I-3 - Taxation Act

Section 832.11 Disposition versions

2006-03-01

832.11. In this chapter,

“conversion benefit” means a benefit received in connection with the demutualization of an insurance corporation because of an interest, before the demutualization, of any person in an insurance policy to which the insurance corporation was a party;

“deadline” for a payment in respect of a demutualization of an insurance corporation means the latest of

(a)  the end of the thirteenth month after the time of the demutualization;

(b)  where the entire amount of the payment depends on the outcome of an initial public offering of shares of the corporation or a holding corporation in respect of the insurance corporation, the end of the day that is 60 days after the day on which the public offering is completed ;

(c)  where the payment is made after the initial deadline for the payment and it is reasonable to conclude that the payment was postponed beyond that initial deadline because there was not sufficient information available 60 days before that initial deadline with regard to the location of a person, the end of the sixth month after such information becomes available; and

(d)  the end of any other day that is acceptable to the Minister;

“demutualization” means the conversion of an insurance corporation from a mutual company into a corporation that is not a mutual company;

“holding corporation” means a corporation that in connection with the demutualization of an insurance corporation, has issued shares of its capital stock to stakeholders and owns shares of the capital stock of the insurance corporation acquired in connection with the demutualization that entitle it to 90% or more of the votes that could be cast in respect of shares under all circumstances at an annual meeting of

(a)  shareholders of the insurance corporation; or

(b)  shareholders of the insurance corporation and holders of insurance policies to which the insurance corporation is a party;

“initial deadline” for a payment is the time that would, if the definition of “deadline” were read without reference to paragraph c of that definition, be the deadline for the payment;

“mutual holding corporation” in respect of an insurance corporation, means a mutual company established to hold shares of the capital stock of the insurance corporation, where the only persons entitled to vote at an annual meeting of the mutual company are policyholders of the insurance corporation;

“ownership rights” means

(a)  in a particular mutual holding corporation, the following rights and interests held by a person in respect of the particular mutual holding corporation because of an interest or former interest of any person in an insurance policy to which an insurance corporation, in respect of which the particular corporation is the mutual holding corporation, has been a party:

i.  rights that are similar to rights attached to shares of the capital stock of a corporation, and

ii.  all other rights with respect to, and interests in, the particular corporation as a mutual company; and

(b)  in a mutual insurance corporation, the following rights and interests held by a person in respect of the mutual insurance corporation because of an interest or former interest of any person in an insurance policy to which that corporation was a party:

i.  rights that are similar to rights attached to shares of the capital stock of a corporation,

ii.  all other rights with respect to, and interests in, the mutual insurance corporation as a mutual company, and

iii.  any contingent or absolute right to receive a benefit in connection with the demutualization of the mutual insurance corporation;

“person” includes a partnership;

“share” of the capital stock of a corporation includes a right granted by the corporation to acquire a share of its capital stock;

“specified insurance benefit” means a taxable conversion benefit that is

(a)  an enhancement of benefits under an insurance policy;

(b)  an issuance of an insurance policy;

(c)  an undertaking by an insurance corporation of an obligation to pay a policy dividend; or

(d)  a reduction in the amount of premiums that would otherwise be payable under an insurance policy;

“stakeholder” means a person who has received or who is entitled to receive a conversion benefit but, in respect of the demutualization of an insurance corporation, does not include a holding corporation in connection with the demutualization or a mutual holding corporation in respect of the insurance corporation;

“taxable conversion benefit” means a conversion benefit received by a stakeholder in connection with the demutualization of an insurance corporation, other than a conversion benefit that is

(a)  a share of a class of the capital stock of the corporation;

(b)  a share of a class of the capital stock of a corporation that is or becomes a holding corporation in connection with the demutualization; or

(c)  an ownership right in a mutual holding corporation in respect of the insurance corporation.

2001, c. 53, s. 167.