I-3 - Taxation Act

Section 1175.8 Disposition versions

2023-09-26

1175.8. In this Part, the capital of a life insurer that is resident in Canada at any time in a taxation year is the amount determined by the formula

A + B + (0.9 × C) − (0.9 × D) − E.

In the formula in the first paragraph,

(a)  A is the amount of the insurer’s long-term debt at the end of the year;

(b)  B is the total, at the end of the year, of the insurer’s

i.  capital stock or, in the case of an insurer incorporated without share capital, the amount of its members’ contributions,

ii.  retained earnings,

iii.  accumulated other comprehensive income,

iv.  policyholders’ liabilities,

v.  contributed surplus, and

vi.  any other surpluses;

(c)  C is the aggregate of all amounts each of which is the contractual service margin for a group of insurance contracts of the insurer at the end of the year other than a group of segregated fund policies;

(d)  D is the aggregate of all amounts each of which is an amount, in respect of a group of reinsurance contracts held by the insurer at the end of the year, that is

i.  if no portion of the contractual service margin for the group is in respect of a risk under a segregated fund policy, the contractual service margin for the group, or

ii.  in any other case, the amount that would be the contractual service margin for the group if the contractual service margin were determined without taking into account any portion of the contractual service margin that is in respect of the reinsurance of risks under segregated fund policies; and

(e)  E is the amount of any deficit deducted in computing the insurer’s net shareholders’ equity.

1997, c. 14, s. 286; 2000, c. 39, s. 261; 2002, c. 40, s. 325; 2023, c. 19, s. 127.

2006-03-01

1175.8. In this Part, the capital of a life insurer that is resident in Canada at any time in a taxation year is the amount by which the aggregate of the following amounts exceeds the aggregate at the end of the year of the amount of its future tax assets balance and the amount of any deficit deducted in computing its net shareholders’ equity:

(a)  the amount of its long-term debt; and

(b)  the amount of its capital stock or, in the case of an insurer incorporated without share capital, the amount of its members’ contributions, plus the amount of its retained earnings, contributed surplus and any other surpluses.

1997, c. 14, s. 286; 2000, c. 39, s. 261; 2002, c. 40, s. 325.