I-3 - Taxation Act

Section 832.22 Disposition versions

2006-03-01

832.22. The rules set out in the second paragraph apply where

(a)  a stakeholder receives a conversion benefit because of the stakeholder’s interest in a group insurance policy under which individuals have been insured in the course of or because of their employment;

(b)  at all times before the payment of a premium described in subparagraph c, the full cost of a particular insurance coverage under the group insurance policy referred to in subparagraph a was borne by the individuals who were insured under the particular insurance coverage;

(c)  the stakeholder referred to in subparagraph a pays a premium under the group insurance policy referred to in subparagraph a in respect of the particular insurance coverage referred to in subparagraph b or under another group insurance policy in respect of coverage that has replaced the particular insurance coverage; and

(d)  either the premium referred to in subparagraph c is deemed by paragraph c of section 832.17 to have been paid, or it is reasonable to conclude that the purpose of the premium is to apply, for the benefit of the individuals who are insured under the particular insurance coverage referred to in subparagraph b or the coverage that has replaced the particular insurance coverage, all or part of the value of the portion of the conversion benefit referred to in subparagraph a that can reasonably be considered to be in respect of the particular insurance coverage.

The rules to which the first paragraph refers are the following:

(a)  for the purposes of section 43, the premium is deemed to be an amount paid by the individuals who are insured under the particular insurance coverage or the coverage that has replaced the particular insurance coverage, as the case may be, and not to be an amount paid by the stakeholder; and

(b)  no amount may be deducted in respect of the premium in computing the stakeholder’s income.

2001, c. 53, s. 167.