurer from liability.

1974, c. 70, s. 272; 1990, c. 86, s. 34.

273. (Repealed).

1974, c. 70, s. 273; 1982, c. 52, s. 71; 1984, c. 22, s. 57; 1990, c. 86, s. 35; 1996, c. 63, s. 46.

274. (Repealed).

1974, c. 70, s. 274; 1999, c. 40, s. 33; 2002, c. 70, s. 104.

DIVISION III ASSETS

275. Every insurer must maintain an adequate capital base consistent with sound and prudent management.

1974, c. 70, s. 275; 1979, c. 33, s. 21; 1984, c. 22, s. 58; 2002, c. 70, s. 105.

275.0.0.1. The Authority may, where it considers it advisable, give written instructions to an insurer concerning the adequacy of and the elements which compose its capital base, and the proportion represented by each element.

Before exercising the power set out in the first paragraph, the Authority must notify the insurer and give it an opportunity to present observations.

2002, c. 70, s. 106; 2004, c. 37, s. 90.

275.0.1. The directors shall be held jointly and severally liable for any amount paid to a shareholder or to a director where the insurer, due to payment of that amount, contravenes the provisions of section 275.

1990, c. 86, s. 36.

275.1. (Repealed).

1979, c. 33, s. 22; 1982, c. 52, s. 80; 1984, c. 22, s. 59.

275.2. No insurer may declare dividends or interest, as the case may be, or distribute its yearly surpluses if a payment made for that purpose causes its assets to cease to meet the requirements of section 275.

1979, c. 33, s. 22; 1984, c. 22, s. 60; 1985, c. 17, s. 34; 1990, c. 86, s. 37.

275.3. Every insurer must, in view of its operations, maintain such liquid assets as are adequate to ensure sound and prudent management.

1985, c. 17, s. 35; 2002, c. 70, s. 107.

275.3.1. The Authority may, where it considers it advisable, give written instructions to an insurer concerning the adequacy of its liquid assets.

Before exercising the power set out in the first paragraph, the Authority must notify the insurer and give it an opportunity to present observations.

2002, c. 70, s. 108; 2004, c. 37, s. 90.

DIVISION III.1 SALE OF THE ENTERPRISE

1990, c. 86, s. 38.

275.4. No insurer may sell, in the course of a 12-month period, all or part of its enterprise if the amount of the sale represents more than 5% of its assets unless it gives prior notice of 45 days to the Authority. The prior notice shall indicate the name and the address of the head office of the parties. It shall also be accompanied with a draft copy of the contract the parties intend to sign.

1990, c. 86, s. 38; 1996, c. 63, s. 83; 2002, c. 70, s. 109; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

275.5. The Authority may prohibit the transaction or impose certain conditions on it if the Authority considers it expedient in the interest of the insured or of one of the parties.

The Authority may, by way of a notice sent before the expiry of a period of 45 days, inform the insurer that it does not object to the sale. Upon receiving the notice, the insurer may proceed with the sale.

Where the Authority considers that insufficient time is available to it to carry out an adequate examination of the transaction, the Authority may extend the period by an additional 45 days.

The Authority shall inform the parties of any such extension not less than five days before the expiry of any period of 45 days.

1990, c. 86, s. 38; 1996, c. 63, s. 47; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

DIVISION IV PROVISIONS AND RESERVES

1996, c. 63, s. 48.

276. (Repealed).

1974, c. 70, s. 276; 1979, c. 33, s. 23; 1982, c. 52, s. 80; 1996, c. 63, s. 49.

277. Every insurer, other than a mutual benefit association, must establish provisions and reserves that are good and sufficient having regard to its obligations to the insured, and that conform to the following provisions:

(a)  the assumptions used to establish the provisions and reserves must be the assumptions that the actuary designated in accordance with Division III.1 of Chapter IV of this Title considers good and sufficient having regard to the insurer’s position and the insurance contracts, and considered appropriate by the Authority;

(b)  the computation methods used must be consistent with the regulations.

1974, c. 70, s. 277; 1979, c. 33, s. 24; 1984, c. 22, s. 61; 1996, c. 63, s. 50; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

278. (Repealed).

1974, c. 70, s. 278; 1985, c. 17, s. 36.

279. Every mutual benefit association constituted under the laws of Québec must establish provisions and reserves that are good and sufficient having regard to the payment at maturity of the obligations of each of the funds established by the association in accordance with this Act, according to the methods established by the regulations.

1974, c. 70, s. 279; 1996, c. 63, s. 51.

DIVISION V SEPARATE FUNDS

1996, c. 63, s. 52.

280. Every insurer constituted under the laws of Québec, transacting life insurance and contracting liabilities that vary according to the market value of a specified group of assets must maintain these assets in one or more groups which are separate from its other property; it must use these assets only to meet those liabilities, until they have been fully discharged.

1974, c. 70, s. 280; 1999, c. 40, s. 33.

280.1. The provisions of Division II of this chapter do not apply to the separate groups of assets maintained by an insurer under this division.

2002, c. 70, s. 110.

281. The insurer may by by-law, in order to constitute any separate group of assets contemplated in section 280, pay into it any amount or security derived from its surplus which it has at its disposal.

For the purposes of the first paragraph, any surplus shall be that shown in the last annual statement of the insurer.

The first paragraph has effect from 20 October 1976 in respect of mutual insurance companies.

1974, c. 70, s. 281; 2002, c. 70, s. 111.

282. (Repealed).

1974, c. 70, s. 282; 1982, c. 52, s. 80; 2002, c. 70, s. 112.

283. (Repealed).

1974, c. 70, s. 283; 1982, c. 52, s. 80; 2002, c. 70, s. 112.

284. (Repealed).

1974, c. 70, s. 284; 1982, c. 52, s. 80; 2002, c. 70, s. 112.

285. (Repealed).

1974, c. 70, s. 285; 2002, c. 70, s. 112.

CHAPTER III.1 ETHICS AND CONFLICTS OF INTEREST

1990, c. 86, s. 39.

DIVISION I APPLICATION

1990, c. 86, s. 39.

285.1. This chapter applies to every insurer constituted in Québec, notwithstanding any provision of its charter that is inconsistent herewith.

However, Division IV of this chapter does not apply to mutual benefit associations which do not issue policies or certificates guaranteeing, for their duration, the amount of mutual benefits and assessments fixed therein, nor to funeral insurance companies.

1990, c. 86, s. 39; 1999, c. 40, s. 33.

DIVISION II DIRECTORS AND OFFICERS

1990, c. 86, s. 39.

285.2. A director or officer of an insurer shall exercise the care, prudence, diligence and skill that a reasonable person would exercise in similar circumstances.

He shall also act with honesty and fairness in the best interest of the insurer. In doing so, he shall take into account the interests of the insured, the shareholders or the members, and shall avoid placing himself in situations where his personal interest is in conflict with his obligations.

1990, c. 86, s. 39.

285.3. A director or officer is presumed to have exercised the care, prudence, diligence and skill that a reasonable person would have exercised if he acted in good faith and based his decisions on an expert’s opinion or report.

1990, c. 86, s. 39.

285.4. (Repealed).

1990, c. 86, s. 39; 2002, c. 70, s. 113.

285.5. (Repealed).

1990, c. 86, s. 39; 2002, c. 70, s. 113.

285.6. A director or officer of an insurer shall, when communicating information concerning the insurer or the persons insured by it, comply with the regulations and, where applicable, with the rules adopted by the ethics committee.

1990, c. 86, s. 39.

285.7. Every director who resigns for reasons relating to the conduct of the affairs of the insurer shall declare his reasons to the insurer and to the Authority,

(1)  where he has grounds to believe that such conduct is contrary to a provision of this Act or the regulations, a provision of any other Act, an order of the Authority or the Criminal Code (Revised Statutes of Canada, 1985, chapter C-46);

(2)  where he has grounds to believe that such conduct may have an adverse effect on the financial position of the insurer.

A director who makes such a declaration in good faith shall not incur any civil liability by doing so.

1990, c. 86, s. 39; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

DIVISION III DISCLOSURE REQUIREMENTS

1990, c. 86, s. 39.

285.8. Every director of an insurer who has an interest that is in conflict with the interest of the insurer must, on pain of removal from office, disclose his interest, abstain from voting on any matter connected with it and avoid influencing any decision relating to it. He must also withdraw from the meeting while any such matter is being discussed or voted upon.

Any other person discharging the duties of an officer and who has such an interest shall, on pain of removal from office, disclose his interest to the insurer. He shall in no way attempt to influence the decision of the directors.

1990, c. 86, s. 39.

285.9. A director or officer is deemed to have the same interest as a person associated with him.

1990, c. 86, s. 39.

285.10. Any person who is removed from office for having contravened section 285.8 or who resigns after having contravened that section is disqualified from sitting as a director of any insurer for a period of five years from his removal or resignation.

1990, c. 86, s. 39.

285.11. The court, at the request of the insurer or of a shareholder, member, insured person or the Authority, may, among other measures, order a director or officer who has contravened section 285.8 to render account and, where applicable, to remit any profit gained to the insurer.

1990, c. 86, s. 39; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

285.12. (Repealed).

1990, c. 86, s. 39; 1996, c. 63, s. 80; 2002, c. 70, s. 113.

DIVISION IV ETHICS COMMITTEE

1990, c. 86, s. 39.

285.13. Every insurer shall appoint an ethics committee from among the members of the board of directors.

The committee shall be composed of not less than three directors, a majority of whom shall be persons who are not

(1)  officers and employees of the insurer;

(2)  members of another committee of the board of directors;

(3)  directors, officers, other mandataries and employees of a legal person affiliated with the insurer;

(4)  directors, officers and other mandataries, where the insurer is a mutual insurance association, of the federation with which that association is affiliated, of the guarantee fund of which it is a member or of a legal person belonging to the same group as the federation;

(5)  shareholders holding 10% or more of the voting rights attached to shares issued by the insurer or by a legal person affiliated with it, or 10% or more of such shares.

Where the Authority considers that circumstances justify it, the Authority may authorize the appointment of a committee composed in a way which does not comply with the requirements of the second paragraph.

1990, c. 86, s. 39; 1996, c. 63, s. 80, s. 82; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

285.14. The ethics committee shall adopt rules of ethics and rules for the application of the provisions of this chapter to the insurer. It shall see that the rules are complied with, and shall advise the board of directors without delay of any serious breach thereof.

The rules shall concern, in particular, the conduct of the directors and officers, the conduct of the insurer with respect to restricted parties or associates of its directors or officers, the formalities and conditions governing contracts with restricted parties and the protection of confidential information held by the insurer in respect of persons insured by it.

In addition, the ethics committee shall carry out any mandate assigned to it by the board of directors.

However, the ethics committee shall not, without the authorization of the Authority, exercise responsibilities normally assigned to another committee.

1990, c. 86, s. 39; 2002, c. 70, s. 114; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

285.15. The rules adopted by the ethics committee shall be transmitted to the board of directors of the insurer which is bound by them. A copy shall also be transmitted to the Authority.

1990, c. 86, s. 39; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

285.16. Each year, the ethics committee shall transmit to the Authority, within two months of the closing date of the fiscal year of the insurer, a report on its activities to the closing date.

The report shall set out, in particular,

(1)  the name, address and occupation of every member of the committee;

(2)  any change among the members of the committee;

(3)  the nature of the mandates assigned to the committee by the board of directors;

(4)  the list of cases of conflict of interest and self-dealing which have come to the notice of the committee;

(5)  the cases where the rules adopted by the committee have not been complied with.

1990, c. 86, s. 39; 1996, c. 63, s. 88; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

DIVISION V TRANSACTIONS WITH RESTRICTED PARTIES AND WITH ASSOCIATES OF DIRECTORS OR OFFICERS

1990, c. 86, s. 39.

285.17. An insurer, a holding company that controls an insurer and any subsidiary of an insurer must, when doing business with restricted parties with respect to the insurer, act in their regard in the same manner as when they are dealing at arm’s length. In addition, any federation of mutual insurance associations must, when doing business with restricted parties with respect to a mutual insurance association that is a member of the federation, act in their regard in the same manner as when it is dealing at arm’s length.

The same applies where an insurer, a holding company that controls an insurer and any subsidiary of the insurer do business with associates of directors or officers of the insurer or, in the case of a federation of mutual insurance associations, where it does business with associates of directors or officers of the mutual insurance association that is a member of the federation.

In cases of contestation, the onus is on the insurer, the holding company that controls an insurer, the subsidiary of an insurer or, as the case may be, the federation of mutual insurance associations to show that they were dealing at arm’s length.

However, notwithstanding the first paragraph, a contract may be entered into, where the parties include an insurer, a holding company that controls an insurer, the subsidiary of an insurer and a legal person in which the insurer or its subsidiary holds more than 30% of the shares provided such a contract is authorized by the Authority. The same applies to a contract between a mutual insurance association and a legal person belonging to the same group as its federation.

In addition, the first paragraph does not apply to contracts concerning the conditions of employment, pension funds, insurance schemes and any other matter connected with contracts of employment of an employee or an officer.

1990, c. 86, s. 39; 1996, c. 63, s. 80; 2002, c. 70, s. 115; 2004, c. 37, s. 90.

285.18. The following are restricted parties with respect to an insurer:

(1)  the directors and officers of the insurer;

(2)  in the case of a capital stock company, the directors and officers of the legal person that controls it;

(3)  in the case of a mutual insurance association, the directors and officers of its federation;

(4)  in the case of a professional order, the members of its Bureau and the administrators of the manager entrusted with the day-to-day operation of the fund;

(5)  any person who holds, directly or indirectly, 10 % or more of the voting rights attached to the shares issued by the insurer, or 10 % or more of such shares;

(6)  a shareholder of the insurer, the shareholder’s spouse and their minor children, if they jointly hold, directly or indirectly, 10 % or more of the voting rights attached to the shares issued by the insurer, or 10 % or more of such shares;

(7)  the associates of the persons referred to in paragraphs 1 to 6, except in the case of a subsidiary of the insurer;

(8)  any other person who, in the opinion of the Authority, may receive preferential treatment to the detriment of the interests of the insurer or its insureds.

1990, c. 86, s. 39; 1994, c. 40, s. 457; 1996, c. 63, s. 53, s. 80; 2002, c. 70, s. 116; 2004, c. 37, s. 90.

285.19. The Authority shall notify any person it designates as being a restricted party in accordance with paragraph 8 of section 285.18, and the insurer concerned by that decision.

The Authority may revise its decision at the request of the person so designated or the insurer concerned.

Before rendering its decision or refusing to revise it, the Authority shall give the person and the insurer concerned an opportunity to present observations.

1990, c. 86, s. 39; 1997, c. 43, s. 79; 2002, c. 70, s. 117; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

285.20. Every insurer shall, in respect of restricted parties with whom it does business, act in the same manner as when it is dealing at arm’s length.

1990, c. 86, s. 39; 2002, c. 70, s. 118.

285.21. Where the Authority designates a person as being a restricted party, the Authority shall so notify the person and the insurer concerned by that decision.

The Authority may revise the decision at the request of the person so designated or the insurer concerned.

Before rendering a decision or refusing to revise it, the Authority shall give the person and the insurer concerned an opportunity to present observations.

1990, c. 86, s. 39; 1996, c. 63, s. 80; 2002, c. 70, s. 118; 2004, c. 37, s. 90.

285.22. All contracts and operations of an insurer with restricted parties must comply with the rules adopted by the ethics committee and the provisions of this Act.

1990, c. 86, s. 39; 2002, c. 70, s. 118.

285.23. Every transaction by an insurer to acquire securities issued by a restricted party or to transfer assets between them must, in addition, be approved by the board of directors of the insurer, which shall obtain the opinion of the ethics committee.

1990, c. 86, s. 39; 1996, c. 63, s. 80; 2002, c. 70, s. 118.

285.24. Every service contract between an insurer and a restricted party must be made on favourable terms for the insurer, or at least on competitive terms.

Every such contract must also be approved by the board of directors of the insurer, which shall obtain the opinion of the ethics committee, except where the amounts involved are minimal.

In cases of contestation, the onus is on the insurer to show that the service contract to which it is a party meets the prescribed requirements.

1990, c. 86, s. 39; 2002, c. 70, s. 118.

285.25. The Authority or any person having a sufficient interest may apply to the court for the cancellation of a transaction made with a restricted party in contravention of the provisions of this Act which may seriously prejudice the interests of the insurer.

1990, c. 86, s. 39; 2002, c. 70, s. 118; 2004, c. 37, s. 90.

285.26. No insurer may extend credit to a restricted party on more favourable terms than those applicable in the ordinary course of its business.

1990, c. 86, s. 39; 2002, c. 70, s. 118.

285.27. No insurer may extend credit to any of its directors or officers or to any person who is an associate of any of its directors or officers except to the extent determined by the rules of ethics applicable to the insurer.

No insurer may extend credit to any of the officers of an affiliated legal person belonging to its group except to the extent determined by the rules of ethics applicable to the insurer.

2002, c. 70, s. 118.

285.28. The provisions of section 285.27 do not apply

(1)  to credit extended by way of a credit card or credit not exceeding the limits usually granted to credit card holders;

(2)  to credit extended to an officer or an associate of an officer where the officer has no authority over the person extending credit on behalf of the insurer.

2002, c. 70, s. 118.

CHAPTER III.2 EXAMINATION OF COMPLAINTS AND DISPUTE RESOLUTION

2002, c. 45, s. 233.

285.29. Every insurer must provide equitable resolution of complaints filed with the insurer. To that end, an insurer must establish a policy dealing with

(1)  the examination of complaints and claims filed by persons having an interest in a product or service it has provided;

(2)  the resolution of disputes pertaining to a product or service it has provided.

2002, c. 45, s. 233; 2002, c. 70, s. 119.

285.30. A person who is dissatisfied with the examination of a complaint by a mutual insurance company or with its outcome may refer the matter to the federation of which the company is a member.

The federation may make recommendations to the mutual insurance company as regards the complaint filed.

2002, c. 45, s. 233; 2002, c. 70, s. 119.

285.31. Every insurer shall, on any date determined by the Authority, submit a report to that date concerning the policy it has established pursuant to section 285.29.

The report shall mention, in particular, the number and nature of the complaints filed.

2002, c. 45, s. 233; 2002, c. 70, s. 119; 2004, c. 37, s. 90; 2008, c. 7, s. 36.

285.32. The Authority may, if it considers it appropriate, give written instructions to an insurer regarding the policy referred to in section 285.29.

Before exercising the power provided for under the first paragraph, the Authority must notify the insurer of its intent and give it the opportunity to present observations.

2002, c. 45, s. 233; 2002, c. 70, s. 119; 2004, c. 37, s. 90.

285.33. Every insurer shall inform each complainant, in writing and without delay, that a complainant may, if he or she is dissatisfied with the complaint examination procedure or its outcome, request the insurer or, in the case of a mutual insurance company, the federation, to forward a copy of the complaint file to the Authority.

Where requested by a complainant, the insurer or the federation, as the case may be, shall forward a copy of the complaint file to the Authority.

The Authority shall examine the complaint file and may, if it considers it appropriate, act as a mediator if the interested parties agree.

2002, c. 45, s. 233; 2002, c. 70, s. 119; 2004, c. 37, s. 48; 2008, c. 7, s. 37.

285.34. Notwithstanding sections 9 and 83 of the Act respecting Access to documents held by public bodies and the Protection of personal information (chapter A‐2.1), the Authority may not communicate a complaint file without the authorization of the insurer or the federation that has transmitted it.

2002, c. 45, s. 233; 2002, c. 70, s. 119; 2004, c. 37, s. 90.

285.35. (Repealed).

2002, c. 45, s. 233; 2002, c. 70, s. 119; 2004, c. 37, s. 90; 2008, c. 7, s. 38.

285.36. A mediator may not be compelled to disclose anything revealed to or learned by the mediator in the exercise of his or her functions or to produce a document prepared or obtained in the course of such exercise before a court of justice or before a person or body of the administrative branch exercising adjudicative functions.

Notwithstanding section 9 of the Act respecting Access to documents held by public bodies and the Protection of personal information (chapter A‐2.1), no person may have access to a document contained in the mediation record.

2002, c. 45, s. 233; 2002, c. 70, s. 119.

CHAPTER IV BOOKS, ACCOUNTS AND REPORTS

DIVISION I APPLICATION

286. This chapter applies to every insurer constituted under the laws of Québec.

1974, c. 70, s. 286; 1999, c. 40, s. 33.

DIVISION II BOOKS AND ACCOUNTS

287. Every insurer must keep, in accordance with the regulations, at least one separate account for each class of insurance business it carries on.

1974, c. 70, s. 287.

288. (Repealed).

1974, c. 70, s. 288; 1984, c. 22, s. 62.

289. Every insurer must keep the books necessary to make a proper showing of its affairs and, in particular, of

(a)  its income and its source, and its expenses and their object;

(b)  the insurance policies which it has issued and the names and addresses of all the persons insured;

(c)  its assets and liabilities, including its equity capital.

Every insurer must also keep the books, registers and accounts prescribed by the regulations, in the manner determined therein.

1974, c. 70, s. 289; 1984, c. 22, s. 63; 2002, c. 70, s. 120.

290. The members of a mutual insurance company may, in the case specified in this Act, request the company to give notice of a special general meeting, or to indicate in the notice of the annual general meeting or of a special general meeting the proposals they intend to submit to the meeting, and the company is bound to comply with the request. In addition, the company shall place the supporting documents to the proposals indicated in the notice of meeting at the disposal of the members.

1974, c. 70, s. 290; 1984, c. 22, s. 64; 1985, c. 17, s. 37.

DIVISION III AUDIT

291. Every insurer, other than a mutual insurance association, shall have its books and accounts audited every year by an auditor who has the qualifications required under this division.

The auditor is appointed as follows:

(1)  in the case of Lloyd’s, by such underwriter;

(2)  in the case of a legal person, by the general assembly of its members or in the case of a professional order, by its Bureau;

(3)  in the case of a company, in accordance with the laws governing it.

1974, c. 70, s. 291; 1985, c. 17, s. 38; 1987, c. 54, s. 15; 1994, c. 40, s. 457; 1996, c. 63, s. 80.

291.1. Insurers must inform the Authority in writing, within 10 days, of the resignation of their auditor.

Insurers must also give the Authority an advance notice in writing of not less than 10 days of their intention to propose the revocation or the non-renewal of their auditor’s appointment.

1984, c. 22, s. 65; 1996, c. 63, s. 54; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

292. If an insurer fails to have its books and accounts audited in accordance with section 291, the Authority may appoint an auditor to make such audit and fix the remuneration that the insurer must pay such auditor.

1974, c. 70, s. 292; 1982, c. 52, s. 80; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

293. The auditor appointed under this division must be an accountant qualified to practise public accounting and a member in good standing of an institute or association of accountants constituted by the legislature of a province of Canada, or under its authority, or a firm of accountants in which one or more of the officers or employees are members of that institute or association.

A federation of mutual insurance associations shall cause the audit of the books and accounts of its members to be carried out only by persons who are members of a professional order of accountants mentioned in the Professional Code (chapter C‐26).

1974, c. 70, s. 293; 1985, c. 17, s. 39; 1990, c. 86, s. 40; 1994, c. 40, s. 457; 1999, c. 40, s. 33; 2002, c. 70, s. 121.

294. The auditor shall be disqualified from acting in respect of an insurer where he or his spouse or minor child living with him, or an associate or the spouse or minor child thereof living with the associate

(1)  is a director, officer or other mandatary of the insurer or of a legal person affiliated with it, or is an associate of such a director, officer or mandatary;

(2)  is a director, officer or other mandatary of the federation, of a legal person belonging to the same group as the federation, or of the guarantee fund of which the mutual insurance association he is appointed to audit is a member;

(3)  holds, directly or indirectly, shares of the insurer or of a legal person affiliated therewith;

(4)  is the sequestrator, liquidator or receiver of any legal person affiliated with the insurer.

In addition, the auditor shall be disqualified from acting if he or a partner is an employee of the insurer or of a legal person affiliated with the insurer.

1974, c. 70, s. 294; 1979, c. 33, s. 25; 1984, c. 22, s. 66; 1990, c. 86, s. 41; 1996, c. 63, s. 80, s. 82.

294.1. The auditor shall resign upon ceasing to be qualified.

1990, c. 86, s. 41.

294.2. The Authority or any interested person may apply to the Superior Court to obtain the revocation of the appointment of an auditor who is not qualified.

1990, c. 86, s. 41; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

294.3. An auditor who resigns for reasons connected with his duties as an auditor or with the conduct of the insurer’s business shall, within 10 days of the sending of his letter of resignation, submit a statement to the Authority giving the reasons for his resignation. The auditor shall forward a copy thereof to the insurer’s secretary within the same time limit.

An auditor who believes that his appointment was revoked or was not renewed for reasons mentioned above shall, within 10 days, submit a statement to inform the Authority, and forward a copy thereof to the insurer’s secretary.

1996, c. 63, s. 55; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

295. Every auditor appointed under this division shall, to carry out his duties, have access to all the books, registers, accounts and other records of the insurer, and every person having the custody of them must facilitate his examination of them.

He is also entitled to require from the directors, officers and employees of the insurer the information and explanations necessary to the carrying out of his duties.

1974, c. 70, s. 295; 1996, c. 63, s. 56.

295.1. The auditor shall, in the ordinary course of his audit, submit a report to the director general, or to any person holding a similar office, and to the board of directors on the facts having come to his notice which may appreciably limit the ability of the insurer to fulfill its obligations.

He shall transmit a copy of that report to the actuary designated in accordance with Division III.1 of Chapter IV of this Title.

1990, c. 86, s. 42; 1996, c. 63, s. 57.

295.2. An auditor in good faith who makes a statement under section 294.3 or who files a report under section 295.1 shall not be liable in any civil action arising therefrom.

The same rule applies to a person in good faith who provides information or explanations under the second paragraph of section 295.

1990, c. 86, s. 42; 1996, c. 63, s. 58.

296. The auditor must make to the shareholders, members or participating policyholders, a report of the condition of the insurer’s affairs at the end of the fiscal year.

1974, c. 70, s. 296.

297. The auditor shall indicate, in the auditor’s report,

(1)  whether the audit was carried out in accordance with generally accepted auditing standards;

(2)  whether, in the auditor’s opinion, the financial statements of the insurer included in the report submitted to the general meeting present fairly the financial position of the insurer and the results of its operations, in accordance with generally accepted accounting principles.

The auditor shall include in the report sufficient explanations in respect of any reservations expressed.

For the purposes of his report, the auditor may accept the certificate contemplated in the third paragraph of section 298.15.

1974, c. 70, s. 297; 1979, c. 33, s. 26; 1996, c. 63, s. 59; 2002, c. 70, s. 122.

298. The Authority may order that the annual audit of the affairs of an insurer be proceeded with or extended or that a special audit be made if the Authority believes it necessary; the Authority may appoint for that purpose an accountant or association of accountants who have the qualifications required under this division. The expenses incurred in such case are payable by the insurer after approval by the Authority.

1974, c. 70, s. 298; 1982, c. 52, s. 80; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

298.1. Every insurer shall form an auditing committee within its board of directors.

The committee shall examine every financial statement before it is submitted to the board of directors.

The auditing committee may be convened by one of its members or by the auditor. The auditor shall be notified of any meeting of the committee and he shall attend any meeting to which he is convened. The committee shall give him an opportunity to be heard.

The committee shall cause any error or inaccurate information in a financial statement to be corrected and inform the general meeting thereof.

1984, c. 22, s. 67; 1990, c. 86, s. 43.

298.2. The auditing committee shall be composed of not less than three directors, a majority of whom shall be persons who are not

(1)  officers and employees of the insurer;

(2)  members of another committee of the board of directors;

(3)  directors, officers, other mandataries and employees of a legal person affiliated with the insurer;

(4)  directors, officers and other mandataries, where the insurer is a mutual insurance association, of the federation with which that association is affiliated, of the guarantee fund of which it is a member or of a legal person belonging to the same group as the federation;

(5)  shareholders holding 10% or more of the voting rights attached to shares issued by the insurer or by a legal person affiliated with it, or 10% or more of such shares.

Where the Authority considers that circumstances justify it, the Authority may authorize the appointment of a committee composed in a way which does not comply with the requirements of the first paragraph.

1990, c. 86, s. 44; 1996, c. 63, s. 80, s. 82; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

298.2.1. The auditing committee shall verify that each insurer adheres to sound and prudent management practices.

The auditing committee shall notify the board of directors in writing on becoming aware of management practices that may adversely affect the financial position of the insurer.

In addition, if it considers that the board of directors has failed to take appropriate and timely measures to remedy the situation identified in the notice, the auditing committee shall so inform the Authority.

2002, c. 70, s. 123; 2004, c. 37, s. 90.

DIVISION III.1 ACTUARY

1996, c. 63, s. 60.

298.3. Every insurer shall designate an actuary who shall carry out the duties prescribed under this division.

1996, c. 63, s. 60.

298.4. Responsibility for the actuary’s appointment or the revocation of the actuary’s appointment lies with the board of directors of the insurer.

1996, c. 63, s. 60.

298.5. Insurers shall, within 10 days, forward to the Authority a copy of the resolution appointing their actuary or inform the Authority in writing of their actuary’s resignation.

In addition, insurers shall give the Authority an advance notice in writing of not less than 10 days of their intention to propose the revocation of their actuary’s appointment.

1996, c. 63, s. 60; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

298.6. The actuary’s term of office terminates on his ceasing to be a Fellow of the Canadian Institute of Actuaries.

1996, c. 63, s. 60.

298.7. An actuary who resigns for reasons connected with his duties as an actuary or with the conduct of the insurer’s business shall, within 10 days of the sending of his letter of resignation, submit a statement to the Authority giving the reasons for his resignation. The actuary shall forward a copy thereof to the insurer’s secretary.

An actuary who believes that his appointment was revoked for reasons mentioned above shall, within 10 days, submit a statement to inform the Authority of such reasons, and forward a copy thereof to the insurer’s secretary within the same time limit.

1996, c. 63, s. 60; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

298.8. No person shall accept an appointment as actuary of an insurer before asking the insurer’s secretary whether the former actuary filed a statement under section 298.7.

The insurer’s secretary shall provide the actuary with a copy of any such statement.

1996, c. 63, s. 60.

298.9. In the carrying out of his duties, the actuary shall have access to all the books, registers, accounts and other records of the insurer, and any person having custody of them shall facilitate his examination of them.

The actuary is also entitled to require from the directors, officers and employees of the insurer the information and explanations necessary for the carrying out of his duties.

1996, c. 63, s. 60.

298.10. An actuary in good faith who submits a statement under section 298.7 or who files a report under section 298.11 or 298.12 shall not be liable in any civil action arising therefrom.

The same applies to a person in good faith who provides information or explanations under the second paragraph of section 298.9.

1996, c. 63, s. 60.

298.11. The actuary shall, if he becomes aware in the course of his duties of any fact, transaction or situation that, in his opinion, has or is likely to have a material adverse effect on the financial condition of the insurer, draft a detailed report thereof. He shall forward a copy of the report to the chief executive officer of the insurer or to the person who carries out the duties of that office.

The actuary shall, at the same time, forward a copy of the report to the board of directors and to the auditor.

1996, c. 63, s. 60.

298.12. Where the actuary is of the opinion that no suitable corrective action has been taken within a reasonable time, he shall send to the Authority a copy of his report together with a description of the events that have occurred since the drafting of the report and any other information he considers relevant.

1996, c. 63, s. 60; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

298.13. The actuary shall prepare, before the end of each fiscal year, a study concerning the current financial position of the insurer. He shall send a copy to the board of directors, to the auditor and, where he so requests, to the Authority.

At the request of the Authority, the study shall also concern the expected future financial condition of the insurer, and shall describe the potential financial repercussions of the insurer’s activities.

The actuary shall meet with the board of directors to present his findings to it. Instead of meeting the actuary, the board of directors may ask that he present his findings to the audit committee.

1996, c. 63, s. 60; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

298.14. The actuary shall prepare, at the end of each fiscal year, a report establishing and presenting the provisions and reserves considered sufficient to ensure sound and prudent management. The report must include any information required by the Authority.

The insurer must, on request, forward a copy of the report to the Authority.

The report must be accompanied by the actuary’s provisions and reserves valuation certificate. The certificate must be appended to the annual statement of the insurer.

1996, c. 63, s. 60; 2002, c. 70, s. 124; 2004, c. 37, s. 90.

298.15. The Authority may, at any time, require that a study of any question, such as the valuation of the provisions and reserves and the financial position of the insurer, be conducted in the manner and within the time limit it indicates. The actuary shall transmit the results of the review to the Authority within the allotted time.

The Authority may designate another actuary to conduct such a review. All expenses incurred for the purposes of the review and approved by the Authority shall be paid by the insurer.

1996, c. 63, s. 60; 2002, c. 70, s. 125; 2004, c. 37, s. 90.

298.16. The actuary shall apply generally accepted actuarial practice. He shall, however, take into account any changes made thereto by the Authority in respect of the insurer.

1996, c. 63, s. 60; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

298.17. The actuary designated by an insurance company that transacts participating insurance shall prepare, before the end of each fiscal year, a review of the method of allocating income and expenses to participating and non-participating business.

The actuary shall indicate in the review whether, in his or her opinion, the allocation method is fair and equitable for participating and other policyholders.

The actuary shall send a copy of the review to the board of directors.

2002, c. 70, s. 126.

298.18. The actuary designated by an insurance company that transacts participating insurance shall prepare a report on the benefits granted to holders of such policies, in particular in the form of dividends or bonuses.

The actuary shall indicate in the report whether, in his or her opinion, the granting of such benefits is in conformity with the policy established pursuant to section 66.1.

The actuary shall send a copy of the report to the board of directors.

2002, c. 70, s. 126.

DIVISION IV ANNUAL REPORT TO SHAREHOLDERS AND MEMBERS

299. The accounts are closed at the end of the fiscal year and, during the ensuing two months, the board of directors shall prepare the annual report which must, in particular, exhibit:

(a)  the names and addresses of the directors;

(a.1)  the number of shareholders or members or, in the case of a professional order, the number of insured members;

(b)  the balance sheet, the income statement and the statement of retained earnings;

(c)  the report of the auditor;

(d)  the actuary’s certificate referred to in section 298.15;

(e)  the other information required by the regulations.

1974, c. 70, s. 299; 1979, c. 33, s. 27; 1987, c. 54, s. 16; 1994, c. 40, s. 457; 1996, c. 63, s. 61; 2002, c. 70, s. 127.

300. The balance sheet and the income statement must be approved by the board of directors which shall appoint two directors to sign the balance sheet.

1974, c. 70, s. 300; 2002, c. 70, s. 154.

301. The annual report must be submitted to the annual general meeting of the insurer and it must be consistent with the statement filed under section 305.

The participating policy holders, the members of mutual insurance companies and the members of mutual insurance associations are entitled, in the same manner as the shareholders, to examine the annual report.

In the case of a professional order, the report must be submitted to the Bureau of the order, which shall make the report available to its members.

1974, c. 70, s. 301; 1984, c. 22, s. 68; 1985, c. 17, s. 40; 1987, c. 54, s. 17; 1994, c. 40, s. 457; 1996, c. 63, s. 62.

DIVISION V LIABILITY FOR MONEY OF INSURED

302. Every person liable for the safe-keeping of an insurer’s money must furnish a deposit, in the amount determined by the directors, to guarantee faithful performance of his duties; the deposit must be delivered to the auditor of the insurer.

Subject to section 135, the amount of such deposit shall not, in any case, be less than $25,000.

1974, c. 70, s. 302.

CHAPTER V ANNUAL STATEMENTS AND INSPECTIONS

303. Every person acting as an insurer must make to the Authority prompt and explicit answer to any request from the Authority for information respecting his insurance transactions.

In addition to the statements required by this Act, every insurer shall furnish, at the request of the Authority, on the dates and in the form fixed by the Authority, the additional statements and information it considers necessary to determine whether the insurer is complying with this Act or the regulations.

1974, c. 70, s. 303; 1982, c. 52, s. 80; 1984, c. 22, s. 69; 1989, c. 48, s. 232; 1998, c. 37, s. 511; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

304. Every person contemplated in section 303 must, on demand, make a report to the Authority, in the form and at the dates required by the latter, indicating the names of all other persons authorized to represent him in Québec and all persons to whom he has paid or promised to pay a commission or remuneration for having acted as a firm, independent representative or independent partnership in a sector of insurance in Québec.

1974, c. 70, s. 304; 1982, c. 52, s. 80; 1989, c. 48, s. 233; 1998, c. 37, s. 512; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

305. Every insurer shall, before 1 March each year, prepare and file with the Authority, in such form as it may determine, an income statement for the year ending on the preceding 31 December.

Where an insurer holds a licence restricted to the business of reinsurance, he shall file the statement provided for in the first paragraph before 15 March of each year.

The Authority may determine, with respect to any insurer it designates and with the insurer’s consent, dates that are different from those provided for in this section.

1974, c. 70, s. 305; 1977, c. 5, s. 14; 1979, c. 33, s. 28; 1982, c. 52, s. 72; 1984, c. 22, s. 70; 2002, c. 70, s. 128; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

306. Such statement must show the financial condition of the insurer and exhibit the information prescribed in section 299.

The statement shall also contain any other information required by the Act respecting the legal publicity of sole proprietorships, partnerships and legal persons (chapter P-45) for the annual updating of information relating to a registered legal person.

1974, c. 70, s. 306; 1993, c. 48, s. 164.

307. The balance sheet must, as the case may be, show in particular:

(a)  the investments and loans of the insurer;

(b)  cash on hand and in the bank;

(c)  the other assets of the insurer from outstanding and accrued investment income, premiums and assessments due and outstanding and any other sums receivable;

(d)  provisions and reserves;

(e)  (paragraph repealed);

(f)  the other sums due to the insured persons, beneficiaries, members and shareholders of the insurer;

(g)  the subscribed and paid-up capital stock;

(h)  the premiums and assessments collected in advance;

(i)  (paragraph repealed) ;

(j)  the amount of the common shares and the amount of the preferred shares subscribed and paid.

1974, c. 70, s. 307; 1985, c. 17, s. 41; 1996, c. 63, s. 63; 2002, c. 70, s. 129.

308. The income statement must exactly represent the operations of the fiscal year and, as the case may be, include in particular:

(a)  revenues from premiums and assessments;

(b)  other revenues of the insurer, especially its investment income;

(c)  losses;

(d)  salaries, commissions, contributions to pension plans and other general operating expenses;

(e)  variations in the provisions.

1974, c. 70, s. 308; 1996, c. 63, s. 64; 2002, c. 70, s. 153.

309. The annual statement of every insurer must be certified under oath by at least two of its directors and must be accompanied with the report of the auditor and with the actuary’s certificate for the annual report on provisions and reserves.

At the request of the Authority, every insurer shall, within the time it indicates, send to the Authority a report prepared in accordance with section 298.14 or a study prepared in accordance with section 298.13.

1974, c. 70, s. 309; 1979, c. 33, s. 29; 1982, c. 52, s. 80; 1984, c. 22, s. 71; 1985, c. 17, s. 42; 1989, c. 67, s. 1; 1996, c. 63, s. 65; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

310. The annual statement of every insurer authorized to transact life insurance must also show:

(a)  an apportionment of the revenues and expenses for each fund of the insurer and a description of the method used to make such apportionment;

(b)  a detailed analysis of the insurance in force for each class of insurance.

1974, c. 70, s. 310.

311. Every insurer maintaining separate groups of assets must furnish a separate annual statement in the form prescribed by the Authority, specially indicating their origin and, where such is the case, their reallocation to the original groups.

1974, c. 70, s. 311; 1979, c. 33, s. 30; 1982, c. 52, s. 80; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

312. An insurer transacting damage insurance must include in its annual statement an analysis, for each class of business, of the Branch reinsurance assigned to unlicensed reinsurers and a statement of the losses and settlement costs incurred during the last fiscal year together with proof that the provisions and reserves established for that purpose during the previous fiscal years are sufficient.

1974, c. 70, s. 312; 1996, c. 63, s. 66.

313. (Repealed).

1974, c. 70, s. 313; 1977, c. 5, s. 14; 1982, c. 52, s. 78, s. 80; 2002, c. 70, s. 130.

314. (Repealed).

1974, c. 70, s. 314; 1979, c. 33, s. 31; 1982, c. 52, s. 80; 2002, c. 70, s. 130.

315. The Authority may, to assure an equitable application of tariffs, require from any insurer or group of insurers undertaking fire insurance in Québec any information respecting the classes of rates applied in the territories of the municipalities of Québec which it designates and the criteria used for fixing such rates.

1974, c. 70, s. 315; 1982, c. 52, s. 80; 1996, c. 2, s. 81; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

316. The Authority may require from any person holding a licence, any person controlling an insurer, any legal person affiliated with an insurer, the auditor, or the actuary designated by an insurer that he or it provides the Authority, on the dates it determines, with the documents and information it considers appropriate for the purposes of the Act and the regulations.

1974, c. 70, s. 316; 1982, c. 52, s. 80; 1990, c. 86, s. 45; 1989, c. 48, s. 234; 1996, c. 63, s. 67, s. 80; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

317. The Authority may, if it considers it advisable, conduct or commission any inspection into the internal affairs and activities of any insurer.

The Government may, for the application of the preceding paragraph, make agreements with any other government.

1974, c. 70, s. 317; 1982, c. 52, s. 80; 1989, c. 48, s. 235; 1999, c. 40, s. 33; 2002, c. 70, s. 131; 2004, c. 37, s. 90.

317.1. The Authority may, if it believes on reasonable grounds that an insurer committed an offence under this Act or that the financial position of an insurer is deteriorating, inspect the internal affairs and activities of the insurer, the holding company directly controlling the insurer and any holding company controlled by the insurer.

2002, c. 70, s. 132; 2004, c. 37, s. 90.

317.2. Any holding company directly controlling an insurer and any holding company controlled by an insurer must make an undertaking enabling the Authority or the representative designated by the Authority to enter, at any reasonable time, their head office and other establishments situated outside Québec and permitting the application of subparagraphs 2 and 3 of the first and second paragraphs of section 10, for the purposes of an inspection of their internal affairs and activities.

2002, c. 70, s. 132; 2004, c. 37, s. 90.

318. The inspection contemplated in the first paragraph of section 317 must in particular relate to:

(a)  the accuracy of the information furnished in the statements and reports filed under this Act;

(b)  the sufficiency of the provisions and reserves for insurance other than life insurance;

(c)  the management practices of the insurer;

(d)  the settlement of losses.

1974, c. 70, s. 318; 1996, c. 63, s. 68; 2002, c. 45, s. 234.

319. The Authority must examine or cause to be examined the affairs of a legal person transacting insurance if at least 100 of its members or shareholders or, in the case of a professional order, 100 of its insured members apply for it.

The Authority must make a special report to the Minister whenever it has made an examination under this section and send a copy of the report to the insurer who has been the object of the examination.

1974, c. 70, s. 319; 1982, c. 52, s. 80; 1987, c. 54, s. 18; 1994, c. 40, s. 457; 1996, c. 63, s. 80; 2002, c. 70, s. 133; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

320. The Authority may, whenever it considers it advisable, cause the provisions and reserves for all outstanding contracts of every insurer doing business in Québec to be valued in accordance with the provisions of this Act.

1974, c. 70, s. 320; 1982, c. 52, s. 80; 1984, c. 22, s. 72; 1996, c. 63, s. 69; 2002, c. 70, s. 134; 2004, c. 37, s. 91.

321. The Authority shall, before 30 June each year, make a report to the Minister, according to the information obtained from the insurers and the inquiries, inspections and evaluations made by the Authority, on the affairs of all the insurers doing business in Québec for the year ending on the preceding 31 December.

1974, c. 70, s. 321; 1982, c. 52, s. 80; 2002, c. 70, s. 135; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

322. (Repealed).

1974, c. 70, s. 322; 1982, c. 52, s. 80; 1999, c. 40, s. 33; 2002, c. 70, s. 136.

323. The Authority may, in its report, value or have valued the assets of an insurer or the hypothecs guaranteeing its debts if such assets or hypothecs do not appear to the Authority to be valued at their actual value in the annual report of the insurer.

Such valuation is made at the expense of the insurer.

1974, c. 70, s. 323; 1982, c. 52, s. 80; 1996, c. 63, s. 70; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

324. The Minister shall lay such report before the National Assembly not later than 30 June following the end of each year or, if the National Assembly is not sitting at that date, within the first 15 days of the next session.

Immediately after it is laid before the National Assembly, the report of the Authority must be printed and distributed.

1974, c. 70, s. 324; 1982, c. 52, s. 80; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

325. Insurers transacting damage insurance in Québec must furnish the Authority with the information, statistics and reports relating to their operations in Québec in the manner and form prescribed by the regulations.

1974, c. 70, s. 325; 1982, c. 52, s. 80; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

CHAPTER V.1 GUIDELINES AND ORDERS OF THE AUTHORITY

1990, c. 86, s. 46; 2002, c. 45, s. 235; 2004, c. 37, s. 90.

325.0.1. The Authority may, after consultation with the Minister, give the guidelines applicable to one or more categories of the following legal persons or companies:

(1)  life insurance companies;

(2)  property insurance companies;

(3)  holding companies controlled by an insurer;

(4)  mutual insurance companies;

(5)  federations of mutual insurance companies;

(6)  guarantee funds;

(7)  mutual benefit associations;

(8)  professional orders, with regard to their insurance funds.

Before issuing guidelines to mutual insurance companies, the Authority shall consult the federation of which they are members.

2002, c. 45, s. 236; 2002, c. 70, s. 137; 2004, c. 37, s. 90.

325.0.2. The guidelines may pertain to

(1)   the adequacy of the capital;

(2)  the adequacy of the liquid assets;

(3)  any other sound and prudent management practices, in particular as regards investments;

(4)  any commercial practice referred to in section 222.2;

(5)  any requirement under section 285.29.

Guidelines are not regulations. They may pertain to the carrying out, interpretation or application of the subject matter of any of subparagraphs 1 to 5 of the first paragraph whether or not it is dealt with in a regulation made under this Act.

2002, c. 45, s. 236; 2002, c. 70, s. 138; 2008, c. 7, s. 39.

325.0.3. A legal person or company that fails to comply with the guidelines is, for the purposes of section 325.5, deemed to have failed to adhere to sound and prudent management practices.

2002, c. 45, s. 236; 2008, c. 7, s. 40.

325.1. The Authority may order a legal person or partnership referred to in subparagraphs 1 to 8 of the first paragraph of section 325.0.1 to cease a course of action or to implement specified measures if the Authority is of the opinion that the legal person or partnership

(1)  is not adhering to sound and prudent management practices, in particular concerning any of the objects referred to in subparagraphs 1 to 3 of the first paragraph of section 325.0.2;

(1.1)  is not adhering to the commercial practices referred to in section 222.2;

(1.2)  is not complying with the requirements under section 285.29;

(2)  is not complying with a provision of this Act, a regulation, an order made pursuant to section 33.2.2 or 93.162 or a written instruction; or

(3)  is not complying with an undertaking under this Act.

The Authority may also order a legal person or a partnership controlled by an insurer to cease a course of action or to implement specified measures if the Authority is of the opinion that the legal person or partnership is not complying with a provision of this Act, a regulation or a written instruction or is not complying with an undertaking under this Act.

At least 15 days before issuing an order, the Authority shall notify the contravener as prescribed in section 5 of the Act respecting administrative justice (chapter J‐3), stating the grounds which appear to justify the order, the date on which the order is to take effect and the right of the contravener to present observations.

1990, c. 86, s. 46; 1996, c. 63, s. 82; 1997, c. 43, s. 80; 2002, c. 45, s. 237; 2002, c. 70, s. 139; 2004, c. 37, s. 90; 2008, c. 7, s. 41.

325.1.1. The Authority may make an order under section 325.1 if it is of the opinion that the legal person or partnership is not adhering to sound and prudent management practices, is not adhering to the commercial practices referred to in section 222.2 or is not complying with the requirements under section 285.29, even if the guidelines are being complied with.

2002, c. 70, s. 139; 2004, c. 37, s. 90; 2008, c. 7, s. 42.

325.2. The order of the Authority must state the reasons which support it, and shall be sent to all the persons to whom it applies. It shall also be sent to every director of the legal person or insurer concerned. The order shall become effective on the day it is served or on any later date indicated therein.

1990, c. 86, s. 46; 1996, c. 63, s. 80; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

325.3. However, the Authority may, without prior notice, issue a provisional order valid for a period not exceeding 15 days if in its opinion any period of time allowed to the person concerned to present observations may be detrimental.

Such an order must state the reasons on which it is based and shall become effective on the day it is served on the person to whom it applies. That person may, within six days of receiving the order, present observations to the Authority.

1990, c. 86, s. 46; 1997, c. 43, s. 81; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

325.4. The Authority may revoke an order issued under this Act.

1990, c. 86, s. 46; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

CHAPTER V.2 INJUNCTION AND PARTICIPATION IN PROCEEDINGS

1990, c. 86, s. 46.

325.5. The Authority may, by a motion, apply to a judge of the Superior Court for an injunction in respect of any matter relating to the carrying out of this Act or the regulations.

The motion for an injunction constitutes an action.

The procedure prescribed in the Code of Civil Procedure (chapter C‐25) applies, except that the Authority shall not be required to give security.

1990, c. 86, s. 46; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

325.6. The Authority may, of its own motion and without notice, intervene in any civil action concerning a provision of this Act or the regulations to take part in the proof or hearing as if the Authority were a party thereto.

1990, c. 86, s. 46; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

CHAPTER V.3 CANCELLATION OF TRANSACTIONS

1990, c. 86, s. 46.

325.7. The Authority or any person having a sufficient interest may apply to the court for the cancellation of a transaction entered into by an insurer contrary to the provisions of this Act.

The court may also order every director or officer who is a party to such a transaction or who facilitated its carrying out to pay to the insurer, solidarily, either the amount of damages awarded as compensation for the injury suffered or the amount paid by the insurer as a result of the transaction.

1990, c. 86, s. 46; 1996, c. 63, s. 71; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

CHAPTER VI

Repealed, 1989, c. 48, s. 236.

1989, c. 48, s. 236.

DIVISION I

Repealed, 1989, c. 48, s. 236.

1989, c. 48, s. 236.

326. (Repealed).

1974, c. 70, s. 326; 1985, c. 17, s. 43; 1987, c. 54, s. 19; 1989, c. 48, s. 236.

327. (Repealed).

1974, c. 70, s. 327; 1982, c. 52, s. 80; 1987, c. 39, s. 1; 1989, c. 48, s. 236.

328. (Repealed).

1974, c. 70, s. 328; 1979, c. 33, s. 32; 1982, c. 52, s. 73; 1989, c. 48, s. 236.

329. (Repealed).

1974, c. 70, s. 329; 1989, c. 48, s. 236.

330. (Repealed).

1974, c. 70, s. 330; 1989, c. 48, s. 236.

331. (Repealed).

1974, c. 70, s. 331; 1979, c. 33, s. 33; 1982, c. 52, s. 80; 1989, c. 48, s. 236.

332. (Repealed).

1974, c. 70, s. 332; 1989, c. 48, s. 236.

333. (Repealed).

1974, c. 70, s. 333; 1989, c. 48, s. 236.

334. (Repealed).

1974, c. 70, s. 334; 1982, c. 52, s. 80; 1989, c. 48, s. 236.

334.1. (Repealed).

1987, c. 39, s. 2; 1989, c. 48, s. 236.

334.2. (Repealed).

1987, c. 39, s. 2; 1989, c. 48, s. 236.

334.3. (Repealed).

1987, c. 39, s. 2; 1989, c. 48, s. 236.

DIVISION II

Repealed, 1989, c. 48, s. 236.

1989, c. 48, s. 236.

335. (Repealed).

1974, c. 70, s. 335; 1989, c. 48, s. 236.

336. (Repealed).

1974, c. 70, s. 336; 1989, c. 48, s. 236.

337. (Repealed).

1974, c. 70, s. 337; 1982, c. 52, s. 80; 1989, c. 48, s. 236.

338. (Repealed).

1974, c. 70, s. 338; 1989, c. 48, s. 236.

339. (Repealed).

1974, c. 70, s. 339; 1989, c. 48, s. 236.

340. (Repealed).

1974, c. 70, s. 340; 1989, c. 48, s. 236.

341. (Repealed).

1974, c. 70, s. 341; 1987, c. 54, s. 20; 1989, c. 48, s. 236.

342. (Repealed).

1974, c. 70, s. 342; 1989, c. 48, s. 236.

343. (Repealed).

1974, c. 70, s. 343; 1989, c. 48, s. 236.

344. (Repealed).

1974, c. 70, s. 344; 1989, c. 48, s. 236.

345. (Repealed).

1974, c. 70, s. 345; 1989, c. 48, s. 236.

346. (Repealed).

1974, c. 70, s. 346; 1979, c. 33, s. 34; 1982, c. 52, s. 80; 1989, c. 48, s. 236.

347. (Repealed).

1974, c. 70, s. 347; 1989, c. 48, s. 236.

CHAPTER VII

Repealed, 1989, c. 48, s. 236.

1989, c. 48, s. 236.

348. (Repealed).

1974, c. 70, s. 348; 1982, c. 52, s. 80; 1989, c. 48, s. 236.

349. (Repealed).

1974, c. 70, s. 349; 1979, c. 72, s. 490; 1985, c. 17, s. 44; 1989, c. 48, s. 236.

349.1. (Repealed).

1979, c. 33, s. 35; 1989, c. 48, s. 236.

350. (Repealed).

1974, c. 70, s. 350; 1979, c. 33, s. 36; 1989, c. 48, s. 236.

351. (Repealed).

1974, c. 70, s. 351; 1989, c. 48, s. 236.

352. (Repealed).

1974, c. 70, s. 352; 1989, c. 48, s. 236.

353. (Repealed).

1974, c. 70, s. 353; 1979, c. 33, s. 37; 1982, c. 52, s. 80; 1989, c. 48, s. 236.

354. (Repealed).

1974, c. 70, s. 354; 1989, c. 48, s. 236.

355. (Repealed).

1974, c. 70, s. 355; 1989, c. 48, s. 236.

356. (Repealed).

1974, c. 70, s. 356; 1989, c. 48, s. 236.

357. (Repealed).

1974, c. 70, s. 357; 1989, c. 48, s. 236.

CHAPTER VIII SUSPENSION AND CANCELLATION OF LICENCES AND CERTIFICATES

358. The Authority may suspend or cancel the licence of any insurer

(a)  which no longer complies with the conditions prescribed;

(b)  which becomes or, in the opinion of the Authority, is about to become insolvent;

(c)  of which the assets are insufficient, in the opinion of the Authority, to provide adequate protection of the insured;

(d)  (paragraph repealed);

(e)  (paragraph repealed);

(f)  which omits to pay, within the 60 days following an offer of discharge or a notice of non-payment served on the Authority, an indemnity requested in application of an insurance contract if the right to such indemnity or the amount of it is not contested or, in case of contestation, if a final judgment has declared it exigible;

(g)  which does not, in the opinion of the Authority, adhere to sound and prudent management practices, adhere to the commercial practices referred to in section 222.2 or comply with the requirements under section 285.29;

(g.1)   where a holding company controlled by the insurer does not, in the opinion of the Authority, adhere to sound and prudent management practices;

(g.2)  where the holding company that controls the insurer directly or a holding company controlled by the insurer has not deposited an undertaking enabling the Authority or the representatives designated by the Authority to enter, at any reasonable time, the head office of the holding company and its other establishments situated outside Québec and permitting the application of subparagraphs 2 and 3 of the first and second paragraphs of section 10, for the purposes of the inspection of the holding company’s internal affairs and activities, or has failed to fulfil such an undertaking ;

(h)  which is, in the opinion of the Authority, in an unsatisfactory financial position that cannot be remedied;

(i)  which has committed an offence or which, in the opinion of the Authority, contravenes this Act, any Act of Québec or of another province or of the Parliament of Canada which governs its activities or a regulation or rule made under such Acts;

(j)  which has obtained such licence through fraud or as the result of an error;

(k)  which contravenes an order of the Authority, notwithstanding any extraordinary recourse, or an injunction issued upon application by the Authority.

The Authority may also modify the licence of an insurer coming under the first paragraph so as to withdraw authorization to transact classes of insurance.

1974, c. 70, s. 358; 1982, c. 52, s. 80; 1984, c. 22, s. 73; 1990, c. 86, s. 47; 2002, c. 45, s. 238; 2002, c. 70, s. 140; 2004, c. 37, s. 90; 2008, c. 7, s. 43.

359. (Repealed).

1974, c. 70, s. 359; 1982, c. 52, s. 80; 1984, c. 22, s. 74.

360. (Repealed).

1974, c. 70, s. 360; 1982, c. 52, s. 80; 1986, c. 95, s. 27; 1989, c. 48, s. 237.

361. The Authority shall, before exercising a power under section 358, notify the holder in writing as prescribed by section 5 of the Act respecting administrative justice (chapter J‐3) and allow the holder at least 10 days to present observations. The Authority shall also give notice in writing of its decision, giving the reasons on which it is based, to the person concerned.

1974, c. 70, s. 361; 1982, c. 52, s. 80; 1989, c. 48, s. 238; 1997, c. 43, s. 82; 2002, c. 70, s. 141; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

362. The Authority shall also give notice in the Gazette officielle du Québec of

(1)  any cancellation or suspension of a licence; or

(2)  any modification to a licence made by the Authority under section 358.

1974, c. 70, s. 362; 1982, c. 52, s. 80; 1989, c. 48, s. 239; 2002, c. 70, s. 142; 2004, c. 37, s. 90.

363. The licence of an insurer is suspended by operation of law if its powers as a legal person are suspended.

1974, c. 70, s. 363; 1982, c. 52, s. 80; 1984, c. 22, s. 75; 1996, c. 63, s. 80; 2002, c. 70, s. 143.

364. Every licence suspended by operation of law or by the Authority may, at the pleasure of the Authority, be provisionally replaced by another exhibiting the conditions or restrictions it considers expedient.

1974, c. 70, s. 364; 1982, c. 52, s. 80; 1989, c. 48, s. 240; 2002, c. 70, s. 144; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

365. The licence of any insurer is without effect from such time as:

(a)  its charter is repealed or annulled or expires or its articles are cancelled;

(b)  its powers as a legal person are revoked;

(c)  it adopts a resolution prescribing its own winding-up;

(d)  a winding-up order is made against it by any competent court.

1974, c. 70, s. 365; 1996, c. 63, s. 80; 2002, c. 70, s. 145.

CHAPTER IX PROCEEDING BEFORE THE ADMINISTRATIVE TRIBUNAL OF QUÉBEC

1997, c. 43, s. 83.

366. Any decision to refuse, suspend or cancel a licence or to modify a licence under section 358 may, within 30 days of its notification, be contested before the Administrative Tribunal of Québec.

The same applies in respect of a decision rendered pursuant to the provisions of Chapter XI.1.

1974, c. 70, s. 366; 1988, c. 21, s. 66; 1989, c. 48, s. 241; 1996, c. 63, s. 80, s. 85; 1997, c. 43, s. 83; 2002, c. 70, s. 146.

367. Notwithstanding the second paragraph of section 15 of the Act respecting administrative justice (chapter J‐3), the Tribunal may only confirm or quash a decision contested under the first paragraph of section 366.

1974, c. 70, s. 367; 1982, c. 52, s. 80; 1988, c. 21, s. 66; 1997, c. 43, s. 83; 2002, c. 70, s. 147.

368. (Replaced).

1974, c. 70, s. 368; 1992, c. 61, s. 73; 1997, c. 43, s. 83.

369. (Replaced).

1974, c. 70, s. 369; 1982, c. 52, s. 80; 1989, c. 48, s. 242; 1997, c. 43, s. 83.

370. (Replaced).

1974, c. 70, s. 370; 1997, c. 43, s. 83.

371. (Replaced).

1974, c. 70, s. 371; 1997, c. 43, s. 83.

372. (Replaced).

1974, c. 70, s. 372; 1997, c. 43, s. 83.

373. (Replaced).

1974, c. 70, s. 373; 1997, c. 43, s. 83.

374. (Replaced).

1974, c. 70, s. 374; 1997, c. 43, s. 83.

375. (Replaced).

1974, c. 70, s. 375; 1997, c. 43, s. 83.

376. (Replaced).

1974, c. 70, s. 376; 1975, c. 83, s. 84; 1988, c. 21, s. 66; 1997, c. 43, s. 83.

377. (Replaced).

1974, c. 70, s. 377; 1997, c. 43, s. 83.

CHAPTER X

Repealed, 2008, c. 7, s. 44.

2008, c. 7, s. 44.

378. (Repealed).

1974, c. 70, s. 378; 1982, c. 52, s. 80; 1985, c. 17, s. 45; 1987, c. 54, s. 21; 1994, c. 40, s. 457; 1996, c. 63, s. 73; 1999, c. 40, s. 33; 2002, c. 45, s. 239; 2004, c. 37, s. 90; 2008, c. 7, s. 44.

379. (Repealed).

1974, c. 70, s. 379; 2008, c. 7, s. 44.

380. (Repealed).

1974, c. 70, s. 380; 1982, c. 52, s. 80; 1999, c. 40, s. 33; 2002, c. 45, s. 243; 2004, c. 37, s. 90; 2008, c. 7, s. 44.

381. (Repealed).

1974, c. 70, s. 381; 2008, c. 7, s. 44.

382. (Repealed).

1974, c. 70, s. 382; 1997, c. 43, s. 84; 2008, c. 7, s. 44.

383. (Repealed).

1974, c. 70, s. 383; 1997, c. 43, s. 85; 2008, c. 7, s. 44.

384. (Repealed).

1974, c. 70, s. 384; 1982, c. 52, s. 80; 1996, c. 63, s. 74; 1999, c. 40, s. 33; 2002, c. 45, s. 243; 2004, c. 37, s. 90; 2008, c. 7, s. 44.

385. (Repealed).

1974, c. 70, s. 385; 2008, c. 7, s. 44.

386. (Repealed).

1974, c. 70, s. 386; 2008, c. 7, s. 44.

387. (Repealed).

1974, c. 70, s. 387; 1982, c. 52, s. 80; 1999, c. 40, s. 33; 2002, c. 45, s. 240; 2004, c. 37, s. 90; 2008, c. 7, s. 44.

388. (Repealed).

1974, c. 70, s. 388; 1987, c. 54, s. 22; 1994, c. 40, s. 457; 1996, c. 63, s. 76; 2008, c. 7, s. 44.

389. (Repealed).

1974, c. 70, s. 389; 2008, c. 7, s. 44.

390. (Repealed).

1974, c. 70, s. 390; 1989, c. 48, s. 243.

CHAPTER XI WINDING-UP

390.1. The provisions of this chapter apply, with the necessary modifications, to the winding-up of an insurance company within the scope of a receivership ordered under Chapter III.1 of Title I of the Act respecting the Autorité des marchés financiers (chapter A-33.2), to the extent that they are not inconsistent with that chapter.

2008, c. 24, s. 180.

391. The Winding-up Act (chapter L-4) applies to the winding-up of any insurance company constituted in Québec, subject to the provisions of this chapter.

1974, c. 70, s. 391; 1999, c. 40, s. 33.

391.1. (Repealed).

2008, c. 7, s. 45; 2008, c. 24, s. 181.

392. Subject to this Act, Divisions II and III of the Winding-up Act (chapter L-4) apply to the winding-up of a mutual association or insurance fund.

For such purpose the word “company”, in the said Act, means a mutual association or an insurance fund, the word “shareholder” means any member of the mutual association or any insured member of the professional order and where a provision of the said Act requires the vote of the shareholders, representing a specified proportion of the capital stock of a company, that provision is considered to require the vote of a number of the members of the mutual association or of insured members of the professional order equal to the specified proportion of the value.

1974, c. 70, s. 392; 1987, c. 54, s. 23; 1994, c. 40, s. 457; 1999, c. 40, s. 33.

393. The winding-up of a mutual association may be decided by the affirmative vote of three-fourths of the members present at a general meeting called for that purpose.

The meeting shall then appoint, by a majority of the members present, one or three liquidators who are entitled to immediate possession of the property of the association.

1974, c. 70, s. 393.

393.1. The winding-up of the insurance fund is decided by resolution of the Bureau of the professional order having established it.

For the purposes of the application of this Act to the winding-up of an insurance fund, any reference to the general meeting of a legal person is a reference to a meeting of the Bureau of the professional order having established the insurance fund.

1987, c. 54, s. 25; 1994, c. 40, s. 457; 1996, c. 63, s. 80.

394. As soon as the winding-up has been voted by the general meeting, every action or suit against the property of the legal person, particularly by seizure by garnishment, seizure before judgment or seizure in execution must be suspended.

The costs incurred by a creditor, after he has become aware of the winding-up, particularly through his attorney, shall not be collocated out of the proceeds of the property of the legal person which are distributed in consequence of the winding-up.

A judge of the Superior Court for the district in which the head office of the legal person is situated may, however, upon the conditions that he considers suitable, authorize the instituting of an action or the continuance of any suit commenced.

1965 (1st sess.), c. 80, a. 1; 1974, c. 70, s. 394; 1996, c. 63, s. 77, s. 80.

395. Every legal person that has decided to effect its winding-up must give notice of it to the Authority and file a declaration to that effect in accordance with the Act respecting the legal publicity of sole proprietorships, partnerships and legal persons (chapter P‐45), and forward a copy to the Authority of the resolution passed for that purpose by the general meeting; a similar notice must also be mailed to each policyholder and published in a daily newspaper circulating in the locality where the legal person has its head office.

The notice must indicate the date on which the legal person will cease to transact insurance, the name and address of the liquidator and the postal address where interested persons may send him their claims.

1974, c. 70, s. 395; 1982, c. 52, s. 80; 1993, c. 48, s. 165; 1996, c. 63, s. 80; 2002, c. 45, s. 241; 2004, c. 37, s. 90.

396. The winding-up of the legal person may commence only after one month from the date of the notice given to the Authority in accordance with section 395.

1974, c. 70, s. 396; 1982, c. 52, s. 80; 1996, c. 63, s. 80; 1999, c. 40, s. 33; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

397. Before taking possession of the property of the legal person or, where such is the case, of its insurance fund, the liquidator shall give sufficient security to guarantee performance of his duties. At the request of the Authority or of any other interested person, the judge of the Superior Court may determine the amount and nature of that security and increase it according to circumstances.

1974, c. 70, s. 397; 1982, c. 52, s. 80; 1987, c. 54, s. 26; 1996, c. 63, s. 80; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

398. The liquidator appointed to the property of a legal person or, where such is the case, of its insurance fund shall act under the control and direction of the Authority who may, even if it alleges no particular interest, act before the courts in all matters respecting the winding-up and exercise, on behalf of any shareholder, member, insured or creditor of the legal person, the rights that such a one has against the legal person.

1974, c. 70, s. 398; 1982, c. 52, s. 80; 1987, c. 54, s. 27; 1996, c. 63, s. 80; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

399. The liquidator shall, upon his appointment, if it has not been already done, reinsure the contracts of insurance in force established by the legal person by using the current net assets, provided that he has paid all debts other than the value of insurance policies and unearned premiums.

Every reinsurance must be effected with an insurer who holds a licence. It shall replace any claim of the insured for recovery of the value of their policies or for a refund of premiums to the extent that such reinsurance replaces the contract originally underwritten.

1974, c. 70, s. 399; 1996, c. 63, s. 78, s. 80.

400. If such reinsurance is not effected in accordance with section 399, every insured, in addition to his rights under the insurance policies that he held on the date of the winding-up, is entitled to the value of the said insurance policy on the said date, less the advances made on the security of such policies.

Such values shall be computed in accordance with the scales approved by the Authority.

1974, c. 70, s. 400; 1982, c. 52, s. 80; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

401. In the case of a legal person that transacted fire insurance, the insured, if there has been no reinsurance, is entitled, in addition to the rights he acquired before the date of the winding-up according to the conditions of any insurance policy, to a refund of every premium or part of premium paid for a risk which has disappeared from the date on which, according to section 395, the legal person ceased to transact insurance.

1974, c. 70, s. 401; 1996, c. 63, s. 80.

402. The assets that a legal person must maintain separately from its other property shall be available only for the carrying out of the obligations of the legal person which must be borne by such assets, until such obligations have been fully carried out. They shall then be available for the carrying out of the other obligations of the legal person other than a professional order.

1974, c. 70, s. 402; 1987, c. 54, s. 28; 1994, c. 40, s. 457; 1996, c. 63, s. 80.

403. These assets may be liquidated separately from the other property of the legal person or even without such other property being liquidated.

The net balance of the liquidation of such assets may be used to discharge any other debt of the legal person.

1974, c. 70, s. 403; 1996, c. 63, s. 80.

404. The following claims shall have, by preference over the other creditors, priority in the following order:

(a)  costs and fees of winding-up;

(b)  salaries and wages of the employees of the legal person other than a professional order, up to three months of unpaid salary;

(c)  claims based on the occurrence, before the date of the winding-up, of a risk assumed by the legal person;

(d)  the claims of insured persons for recovery of the value of their policies or for a refund of the premiums paid with respect to risks which have ceased to be insured following the winding-up and sums paid into the pension plan of the employees of a legal person other than a professional order.

1974, c. 70, s. 404; 1984, c. 22, s. 76; 1987, c. 54, s. 29; 1994, c. 40, s. 457; 1996, c. 63, s. 80.

404.1. The members who are insured by a professional order in any of the three years preceding the commencement of the winding-up of its insurance fund shall share any balance remaining in the insurance fund once its obligations have been discharged, in proportion to the sums paid by them in the course of those years.

1987, c. 54, s. 30; 1994, c. 40, s. 457.

405. The liquidator shall, within seven days after the end of any three month period, make to the Authority a summary report of his activities for that period. The report must indicate the receipts and expenses of the winding-up and a statement of its assets and liabilities at the end of that period.

1974, c. 70, s. 405; 1979, c. 33, s. 38; 1982, c. 52, s. 80; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

CHAPTER XI.1 ADMINISTRATIVE SANCTIONS

2002, c. 70, s. 148.

405.1. Following the establishment of facts brought to the attention of the Authority showing that a person or partnership has failed to comply with a provision of this Act or a regulation thereunder, the Authority may impose an administrative sanction on that person or partnership and collect payment thereof.

The amount of the sanction shall be proportionate to the seriousness of the violation and may, in no case, exceed $1,000,000.

2002, c. 70, s. 148; 2004, c. 37, s. 90; 2008, c. 7, s. 46.

405.2. The Authority may require a person or partnership referred to in section 405.1 to repay, in addition to an administrative sanction, the costs incurred in connection with the inspection or inquiry which established proof of the facts showing non-compliance with the provision concerned, according to the tariff established by regulation.

2002, c. 70, s. 148; 2004, c. 37, s. 90.

405.3. At least 15 days before rendering a decision under this chapter, the Authority shall notify the interested party as prescribed by section 5 of the Act respecting administrative justice (chapter J‐3), stating the grounds which appear to justify the decision, the date on which the decision is to take effect and the right of the interested party to present observations.

2002, c. 70, s. 148; 2004, c. 37, s. 90.

Not in force

405.4. (Not in force).

2008, c. 7, s. 47.

CHAPTER XII PENAL PROVISIONS

1992, c. 61, s. 74.

406. Every person is guilty of an offence who:

(a)  acts as an insurer without being able to prove that he holds a licence;

(b)  makes a false declaration in an application for a licence;

(c)  knowingly gives the Authority or a member of its personnel incorrect information;

(d)  represents that he holds a licence which he does not have;

(e)  hinders or attempts to hinder any person performing functions which this Act or the regulations oblige or authorize him to perform;

(f)  communicates any information in contravention of this Act;

(g)  publishes or files with the Authority a statement or report that he knows to be false or makes in a book or register an entry that he knows to be false or refuses or neglects to make an entry which he is bound to make under this Act;

(h)  refuses or neglects to file with the Authority a statement or report he is bound to file under this Act;

(i)  (paragraph repealed);

(j)  (paragraph repealed);

(k)  (paragraph repealed);

(l)  (paragraph repealed);

(m)  (paragraph repealed);

(n)  (paragraph repealed);

(o)  (paragraph repealed);

(p)  otherwise contravenes this Act or the regulations;

(q)  being a director, authorizes the repayment of common shares or the redemption or repayment of preferred shares in contravention of sections 93.46 and 93.53;

(r)  being an insurer, contravenes section 43 or 275.4;

(s)  contravenes the first paragraph of section 50.1 or section 52.1;

(t)  being a director or officer, communicates information in contravention of the regulations or of the rules adopted by the ethics committee;

(u)  fails to comply with an order of the Authority given under this Act;

(v)  contravenes the provisions of Chapter III.1 of Title IV.

1974, c. 70, s. 406; 1977, c. 5, s. 14; 1982, c. 52, s. 74, s. 78; 1985, c. 17, s. 46; 1990, c. 86, s. 48; 1989, c. 48, s. 244; 2002, c. 70, s. 149; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

406.1. Every insurer, other than a professional order, who accepts an insurance application or proposal from a person other than the insured, the policy holder, the participant or a person authorized to do so under the Act respecting the distribution of financial products and services (chapter D-9.2) is guilty of an offence.

1989, c. 48, s. 245; 1994, c. 40, s. 457; 1998, c. 37, s. 513.

406.2. Any insurer who, directly or indirectly, grants a rebate on the premium stipulated in an insurance policy to any person insured or applying for insurance, or agrees with that person on a method of payment of the premium other than the method set forth in the policy or who renders the making of a contract conditional upon the making of another contract is guilty of an offence.

Moreover, a contract whereby a product is acquired conditionally upon the making of a contract may be cancelled within 10 days after the day it is made by notice sent by registered or certified mail.

The payment of benefits stipulated in a policy, the reduction granted to an insured for the acquisition of two or more financial products from that insurer or from the financial group of which he is a member, or the compensation paid to an employee by an insurer for services rendered as such, even if the employee is insured by his employer, does not constitute a rebate of premium to which the first paragraph applies.

1989, c. 48, s. 245.

406.3. (Repealed).

1989, c. 48, s. 245; 1998, c. 37, s. 514.

406.4. In no case may the commission of an offence under any of sections 406.1 and 406.2 result in invalidating an insurance contract.

1989, c. 48, s. 245; 1998, c. 37, s. 515.

407. Every offence against this Act or the regulations imputable to a legal person is also imputable to all the officers, directors, employees or agents of the legal person who assented thereto or participated therein; they are then liable to the fine provided for the legal person itself, whether or not it has been convicted.

1974, c. 70, s. 407; 1996, c. 63, s. 80.

408. Every person convicted of an offence under a provision of this Act or the regulations is liable to a minimum fine of $1,000 for a natural person and $3,000 for a legal person, double the profit realized or one fifth of the sums entrusted to or collected by the person, whichever is the greatest amount.

However, in the case of an offence under paragraph b, c, e or u of section 406, the minimum fine is $5,000, double the profit realized or one fifth of the sums entrusted to or collected by the person, whichever is the greatest amount.

In all cases, the maximum fine is $50,000 for a natural person and $200,000 for a legal person, four times the profit realized or half the sums entrusted to or collected by the person, whichever is the greatest amount.

In the case of a second or subsequent conviction, the minimum and maximum fines are doubled.

However, every natural or legal person contemplated in section 407 convicted of an offence under paragraph r of section 406 is liable to a fine of $5,000 to $200,000.

1974, c. 70, s. 408; 1986, c. 58, s. 14; 1990, c. 4, s. 86; 1990, c. 86, s. 49; 1991, c. 33, s. 14; 2008, c. 7, s. 48.

408.1. Penal proceedings may be instituted by the Authority for an offence under this Act.

2008, c. 7, s. 49.

408.2. The fine imposed by the court is remitted to the Authority if it has taken charge of the prosecution.

2008, c. 7, s. 49.

408.3. Penal proceedings for an offence under any of sections 406 to 406.2 are prescribed three years from the date the investigation record relating to the offence was opened. However, no proceedings may be instituted if more than five years have elapsed since the date of the offence.

The certificate of the secretary of the Authority indicating the date on which the investigation record was opened constitutes conclusive proof of the date, in the absence of any evidence to the contrary.

2008, c. 7, s. 49.

CHAPTER XIII PROCEDURE AND PROOF

409. (Repealed).

1974, c. 70, s. 409; 1979, c. 33, s. 39; 1990, c. 4, s. 87; 1992, c. 61, s. 75.

410. (Repealed).

1974, c. 70, s. 410; 1990, c. 4, s. 88.

411. The Authority or the person designated by it may issue a certified true copy or certified extract of any book, document, order or register in its possession.

1974, c. 70, s. 411; 1982, c. 52, s. 75; 1983, c. 54, s. 12; 1990, c. 4, s. 89; 1992, c. 61, s. 76; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

412. (Repealed).

1974, c. 70, s. 412; 1990, c. 4, s. 90.

413. Any proceeding against an insurer constituted under an Act other than an Act of Québec and not having its head office therein may be validly served upon the attorney designated by such insurer in accordance with section 207 at the address provided for in section 208.

1974, c. 70, s. 413; 1999, c. 40, s. 33.

414. Every document which is to be served under this Act may be sent by mail.

Any document sent by registered or certified letter to the last known address of the person for whom it is intended is validly sent by mail.

If the document is sent from a foreign country, the time limits shall begin to run only when it arrives at a post office situated in Canada.

1974, c. 70, s. 414; 1975, c. 83, s. 84; 1999, c. 40, s. 33.

415. In any civil proceedings, or upon an appeal, any original, copy or extract of or from any book, document or voucher kept at the Authority’s office pursuant to this Act and certified true by it is proof prima facie of its contents and of the capacity of the signatory, unless it is established that it is false.

1974, c. 70, s. 415; 1977, c. 5, s. 14; 1982, c. 52, s. 76; 1990, c. 4, s. 91; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

416. When under this Act proof is made by the filing of a sworn declaration of a staff member of the Authority, the filing of that declaration is proof prima facie of the signature and capacity of the signatory.

1974, c. 70, s. 416; 1977, c. 5, s. 14; 1982, c. 52, s. 77; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

417. In any penal proceedings under this Act, any document prescribed by it which appears to bear the signature of the accused or to have been furnished or produced by him is deemed prima facie to have been so effectively.

1974, c. 70, s. 417.

418. (Repealed).

1974, c. 70, s. 418; 1982, c. 52, s. 80; 1990, c. 4, s. 92.

419. The attorney of Lloyd’s, designated in the power of attorney filed under section 206, may in that capacity and in his own name, notwithstanding any inconsistent provision of a law of Québec, exercise before the courts, as plaintiff or defendant, the rights of the members of that association who have issued an insurance contract.

1974, c. 70, s. 419.

CHAPTER XIV REGULATIONS AND FORMS

420. In addition to the regulatory powers conferred upon it by this Act, the Government may make regulations consistent with this Act to:

(a)  determine the qualifications required of any person applying for a licence, the conditions that such person must comply with and the information he must furnish;

(b)  determine the categories of licences and the classes of holders of such licences and the conditions and restrictions attaching to each category and class;

(c)  determine the tenor of applications for licences and the tenor of such licences;

(d)  determine, for each class of licence or certificate holders, the nature and form of the books, accounts and registers they must keep in addition to those prescribed by this Act;

(e)  determine, for each class of licence or certificate holders, the nature and tenor of the statements they must furnish in addition to those prescribed by this Act, and the time when they must be filed;

(f)  (paragraph repealed);

(g)  determine the form of the inspection reports made for the Authority and the information they must contain;

(h)  determine the procedure to be followed and the notices to be given before the Authority suspends, cancels or, under section 358, modifies a licence;

(i)  oblige insurers who carry on business in Québec to furnish the Authority with information and statistics on their operations in Québec and to file the statements relating thereto and determine the nature of the information that must be so given and the tenor of the statements to be so filed;

(j)  determine the cases in which the expenses incurred by the Authority to inspect or cause to be inspected the business of an insurer shall be repaid by that insurer and the extent of these repayments;

(k)  establish a tariff of fees payable for the constitution of insurance companies and associations into legal persons, the issuance of letters patent, the filing, examination and certification of articles and other documents, the issuance and reinstatement of licences as well as for inspections;

(l)  determine the methods to be followed for the valuation of the assets and liabilities of insurers or, where such is the case, of their insurance funds;

(m)  provide for the issue of a licence to trustees in bankruptcy, liquidators or heirs of deceased holders of licences or certificates, but only for the time necessary to allow the winding-up of the portfolio;

(n)  (paragraph repealed);

(o)  (paragraph repealed);

(p)  (paragraph repealed);

(q)  determine the conditions with which every funeral expenses insurance contract signed before 20 October 1976 must comply;

(r)  define the different classes of insurance and determine the cases and the conditions where they may be contained in a single policy;

(s)  establish the conditions applicable to group insurance contracts and their marketing, and to admission to a group of participants;

(t)  establish standards relating to the disclosure of the conditions of insurance contracts and to the presentation of the text, in particular, the printing type, and provide for the adoption by insurers of mandatory forms of insurance policies;

(u)  regulate the form of insurance policies and the minimum coverage that must be stipulated by each class of insurance policies indicated by it;

(v)  (paragraph repealed);

(w)  regulate reinsurance;

(x)  regulate the printing type and the colour of the ink to be used for the printing of clauses of exclusion or reduction of the liability of an insurer;

(y)  oblige the insurers who carry on business in Québec to furnish every year to the Authority a statement of the investments made by them in Québec, in Canada or elsewhere and for that purpose determine what constitutes an investment in Québec;

(z)  fix a maximum rate of interest exigible from the insured or participants on premiums due in group insurance of pension benefits;

(aa)  determine, for any legal person acting as insurer in Québec, as a condition for the issue of the licence contemplated in section 211, the reasonable proportion of its assets which must be invested in Québec having regard to the true value of its undertakings towards its insured in Québec;

(ab)  (paragraph repealed);

(ac)  prescribe the documents and information that must be furnished to the Minister and the Authority in relation to the constitution of an insurance company, the continuance of an insurance company governed by the Companies Act (chapter C-38) or the constitution of a mutual insurance association or in relation to any amendment of their constituting acts;

(ad)  prescribe the modalities and conditions relating to issues of bonds or other evidences of indebtedness and to subordinated loans;

(ae)  prescribe the conditions that must be met by the subsidiary of an insurer under section 247.1;

(af)  prescribe the duties exigible for the constitution and for the amendment of the articles of a mutual insurance association, a federation of mutual insurance associations or a guarantee fund;

(ag)  (paragraph repealed);

(ah)  determine the investment that may be made out of the investment fund of a federation of mutual insurance associations, the intervals and mode of valuation of the fund and the financial disclosure requirements to participating members;

(ai)  prescribe any document that must accompany the articles of constitution or of amendment of a mutual insurance association, of a federation of mutual insurance associations or of a guarantee fund;

(aj)  (paragraph repealed);

(ak)  define, for the purposes of the Act, the notion of indirect holding;

(al)  (paragraph repealed);

(am)  determine the terms and conditions according to which an insurer may invest in subsidiaries or associations whose principal activity is the purchase, management, sale or leasing of immovables, or the making of loans and investments;

(an)  (paragraph repealed);

(ao)  determine the other persons that are restricted parties with respect to an insurer;

(ap)  determine standards respecting the use an insurer may make of information held by it on those it insures or on the customers of another financial institution whose products it offers for sale;

(aq)  prescribe standards governing arrangements between an insurer and a financial institution for the sale of the financial products of either, and conditions permitting such arrangements to be made;

(ar)  determine the public authorities to which paragraph 6 of section 93.22 applies;

(as)  determine the cases in which the name of a mutual association suggests that it is related to another person, partnership or group, for the application of paragraph 7 of section 93.22;

(at)  determine the criteria to be taken into account in the application of paragraphs 7 and 8 of section 93.22;

(au)  prescribe the fees payable for a petition under section 93.25;

(av)  determine the policy that must be established by every insurer pursuant to section 285.29 or elements of such a policy.

1974, c. 70, s. 420; 1979, c. 33, s. 40; 1982, c. 52, s. 80; 1984, c. 22, s. 77; 1985, c. 17, s. 47; 1987, c. 54, s. 31; 1990, c. 86, s. 50; 1989, c. 48, s. 248; 1993, c. 48, s. 166; 1996, c. 63, s. 79, s. 80, s. 82; 1999, c. 40, s. 33; 2002, c. 45, s. 242; 2002, c. 70, s. 150; 2003, c. 1, s. 13; 2004, c. 37, s. 90.

420.1. In addition, the Government may, by regulation,

(1)  fix the minimum amount of the combined paid-up capital and contributed surplus for the purposes of the second paragraph of section 27;

(1.1)  determine, for the purposes of paragraph 2 of section 62.1, the limits in excess of which an insurer may not issue bonds or other evidences of indebtedness;

(2)  prescribe the documents and information that must be provided to the Minister in support of an application for authorization to restructure under section 66.2;

(3)  determine the number or percentage of members required for the purposes of the first paragraph of section 88.1;

(4)  determine the activities of a trust company which may be exercised by an insurance company and specify the cases and conditions in and on which the insurance company may exercise them;

(5)  determine the activities of a trust company which may be exercised by a mutual insurance association and specify the cases and conditions in and on which the mutual insurance association may exercise them;

(6)  prescribe standards respecting the adequacy of the capital of an insurer, of a holding company controlled by an insurer and of a federation of mutual insurance associations, the assets that make up such capital as well as the proportion of those assets to each other;

(7)  prescribe standards respecting the adequacy of the liquid assets of an insurer, of a holding company controlled by an insurer and of a federation of mutual insurance associations;

(7.1)  prescribe standards respecting the commercial practices of an insurer, of a holding company controlled by an insurer and of a federation of mutual insurance associations;

(8)  determine the limits applicable to the investments which an insurer, a holding company controlled by an insurer and a federation of mutual insurance associations may make;

(9)  determine the cases in which an insurer may, notwithstanding the first paragraph of section 244.1, acquire all or part of the shares of any legal person;

(10)  determine the cases in which a federation may acquire all or part of the shares of any legal person, in accordance with section 93.161.2;

(11)  determine the cases in which the first paragraph of section 245 does not apply;

(12)  determine the limits applicable to investments relating to separate groups of assets maintained by an insurer in accordance with section 280;

(13)  prescribe the conditions governing the transfer of assets from one separate group of assets to another and those governing the return of such assets to their original group, including the requirement to obtain the Authority’s authorization to effect such a transfer or return;

(14)  determine, in respect of an insurance company that transacts participating insurance, the method for allocating income and expenses to participating and non-participating business;

(15)  establish a tariff of fees payable for the purposes of section 405.2;

(16)  enact, notwithstanding the provisions of the Companies Act (chapter C‐38), any other provision necessary for the application of Part IA of that Act to insurance companies.

The standards prescribed under subparagraphs 6 and 7 of the first paragraph may indicate expectations with regard to insurers and provide a framework for their management. The Regulations Act (chapter R‐18.1) does not apply to regulations or draft regulations made under those provisions.

2002, c. 70, s. 151; 2003, c. 1, s. 14; 2004, c. 37, s. 90; 2008, c. 7, s. 50.

420.2. The Government may, by regulation and notwithstanding any provision of any special Act applicable to a mutual insurance company, prescribe the conditions subject to which a mutual insurance company may convert into a capital stock company and in particular prescribe any measure concerning

(1)  the estimation and distribution of the value of the mutual insurance company and any participating business surplus;

(2)  the conversion of shares, other securities, rights or property belonging to or beneficially owned by the members;

(3)  the fair and equitable treatment of the members of the mutual insurance company under a demutualization proposal;

(4)  the description of the capital stock and the amount of contributed surplus which must be paid;

(5)  the ownership of shares issued by a mutual insurance company that has been converted into a capital stock company;

(6)  the term of office of the members of the first board of directors of the company resulting from the demutualization;

(7)  the application for authorization referred to in section 200.0.4;

(8)  the documents that must be filed with the articles of demutualization under section 200.0.9;

(9)  the necessary or transitional provisions to complete the conversion and ensure the organization or management of the company resulting from the demutualization.

2002, c. 70, s. 151.

420.3. In exercising the regulatory powers under this Act, various classes of persons, associations, contracts, activities or operations may be established and rules appropriate for each class may be prescribed.

2002, c. 70, s. 151.

421. The draft regulations relating to this Act shall not be adopted unless a prior notice of thirty days reproducing the text thereof is published in the Gazette officielle du Québec.

The above mentioned regulations shall come into force on the day of publication, in the Gazette officielle du Québec, of a notice indicating that they have received the approval of the Government or, if amended by the latter, of their final text.

1974, c. 70, s. 421.

422. The Authority may prescribe the forms necessary for the application of this Act.

The form and the conditions of insurance policies relating to the ownership or use of motor vehicles must be approved by the Authority.

1974, c. 70, s. 422; 1979, c. 33, s. 41; 1982, c. 52, s. 80; 1992, c. 57, s. 440; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

422.0.1. Notwithstanding the second paragraph of section 422, a rider may be added to an insurance policy that relates to the ownership or use of a motor vehicle to provide for conditions that are not approved by the Authority, to the extent that they are stipulated solely for the benefit of the policyholder.

The insurer shall transmit the text of the rider to the Authority before offering it.

2002, c. 70, s. 152; 2004, c. 37, s. 90.

TITLE V FINAL PROVISIONS

422.1. The Authority is responsible for carrying out the administration of this Act.

1982, c. 52, s. 81; 2002, c. 45, s. 243; 2004, c. 37, s. 90.

422.2. The costs incurred by the Government for the administration of this Act, as determined each year by the Government, shall be borne by the Authority.

2004, c. 37, s. 49.

423. The Minister of Finance is responsible for the administration of this Act.

1974, c. 70, s. 423; 1975, c. 76, s. 11; 1981, c. 9, s. 24; 1982, c. 52, s. 82.

424. The beneficiary governed by article 1029 of the Civil Code of Lower Canada and designated before 20 October 1976 is a revocable beneficiary within the meaning of this Act, except

(a)  the person designated irrevocably by a stipulation to that effect in the policy or in the document effecting the appointment;

(b)  the person designated under a contract in which the policyholder or participant has not reserved for himself the right of revocation if this beneficiary has served in writing upon the insurer, before 20 October 1976 or within 12 months after that date but before his revocation, notice of his intention to accept the stipulation in his favour.

1974, c. 70, s. 478.

425. The beneficiary in whose favour insurance contemplated by the Husbands and Parents Life Insurance Act (Revised Statutes, 1964, chapter 296) has been effected becomes a beneficiary irrevocably designated according to the prescriptions of this Act.

However, the policyholder or participant may, within twelve months after 20 October 1976, only once change the designation in accordance with sections 12 and 13 of the said Husbands and Parents Life Insurance Act. The designation arising from the change provided for in this paragraph is irrevocable.

1974, c. 70, s. 479.

425.1. The Minister shall, at least once every five years, make a report to the National Assembly on the application of this Act and make recommendations on the expediency of maintaining or amending the provisions of this Act.

1984, c. 22, s. 78.

426. (This section ceased to have effect on 17 April 1987).

1982, c. 21, s. 1; U. K., 1982, c. 11, Sch. B, Part I, s. 33.

REPEAL SCHEDULES

In accordance with section 17 of the Act respecting the consolidation of the statutes (chapter R-3), chapter 70 of the statutes of 1974, in force on 31 December 1977, is repealed, except sections 1 (part), 2, 439, 441 to 444, 447 to 468, 471 to 477 and 480 to 482, effective from the coming into force of chapter A-32 of the Revised Statutes.

In accordance with section 17 of the Act respecting the consolidation of the statutes and regulations (chapter R-3), section 275 of chapter 70 of the statutes of 1974, in force on 1 November 1980, is repealed effective from the coming into force of the updating to 1 November 1980 of chapter A-32 of the Revised Statutes.