I-3 - Taxation Act

Section 832.13 Disposition versions

2006-03-01

832.13. For the purposes of sections 832.11 to 832.25, the following rules apply:

(a)  where benefits under an insurance policy are enhanced, otherwise than by way of an amendment to which section 965.0.17.3 would, but for subparagraph b of the first paragraph thereof, apply, in connection with a demutualization, the value of the enhancement is deemed to be a benefit received by the policyholder and not by any other person;

(b)  where premiums payable under an insurance policy to an insurance corporation are reduced in connection with a demutualization, the policyholder is deemed, as a consequence of the undertaking to reduce the premiums, to have received a benefit equal to the present value at the time of the demutualization of the additional premiums that would have been payable if the premiums had not been reduced in connection with the demutualization;

(c)  the payment of a policy dividend by an insurance corporation or an undertaking of an obligation by the corporation to pay a policy dividend is considered to be in connection with the demutualization of the corporation only to the extent that

i.  the policy dividend is referred to in the demutualization proposal sent by the corporation to stakeholders,

ii.  the obligation to make the payment is contingent on stakeholder approval for the demutualization, and

iii.  the payment or undertaking cannot reasonably be considered to have been made or given, as the case may be, to ensure that policyholders are not adversely affected by the demutualization;

(d)  except for the purposes of paragraphs c, e and f, where part of a policy dividend is a conversion benefit in respect of the demutualization of an insurance corporation and part of it is not, each part of the policy dividend is deemed to be a policy dividend that is separate from the other part;

(e)  a policy dividend includes an amount that is in lieu of payment of, or in satisfaction of, a policy dividend;

(f)  the payment of a policy dividend includes the application of the policy dividend to pay a premium under an insurance policy or to repay a policy loan;

(g)  where the demutualization of an insurance corporation is effected by the amalgamation of the corporation with one or more other corporations to form one corporate entity, that entity is deemed to be the same corporation as, and a continuation of, the insurance corporation; and

(h)  an insurance corporation shall be considered to have become a party to an insurance policy at the time that the insurance corporation becomes liable in respect of obligations of an insurer under the policy.

2001, c. 53, s. 167.