I-3 - Taxation Act

Section 835 Disposition versions

2023-09-26

835. In this Title, sections 92.11 to 104, 130, 130.1, 135, 137 to 163.1, 176 to 179, 183, 428 to 451 and 570 and Part II,

(a)  (subparagraph repealed);

(b)  “segregated fund” means a specified group of property that is reported to the Superintendent of Financial Institutions as a segregated fund and whose fair market value causes all or part of an insurer’s reserves to vary with respect to any life insurance policy;

(c)  (subparagraph repealed);

(d)  (subparagraph repealed);

(e)  “life insurance policy” includes an annuity contract or a contract in respect of which all or part of the insurer’s reserves vary in amount depending upon the fair market value of the property of a segregated fund;

(e.1)  “life insurance policy in Canada” means a life insurance policy issued or effected by an insurer on the life of a person resident in Canada at the time the policy was issued or effected;

(f)  “participating life insurance policy” means a life insurance policy under which the holder is entitled to share, other than by way of an experience rating refund, in the profits of the insurer other than profits in respect of property in a segregated fund;

(g)  “segregated fund policy” means a life insurance policy under which the amount of benefits payable varies in accordance with the fair market value of the property of the segregated fund relating to the policy;

(h)  “policy loan” means an amount advanced at a particular time by an insurer to a policyholder in accordance with the terms and conditions of a life insurance policy in Canada;

(i)  “interest”, in relation to a policy loan, means the amount that must be paid in respect of the loan, in accordance with the terms and conditions of the policy in respect of which the loan is granted in order to maintain the policyholder’s interest in the policy;

(j)  “amount payable”, in respect of a policy loan at a particular time, means the amount of the loan and the interest thereon that is outstanding at that time;

(k)  “segregated fund trust” means a trust referred to in section 851.2;

(l)  “surplus funds derived from operations” of an insurer at the end of a particular taxation year means the amount by which

i.  the aggregate of

(1)  the total of the insurer’s income for each taxation year in the period beginning on the first day of its taxation year 1969 and ending at the end of the particular taxation year from all insurance businesses carried on by it,

(2)  the total of all amounts each of which is a portion of a non-capital loss that was deemed under section 736.1, as it read for the taxation year 1977, to have been deductible in computing the insurer’s taxable income for a taxation year ending before 1 January 1977, and

(3)  the total of all profits or gains made by the insurer in the period referred to in subparagraph 1 in respect of property not included in a segregated fund that was disposed of by the insurer and used by it in, or held by it in the course of, carrying on an insurance business in Canada, except to the extent that those profits or gains have been or are included in computing the insurer’s income or loss for any taxation year in the period from carrying on an insurance business; exceeds

ii.  the aggregate of

(1)  the total of all the insurer’s losses for each taxation year in the period referred to in subparagraph 1 of subparagraph i from all insurance businesses carried on by it,

(2)  the total of all losses sustained by the insurer in the period referred to in subparagraph 1 of subparagraph i in respect of property not included in a segregated fund that was disposed of by the insurer and used by it in, or held by it in the course of, carrying on an insurance business in Canada, except to the extent that those losses have been or are included in computing the insurer’s income or loss for any taxation year in the period from carrying on an insurance business,

(3)  the total of all taxes payable under this Part by the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i, except such portion thereof as would not have been payable by it if section 846, as it read before its repeal in its application to each of those years, had not been enacted,

(4)  the total of all amounts determined in respect of the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i, under paragraph a of the description of F in the definition of “surplus funds derived from operations” in subsection 12 of section 138 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), other than the amount so determined under paragraph 3 or that would be so determined but for the exception thereunder,

(5)  the total of all income taxes payable under Parts I.3 and VI of the Income Tax Act by the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i,

(6)  the total of all taxes payable under Part VI.1 by the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i,

(7)  the total of all gifts made in the period referred to in subparagraph 1 of subparagraph i by the insurer to a qualified donee, and

(8)  (subparagraph repealed);

(m)  “base year” of an insurer means the insurer’s taxation year that precedes its transition year;

(n)  “transition year” of an insurer means the insurer’s first taxation year that begins after 31 December 2022;

(o)  “reserve transition amount” of an insurer, in respect of an insurance business carried on by it in its transition year, is the positive or negative amount determined by the formula

A + B – C – D – E – F + G + H;

(p)  “deposit accounting insurance policy” means an insurance policy of an insurer that, according to International Financial Reporting Standards, is not an insurance contract for a taxation year of the insurer;

(q)  “excluded policy” means an insurance policy of an insurer that would be a deposit accounting insurance policy for the insurer’s base year if International Financial Reporting Standards applied for that base year;

(r)  “insurance”, of a risk, includes the reinsurance of the risk;

(s)  “designated foreign insurance business”, of a life insurer resident in Canada in a taxation year, means an insurance business that is carried on by the life insurer in a country other than Canada in the year unless more than 90% of the gross revenue from the business for the year from the insurance of risks (except risks ceded to a reinsurer) is in respect of the insurance of risks (other than specified Canadian risks) of persons with whom the life insurer deals at arm’s length;

(t)  “specified Canadian risk” has the meaning assigned by paragraph a.23 of subsection 2 of section 95 of the Income Tax Act;

(u)  “group of insurance contracts” of an insurer means a group of insurance contracts of the insurer that is determined in accordance with International Financial Reporting Standards and that is a group for the purpose of determining an amount of the insurer that is reported as at the end of the insurer’s taxation year and includes a group of insurance contracts that include reinsurance contracts under which the insurer has assumed reinsurance risk;

(v)  “group of life insurance contracts” of an insurer means a group of life insurance contracts of the insurer that is determined in accordance with International Financial Reporting Standards and that is a group for the purpose of determining an amount of the insurer that is reported as at the end of the insurer’s taxation year and includes a group of life insurance contracts that include reinsurance contracts under which the insurer has assumed reinsurance risk;

(w)  “group of life insurance contracts in Canada” of an insurer means a group of life insurance contracts of the insurer that includes only life insurance contracts issued or effected by the insurer on the life of a person resident in Canada at the time the contract was issued or effected;

(x)  “group of reinsurance contracts” means a group of reinsurance contracts held by an insurer that is determined in accordance with International Financial Reporting Standards and that is a group for the purpose of determining an amount of the insurer that is reported as at the end of the insurer’s taxation year;

(y)  “group of segregated fund policies” of an insurer means a group of insurance contracts of the insurer that includes only segregated fund policies within the meaning of subparagraph g;

(z)  “contractual service margin” for a group of insurance contracts of an insurer, or a group of reinsurance contracts held by an insurer, at the end of a taxation year means the greater of

i.  the positive or negative amount of the contractual service margin for the group that would be reported as at the end of the taxation year in respect of the group if the amount were determined without reference to amounts described in subparagraphs 1 to 3 of subparagraph i of subparagraph z.3, and

ii.  the positive or negative amount of the contractual service margin for the group that would be determined at the end of the taxation year in respect of the group in accordance with International Financial Reporting Standards using reasonable assumptions in the circumstances if the amount were determined without reference to amounts described in subparagraphs 1 to 3 of subparagraph i of subparagraph z.3;

(z.1)  “reinsurance contract held amount” for a group of reinsurance contracts held by an insurer at the end of a taxation year means the lesser of

i.  the positive or negative amount of the reinsurance contract held asset for the group that would be reported as at the end of the taxation year if the amount were determined without reference to amounts described in subparagraphs 1 to 3 of subparagraph i of subparagraph z.3, and

ii.  the positive or negative amount of the reinsurance contract held asset for the group that would be determined at the end of the taxation year in accordance with International Financial Reporting Standards using reasonable assumptions in the circumstances if the amount were determined without reference to amounts described in subparagraphs 1 to 3 of subparagraph i of subparagraph z.3;

(z.2)  “policyholders’ liabilities” of an insurer as at the end of a taxation year means the amount reported as policyholders’ liabilities as at the end of the year;

(z.3)  “liability for remaining coverage” for a group of insurance contracts of an insurer at the end of a taxation year means the lesser of

i.  the positive or negative amount of the liability for remaining coverage for the group that would be reported as at the end of the taxation year if the amount were determined without reference to

(1)  projected income or capital taxes (other than the tax payable under Part XII.3 of the Income Tax Act, taxes on premiums that are not deductible under this Part, amounts not deductible after the taxation year in computing income under this Part and cash flows in respect of funds withheld arrangements,

(2)  amounts payable that are deductible for the taxation year, or a previous taxation year, in computing income under this Part, and

(3)  amounts receivable to the extent that they have been included for the taxation year, or a previous taxation year, in computing income under this Part, and

ii.  the positive or negative amount of the liability for remaining coverage for the group that would be determined at the end of the taxation year in accordance with International Financial Reporting Standards using reasonable assumptions in the circumstances if the amount were determined without reference to amounts described in subparagraphs 1 to 3 of subparagraph i;

(z.4)  “liability for incurred claims” for a group of insurance contracts of an insurer at the end of a taxation year means the lesser of

i.  the positive or negative amount of the liability for incurred claims for the group that would be reported as at the end of the taxation year if the amount were determined without reference to amounts described in subparagraphs 1 to 3 of subparagraph i of subparagraph z.3, and

ii.  the positive or negative amount of the liability for incurred claims for the group that would be determined at the end of the taxation year in accordance with International Financial Reporting Standards using reasonable assumptions in the circumstances if the amount were determined without reference to amounts described in subparagraphs 1 to 3 of subparagraph i of subparagraph z.3; and;

(z.5)  “Superintendent of Financial Institutions” in respect of an insurer means

i.  the Superintendent of Financial Institutions of Canada, where the insurer is required by law to report to the Superintendent, or

ii.  in any other case, where the insurer is incorporated under the laws of Québec, the Autorité des marchés financiers, or where the insurer is incorporated under the laws of another province, the superintendent of insurance or other similar agent or authority of the other province.

In the formula in subparagraph o of the first paragraph,

(a)  A is the maximum amount that the insurer could deduct under paragraph a of section 840 for its base year as a reserve in respect of its groups of life insurance contracts in Canada at the end of the base year if

i.  the International Financial Reporting Standards that applied to the insurer in valuing its assets and liabilities for its transition year had applied to it for its base year, and

ii.  the regulations made under paragraph a of section 840, as they read for the insurer’s transition year, applied to its base year;

(b)  B is the maximum amount that the insurer could deduct under the second paragraph of section 152 for its base year as a reserve in respect of its groups of insurance contracts at the end of the base year if

i.  the International Financial Reporting Standards that applied to the insurer in valuing its assets and liabilities for its transition year had applied to it for its base year, and

ii.  the regulations made under the second paragraph of section 152, as they read for the insurer’s transition year, applied to its base year;

(c)  C is the maximum amount that the insurer may deduct under paragraphs a and a.1 of section 840 (as they read in their application to a taxation year that begins before 1 January 2023) as a reserve for its base year;

(d)  D is the maximum amount that the insurer may deduct under the second paragraph of section 152 as a reserve for its base year;

(e)  E is the amount that would be included under paragraph a.1 of section 844 in computing the insurer’s income for its base year in respect of its groups of life insurance contracts in Canada at the end of the base year if

i.  the International Financial Reporting Standards that applied to the insurer in valuing its assets and liabilities for its transition year had applied to it for its base year, and

ii.  the regulations made under paragraph a of section 840, as they read for the insurer’s transition year, applied to its base year;

(f)  F is the amount that would be included under paragraph e.1 of section 87 in computing the insurer’s income for its base year if

i.  the International Financial Reporting Standards that applied to the insurer in valuing its assets and liabilities for its transition year had applied to it for its base year, and

ii.  the regulations made under the second paragraph of section 152, as they read for the insurer’s transition year, applied to its base year;

(g)  G is the amount included under paragraph a.1 of section 844 (as it read in its application to a taxation year that begins before 1 January 2023) in computing the insurer’s income for its base year in respect of its life insurance policies; and

(h)  H is the amount included under paragraph e.1 of section 87 in computing the insurer’s income for its base year.

1972, c. 23, s. 626; 1977, c. 26, s. 88; 1978, c. 26, s. 149; 1982, c. 5, s. 150; 1982, c. 52, s. 201; 1984, c. 15, s. 187; 1985, c. 25, s. 136; 1987, c. 67, s. 162; 1988, c. 18, s. 70; 1990, c. 59, s. 315; 1993, c. 16, s. 303; 1995, c. 49, s. 186; 1996, c. 39, s. 230; 1998, c. 16, s. 200; 1999, c. 83, s. 120; 2001, c. 53, s. 169; 2010, c. 25, s. 93; 2011, c. 34, s. 43; 2012, c. 8, s. 142; 2015, c. 24, s. 120; 2017, c. 1, s. 242; 2019, c. 14, s. 277; 2020, c. 16, s. 123; 2023, c. 19, s. 68.

2020-09-24

835. In this Title, sections 92.11 to 104, 130, 130.1, 135, 137 to 163.1, 176 to 179, 183, 428 to 451 and 570 and Part II,

(a)  (subparagraph repealed);

(b)  “segregated fund” means a specified group of property the fair market value of which causes all or part of the insurer’s reserves to vary with respect to any life insurance policy;

(c)  (subparagraph repealed);

(d)  (subparagraph repealed);

(e)  “life insurance policy” includes an annuity contract or a contract in respect of which all or part of the insurer’s reserves vary in amount depending upon the fair market value of the property of a segregated fund;

(e.1)  “life insurance policy in Canada” means a life insurance policy issued or effected by an insurer on the life of a person resident in Canada at the time the policy was issued or effected;

(f)  “participating life insurance policy” means a life insurance policy under which the holder is entitled to share, other than by way of an experience rating refund, in the profits of the insurer other than profits in respect of property in a segregated fund;

(g)  “segregated fund policy” means a life insurance policy under which the amount of benefits payable varies in accordance with the fair market value of the property of the segregated fund relating to the policy;

(h)  “policy loan” means an amount advanced at a particular time by an insurer to a policyholder in accordance with the terms and conditions of a life insurance policy in Canada;

(i)  “interest”, in relation to a policy loan, means the amount that must be paid in respect of the loan, in accordance with the terms and conditions of the policy in respect of which the loan is granted in order to maintain the policyholder’s interest in the policy;

(j)  “amount payable”, in respect of a policy loan at a particular time, means the amount of the loan and the interest thereon that is outstanding at that time;

(k)  “segregated fund trust” means a trust referred to in section 851.2;

(l)  “surplus funds derived from operations” of an insurer at the end of a particular taxation year means the amount by which

i.  the aggregate of

(1)  the total of the insurer’s income for each taxation year in the period beginning on the first day of its taxation year 1969 and ending at the end of the particular taxation year from all insurance businesses carried on by it,

(2)  the total of all amounts each of which is a portion of a non-capital loss that was deemed under section 736.1, as it read for the taxation year 1977, to have been deductible in computing the insurer’s taxable income for a taxation year ending before 1 January 1977, and

(3)  the total of all profits or gains made by the insurer in the period referred to in subparagraph 1 in respect of property not included in a segregated fund that was disposed of by the insurer and used by it in, or held by it in the course of, carrying on an insurance business in Canada, except to the extent that those profits or gains have been or are included in computing the insurer’s income or loss for any taxation year in the period from carrying on an insurance business; exceeds

ii.  the aggregate of

(1)  the total of all the insurer’s losses for each taxation year in the period referred to in subparagraph 1 of subparagraph i from all insurance businesses carried on by it,

(2)  the total of all losses sustained by the insurer in the period referred to in subparagraph 1 of subparagraph i in respect of property not included in a segregated fund that was disposed of by the insurer and used by it in, or held by it in the course of, carrying on an insurance business in Canada, except to the extent that those losses have been or are included in computing the insurer’s income or loss for any taxation year in the period from carrying on an insurance business,

(3)  the total of all taxes payable under this Part by the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i, except such portion thereof as would not have been payable by it if section 846, as it read before its repeal in its application to each of those years, had not been enacted,

(4)  the total of all amounts determined in respect of the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i, under paragraph a of the description of F in the definition of “surplus funds derived from operations” in subsection 12 of section 138 of the Income Tax Act (Revised Statutes of Canada, 1985, chapter 1, 5th Supplement), other than the amount so determined under paragraph 3 or that would be so determined but for the exception thereunder,

(5)  the total of all income taxes payable under Parts I.3 and VI of the Income Tax Act by the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i,

(6)  the total of all taxes payable under Part VI.1 by the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i,

(7)  the total of all gifts made in the period referred to in subparagraph 1 of subparagraph i by the insurer to a qualified donee, and

(8)  (subparagraph repealed);

(m)  “base year” of a life insurer means the life insurer’s taxation year that precedes its transition year;

(n)  “transition year” of a life insurer means

i.  in respect of the accounting standards adopted by the Accounting Standards Board and effective from 1 October 2006, the life insurer’s first taxation year that begins after 30 September 2006,

ii.  in respect of the International Financial Reporting Standards adopted by the Accounting Standards Board and effective from 1 January 2011, the life insurer’s first taxation year that begins after 31 December 2010; or

iii.  in respect of the amendment made to paragraph b of section 840R12 of the Regulation respecting the Taxation Act (chapter I-3, r. 1) by subsection 1 of section 20 of the Regulation to amend the Regulation respecting the Taxation Act enacted by (O.C. 1105-2014, 2014, G.O. 2, 2812) and applicable from the taxation year 2012, the life insurer’s taxation year 2012;

(o)  “reserve transition amount” of a life insurer, in respect of a life insurance business carried on by it in Canada in its transition year, is the positive or negative amount determined by the formula

A - B;

(p)  “deposit accounting insurance policy” means an insurance policy of a life insurer that, according to generally accepted accounting principles, is not an insurance contract for a taxation year of the life insurer;

(q)  “excluded policy” means an insurance policy of a life insurer that would be a deposit accounting insurance policy for the life insurer’s base year if the International Financial Reporting Standards adopted by the Accounting Standards Board and effective from 1 January 2011 applied for that base year;

(r)  “insurance”, of a risk, includes the reinsurance of the risk;

(s)  “designated foreign insurance business”, of a life insurer resident in Canada in a taxation year, means an insurance business that is carried on by the life insurer in a country other than Canada in the year unless more than 90% of the gross revenue from the business for the year from the insurance of risks (except risks ceded to a reinsurer) is in respect of the insurance of risks (other than specified Canadian risks) of persons with whom the life insurer deals at arm’s length; and

(t)  “specified Canadian risk” has the meaning assigned by paragraph a.23 of subsection 2 of section 95 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)).

In the formula in subparagraph o of the first paragraph,

(a)  A is the maximum amount that the life insurer would be permitted to claim under paragraph a of section 840 as a reserve for its base year in respect of its life insurance policies in Canada if

i.  the generally accepted accounting principles that applied to the life insurer in valuing its assets and liabilities for its transition year had applied to it for its base year, and

ii.  the regulations made under paragraph a of section 840, as they read for the life insurer’s transition year, applied to its base year; and

(b)  B is the maximum amount that the life insurer is permitted to claim under paragraph a of section 840 as a reserve for its base year.

1972, c. 23, s. 626; 1977, c. 26, s. 88; 1978, c. 26, s. 149; 1982, c. 5, s. 150; 1982, c. 52, s. 201; 1984, c. 15, s. 187; 1985, c. 25, s. 136; 1987, c. 67, s. 162; 1988, c. 18, s. 70; 1990, c. 59, s. 315; 1993, c. 16, s. 303; 1995, c. 49, s. 186; 1996, c. 39, s. 230; 1998, c. 16, s. 200; 1999, c. 83, s. 120; 2001, c. 53, s. 169; 2010, c. 25, s. 93; 2011, c. 34, s. 43; 2012, c. 8, s. 142; 2015, c. 24, s. 120; 2017, c. 1, s. 242; 2019, c. 14, s. 277; 2020, c. 16, s. 123.

2019-06-19

835. In this Title, sections 92.11 to 104, 130, 130.1, 135, 137 to 163.1, 176 to 179, 183, 428 to 451 and 570 and Part II,

(a)  (subparagraph repealed);

(b)  “segregated fund” means a specified group of property the fair market value of which causes all or part of the insurer’s reserves to vary with respect to any life insurance policy;

(c)  (subparagraph repealed);

(d)  (subparagraph repealed);

(e)  “life insurance policy” includes an annuity contract or a contract in respect of which all or part of the insurer’s reserves vary in amount depending upon the fair market value of the property of a segregated fund;

(e.1)  “life insurance policy in Canada” means a life insurance policy issued or effected by an insurer on the life of a person resident in Canada at the time the policy was issued or effected;

(f)  “participating life insurance policy” means a life insurance policy under which the holder is entitled to share, other than by way of an experience rating refund, in the profits of the insurer other than profits in respect of property in a segregated fund;

(g)  “segregated fund policy” means a life insurance policy under which the amount of benefits payable varies in accordance with the fair market value of the property of the segregated fund relating to the policy;

(h)  “policy loan” means an amount advanced at a particular time by an insurer to a policyholder in accordance with the terms and conditions of a life insurance policy in Canada;

(i)  “interest”, in relation to a policy loan, means the amount that must be paid in respect of the loan, in accordance with the terms and conditions of the policy in respect of which the loan is granted in order to maintain the policyholder’s interest in the policy;

(j)  “amount payable”, in respect of a policy loan at a particular time, means the amount of the loan and the interest thereon that is outstanding at that time;

(k)  “segregated fund trust” means a trust referred to in section 851.2;

(l)  “surplus funds derived from operations” of an insurer at the end of a particular taxation year means the amount by which

i.  the aggregate of

(1)  the total of the insurer’s income for each taxation year in the period beginning on the first day of its taxation year 1969 and ending at the end of the particular taxation year from all insurance businesses carried on by it,

(2)  the total of all amounts each of which is a portion of a non-capital loss that was deemed under section 736.1, as it read for the taxation year 1977, to have been deductible in computing the insurer’s taxable income for a taxation year ending before 1 January 1977, and

(3)  the total of all profits or gains made by the insurer in the period referred to in subparagraph 1 in respect of property not included in a segregated fund that was disposed of by the insurer and used by it in, or held by it in the course of, carrying on an insurance business in Canada, except to the extent that those profits or gains have been or are included in computing the insurer’s income or loss for any taxation year in the period from carrying on an insurance business; exceeds

ii.  the aggregate of

(1)  the total of all the insurer’s losses for each taxation year in the period referred to in subparagraph 1 of subparagraph i from all insurance businesses carried on by it,

(2)  the total of all losses sustained by the insurer in the period referred to in subparagraph 1 of subparagraph i in respect of property not included in a segregated fund that was disposed of by the insurer and used by it in, or held by it in the course of, carrying on an insurance business in Canada, except to the extent that those losses have been or are included in computing the insurer’s income or loss for any taxation year in the period from carrying on an insurance business,

(3)  the total of all taxes payable under this Part by the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i, except such portion thereof as would not have been payable by it if section 846, as it read before its repeal in its application to each of those years, had not been enacted,

(4)  the total of all amounts determined in respect of the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i, under paragraph a of the description of F in the definition of “surplus funds derived from operations” in subsection 12 of section 138 of the Income Tax Act (Revised Statutes of Canada, 1985, chapter 1, 5th Supplement), other than the amount so determined under paragraph 3 or that would be so determined but for the exception thereunder,

(5)  the total of all income taxes payable under Parts I.3 and VI of the Income Tax Act by the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i,

(6)  the total of all taxes payable under Part VI.1 by the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i,

(7)  the total of all gifts made in the period referred to in subparagraph 1 of subparagraph i by the insurer to a qualified donee, and

(8)  (subparagraph repealed);

(m)  “base year” of a life insurer means the life insurer’s taxation year that precedes its transition year;

(n)  “transition year” of a life insurer means

i.  in respect of the accounting standards adopted by the Accounting Standards Board and effective from 1 October 2006, the life insurer’s first taxation year that begins after 30 September 2006,

ii.  in respect of the International Financial Reporting Standards adopted by the Accounting Standards Board and effective from 1 January 2011, the life insurer’s first taxation year that begins after 31 December 2010; or

iii.  in respect of the amendment made to paragraph b of section 840R12 of the Regulation respecting the Taxation Act (chapter I-3, r. 1) by subsection 1 of section 20 of the Regulation to amend the Regulation respecting the Taxation Act enacted by (O.C. 1105-2014, 2014, G.O. 2, 2812) and applicable from the taxation year 2012, the life insurer’s taxation year 2012;

(o)  “reserve transition amount” of a life insurer, in respect of a life insurance business carried on by it in Canada in its transition year, is the positive or negative amount determined by the formula

A - B;

(p)  “deposit accounting insurance policy” means an insurance policy of a life insurer that, according to generally accepted accounting principles, is not an insurance contract for a taxation year of the life insurer; and

(q)  “excluded policy” means an insurance policy of a life insurer that would be a deposit accounting insurance policy for the life insurer’s base year if the International Financial Reporting Standards adopted by the Accounting Standards Board and effective from 1 January 2011 applied for that base year.

In the formula in subparagraph o of the first paragraph,

(a)  A is the maximum amount that the life insurer would be permitted to claim under paragraph a of section 840 as a reserve for its base year in respect of its life insurance policies in Canada if

i.  the generally accepted accounting principles that applied to the life insurer in valuing its assets and liabilities for its transition year had applied to it for its base year, and

ii.  the regulations made under paragraph a of section 840, as they read for the life insurer’s transition year, applied to its base year; and

(b)  B is the maximum amount that the life insurer is permitted to claim under paragraph a of section 840 as a reserve for its base year.

1972, c. 23, s. 626; 1977, c. 26, s. 88; 1978, c. 26, s. 149; 1982, c. 5, s. 150; 1982, c. 52, s. 201; 1984, c. 15, s. 187; 1985, c. 25, s. 136; 1987, c. 67, s. 162; 1988, c. 18, s. 70; 1990, c. 59, s. 315; 1993, c. 16, s. 303; 1995, c. 49, s. 186; 1996, c. 39, s. 230; 1998, c. 16, s. 200; 1999, c. 83, s. 120; 2001, c. 53, s. 169; 2010, c. 25, s. 93; 2011, c. 34, s. 43; 2012, c. 8, s. 142; 2015, c. 24, s. 120; 2017, c. 1, s. 242; 2019, c. 14, s. 277.

2017-02-08

835. In this Title, sections 92.11 to 104, 130, 130.1, 135, 137 to 163.1, 176 to 179, 183, 428 to 451, 570 and 736.1 and Part II,

(a)  (subparagraph repealed);

(b)  “segregated fund” means a specified group of property the fair market value of which causes all or part of the insurer’s reserves to vary with respect to any life insurance policy;

(c)  (subparagraph repealed);

(d)  (subparagraph repealed);

(e)  “life insurance policy” includes an annuity contract or a contract in respect of which all or part of the insurer’s reserves vary in amount depending upon the fair market value of the property of a segregated fund;

(e.1)  “life insurance policy in Canada” means a life insurance policy issued or effected by an insurer on the life of a person resident in Canada at the time the policy was issued or effected;

(f)  “participating life insurance policy” means a life insurance policy under which the holder is entitled to share, other than by way of an experience rating refund, in the profits of the insurer other than profits in respect of property in a segregated fund;

(g)  “segregated fund policy” means a life insurance policy under which the amount of benefits payable varies in accordance with the fair market value of the property of the segregated fund relating to the policy;

(h)  “policy loan” means an amount advanced at a particular time by an insurer to a policyholder in accordance with the terms and conditions of a life insurance policy in Canada;

(i)  “interest”, in relation to a policy loan, means the amount that must be paid in respect of the loan, in accordance with the terms and conditions of the policy in respect of which the loan is granted in order to maintain the policyholder’s interest in the policy;

(j)  “amount payable”, in respect of a policy loan at a particular time, means the amount of the loan and the interest thereon that is outstanding at that time;

(k)  “segregated fund trust” means a trust referred to in section 851.2;

(l)  “surplus funds derived from operations” of an insurer at the end of a particular taxation year means the amount by which

i.  the aggregate of

(1)  the total of the insurer’s income for each taxation year in the period beginning on the first day of its taxation year 1969 and ending at the end of the particular taxation year from all insurance businesses carried on by it,

(2)  the total of all amounts each of which is a portion of a non-capital loss that was deemed under section 736.1, as it read for the taxation year 1977, to have been deductible in computing the insurer’s taxable income for a taxation year ending before 1 January 1977, and

(3)  the total of all profits or gains made by the insurer in the period referred to in subparagraph 1 in respect of property not included in a segregated fund that was disposed of by the insurer and used by it in, or held by it in the course of, carrying on an insurance business in Canada, except to the extent that those profits or gains have been or are included in computing the insurer’s income or loss for any taxation year in the period from carrying on an insurance business; exceeds

ii.  the aggregate of

(1)  the total of all the insurer’s losses for each taxation year in the period referred to in subparagraph 1 of subparagraph i from all insurance businesses carried on by it,

(2)  the total of all losses sustained by the insurer in the period referred to in subparagraph 1 of subparagraph i in respect of property not included in a segregated fund that was disposed of by the insurer and used by it in, or held by it in the course of, carrying on an insurance business in Canada, except to the extent that those losses have been or are included in computing the insurer’s income or loss for any taxation year in the period from carrying on an insurance business,

(3)  the total of all taxes payable under this Part by the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i, except such portion thereof as would not have been payable by it if section 846, as it read before its repeal in its application to each of those years, had not been enacted,

(4)  the total of all amounts determined in respect of the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i, under paragraph a of the description of F in the definition of “surplus funds derived from operations” in subsection 12 of section 138 of the Income Tax Act (Revised Statutes of Canada, 1985, chapter 1, 5th Supplement), other than the amount so determined under paragraph 3 or that would be so determined but for the exception thereunder,

(5)  the total of all income taxes payable under Parts I.3 and VI of the Income Tax Act by the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i,

(6)  the total of all taxes payable under Part VI.1 by the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i,

(7)  the total of all gifts made in the period referred to in subparagraph 1 of subparagraph i by the insurer to a qualified donee, and

(8)  (subparagraph repealed);

(m)  “base year” of a life insurer means the life insurer’s taxation year that precedes its transition year;

(n)  “transition year” of a life insurer means

i.  in respect of the accounting standards adopted by the Accounting Standards Board and effective from 1 October 2006, the life insurer’s first taxation year that begins after 30 September 2006,

ii.  in respect of the International Financial Reporting Standards adopted by the Accounting Standards Board and effective from 1 January 2011, the life insurer’s first taxation year that begins after 31 December 2010; or

iii.  in respect of the amendment made to paragraph b of section 840R12 of the Regulation respecting the Taxation Act (chapter I-3, r. 1) by subsection 1 of section 20 of the Regulation to amend the Regulation respecting the Taxation Act enacted by (O.C. 1105-2014, 2014, G.O. 2, 2812) and applicable from the taxation year 2012, the life insurer’s taxation year 2012;

(o)  “reserve transition amount” of a life insurer, in respect of a life insurance business carried on by it in Canada in its transition year, is the positive or negative amount determined by the formula

A - B;

(p)  “deposit accounting insurance policy” means an insurance policy of a life insurer that, according to generally accepted accounting principles, is not an insurance contract for a taxation year of the life insurer; and

(q)  “excluded policy” means an insurance policy of a life insurer that would be a deposit accounting insurance policy for the life insurer’s base year if the International Financial Reporting Standards adopted by the Accounting Standards Board and effective from 1 January 2011 applied for that base year.

In the formula in subparagraph o of the first paragraph,

(a)  A is the maximum amount that the life insurer would be permitted to claim under paragraph a of section 840 as a reserve for its base year in respect of its life insurance policies in Canada if

i.  the generally accepted accounting principles that applied to the life insurer in valuing its assets and liabilities for its transition year had applied to it for its base year, and

ii.  the regulations made under paragraph a of section 840, as they read for the life insurer’s transition year, applied to its base year; and

(b)  B is the maximum amount that the life insurer is permitted to claim under paragraph a of section 840 as a reserve for its base year.

1972, c. 23, s. 626; 1977, c. 26, s. 88; 1978, c. 26, s. 149; 1982, c. 5, s. 150; 1982, c. 52, s. 201; 1984, c. 15, s. 187; 1985, c. 25, s. 136; 1987, c. 67, s. 162; 1988, c. 18, s. 70; 1990, c. 59, s. 315; 1993, c. 16, s. 303; 1995, c. 49, s. 186; 1996, c. 39, s. 230; 1998, c. 16, s. 200; 1999, c. 83, s. 120; 2001, c. 53, s. 169; 2010, c. 25, s. 93; 2011, c. 34, s. 43; 2012, c. 8, s. 142; 2015, c. 24, s. 120; 2017, c. 1, s. 242.

2015-10-26

835. In this Title, sections 92.11 to 104, 130, 130.1, 135, 137 to 163.1, 176 to 179, 183, 428 to 451, 570 and 736.1 and Part II,

(a)  (subparagraph repealed);

(b)  “segregated fund” means a specified group of property the fair market value of which causes all or part of the insurer’s reserves to vary with respect to any life insurance policy;

(c)  (subparagraph repealed);

(d)  (subparagraph repealed);

(e)  “life insurance policy” includes an annuity contract or a contract in respect of which all or part of the insurer’s reserves vary in amount depending upon the fair market value of the property of a segregated fund;

(e.1)  “life insurance policy in Canada” means a life insurance policy issued or effected by an insurer on the life of a person resident in Canada at the time the policy was issued or effected;

(f)  “participating life insurance policy” means a life insurance policy under which the holder is entitled to share, other than by way of an experience rating refund, in the profits of the insurer other than profits in respect of property in a segregated fund;

(g)  “segregated fund policy” means a life insurance policy under which the amount of benefits payable varies in accordance with the fair market value of the property of the segregated fund relating to the policy;

(h)  “policy loan” means an amount advanced at a particular time by an insurer to a policyholder in accordance with the terms and conditions of a life insurance policy in Canada;

(i)  “interest”, in relation to a policy loan, means the amount that must be paid in respect of the loan, in accordance with the terms and conditions of the policy in respect of which the loan is granted in order to maintain the policyholder’s interest in the policy;

(j)  “amount payable”, in respect of a policy loan at a particular time, means the amount of the loan and the interest thereon that is outstanding at that time;

(k)  “segregated fund trust” means a trust referred to in section 851.2;

(l)  “surplus funds derived from operations” of an insurer at the end of a particular taxation year means the amount by which

i.  the aggregate of

(1)  the total of the insurer’s income for each taxation year in the period beginning on the first day of its taxation year 1969 and ending at the end of the particular taxation year from all insurance businesses carried on by it,

(2)  the total of all amounts each of which is a portion of a non-capital loss that was deemed under section 736.1, as it read for the taxation year 1977, to have been deductible in computing the insurer’s taxable income for a taxation year ending before 1 January 1977, and

(3)  the total of all profits or gains made by the insurer in the period referred to in subparagraph 1 in respect of property not included in a segregated fund that was disposed of by the insurer and used by it in, or held by it in the course of, carrying on an insurance business in Canada, except to the extent that those profits or gains have been or are included in computing the insurer’s income or loss for any taxation year in the period from carrying on an insurance business; exceeds

ii.  the aggregate of

(1)  the total of all the insurer’s losses for each taxation year in the period referred to in subparagraph 1 of subparagraph i from all insurance businesses carried on by it,

(2)  the total of all losses sustained by the insurer in the period referred to in subparagraph 1 of subparagraph i in respect of property not included in a segregated fund that was disposed of by the insurer and used by it in, or held by it in the course of, carrying on an insurance business in Canada, except to the extent that those losses have been or are included in computing the insurer’s income or loss for any taxation year in the period from carrying on an insurance business,

(3)  the total of all taxes payable under this Part by the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i, except such portion thereof as would not have been payable by it if section 846, as it read before its repeal in its application to each of those years, had not been enacted,

(4)  the total of all amounts determined in respect of the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i, under paragraph a of the description of F in the definition of “surplus funds derived from operations” in subsection 12 of section 138 of the Income Tax Act (Revised Statutes of Canada, 1985, chapter 1, 5th Supplement), other than the amount so determined under paragraph 3 or that would be so determined but for the exception thereunder,

(5)  the total of all income taxes payable under Parts I.3 and VI of the Income Tax Act by the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i,

(6)  the total of all taxes payable under Part VI.1 by the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i,

(7)  the total of all gifts made in the period referred to in subparagraph 1 of subparagraph i by the insurer to a qualified donee, and

(8)  (subparagraph repealed);

(m)  “base year” of a life insurer means the life insurer’s taxation year that precedes its transition year;

(n)  “transition year” of a life insurer means

i.  in respect of the accounting standards adopted by the Accounting Standards Board and effective from 1 October 2006, the life insurer’s first taxation year that begins after 30 September 2006, or

ii.  in respect of the International Financial Reporting Standards adopted by the Accounting Standards Board and effective from 1 January 2011, the life insurer’s first taxation year that begins after 31 December 2010;

(o)  “reserve transition amount” of a life insurer, in respect of a life insurance business carried on by it in Canada in its transition year, is the positive or negative amount determined by the formula

A - B;

(p)  “deposit accounting insurance policy” means an insurance policy of a life insurer that, according to generally accepted accounting principles, is not an insurance contract for a taxation year of the life insurer; and

(q)  “excluded policy” means an insurance policy of a life insurer that would be a deposit accounting insurance policy for the life insurer’s base year if the International Financial Reporting Standards adopted by the Accounting Standards Board and effective from 1 January 2011 applied for that base year.

In the formula in subparagraph o of the first paragraph,

(a)  A is the maximum amount that the life insurer would be permitted to claim under paragraph a of section 840 as a reserve for its base year in respect of its life insurance policies in Canada if

i.  the generally accepted accounting principles that applied to the life insurer in valuing its assets and liabilities for its transition year had applied to it for its base year, and

ii.  the regulations made under paragraph a of section 840, as they read for the life insurer’s transition year, applied to its base year; and

(b)  B is the maximum amount that the life insurer is permitted to claim under paragraph a of section 840 as a reserve for its base year.

1972, c. 23, s. 626; 1977, c. 26, s. 88; 1978, c. 26, s. 149; 1982, c. 5, s. 150; 1982, c. 52, s. 201; 1984, c. 15, s. 187; 1985, c. 25, s. 136; 1987, c. 67, s. 162; 1988, c. 18, s. 70; 1990, c. 59, s. 315; 1993, c. 16, s. 303; 1995, c. 49, s. 186; 1996, c. 39, s. 230; 1998, c. 16, s. 200; 1999, c. 83, s. 120; 2001, c. 53, s. 169; 2010, c. 25, s. 93; 2011, c. 34, s. 43; 2012, c. 8, s. 142; 2015, c. 24, s. 120.

2012-05-09

835. In this Title, sections 92.11 to 104, 130, 130.1, 135, 137 to 163.1, 176 to 179, 183, 428 to 451, 570 and 736.1 and Part II,

(a)  (subparagraph repealed);

(b)  “segregated fund” means a specified group of property the fair market value of which causes all or part of the insurer’s reserves to vary with respect to any life insurance policy;

(c)  (subparagraph repealed);

(d)  (subparagraph repealed);

(e)  “life insurance policy” includes an annuity contract or a contract in respect of which all or part of the insurer’s reserves vary in amount depending upon the fair market value of the property of a segregated fund;

(e.1)  “life insurance policy in Canada” means a life insurance policy issued or effected by an insurer on the life of a person resident in Canada at the time the policy was issued or effected;

(f)  “participating life insurance policy” means a life insurance policy under which the holder is entitled to share, other than by way of an experience rating refund, in the profits of the insurer other than profits in respect of property in a segregated fund;

(g)  “segregated fund policy” means a life insurance policy under which the amount of benefits payable varies in accordance with the fair market value of the property of the segregated fund relating to the policy;

(h)  “policy loan” means an amount advanced at a particular time by an insurer to a policyholder in accordance with the terms and conditions of a life insurance policy in Canada;

(i)  “interest”, in relation to a policy loan, means the amount that must be paid in respect of the loan, in accordance with the terms and conditions of the policy in respect of which the loan is granted in order to maintain the policyholder’s interest in the policy;

(j)  “amount payable”, in respect of a policy loan at a particular time, means the amount of the loan and the interest thereon that is outstanding at that time;

(k)  “segregated fund trust” means a trust referred to in section 851.2;

(l)  “surplus funds derived from operations” of an insurer at the end of a particular taxation year means the amount by which

i.  the aggregate of

(1)  the total of the insurer’s income for each taxation year in the period beginning on the first day of its taxation year 1969 and ending at the end of the particular taxation year from all insurance businesses carried on by it,

(2)  the total of all amounts deemed by section 736.1 to have been deductible in computing its taxable income for a taxation year ending before 1 January 1977, and

(3)  the total of all profits or gains made by the insurer in the period referred to in subparagraph 1 in respect of property not included in a segregated fund that was disposed of by the insurer and used by it in, or held by it in the course of, carrying on an insurance business in Canada, except to the extent that those profits or gains have been or are included in computing the insurer’s income or loss for any taxation year in the period from carrying on an insurance business; exceeds

ii.  the aggregate of

(1)  the total of all the insurer’s losses for each taxation year in the period referred to in subparagraph 1 of subparagraph i from all insurance businesses carried on by it,

(2)  the total of all losses sustained by the insurer in the period referred to in subparagraph 1 of subparagraph i in respect of property not included in a segregated fund that was disposed of by the insurer and used by it in, or held by it in the course of, carrying on an insurance business in Canada, except to the extent that those losses have been or are included in computing the insurer’s income or loss for any taxation year in the period from carrying on an insurance business,

(3)  the total of all taxes payable under this Part by the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i, except such portion thereof as would not have been payable by it if section 846, as it read before its repeal in its application to each of those years, had not been enacted,

(4)  the total of all amounts determined in respect of the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i, under paragraph a of the description of F in the definition of “surplus funds derived from operations” in subsection 12 of section 138 of the Income Tax Act (Revised Statutes of Canada, 1985, chapter 1, 5th Supplement), other than the amount so determined under paragraph 3 or that would be so determined but for the exception thereunder,

(5)  the total of all income taxes payable under Parts I.3 and VI of the Income Tax Act by the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i,

(6)  the total of all taxes payable under Part VI.1 by the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i,

(7)  the total of all gifts made in the period referred to in subparagraph 1 of subparagraph i by the insurer to a qualified donee, and

(8)  the amount by which the amount determined in respect of the insurer for the particular taxation year under subparagraph i of paragraph a of section 841 exceeds the amount so determined under subparagraph ii of that paragraph a;

(m)  “base year” of a life insurer means the life insurer’s taxation year that precedes its transition year;

(n)  “transition year” of a life insurer means

i.  in respect of the accounting standards adopted by the Accounting Standards Board and effective from 1 October 2006, the life insurer’s first taxation year that begins after 30 September 2006, or

ii.  in respect of the International Financial Reporting Standards adopted by the Accounting Standards Board and effective from 1 January 2011, the life insurer’s first taxation year that begins after 31 December 2010;

(o)  “reserve transition amount” of a life insurer, in respect of a life insurance business carried on by it in Canada in its transition year, is the positive or negative amount determined by the formula

A - B;

(p)  “deposit accounting insurance policy” means an insurance policy of a life insurer that, according to generally accepted accounting principles, is not an insurance contract for a taxation year of the life insurer; and

(q)  “excluded policy” means an insurance policy of a life insurer that would be a deposit accounting insurance policy for the life insurer’s base year if the International Financial Reporting Standards adopted by the Accounting Standards Board and effective from 1 January 2011 applied for that base year.

In the formula in subparagraph o of the first paragraph,

(a)  A is the maximum amount that the life insurer would be permitted to claim under paragraph a of section 840 as a reserve for its base year in respect of its life insurance policies in Canada if

i.  the generally accepted accounting principles that applied to the life insurer in valuing its assets and liabilities for its transition year had applied to it for its base year, and

ii.  the regulations made under paragraph a of section 840, as they read for the life insurer’s transition year, applied to its base year; and

(b)  B is the maximum amount that the life insurer is permitted to claim under paragraph a of section 840 as a reserve for its base year.

1972, c. 23, s. 626; 1977, c. 26, s. 88; 1978, c. 26, s. 149; 1982, c. 5, s. 150; 1982, c. 52, s. 201; 1984, c. 15, s. 187; 1985, c. 25, s. 136; 1987, c. 67, s. 162; 1988, c. 18, s. 70; 1990, c. 59, s. 315; 1993, c. 16, s. 303; 1995, c. 49, s. 186; 1996, c. 39, s. 230; 1998, c. 16, s. 200; 1999, c. 83, s. 120; 2001, c. 53, s. 169; 2010, c. 25, s. 93; 2011, c. 34, s. 43; 2012, c. 8, s. 142.

2011-12-09

835. In this Title, sections 92.11 to 104, 130, 130.1, 135, 137 to 163.1, 176 to 179, 183, 428 to 451, 570 and 736.1 and Part II,

(a)  (paragraph repealed);

(b)  “segregated fund” means a specified group of property the fair market value of which causes all or part of the insurer’s reserves to vary with respect to any life insurance policy;

(c)  (paragraph repealed);

(d)  (paragraph repealed);

(e)  “life insurance policy” includes an annuity contract or a contract in respect of which all or part of the insurer’s reserves vary in amount depending upon the fair market value of the property of a segregated fund;

(e.1)  “life insurance policy in Canada” means a life insurance policy issued or effected by an insurer on the life of a person resident in Canada at the time the policy was issued or effected;

(f)  “participating life insurance policy” means a life insurance policy under which the holder is entitled to share, other than by way of an experience rating refund, in the profits of the insurer other than profits in respect of property in a segregated fund;

(g)  “segregated fund policy” means a life insurance policy under which the amount of benefits payable varies in accordance with the fair market value of the property of the segregated fund relating to the policy;

(h)  “policy loan” means an amount advanced at a particular time by an insurer to a policyholder in accordance with the terms and conditions of a life insurance policy in Canada;

(i)  “interest”, in relation to a policy loan, means the amount that must be paid in respect of the loan, in accordance with the terms and conditions of the policy in respect of which the loan is granted in order to maintain the policyholder’s interest in the policy;

(j)  “amount payable”, in respect of a policy loan at a particular time, means the amount of the loan and the interest thereon that is outstanding at that time;

(k)  “segregated fund trust” means a trust referred to in section 851.2;

(l)  “surplus funds derived from operations” of an insurer at the end of a particular taxation year means the amount by which

i.  the aggregate of

(1)  the total of the insurer’s income for each taxation year in the period beginning on the first day of its taxation year 1969 and ending at the end of the particular taxation year from all insurance businesses carried on by it,

(2)  the total of all amounts deemed by section 736.1 to have been deductible in computing its taxable income for a taxation year ending before 1 January 1977, and

(3)  the total of all profits or gains made by the insurer in the period referred to in subparagraph 1 in respect of property not included in a segregated fund that was disposed of by the insurer and used by it in, or held by it in the course of, carrying on an insurance business in Canada, except to the extent that those profits or gains have been or are included in computing the insurer’s income or loss for any taxation year in the period from carrying on an insurance business; exceeds

ii.  the aggregate of

(1)  the total of all the insurer’s losses for each taxation year in the period referred to in subparagraph 1 of subparagraph i from all insurance businesses carried on by it,

(2)  the total of all losses sustained by the insurer in the period referred to in subparagraph 1 of subparagraph i in respect of property not included in a segregated fund that was disposed of by the insurer and used by it in, or held by it in the course of, carrying on an insurance business in Canada, except to the extent that those losses have been or are included in computing the insurer’s income or loss for any taxation year in the period from carrying on an insurance business,

(3)  the total of all taxes payable under this Part by the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i, except such portion thereof as would not have been payable by it if section 846, as it read before its repeal in its application to each of those years, had not been enacted,

(4)  the total of all amounts determined in respect of the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i, under paragraph a of the description of F in the definition of “surplus funds derived from operations” in subsection 12 of section 138 of the Income Tax Act (Revised Statutes of Canada, 1985, chapter 1, 5th Supplement), other than the amount so determined under paragraph 3 or that would be so determined but for the exception thereunder,

(5)  the total of all income taxes payable under Parts I.3 and VI of the Income Tax Act by the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i,

(6)  the total of all taxes payable under Part VI.1 by the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i,

(7)  the total of all gifts made in the period referred to in subparagraph 1 of subparagraph i by the insurer to a person or entity described in paragraphs a to c of section 710, and

(8)  the amount by which the amount determined in respect of the insurer for the particular taxation year under subparagraph i of paragraph a of section 841 exceeds the amount so determined under subparagraph ii of that paragraph a;

(m)  “base year” of a life insurer means the life insurer’s taxation year that precedes its transition year;

(n)  “transition year” of a life insurer means

i.  in respect of the accounting standards adopted by the Accounting Standards Board and effective from 1 October 2006, the life insurer’s first taxation year that begins after 30 September 2006, or

ii.  in respect of the International Financial Reporting Standards adopted by the Accounting Standards Board and effective from 1 January 2011, the life insurer’s first taxation year that begins after 31 December 2010;

(o)  “reserve transition amount” of a life insurer, in respect of a life insurance business carried on by it in Canada in its transition year, is the positive or negative amount determined by the formula

A - B;

(p)  “deposit accounting insurance policy” means an insurance policy of a life insurer that, according to generally accepted accounting principles, is not an insurance contract for a taxation year of the life insurer; and

(q)  “excluded policy” means an insurance policy of a life insurer that would be a deposit accounting insurance policy for the life insurer’s base year if the International Financial Reporting Standards adopted by the Accounting Standards Board and effective from 1 January 2011 applied for that base year.

In the formula in subparagraph o of the first paragraph,

(a)  A is the maximum amount that the life insurer would be permitted to claim under paragraph a of section 840 as a reserve for its base year in respect of its life insurance policies in Canada if

i.  the generally accepted accounting principles that applied to the life insurer in valuing its assets and liabilities for its transition year had applied to it for its base year, and

ii.  the regulations made under paragraph a of section 840, as they read for the life insurer’s transition year, applied to its base year; and

(b)  B is the maximum amount that the life insurer is permitted to claim under paragraph a of section 840 as a reserve for its base year.

1972, c. 23, s. 626; 1977, c. 26, s. 88; 1978, c. 26, s. 149; 1982, c. 5, s. 150; 1982, c. 52, s. 201; 1984, c. 15, s. 187; 1985, c. 25, s. 136; 1987, c. 67, s. 162; 1988, c. 18, s. 70; 1990, c. 59, s. 315; 1993, c. 16, s. 303; 1995, c. 49, s. 186; 1996, c. 39, s. 230; 1998, c. 16, s. 200; 1999, c. 83, s. 120; 2001, c. 53, s. 169; 2010, c. 25, s. 93; 2011, c. 34, s. 43.

2010-10-27

835. In this Title, sections 92.11 to 104, 130, 130.1, 135, 137 to 163.1, 176 to 179, 183, 428 to 451, 570 and 736.1 and Part II,

(a)  (paragraph repealed);

(b)  “segregated fund” means a specified group of property the fair market value of which causes all or part of the insurer’s reserves to vary with respect to any life insurance policy;

(c)  (paragraph repealed);

(d)  (paragraph repealed);

(e)  “life insurance policy” includes an annuity contract or a contract in respect of which all or part of the insurer’s reserves vary in amount depending upon the fair market value of the property of a segregated fund;

(e.1)  “life insurance policy in Canada” means a life insurance policy issued or effected by an insurer on the life of a person resident in Canada at the time the policy was issued or effected;

(f)  “participating life insurance policy” means a life insurance policy under which the holder is entitled to share, other than by way of an experience rating refund, in the profits of the insurer other than profits in respect of property in a segregated fund;

(g)  “segregated fund policy” means a life insurance policy under which the amount of benefits payable varies in accordance with the fair market value of the property of the segregated fund relating to the policy;

(h)  “policy loan” means an amount advanced at a particular time by an insurer to a policyholder in accordance with the terms and conditions of a life insurance policy in Canada;

(i)  “interest”, in relation to a policy loan, means the amount that must be paid in respect of the loan, in accordance with the terms and conditions of the policy in respect of which the loan is granted in order to maintain the policyholder’s interest in the policy;

(j)  “amount payable”, in respect of a policy loan at a particular time, means the amount of the loan and the interest thereon that is outstanding at that time;

(k)  “segregated fund trust” means a trust referred to in section 851.2;

(l)  “surplus funds derived from operations” of an insurer at the end of a particular taxation year means the amount by which

i.  the aggregate of

(1)  the total of the insurer’s income for each taxation year in the period beginning on the first day of its taxation year 1969 and ending at the end of the particular taxation year from all insurance businesses carried on by it,

(2)  the total of all amounts deemed by section 736.1 to have been deductible in computing its taxable income for a taxation year ending before 1 January 1977, and

(3)  the total of all profits or gains made by the insurer in the period referred to in subparagraph 1 in respect of property not included in a segregated fund that was disposed of by the insurer and used by it in, or held by it in the course of, carrying on an insurance business in Canada, except to the extent that those profits or gains have been or are included in computing the insurer’s income or loss for any taxation year in the period from carrying on an insurance business; exceeds

ii.  the aggregate of

(1)  the total of all the insurer’s losses for each taxation year in the period referred to in subparagraph 1 of subparagraph i from all insurance businesses carried on by it,

(2)  the total of all losses sustained by the insurer in the period referred to in subparagraph 1 of subparagraph i in respect of property not included in a segregated fund that was disposed of by the insurer and used by it in, or held by it in the course of, carrying on an insurance business in Canada, except to the extent that those losses have been or are included in computing the insurer’s income or loss for any taxation year in the period from carrying on an insurance business,

(3)  the total of all taxes payable under this Part by the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i, except such portion thereof as would not have been payable by it if section 846, as it read before its repeal in its application to each of those years, had not been enacted,

(4)  the total of all amounts determined in respect of the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i, under paragraph a of the description of F in the definition of “surplus funds derived from operations” in subsection 12 of section 138 of the Income Tax Act (Revised Statutes of Canada, 1985, chapter 1, 5th Supplement), other than the amount so determined under paragraph 3 or that would be so determined but for the exception thereunder,

(5)  the total of all income taxes payable under Parts I.3 and VI of the Income Tax Act by the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i,

(6)  the total of all taxes payable under Part VI.1 by the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i,

(7)  the total of all gifts made in the period referred to in subparagraph 1 of subparagraph i by the insurer to a person or entity described in paragraphs a to c of section 710, and

(8)  the amount by which the amount determined in respect of the insurer for the particular taxation year under subparagraph i of paragraph a of section 841 exceeds the amount so determined under subparagraph ii of that paragraph a;

(m)  “base year” of a life insurer means the life insurer’s taxation year that precedes its transition year;

(n)  “transition year” of a life insurer means the life insurer’s first taxation year that begins after 30 September 2006;

(o)  “reserve transition amount” of a life insurer, in respect of a life insurance business carried on by it in Canada in its transition year, is the positive or negative amount determined by the formula

A - B.

In the formula in subparagraph o of the first paragraph,

(a)  A is the maximum amount that the life insurer would be permitted to claim under paragraph a of section 840 as a reserve for its base year in respect of its life insurance policies in Canada if

i.  the generally accepted accounting principles that applied to the life insurer in valuing its assets and liabilities for its transition year had applied to it for its base year, and

ii.  the regulations made under paragraph a of section 840, as they read for the life insurer’s transition year, applied to its base year; and

(b)  B is the maximum amount that the life insurer is permitted to claim under paragraph a of section 840 as a reserve for its base year.

1972, c. 23, s. 626; 1977, c. 26, s. 88; 1978, c. 26, s. 149; 1982, c. 5, s. 150; 1982, c. 52, s. 201; 1984, c. 15, s. 187; 1985, c. 25, s. 136; 1987, c. 67, s. 162; 1988, c. 18, s. 70; 1990, c. 59, s. 315; 1993, c. 16, s. 303; 1995, c. 49, s. 186; 1996, c. 39, s. 230; 1998, c. 16, s. 200; 1999, c. 83, s. 120; 2001, c. 53, s. 169; 2010, c. 25, s. 93.

2006-03-01

835. In this Title, sections 92.11 to 104, 130, 130.1, 135, 137 to 163.1, 176 to 179, 183, 428 to 451, 570 and 736.1 and Part II,

(a)  (paragraph repealed);

(b)  “segregated fund” means a specified group of property the fair market value of which causes all or part of the insurer’s reserves to vary with respect to any life insurance policy;

(c)  (paragraph repealed);

(d)  (paragraph repealed);

(e)  “life insurance policy” includes an annuity contract or a contract in respect of which all or part of the insurer’s reserves vary in amount depending upon the fair market value of the property of a segregated fund;

(e.1)  “life insurance policy in Canada” means a life insurance policy issued or effected by an insurer on the life of a person resident in Canada at the time the policy was issued or effected;

(f)  “participating life insurance policy” means a life insurance policy under which the holder is entitled to share, other than by way of an experience rating refund, in the profits of the insurer other than profits in respect of property in a segregated fund;

(g)  “segregated fund policy” means a life insurance policy under which the amount of benefits payable varies in accordance with the fair market value of the property of the segregated fund relating to the policy;

(h)  “policy loan” means an amount advanced at a particular time by an insurer to a policyholder in accordance with the terms and conditions of a life insurance policy in Canada;

(i)  “interest”, in relation to a policy loan, means the amount that must be paid in respect of the loan, in accordance with the terms and conditions of the policy in respect of which the loan is granted in order to maintain the policyholder’s interest in the policy;

(j)  “amount payable”, in respect of a policy loan at a particular time, means the amount of the loan and the interest thereon that is outstanding at that time;

(k)  “segregated fund trust” means a trust referred to in section 851.2;

(l)  “surplus funds derived from operations” of an insurer at the end of a particular taxation year means the amount by which

i.  the aggregate of

(1)  the total of the insurer’s income for each taxation year in the period beginning on the first day of its taxation year 1969 and ending at the end of the particular taxation year from all insurance businesses carried on by it,

(2)  the total of all amounts deemed by section 736.1 to have been deductible in computing its taxable income for a taxation year ending before 1 January 1977, and

(3)  the total of all profits or gains made by the insurer in the period referred to in subparagraph 1 in respect of property not included in a segregated fund that was disposed of by the insurer and used by it in, or held by it in the course of, carrying on an insurance business in Canada, except to the extent that those profits or gains have been or are included in computing the insurer’s income or loss for any taxation year in the period from carrying on an insurance business; exceeds

ii.  the aggregate of

(1)  the total of all the insurer’s losses for each taxation year in the period referred to in subparagraph 1 of subparagraph i from all insurance businesses carried on by it,

(2)  the total of all losses sustained by the insurer in the period referred to in subparagraph 1 of subparagraph i in respect of property not included in a segregated fund that was disposed of by the insurer and used by it in, or held by it in the course of, carrying on an insurance business in Canada, except to the extent that those losses have been or are included in computing the insurer’s income or loss for any taxation year in the period from carrying on an insurance business,

(3)  the total of all taxes payable under this Part by the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i, except such portion thereof as would not have been payable by it if section 846, as it read before its repeal in its application to each of those years, had not been enacted,

(4)  the total of all amounts determined in respect of the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i, under paragraph a of the description of F in the definition of “surplus funds derived from operations” in subsection 12 of section 138 of the Income Tax Act (Revised Statutes of Canada, 1985, chapter 1, 5th Supplement), other than the amount so determined under paragraph 3 or that would be so determined but for the exception thereunder,

(5)  the total of all income taxes payable under Parts I.3 and VI of the Income Tax Act by the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i,

(6)  the total of all taxes payable under Part VI.1 by the insurer for each taxation year in the period referred to in subparagraph 1 of subparagraph i,

(7)  the total of all gifts made in the period referred to in subparagraph 1 of subparagraph i by the insurer to a person or entity described in paragraphs a to c of section 710, and

(8)  the amount by which the amount determined in respect of the insurer for the particular taxation year under subparagraph i of paragraph a of section 841 exceeds the amount so determined under subparagraph ii of that paragraph a.

1972, c. 23, s. 626; 1977, c. 26, s. 88; 1978, c. 26, s. 149; 1982, c. 5, s. 150; 1982, c. 52, s. 201; 1984, c. 15, s. 187; 1985, c. 25, s. 136; 1987, c. 67, s. 162; 1988, c. 18, s. 70; 1990, c. 59, s. 315; 1993, c. 16, s. 303; 1995, c. 49, s. 186; 1996, c. 39, s. 230; 1998, c. 16, s. 200; 1999, c. 83, s. 120; 2001, c. 53, s. 169.