Revised Statutes of Newfoundland 1990 Chapter I-10

(a) "accident insurance" means insurance by which the insurer undertakes, otherwise than incidentally to some other class of insurance defined under this Act, to pay insurance money in the event of accident to the person insured but does not include insurance by which the insurer undertakes to pay insurance money both in the event of death by accident and in the event of death from another cause;

(b) "agent" means agent as defined by the Insurance Adjusters Act;

(c) "approved securities" means securities of or guaranteed by Canada or by a province of Canada, securities of an incorporated municipality of Canada and other securities that are authorized for the investment of trust funds under the Trustee Act;

(d) "association" means the Facility Association referred to in section 97;

(e) "automobile" includes a trolley bus and a self propelled vehicle, and the trailers, accessories and equipment of automobiles, but does not include railway rolling stock that runs on rails or watercraft or aircraft;

(f) "automobile insurance" means insurance

(i) against liability arising out of

(A) bodily injury to or the death of a person, or

(B) loss of or damage to property

caused by an automobile or the use or operation of an automobile, or

(ii) against loss of or damage to an automobile and the loss of use of an automobile,

and includes insurance otherwise coming within the class of accident insurance where the accident is caused by an automobile or the use or operation of an automobile, whether liability exists or not, if the contract also includes insurance described in subparagraph (i);

(g) "broker" means broker as defined by the Insurance Adjusters Act;

(h) "cash-mutual company" means a company without share capital or with guarantee capital subject to repayment by the company, in respect of which the dividend rate is limited by its charter, which is empowered to undertake insurance on both the cash plan and the mutual plan;

(i) "charter" includes an Act, statute, ordinance or other provision of law by or under which an insurer has been incorporated or organized and an amendment applying to the insurer and a memorandum of association, articles of association, agreement or deed of settlement of the insurer, letters patent or other instrument incorporating the insurer, its regulations, by-laws and rules and amendments to them;

(j) "contract" means a contract of insurance and includes a policy, certificate, interim receipt, renewal receipt or writing evidencing the contract, whether sealed or not, and a binding oral agreement;

(k) "court" means the Trial Division or a judge of the Trial Division;

(l) "deposit" means a deposit made by an insurer with the minister in accordance with this Act;

(m) "disability insurance" means insurance undertaken by an insurer as part of a life insurance contract whose terms provide for the duration of the insurance for more than a year and for the payment of insurance money or the granting of benefits in the event that the insured becomes disabled as a result of bodily injury or disease;

(n) "double indemnity insurance" means insurance undertaken by an insurer as part of a life insurance contract whose terms provide for the duration of the insurance for more than a year and for payment only in the event of the death of the insured by accident of an additional amount of insurance money not exceeding the amount payable in the event of death from other causes;

(o) "due application" includes information, evidence and material that the superintendent requires to be provided, and the payment of the fees prescribed in accordance with this Act in respect of an application, certificate or document required or issued by this Act;

(p) "employees mutual benefit society" means a society incorporated or formed and operated by the officers or officers and employees of an employer for the purpose of providing support and pensions for those officers or employees who become incapacitated or who cease to be employed by the employer or for the purpose of paying pensions, annuities or gratuities to, or for dependents of, those officers or employees, or funeral benefits upon the death of those officers or employees, and membership in which is restricted exclusively to actual employees of an employer;

(q) "endowment insurance" as applied to a fraternal or sororal society means an undertaking to pay an ascertained or ascertainable sum at a fixed future date, where the person whose life is insured is then alive, or at his or her death, where that person dies before that date;

(r) "extra-provincial insurer" means an insurer incorporated or legally constituted in a foreign jurisdiction other than an insurer which is registered and holds a certificate of registry under the Canadian and British Insurance Companies Act (Canada) or under the Foreign Insurance Companies Act (Canada);

(s) "fire insurance" means insurance, not being insurance incidental to some other class of insurance defined by this Act, against loss of or damage to property through fire, lightning or explosion due to ignition;

(t) "foreign jurisdiction" means a jurisdiction other than the province;

(u) "fraternal or sororal society" means a society, order or association incorporated for the purpose of making with its members only and not for profit, contracts of life, accident or sickness insurance under which benefits may be paid only to its members or their beneficiaries, in accordance with its charter and this Act;

(v) "friendly society" means a society, order, association or company formed or incorporated and operated for the purpose of making with its members only, and not for profit, contracts under which

(i) sickness, accident and disability benefits, or 1 or more of them, not exceeding $5 per week, or

(ii) funeral benefits not exceeding $150,

or all of those benefits may be paid only to its members or their beneficiaries in accordance with its charter and this Act;

(w) "head office" means the place where the chief executive officer of an insurer transacts his or her business;

(x) "insurance" means the undertaking by a person to indemnify another person against loss or liability for loss in respect of a certain risk or peril to which the object of the insurance may be exposed, or to pay a sum of money or other thing of value upon the happening of a certain event;

(y) "insurance money" means the amount payable by an insurer under a contract, and includes all benefits, surplus, profits, dividends, bonuses, and annuities payable under the contract;

(z) "insurance on the cash plan" means insurance which is not mutual insurance;

(aa) "insured person", for the purposes of sections 27 to 73, means a person who enters into a contract with an insurer and includes

(i) a person insured by a contract whether named or not,

(ii) a person to whom, or for whose benefit, all or part of the proceeds of a contract are payable, and

(iii) a person entitled to have insurance money applied toward satisfaction of a judgment in accordance with section 28 of the Automobile Insurance Act;

(bb) "insurer" means the person who undertakes or agrees or offers to undertake a contract;

(cc) "licence" means a licence issued to an insurer under this Act to undertake insurance or to carry on business of insurance;

(dd) "life insurance" means insurance by which the insurer undertakes to pay insurance money on death, or on the happening of a contingency dependent on human life, or by which the insurer undertakes to pay insurance money subject to the payment of premiums for a term depending on human life, but, except to the extent of double indemnity insurance, does not include insurance payable in the event of death by accident only;

(ee) "loss" includes the happening of an event or contingency by reason of which a person becomes entitled to a payment under a contract of money other than a refund of unearned premiums;

(ff) "marine insurance" means insurance against losses incidental to marine adventure which may by the express terms of a contract or by usage of trade extend so as to protect the insured against losses on inland waters or by land or air which are incidental to a sea voyage;

(gg) "minister" means the Minister of Justice;

(hh) "motor vehicle liability policy" means a policy or part of a policy evidencing a contract insuring

(i) the owner or driver of an automobile, or

(ii) a person who is not the owner or driver of an automobile where the automobile is being used or operated by his or her employee or agent or another person on his or her behalf

against liability arising out of bodily injury to or the death of a person or loss or damage to property caused by an automobile or the use or operation of an automobile;

(ii) "mutual benefit society" means a mutual company formed for the purpose of providing sick and funeral benefits for its members, or for this and other necessary or incidental purposes, except life insurance, but does not include a pension fund or employees' mutual benefit society incorporated under or subject to the Corporations Act;

(jj) "mutual insurance" means a contract in which the consideration is not fixed or certain at the time the contract is made and is to be determined at the termination of the contract or at fixed periods during the term of the contract according to the experience of the insurer in respect of all similar contracts whether or not the maximum amount of the consideration is predetermined;

(kk) "mutual insurance company" means a company without share capital or with guarantee capital stock subject to repayment by the company, in respect of which the dividend rate is limited by its charter, which is empowered to undertake mutual insurance exclusively;

(ll) "Newfoundland contract", for the purposes of sections 27 to 73, means an existing contract that

(i) has for its subject

(A) property that, at the time of the making of the contract, is in the province or is in transit to or from the province, or

(B) the life, safety, fidelity, or insurable interest of a person who, at the time of the making of the contract, is resident in, or has its head office in the province, or

(ii) makes provision for payment under the contract primarily to a resident of the province or to a company that has its head office in the province;

(mm) "officer" includes a trustee, director, manager, treasurer, secretary or member of the board or committee of management of an insurer or a person appointed by the insurer to sue and be sued in its behalf;

(nn) "paid in" when applied to the capital of an insurer or to shares of an insurer, means the amount paid to the insurer on its shares, not including the premium paid, whether those shares are or are not fully paid;

(oo) "paid up" when applied to the capital of an insurer or to shares of an insurer, means capital or shares on which there remains no liability, actual or contingent, to the issuing insurer;

(pp) "plan" means the Plan of Operation referred to in subsection 98(2);

(qq) "policy" means the instrument evidencing a contract;

(rr) "premium" means the single or periodical payment under a contract for the insurance, and includes dues, assessments and other considerations;

(ss) "premium note" means an instrument given as consideration for insurance by which the maker undertakes to pay a sum that may be legally demanded by the insurer, but the total of the sums does not exceed an amount specified in the instrument;

(tt) "provisional liquidator" means a provisional liquidator appointed by the minister under this Act;

(uu) "receiver" means a receiver appointed by the court for the administration of a deposit of an insurer;

(vv) "representative" means representative as defined by the Insurance Adjusters Act;

(ww) "sick and funeral benefits" includes insurance against sickness, disability or death under which the money payable upon the happening of sickness, disability or death does not exceed $30 a week in the case of sick benefits or $300 in the case of funeral benefits;

(xx) "sickness insurance" means insurance by which the insurer undertakes to pay insurance money in the event of sickness of the person insured, but does not include disability insurance;

(yy) "superintendent" means the Superintendent of Insurance appointed in the manner authorized by law; and

(zz) "upon proof" as applied to a matter connected with the licensing of an insurer or other person means upon proof to the satisfaction of the superintendent.

RSN1970 c176 s2; 1973 No39 Sch C; 1975-76 No58 s4; 1981 c4 Sch C; 1984 c41 Sch C; 1985 c21 s1; 1986 c12 Sch; 1986 c36 s50; 1986 c42 Sch A; 1987 c38 Sch B; 1989 c19 Sch B

3. This Act applies to all classes of insurance undertaken in the province and to all insurers carrying on business in the province.

RSN1970 c176 s3

4. (1) An insurer undertaking a contract which, under this Act, is considered to be made in the province, whether the contract is original or a renewal, except the renewal of life insurance policies, is for the purpose of this Act considered to be undertaking insurance in the province.

(2) An insurer which, within the province,

(a) undertakes or offers to undertake insurance;

(b) sets up or causes to be set up a sign containing the name of the insurer;

(c) maintains or operates either in its own name or in the name of an agent or other representative an office for the transaction of the business of insurance within or outside the province;

(d) distributes or publishes or has distributed or published a proposal, circular, card, advertisement, printed form or like document;

(e) inserts, prints or publishes its name or permits or causes its name to be inserted, printed or published in a telephone directory or in another directory or list of the names, with or without addresses, of the residents or occupants of premises in a city, municipality, locality, area or district or in a building;

(f) makes or has made a written or oral solicitation for insurance;

(g) issues or delivers a policy of insurance or interim receipt, collects, receives or negotiates for or causes to be collected, received or negotiated for, a premium or part of a premium for a contract;

(h) prosecutes or maintains an action or proceeding in respect of a contract; or

(i) represents or holds itself out to the public as being engaged in the insurance business

is for the purposes of this Act considered to be an insurer carrying on business in the province.

RSN1970 c176 s4

5. (1) A society, order, association or corporation which under its constitution and laws is empowered

(a) to pay to its members or their beneficiaries, as a benefit payable by the society, order, association or corporation, the proceeds of a contingency levy; or

(b) to pay sickness, accident, disability, unemployment, funeral, hospital, medical or dental benefits or benefits payable on death or on the happening of a contingency dependent on human life, in an amount that is fixed at the discretion of the directors or of an executive or management committee of the society, order, association or corporation,

is considered to be an insurer.

(2) For the purposes of this section, the expression "contingency levy" means an assessment or levy made on members of a society, order, association or corporation on the occasion of the happening to a member of 1 or more of certain contingencies upon the happening of which that member or his or her beneficiaries become entitled to receive the proceeds of that assessment or levy.

RSN1970 c176 s5

6. (1) An insurer undertaking insurance in the province or carrying on business in the province shall obtain from the superintendent and hold a licence.

(2) An insurer undertaking insurance in the province or carrying on business in the province without first having obtained a licence is guilty of an offence.

(3) A person who within the province does or causes to be done an act or thing mentioned in subsection 4(2) on behalf of or as an agent of an insurer which is not licensed or who receives directly or indirectly remuneration for so doing is guilty of an offence.

RSN1970 c176 s6

7. The following are not considered to be insurers within the meaning of this Act or required to be licensed

(a) employees' mutual benefit societies;

(b) a society, association or organization the membership of which is limited to those engaged in or who, at the time they become members, are engaged in a particular trade, calling or profession which, under the authority of its charter, has an assurance or benefit fund for the benefit of its own members exclusively;

(d) other organizations that the Lieutenant-Governor in Council may by regulation prescribe.

RSN1970 c176 s7

8. An insurer incorporated under the laws of the province which carries on or solicits business in a foreign jurisdiction without first being licensed and without first being authorized to do so under the law of the foreign jurisdiction is guilty of an offence.

RSN1970 c176 s8

9. Nothing in this Act shall prevent a licensed insurer which has lawfully effected a contract in the province from reinsuring the risk or a portion of the risk with an insurer transacting business outside the province and not licensed under this Act.

RSN1970 c176 s9

10. (1) Upon application and upon proof of compliance with this Act, the superintendent may issue a licence to undertake contracts and carry on business in the province to

(a) an insurer which is incorporated under the laws of the province;

(b) an extra-provincial insurer approved by the minister to carry on business in the province;

(c) an insurer which is registered and holds a certificate of registry under the Canadian and British Insurance Companies Act (Canada) or the Foreign Insurance Companies Act (Canada);

(d) a fraternal or sororal society;

(e) a mutual benefit society;

(f) an underwriter or syndicate of underwriters operating on the plan known as Lloyd's; and

(g) reciprocal or inter-insurance exchanges.

(2) The superintendent may include in a licence those restrictions, limitations and conditions that the superintendent considers necessary.

(3) The superintendent shall not issue a licence to an insurer not coming within 1 of the classes referred to in subsection (1).

(4) The superintendent shall not issue a licence under this section unless he or she is satisfied that the corporate name of the insurer is not that of another known insurer carrying on business in the province or a name likely to be confused with the known insurer's name or otherwise objectionable on public grounds.

RSN1970 c176 s10; 1985 c21 s2; 1988 c42 s1

11. (1) A licence authorizes the insurer named in the licence to exercise in the province all rights and powers reasonably incidental to the carrying on of the business of insurance named in the licence which are consistent with the laws of the province relating to insurance or with the terms of the insurer's charter.

(2) Subject to the laws of the province, particularly relating to the classes of insurers mentioned in subsection 10(1) the superintendent may issue a licence to an insurer to carry on 1 or more of the classes of insurance defined in section 2 or other classes that may be defined by the Lieutenant-Governor in Council by regulation.

(3) Where a question arises as to the class of insurance into which a specific contract or form of policy falls, the minister may determine the question and his or her determination is effective and final for the purposes of this Act.

RSN1970 c176 s11

12. An insurer licensed to carry on life insurance may, subject to its charter and the restrictions, limitations and conditions, contained in its licence, issue annuities and endowments of all kinds and include in a policy of life insurance, in respect of the same life insured, disability insurance and double indemnity insurance.

RSN1970 c176 s12

13. An insurer licensed to carry on fire insurance may, subject to its charter and the restrictions, limitations and conditions, contained in its licence, insure or reinsure property in which the insured has an insurable interest against loss or damage by fire, lightning or explosion and may insure or reinsure the same property against loss or damage from falling aircraft, earthquake, windstorm, tornado, hail, sprinkler leakage, riot, malicious damage, weather, water damage, smoke damage, civil commotion and impact by vehicles and 1 or more perils falling within those other classes of insurance that are prescribed by the Lieutenant-Governor in Council by regulation.

RSN1970 c176 s13

14. (1) The superintendent shall not issue a licence to an insurer which is a company incorporated in the province if it is

(a) a company undertaking life insurance, unless the company provides to the superintendent satisfactory evidence that not less than $500,000 of its capital has been in good faith subscribed for the shares allotted and at least $250,000 of the subscribed capital has been paid in, in cash;

(b) a company undertaking 1 or more classes of insurance other than life insurance except upon proof

(i) where a company is undertaking the insurance in the province only, that not less than $300,000 of its capital has been in good faith subscribed for and allotted and at least $150,000 of its subscribed capital has been paid in, in cash, and

(ii) where a company is undertaking insurance elsewhere than in the province, that not less than $700,000 of its capital has been in good faith subscribed for and allotted and at least $400,000 of its subscribed capital has been paid in, in cash; or

(c) a mutual insurance company, a cash-mutual insurance company or an underwriter or syndicate of underwriters operating on the plan known as Lloyd's, except upon proof that the net surplus of assets over all liabilities exceeds the amount fixed by this subsection for the paid in capital of insurance companies referred to in paragraphs (a) and (b) and that that net surplus of assets over all liabilities, together with the contingent liability of members, exceeds the amount fixed by this subsection for the subscribed and allotted capital of those insurance companies for the respective classes of insurance mentioned.

(2) After February 17, 1986 the superintendent shall not issue a licence to an insurer which is a company incorporated in the province if it is

(a) a company undertaking life insurance within or outside the province or both within and outside the province, unless the company provides to the superintendent satisfactory evidence that not less than $3,000,000 of the subscribed capital has been paid in, in cash;

(b) a company undertaking 1 or more classes of insurance other than life insurance except upon proof satisfactory to the superintendent

(i) where a company is undertaking insurance in the province only, that at least $1,000,000 of its subscribed capital has been paid in, in cash, and

(ii) where a company is undertaking insurance outside the province, that at least $3,000,000 of its subscribed capital has been paid in, in cash; or

(c) a mutual insurance company or a cash-mutual insurance company, except upon proof that the net surplus of assets over all liabilities, together with the contingent liability of members, exceeds the amount fixed by this subsection for the paid in capital of insurance companies referred to in paragraphs (a) and (b).

(3) Subsections (1) and (2) do not apply to a purely mutual insurance company insuring only risks other than mercantile or manufacturing on the premium note plan.

(4) The superintendent shall not issue a licence to an insurer which is incorporated in the province and which does not come within 1 of the classes referred to in subsections (1), (2) and (3) except upon those terms and conditions, that may be prescribed by the laws of the province or by the Lieutenant-Governor in Council by regulation.

(5) After January 31, 1986, the superintendent shall not issue a licence to an extra-provincial insurer unless that insurer meets the capital and surplus requirements for registration as set out in the Canadian and British Insurance Companies Act (Canada).

(6) Notwithstanding subsection (5), the superintendent may issue a licence to an extra-provincial insurer, which does not come within 1 of the classes referred to in the Canadian and British Insurance Companies Act (Canada), on the fulfilment of those terms and conditions with respect to capital stock and surplus that may be prescribed by the Lieutenant-Governor in Council to be appropriate in the circumstances.

(7) The superintendent shall not issue a licence to an insurer except upon proof satisfactory to the superintendent that the insurer has complied with those provisions of the laws of the province that may be applicable to it.

(8) The superintendent shall not issue a licence to an insurer for the transaction of both fire and life insurance unless it maintains separate and distinct accounts, funds and securities in respect of its business of life insurance and those funds and securities are available only for the protection of the holders of its policies of life insurance and are not liable for the payment of claims arising from another class of insurance which the insurer undertakes, and unless the insurer complies with those other requirements, that the superintendent may prescribe for the purpose of this subsection.

(9) Where the head office of an applicant for a licence is situated outside of the province, the superintendent shall not issue a licence except upon proof of the applicant's ability to provide for the payment at maturity of all its contracts but the superintendent may accept as sufficient the fact that the applicant is registered and holds a certificate of registry under the Canadian and British Insurance Companies Act (Canada) or the Foreign Insurance Companies Act (Canada).

RSN1970 c176 s14; 1975 No15 s2; 1985 c21 s3

15. The superintendent may require an insurer applying for a licence to give notice of its application in the Gazette and elsewhere in a form that the superintendent considers necessary.

RSN1970 c176 s15

16. (1) Before the superintendent issues a licence to an insurer the insurer shall file with the superintendent

(a) a certified copy of the charter of the insurer verified in a manner satisfactory to the superintendent;

(b) an affidavit or statutory declaration that the insurer is still in existence and legally authorized to transact business under its charter;

(d) notice of the place where the head office of the insurer is situated and the name of the insurer's chief executive officer;

(e) notice of the place where the chief office or agency of the insurer in Canada is situated together with the name of the chief agent or resident manager of the insurer in Canada and a certified copy of power of attorney, to that chief agent or resident manager;

(f) notice of the place where the chief office or agency, of the insurer in the province is situated together with the name of the chief agent or resident manager, of the insurer in the province and notice of appointment of and a certified copy of power of attorney, to that chief agent or residential manager; and

(g) other documents or information, that the superintendent may require.

(2) In addition to the documents and information specified in subsection (1)

(a) each insurer incorporated under the laws of the province shall provide to the superintendent

(i) the names and addresses of the officers of the insurer,

(ii) the names and addresses of the directors of the insurer,

(iii) a list of the shareholders of the insurer showing, in respect of each, the number of shares held, the amount subscribed for, the amount paid in cash and the amount in arrears of call, and

(iv) a statement showing the authorized capital of the insurer, the number of shares subscribed and the amount paid in cash;

(b) each insurer registered under the Canadian and British Insurance Companies Act (Canada) or the Foreign Insurance Companies Act (Canada) shall provide to the superintendent

(i) notice of the number and date of the current certificate or certificates of registry issued to and held by the insurer under either of those Acts,

(ii) notice of the classes of insurance which the insurer is authorized to transact in Canada under its certificate,

(iii) notice of the classes of insurance which the insurer proposes to transact in the province which shall not include a class of insurance not specifically provided for in a certificate of registry held by the insurer as referred to in subparagraph (i), and

(iv) proof of registration under the Corporations Act; and

(i) the names and addresses of the officers and directors of the insurer,

(ii) a list of the shareholders of the insurer showing, in respect of each, the number of shares held, the amount subscribed for, the amount paid in cash and the amount in arrears of call,

(iii) a statement showing the authorized capital of the insurer, the number of shares subscribed and the amount paid in cash,

(iv) notice of the classes of insurance which the insurer is authorized to transact in Canada under its certificate,

(v) notice of the classes of insurance which the insurer proposes to transact in the province which shall not include a class of insurance not specifically provided for in a certificate of registry held by the insurer,

(vi) proof of licensing issued to and held by the insurer in the home jurisdiction of the insurer, and

(vii) proof of registration under the Corporations Act.

(3) Where an insurer is not a company or where some or all of the provisions of subsections (1) and (2) are otherwise inapplicable to an insurer, the superintendent may exempt the insurer from filing the documents or information which does not apply to the insurer.

(4) Where a change is made in respect of the documents or information filed with the superintendent under paragraph (1)(a), (d), (e) or (f) or paragraph (2)(a), (d), (e) or (f), the insurer shall immediately notify the superintendent of the change and file with the superintendent those further documents or notices that are necessary to evidence the change.

(5) When the documents or information referred to in subsections (1) and (2) have been filed under the Corporations Act, those documents or the information shall be considered to have been filed in accordance with this section.

RSN1970 c176 s16; 1985 c21 s4; 1986 c12 Sch

17. (1) The power of attorney, to the chief agent or resident manager of an insurer in the province referred to in paragraph 16(1)(f) shall expressly authorize the attorney to receive service of process in all suits and proceedings against the insurer in the province in respect of liabilities incurred by the insurer and to receive from the superintendent all notices which the law requires to be given or which it is thought advisable to give and it shall declare that service of process for or in respect of those liabilities and receipt of those notices on or by the attorney shall be legal and binding on the insurer to all intents and purposes.

(2) Where an insurer applying for a licence does not have a chief agent or resident manager in the province or where the chief agent or resident manager does not have power of attorney on behalf of the insurer, the insurer shall designate to the superintendent some other person resident in the province who has been authorized by the insurer to receive service of process and notices referred to in subsection (1) and service of process on or receipt of notices from the superintendent by that designated person is legal and binding on the insurer to all intents and purposes.

(3) After a power of attorney under subsection (1) or a designation under subsection (2) is filed with the superintendent, process in a suit or proceeding against an insurer in respect of a liability incurred in the province may be validly served on the attorney or the person otherwise designated and the service shall be considered to be service on the insurer.

RSN1970 c176 s17

18. An insurer licensed under this Act shall be a member of and adhere to the rules of a compensation fund that may be prescribed in the regulations.

1985 c21 s5

19. (1) Upon application being made for a licence by an insurer incorporated under the laws of the province after March 13, 1961, there shall be submitted to the superintendent a sworn or affirmed statement setting out the several sums of money paid in connection with the incorporation and organization of the insurer and listing all unpaid liabilities, in connection with or arising out of the incorporation and organization.

(2) Until the licence is issued to it an insurer shall not make payments on account of expenses of incorporation and organization out of the money paid in by shareholders except reasonable sums for the payment of clerical assistance, legal service, office rental, advertising, stationery, postage and expense of travel.

(3) The superintendent shall not issue the licence until he or she is satisfied that all the requirements of the laws of the province as to subscriptions to capital, the payment of money by shareholders on account of their subscriptions, the election of directors and other preliminaries have been complied with, and unless the superintendent is satisfied that the expenses of incorporation and organization, including the commission payable for the sale of shares of the insurer, are reasonable.

RSN1970 c176 s18

20. (1) A licence shall be in a form that the superintendent prescribes and considers necessary and shall specify the class of insurance which the insurer is authorized to transact in the province.

(2) A licence expires on March 31 in each year and may be renewed from year to year but the superintendent may issue or renew a licence for a period of less than a year.

(3) A licence to carry on automobile insurance in the province is subject to the following conditions:

(a) in an action in the province against the licensed insurer, or its insured, arising out of an automobile accident in the province, the insurer shall appear and shall not set up a defence to a claim under a contract made outside the province, including defence as to the limit of liability under the contract, that might not be set up if the contract were evidenced by a motor vehicle liability policy issued in the province; and

(b) in an action in another province or territory of Canada against the licensed insurer, or its insured, arising out of an automobile accident in that province or territory, the insurer shall appear and shall not set up a defence to a claim under a contract evidenced by a motor vehicle liability policy issued in the province, including a defense as to the limit of liability under the contract, that might not be set up if the contract were evidenced by a motor vehicle liability policy issued in that province or territory.

(4) The superintendent may cancel the licence of an insurer who commits a breach of either of the conditions set out in subsection (3).

(5) The superintendent may, notwithstanding anything contained in this Act, refuse to issue or renew a licence without stating or assigning a reason for the refusal.

(6) The Lieutenant-Governor in Council shall by order fix the fees payable for a licence or renewal of a licence and the fees so fixed shall be paid before a licence is issued.

RSN1970 c176 s19

21. (1) Where written notice has been served on the superintendent and upon proof of an undisputed claim arising from loss insured against in the province remaining unpaid for the space of 60 days after being due, or of a disputed claim after final judgment in the regular course of law and tender of a legal and valid discharge being unpaid, the licence of the insurer is automatically void and is considered to be cancelled from the date the superintendent received the notice.

(2) A licence which has been cancelled under subsection (1) may be restored and the insurer may again transact business in the province where, within 6 months after the superintendent received the notice referred to in subsection (1), the undisputed claim or final judgment referred to in that subsection is paid and satisfied.

RSN1970 c176 s20

22. Where an insurer fails to keep unimpaired the deposit, required by this Act, the superintendent may suspend or cancel the licence of the insurer.

RSN1970 c176 s21

23. (1) Where the superintendent, upon examination or from annual statements or upon other evidence, considers that the assets of an insurer are insufficient to justify the continuance of the insurer in business in the province or to provide proper security to persons effecting insurance with the insurer in the province or that an insurer has failed to comply with the laws of the province or with its charter or that an insurer should not be permitted to carry on business in the province, the superintendent shall report to the minister.

(2) Where the minister, after consideration of a report made under subsection (1) and upon further inquiry and investigation that the minister may think appropriate to make, concurs in the report of the superintendent, the minister may suspend or cancel the licence of the insurer.

(3) Notice of the suspension or cancellation of a licence under subsection (2) shall be published in the Gazette and elsewhere as the superintendent directs and once it is published a person transacting business in the province on behalf of the insurer except for winding-up purposes is guilty of an offence.

(4) Where the superintendent has made a report under subsection (1), the minister may direct the superintendent to issue a modified, limited or conditional licence that the superintendent considers necessary for the protection of persons in the province who have effected or effect contracts of insurance with the insurer.

RSN1970 c176 s22

24. (1) Upon the suspension or cancellation of the licence of an insurer in a foreign jurisdiction, the minister may direct the superintendent to and the superintendent shall suspend or cancel the licence of the insurer issued under this Act.

(2) Where a licence has been suspended or cancelled, the superintendent may restore it where the insurer makes good the deficiency to the satisfaction of the minister or remedies the default that led to the licence being suspended or cancelled.

RSN1970 c176 s23

25. An insurer whose licence has been suspended or cancelled under this Act or whose application for a licence or renewal of a licence has been refused under this Act may appeal against the suspension, cancellation or refusal to the minister who may confirm or overrule the suspension, cancellation or refusal.

RSN1970 c176 s24

26. Unless the Lieutenant-Governor in Council by order otherwise prescribes, sections 27 to 78 apply only to insurers incorporated under the laws of the province after March 13, 1961 and extra-provincial insurers except

(a) mutual insurance companies;

(b) fraternal or sororal societies;

(d) underwriters or syndicates of underwriters operating on the plan known as Lloyd's;

(e) insurers undertaking marine insurance only; and

(f) those insurers that the Lieutenant-Governor in Council may by regulation except.

RSN1970 c176 s25; 1981 c88 s1; 1985 c21 s6

27. (1) An insurer shall, before receiving a licence under this Act, deposit with the minister approved securities worth,

(a) where an insurer undertakes life insurance, $200,000; and

(b) where an insurer undertakes 1 or more classes of insurance other than life insurance

(i) in the province only, $100,000, or

(ii) elsewhere than in the province, $200,000.

(2) The minister may require the deposit referred to in subsection (1) to be increased, either before or after the minister issues the licence, to an amount that the minister considers necessary.

(3) An insurer may voluntarily make a deposit in excess of the amount prescribed by subsection (1) but no part of a voluntary deposit shall be withdrawn without the consent of the minister.

RSN1970 c176 s26; 1975 No15 s3

28. (1) The value of the securities referred to in section 27 shall be estimated at their market value, not exceeding par, at the time when they are deposited.

(2) Where any other than approved securities are offered as a deposit, the minister may accept them on the valuation and on the conditions that the minister considers appropriate.

(3) Where the market value of securities which have been deposited by an insurer declines below that at which they were deposited, the minister may notify the insurer to make further deposits that will ensure the accepted value of all the securities deposited by the insurer being equal to the amount which is required by this Act to be deposited.

(4) On failure by an insurer to make a further deposit referred to in subsection (3), the minister may suspend or cancel its licence.

(5) The property in stock, bonds or debentures deposited with the minister under this Act vests in the minister by virtue of his or her office without a formal transfer while the stock, bonds or debentures form the whole or a part of the deposit required by this Act.

(6) So long as the conditions of this Act are satisfied by an insurer and no attachment or notice of a final judgment against the insurer or order for its winding-up or for the distribution of its assets or for administration of its deposit is served upon the minister, the insurer is entitled to receive the interest upon the securities forming the deposit as it falls due.

RSN1970 c176 s27

29. Where an insurer wishes to substitute other approved securities for securities deposited under section 27, the minister may permit the substitution to be made.

RSN1970 c176 s28

30. Where it appears that an insured has on deposit with the minister under this Act a sum in excess of the amount prescribed by section 27, the minister, upon being satisfied that the interest of persons effecting contracts with the insurer in the province will not be prejudiced, and upon taking other precautions that the minister considers expedient, may authorize the withdrawal of the amount of the excess or a portion of the excess that the minister considers advisable.

RSN1970 c176 s29

31. (1) An insurer which has ceased to transact business in the province and wishes to obtain a return of its deposit may give written notice to that effect to the minister and shall publish in the Gazette a notice that it has applied to the Lieutenant-Governor in Council for the return of its deposit, calling upon all claimants, contingent or actual, who object to the return to file their objections with the minister on or before a day named in the notice which shall be not less than 3 months after the 1st publication of it.

(2) Upon giving notice to the minister under subsection (1) an insurer shall file with the minister a list of all its outstanding contracts, including contracts in respect of which claims have accrued.

(3) After the day named in a notice given under subsection (1) where the minister is satisfied that the insurer has obtained a discharge of all its outstanding contracts, the Lieutenant-Governor in Council may direct that its deposit be returned.

(4) Where the minister is not satisfied that all outstanding contracts have been discharged by an insurer which has ceased to transact business in the province, the Lieutenant-Governor in Council may direct that a sufficient amount of its deposit be retained to meet the contracts unprovided for and that the remainder of the deposit be returned and as those contracts lapse or proof is brought forward that they have been satisfied, further return of the deposit may be directed by the Lieutenant-Governor in Council.

RSN1970 c176 s30

32. (1) Where a licensed insurer, in this section called the "continuing insurer", has acquired the assets and assumed the liabilities within the province of another licensed insurer, in this section called the "discontinuing insurer", or reinsured all the contracts of a discontinuing insurer outstanding within the province, the Lieutenant-Governor in Council may, upon the application of the continuing insurer and upon the report of the minister, direct the transfer to the continuing insurer of the deposit held by the minister on behalf of the discontinuing insurer.

(2) A deposit which has been transferred in accordance with subsection (1) shall afterward be treated and dealt with under this Act as and be considered to be a deposit by the continuing insurer.

RSN1970 c176 s31

33. At any time before the granting of an order for the administration of a deposit the minister may use all or a part of the deposit for the purpose of reinsuring all or a part of the contracts where the minister is satisfied that the action is necessary or desirable for the protection of policyholders entitled to share in the proceeds of the deposit.

RSN1970 c176 s32; 1985 c21 s7

34. (1) A deposit made by an insurer under this Act shall be administered in accordance with this Act.

(2) The deposit shall be held and administered for the benefit of all insured persons under the contracts and they are entitled to share in the proceeds of the deposit.

(3) An insured person under a contract is entitled to share in the proceeds of the deposit in respect of

(a) a claim for a loss that is covered by the contract and that occurred before the termination date fixed under section 39 or 67;

(b) a claim for refund of unearned premiums except in the case of life insurance;

(d) claims under paragraphs (a) and (b).

RSN1970 c176 s33; 1985 c21 s7

35. An application for administration of a deposit shall be made by originating application in the Trial Division.

RSN1970 c176 s34; 1974 No57 s38; 1986 c42 s153

36. (1) The minister may apply for administration of a deposit where, in his or her opinion, it is necessary or desirable for the protection of insured persons entitled to share in the proceeds of the deposit.

(2) An insured person entitled to share in the proceeds of a deposit may apply for administration of the deposit upon producing evidence that

(a) the insured person has served the minister with a written notice of his or her intention to make the application, where the minister does not apply; and

(b) 60 days have elapsed since the service of the notice and an application for administration of the deposit has not been made.

RSN1970 c176 s35

37. (1) The applicant for administration of a deposit shall serve the originating summons at least 10 days before the date specified in the notice for the making of the application

(a) upon the insurer or, where the insurer is in liquidation, upon the liquidator of the insurer; and

(b) upon the minister.

(2) An applicant for administration of a deposit is entitled to an order for administration upon proof that

(a) the licence of the insurer has been cancelled and its assets are insufficient to discharge its outstanding liabilities;

(b) an order has been made for the winding up of the insurer; or

(i) an undisputed claim for 60 days after it has been admitted, or

(ii) a disputed claim after final judgment and tender of a valid discharge,

where the claim arose under a contract in respect of which the deposit is subject to administration.

RSN1970 c176 s36

38. (1) Upon the granting of an order for administration of a deposit, the court shall appoint a receiver to administer the deposit.

(2) Where a provisional liquidator or a liquidator has been appointed under this Act or the Corporations Act to wind up a company that has made a deposit, the court may appoint that person as the receiver to administer the deposit.

(3) A provisional liquidator or the liquidator appointed as receiver under subsection (2) shall administer the deposit for the benefit of the insured persons entitled to share in the proceeds of the deposit in accordance with this Act.

RSN1970 c176 s37

39. (1) Where a termination date has not been fixed by a provisional liquidator or a liquidator under section 67 immediately after his or her appointment, the receiver shall fix a termination date for the existing contracts of the insurer and, on and after that date, coverage and protection under the Newfoundland contracts shall cease and the insurer shall not be liable under those contracts for a loss that occurs after that date.

(2) The termination date fixed under subsection (1) shall not be fewer than 20 nor more than 45 days after the date upon which the receiver was appointed.

(3) The receiver shall immediately upon fixing a termination date under subsection (1)

(a) give written notice of the termination date to the minister; and

(b) publish notice of the termination date in the Gazette and in a newspaper circulating in the province as the receiver in his or her opinion considers advisable in order to give reasonable notice of the termination date.

RSN1970 c176 s38

40. (1) The minister shall, immediately upon receiving notice of a termination date fixed by a receiver, take the action that the minister considers advisable in the interests of insured persons under Newfoundland contracts entered into by the insurer whose deposit the receiver is administering to give notice of that date to them as soon as is reasonably possible.

(2) The minister may immediately require each agent of the insurer in the province referred to in subsection (1) to forward to the minister a list showing the name and address of each person who has entered into a contract with the insurer of whom the agent of the insurer has a record.

(3) On receipt of each list forwarded by an agent under subsection (2) the minister may send by ordinary mail to each person whose name appears on the list a notice setting out

(a) the termination date fixed by the receiver;

(b) the name and address of the receiver to whom particulars of claims for loss and claims for refund of unearned premiums should be submitted; and

(4) The minister may publish, broadcast or otherwise communicate or distribute the information set out in the notice referred to in subsection (3) either generally or in a particular area or case, in a manner and by a means that the minister considers best suited to convey the information to the insured persons as soon as is reasonably possible.

RSN1970 c176 s39

41. Immediately after his or her appointment a receiver shall

(a) call upon the insurer or its agent or liquidator to provide a list of all insured persons who are entitled to share in the proceeds of the deposit; and

(b) call upon all insured persons who are entitled to share in the proceeds of the deposit to file their claims if they have not already done so.

RSN1970 c176 s40

42. The court may, by the order appointing a receiver or by a subsequent order, authorize the receiver to exercise in respect of the accounts of the insurer all or any of the powers that a liquidator would have if he or she were taking an account of the claims against the deposit and every receiver so authorized shall have those powers as well as all other powers enjoyed by a receiver appointed under an order of the court.

RSN1970 c176 s41

43. (1) A receiver may apply to the court for an order authorizing the receiver

(a) to sell or realize upon all or a portion of the securities comprised in the deposit; and

(b) to pay from the proceeds of the securities the costs of the administration of the deposit, including salaries of the office staff, office expenses, the fee for the services of the receiver, fees and disbursements to adjusters and solicitors and other costs and expenses that the court considers appropriate.

(2) The court may require a receiver to give a notice of an application under subsection (1) in a manner that the court may require.

(3) After hearing an application under subsection (1) the court may make the order and may require the receiver to comply with those conditions that the court may direct.

RSN1970 c176 s42

44. The proceeds of a deposit are payable by a receiver

(a) firstly, in payment of the receiver and of all costs and expenses incurred by the receiver in the administration of the deposit, and in payment of all or part of the remuneration, cost and expenses of the provisional liquidator, where so ordered by the minister under subsection 63(3); and

(b) secondly, in payment of the insured persons who are entitled to share in the proceeds of the deposit in accordance with the priorities set out in section 45.

RSN1970 c176 s43

45. (1) Except in the case of life insurance, each insured person who claims in respect of a loss covered by a contract that occurred before the termination date fixed under section 39 or 67 is entitled to receive payment of his or her approved or settled claim in full in priority to insured persons who claim in respect of refunds of unearned premiums.

(2) An insured person who claims in respect of a refund of unearned premiums may claim that part of the premium paid that is proportionate to the period of his or her contract unexpired

(a) at the termination date fixed by the receiver under section 39 or fixed by the provisional liquidator or the liquidator under section 67; or

(b) at the date the insured person cancelled the contract,

whichever date is the earlier.

(3) In the case of life insurance, each insured person who has a claim for a loss covered by a contract that occurred before the termination date fixed under section 39 or 67 shall rank in the distribution of the proceeds of the deposit for the approved or settled amount of the claim equally, without preference, with insured persons under unmatured life insurance contracts.

(4) An insured person under an unmatured life insurance contract is entitled to the full amount of the legal reserve in respect of his or her contract determined by the receiver according to the valuation of it approved by the minister under this Act.

RSN1970 c176 s44

46. (1) Where an insured person has filed a claim for a loss covered by a contract that occurred before the termination date fixed under section 39 or 67, the receiver shall inquire into the claim and

(a) may approve the claim where a final judgment has been obtained against the insurer in respect of the claim;

(b) may approve the claim where it has been adjusted or settled by the insurer or by the receiver at an amount that, in his or her opinion, the claimant is reasonably entitled to receive; or

(2) An appeal lies from a decision of the receiver if taken within 30 days from the date on which the person appealing has received notice of the decision.

(3) The appeal shall be taken by the filing and service on the receiver of a notice of motion returnable before a judge of the Trial Division in chambers who may summarily determine the matter or may direct an issue to be tried or may make an order that he or she considers appropriate.

RSN1970 c176 s45; 1974 No57 Sch C;
1986 c42 Sch A

47. (1) The receiver shall prepare a list showing the names of the persons who appear, by the books and records of the insurer or otherwise, to be entitled to share in the proceeds of a deposit.

(2) The receiver shall prepare and attach to the list referred to in subsection (1) a schedule of approved claims for losses showing, in respect of each approved claim for loss made by a person appearing on the list,

(a) the name and address of the claimant;

(b) the particulars of the contract upon which the claim is based;

(d) the amount to which the claimant is entitled.

(3) The receiver shall prepare and attach to the list referred to in subsection (1) a schedule of unapproved claims for losses showing, in respect of each claim for loss that has not yet been approved by a person appearing on the list,

(a) the name and address of the claimant;

(b) the particulars of the contract upon which the claim is based; and

(c) the amount for which the claim is made or the amount estimated by the receiver as the probable maximum amount that will be payable under the contract in respect of that loss.

(4) Except in the case of life insurance, the receiver shall prepare and attach to the list referred to in subsection (1) a schedule of unearned premiums refundable showing, in respect of each person whose name appears on the list and who is entitled to a refund,

(a) his or her name and address;

(b) the particulars of the contract in respect of which the unearned premium is refundable;

(c) the date on which the policy was terminated either by the receiver under section 39 or by the provisional liquidator or the liquidator under section 67 or was cancelled by the insured person; and

(d) the amount of the unearned premium as calculated by the receiver in accordance with subsection 45(2).

(5) In the case of life insurance, the receiver shall prepare and attach to the list referred to in subsection (1) a schedule of contract legal reserves showing, in respect of each person whose name appears on the list and who is entitled to claim for the legal reserve in respect of his or her contract,

(a) his or her name and address;

(b) the particulars of the contract in respect of which the legal reserve is payable; and

RSN1970 c176 s46

48. (1) Upon completion of the schedules and after having paid or provided reasonable reserves from the deposit to pay the amounts payable under paragraph 44(a), the receiver may apply to the court for an order authorizing the payment of a total sum that may be fixed by the court on account of the amounts payable under paragraph 44(b).

(2) Except in the case of life insurance, the receiver shall divide the sum referred to in subsection (1) so as to provide for payment of the claims for loss in full or, if the sum is inadequate, proportionally on account of

(a) the approved claims for losses set out in the schedule of approved claims for losses; and

(b) the unapproved claims for losses set out in the schedule of unapproved claims for losses,

and shall distribute the portion referred to in paragraph (a) at a time that the receiver may determine to the persons entitled to it, and shall retain the portion referred to in paragraph (b) for distribution as the unapproved claims are approved.

(3) Except in the case of life insurance, where there appears to be a surplus remaining after the receiver has paid or retained a sum that in his or her opinion is reasonably adequate to pay in full all claims for loss referred to in subsection (2), the receiver shall divide the surplus so as to provide for payment of all unearned premiums in full or, if it is inadequate, among the persons entitled to a refund of unearned premiums in proportion to the amounts payable, as set out in the schedule of unearned premiums refundable.

(4) In the case of life insurance, the receiver shall divide the sum fixed under subsection (1) so as to provide for payment of the following amounts in full or, if the sum is inadequate, proportionally on account of

(a) the approved claims for losses set out in the schedule of approved claims for losses;

(b) the unapproved claims for losses set out in the schedule of unapproved claims for losses; and

(c) the full amount of the legal reserve in respect of each unmatured life insurance contract as set out in the schedule of contract legal reserves,

and shall distribute the portions referred to in paragraphs (a) and (c) at a time that the receiver may determine to the persons entitled to it, and shall retain the portion referred to in paragraph (b) for distribution as the unapproved claims are approved.

RSN1970 c176 s47

49. Where a claim in respect of a loss that occurred before the termination date is filed after the receiver has applied to the court under subsection 48(1) and before the final order of the court discharging the receiver, the claimant is entitled to share in the distribution of the money remaining in the hands of the receiver upon proof of his or her claim and upon those terms and conditions that the court may direct.

RSN1970 c176 s48

50. A receiver administering a deposit may apply to the court on summary application for directions or advice pertaining to a matter arising in the administration of the deposit.

RSN1970 c176 s49

51. Upon the completion of the distribution of the proceeds of a deposit, the receiver shall submit his or her final accounts to the court and the court, on the passing of the accounts, may make an order approving the accounts and discharging the receiver.

RSN1970 c176 s50

52. Where a claim is made after the completion of the distribution of the proceeds of a deposit and the discharge of the receiver, or where there is a claim against an insurer by an insured person not fully paid by the distribution of the proceeds of the deposit, the claimant is not barred from a recourse the claimant may have under another statute or law against the insurer.

RSN1970 c176 s51

53. A person who holds security for his or her claim under a contract, or who is entitled to share in the administration of a fund deposited with the government of another province for the protection of persons resident in that province, shall only be entitled to share in the administration of the Newfoundland deposit if that person abandons that special security and releases his or her claim upon another government deposit.

RSN1970 c176 s52

54. (1) In sections 55 and 56, "contracts" in relation to another province has the meaning assigned to it by the Act of that province under which insurers are licensed to carry on the business of insurance.

(2) This section and sections 55 and 56 are applicable notwithstanding that the insurer is or may become licensed in 1 province for classes of insurance different from those for which it is or may become licensed in another province.

1985 c21 s8

55. (1) Where an insurer has its head office for Canada in the province and makes a deposit under this Act for the purposes of this section, by virtue of which the insurer will not be required to make a deposit in another province in which it is or may become licensed to undertake insurance, the following provisions have effect, and to the extent that they are inconsistent with another provision of this Act prevail over that provision:

(a) the amount of the deposit to be made and maintained by the insurer shall be fixed by order of the Lieutenant-Governor in Council and the order shall declare what provinces are reciprocating provinces with respect to that insurer's deposit;

(b) the deposit shall be held and administered as security equally, without preference, for the Newfoundland contracts of the insurer and for its contracts in a reciprocating province;

(c) the minister shall, on the request of the official who issues or proposes to issue a licence to the insurer in another province, certify that the deposit is held in the manner provided by paragraph (b), and the superintendent shall forward the certificate to that official and a copy to the superintendent of insurance in each province;

(d) where, with respect to the outstanding contracts of the insurer, it appears to the superintendent from the annual report of the insurer or an examination of the affairs of the insurer that a further deposit for the purposes of this section is necessary, or where it appears to the superintendent of insurance for another province in which the insurer is licensed from an annual report made to the superintendent by the insurer or an examination of the affairs of the insurer that a further deposit for the purposes of this section is necessary, and that superintendent requests the superintendent to obtain a further deposit, the insurer shall immediately deposit the further sum the Lieutenant-Governor in Council fixes;

(e) where the insurer is a Canadian registered company authorized to carry on business in the province or another province and as a Canadian registered company makes a deposit under the Canadian and British Insurance Companies Act (Canada) or under the Foreign Insurance Companies Act (Canada), the minister may, on the request of the insurer, deliver to the insurer or transfer to the Minister of Finance for Canada the whole or part of the deposit under this Act as the minister thinks appropriate, having regard to the extent to which the Canadian registered company is authorized to carry on business in Canada, and the superintendent immediately shall give notice of the delivery or transfer to the superintendent of insurance of each reciprocating province;

(f) where the licence of the insurer is suspended or cancelled under this Act, the superintendent shall give immediate notice to the superintendent of insurance in each province;

(g) where the insurer ceases to carry on insurance business in Canada and its deposit may be withdrawn under this Act, the superintendent shall notify the superintendent of insurance in each province, and all claims and liabilities arising in a province shall be verified by the superintendent of insurance there and a statement of it communicated to the superintendent; and

(h) where the insurer ceases to transact business in, or its licence is suspended or cancelled in, a reciprocating province and notice is given to the superintendent, the minister and the superintendent, on the request of the superintendent of insurance in the reciprocating province, may take an action that could be taken if the insurer were ceasing to transact business in, or its licence where suspended or cancelled in the province.

(2) The insurer shall not change the situation of its head office to another province without the consent of the minister, but when the minister so consents the insurer may transfer the insurer's deposit to the minister responsible for the deposit in that province, or to the insurer, as the minister in that province requests, and the superintendent immediately shall give notice of a change or transfer to the superintendent of insurance of each reciprocating province.

1985 c21 s8

56. (1) Where an insurer has its head office for Canada in another province and there makes a deposit of the amount fixed by the proper authority in that province and where under the laws of that province the deposit is held as security equally, without preference, for its Newfoundland contracts and its contracts in every reciprocating province, the minister shall, on receipt of

(a) a certified copy of an order of the Lieutenant-Governor in Council of the province in which the deposit is made fixing the amount of the deposit and declaring that the province is a reciprocating province with respect to that insurer's deposit; and

(b) the consent of the insurer to its deposit being so held,

exempt the insurer from the provisions of this Act requiring it to make and maintain a deposit.

(2) Where the insurer ceases to transact business in or its licence is suspended or cancelled in the province, the superintendent shall immediately give notice to the superintendent of the province in which the reciprocal deposit is held and to the superintendent of each other reciprocating province.

(3) Where an order is made for the administration of a reciprocal deposit held in another province under subsection (1), the superintendent, as soon as is reasonably possible after receipt of notice of the termination date fixed by the receiver, shall proceed under section 40 to give the notice required by that section to the insured persons under the Newfoundland contracts.

(4) Where an insurer licensed under this Act is exempted under this section from making a deposit, the minister shall transfer its deposit under this Act to the minister responsible for the deposit in the province in which the insurer has its head office and which will hold the deposit, or to the insurer, as that minister requests.

(5) This section prevails over another provision of this Act to the extent that it is inconsistent with that other provision.

1985 c21 s8

57. (1) Notwithstanding section 56, the minister shall not exempt an insurer under subsection 56(1) unless the amount of the deposit fixed by the proper authority of the province in which the deposit is made is at least equal to the amount of the deposit required for the insurer under section 27.

(2) Notwithstanding section 56, where the minister has exempted an insurer under subsection 56(1) and for a reason either at the time of the exemption or subsequently

(a) the amount of the deposit that would be required for the insurer under section 27, in the absence of the exemption,

exceeds

(b) the amount of the deposit fixed by the proper authority of the province in which the deposit is made,

the minister may by notice require the insurer, within the time prescribed in the notice, to deposit with the minister a deposit equal to the amount of the excess.

(3) A deposit made with the minister under subsection (2) is subject to this Act to the same extent as if it were a deposit made under section 27.

1985 c21 s8

58. At any time before the granting of an order for the administration of a reciprocal deposit the superintendent of insurance of each reciprocating province may enter into an agreement to use all or a part of the securities deposited for the purpose of reinsuring all or a part of the risks of the insurer outstanding in all or any of those provinces.

1985 c21 s8

59. (1) The Lieutenant-Governor in Council may, on being satisfied that another province has enacted provisions identical with or substantially the same as sections 54 to 56, direct by order that those sections shall apply to that province, and may, by order, revoke or alter the order.

(2) An order under this section shall be published in the Gazette, and a copy shall be sent to the superintendent of insurance in each province.

1985 c21 s8

60. An insurer is subject to the winding-up provisions of the Corporations Act except in so far as they may be varied by this Act.

RSN1970 c176 s53

61. (1) An insurer may be wound up by order of the court on the application of the minister where the court is satisfied that

(a) the insurer has failed to exercise its corporate powers during a continuous period of 1 year;

(b) the insurer has not started business or gone into actual operation within 1 year after it was incorporated;

(d) the insurer's licence has been suspended for 1 year or more;

(e) the insurer has carried on business or entered into a contract or used its funds in a manner or for a purpose prohibited or not authorized by this Act or by its charter or by the Corporations Act or by a special Act; or

(f) other sufficient cause has been shown.

(2) The minister shall not make an application under subsection (1) without the approval of the Lieutenant-Governor in Council.

(3) Upon the making of an order under subsection (1) the provisions of the Corporations Act relating to the winding up of a company, in so far as they are consistent with this Act, apply.

RSN1970 c176 s54; 1986 c12 Sch; 1987 c38 Sch B

62. (1) Where

(a) the licence of an insurer expires and

(i) the insurer fails to renew the licence within a period of 6 months after the date of expiry, or

(ii) a renewal of licence is refused; or

(b) the licence of an insurer is cancelled,

the minister may appoint a provisional liquidator who shall take charge of the affairs of the insurer and may direct that it be wound up immediately under the Corporations Act.

(2) Until a permanent liquidator is appointed the provisional liquidator shall exercise all the powers of the insurer and none of the officers or employees of the insurer shall make a contract for, incur a liability on behalf of, or spend money of the insurer without the approval of the provisional liquidator.

(3) The provisional liquidator shall petition the court for a winding-up order and where the court is of the opinion that it is just and equitable to do so it may make an order for the winding up of the insurer and the provisions of the Corporations Act relating to the winding up of a company, in so far as they are consistent with this Act, apply.

(4) The provisional liquidator or the liquidator, notwithstanding the Corporations Act, but subject to the approval of the court, may sell the business and undertaking of the insurer as a going concern.

RSN1970 c176 s55; 1986 c12 Sch; 1987 c38 Sch B

63. (1) The remuneration to be paid to a provisional liquidator shall be fixed by the minister.

(2) The remuneration and all expenses and outlay in connection with the appointment of the provisional liquidator, together with all expenses and outlay of the provisional liquidator while he or she acts in that capacity, shall be borne and paid by the insurer and shall form a 1st charge upon the assets of the insurer other than the deposit unless otherwise directed under subsection (3).

(3) The minister may direct that the remuneration, expenses and outlay in connection with the appointment of the provisional liquidator shall be paid out of the proceeds of the deposit made by the insurer and, in that case, the amount directed to be paid shall have the same priority as the expenses of a receiver under paragraph 44(a).

RSN1970 c176 s56

64. (1) When an insurer proposes to cease writing insurance or to call a general meeting to consider a resolution for the voluntary liquidation of the insurer under the Corporations Act, it shall give at least 1 month's notice in writing to the minister.

(2) Where an insurer has passed a resolution for voluntary winding up, the insurer shall notify the minister of the winding up and of the date at which contracts will cease to be entered into by the insurer and of the name and address of its liquidator.

(3) The notice under subsection (2) shall also be published by the insurer in 2 consecutive issues of the Gazette and in those newspapers and other publications that the minister may require.

(4) A fraternal or sororal society or mutual insurance company to which this Act applies shall not go into voluntary liquidation or otherwise arrange for the winding up of its affairs without the written consent of the minister.

RSN1970 c176 s57; 1986 c12 Sch; 1987 c38 Sch B

65. (1) The provisional liquidator or the liquidator, before an order granting administration of the deposit and before the fixing of a termination date under section 67, may arrange for the reinsurance of the existing contracts of the insurer with some other insurer licensed in the province.

(2) For the purpose of securing the reinsurance in accordance with subsection (1) the following funds shall be available:

(a) the entire assets of the insurer in the province other than the deposit, except the amount reasonably estimated by the liquidator or the provisional liquidator as being required to pay

(i) the costs of the liquidation or winding up,

(ii) all claims for losses covered by the insurer's contracts of which notice has been received by the insurer or liquidator or provisional liquidator before the date on which the reinsurance is effected, and

(iii) the claims of the preferred creditors who are the persons paid in priority to other creditors under the winding-up provisions of the Corporations Act,

all of which shall be the 1st charge on the assets of the insurer other than the deposit; and

(b) all or a portion, of the deposit as may be agreed upon under subsection (3).

(3) Where it appears necessary or desirable to secure reinsurance for the protection of insured persons entitled to share in the proceeds of the deposit, the minister may enter into an agreement with the provisional liquidator or the liquidator by the terms of which all or a part of the securities in the deposit may be used for the purpose of securing the reinsurance.

(4) Creditors of the insurer, other than the insured persons and the preferred creditors referred to in subparagraph (2)(a)(iii), are entitled to receive a payment on their claims only if provision has been made for the payments mentioned in subsection (2) and for the reinsurance.

(5) Where, after providing for the payments mentioned in subsection (2), the balance of the assets of the insurer, together with all or a portion, of the deposit that may be agreed upon under subsection (3), is insufficient to secure the reinsurance of the contracts of the insured persons in full, the reinsurance may be effected for the portion of the full amount of the contracts that may be possible.

(6) A contract of reinsurance shall not be entered into under this section until it is approved by the court.

(7) Nothing in this section prejudices or affects the priority of a mortgage, lien or charge upon the property of the insurer.

RSN1970 c176 s58; 1986 c12 Sch; 1987 c38 Sch B

66. (1) In the winding up of an insurer that has made a deposit where the person appointed as receiver is not the person appointed as provisional liquidator or the liquidator under this Act or the Corporations Act, the court may order that the deposit and its administration be transferred from the receiver to the provisional liquidator or the liquidator.

(2) Upon the making of an order under subsection (1), the provisional liquidator or the liquidator shall administer the deposit for the benefit of the persons entitled to share in the proceeds of the deposit in accordance with the priorities and other provisions prescribed in this Act.

(3) The amount payable to the provisional liquidator or the liquidator for administering the deposit and all costs and expenses incurred by him or her in administering the deposit shall be paid from the proceeds of the deposit in accordance with the priorities fixed by paragraph 44(a) but the amount payable to the provisional liquidator or the liquidator and all costs and expenses incurred by him or her in the winding up of the insurer shall not be paid from the deposit but shall be paid from and constitute a 1st charge on the assets of the insurer subject to subsection 63(3).

RSN1970 c176 s59; 1986 c12 Sch; 1987 c38 Sch B

67. (1) Where the provisional liquidator or the liquidator fails to secure reinsurance or if, in his or her opinion, it is impracticable or inexpedient to arrange for reinsurance, the provisional liquidator or the liquidator,

(a) with the approval of the court and subject to those terms that may be prescribed by the court; and

(b) for the purpose of securing the payment of existing claims and avoiding further losses,

may publish a notice fixing a termination date for the existing contracts of that insurer, and on and after that date coverage and protection under the Newfoundland contracts shall cease, and the insurer is not liable under those contracts for a loss that occurs after that date.

(2) Where a receiver administering a deposit has fixed a termination date under section 39, the termination date fixed under this section shall apply only to those contracts not already terminated on the date fixed by the receiver.

RSN1970 c176 s60

68. The provisional liquidator or the liquidator shall

(a) publish the notice referred to in section 67 in the Gazette and in those newspapers, that the court may direct in order to give reasonable notice of the termination date so fixed; and

(b) mail the notice referred to in section 67 to each policyholder at his or her address as shown on the books and records of the insurer.

RSN1970 c176 s61

69. (1) The liquidator shall pay or set aside from the assets of the insurer sums which in his or her opinion are sufficient to pay

(a) the costs of the liquidation or winding up;

(b) all claims for losses covered by the insurer's contracts that occurred before the termination date fixed under section 39 or 67 and that have not been paid or provided for in the administration of the deposit and of which notice has been received by the insurer or the liquidator;

(d) the claims of preferred creditors who are the persons paid in priority to other creditors under the winding-up provisions of the Corporations Act.

(2) Except in the case of life insurance, the assets remaining after payment or making provision for payment of the amounts referred to in subsection (1) shall be used to pay the claims of insured persons for refunds of unearned premiums on a proportional basis in proportion to the periods of their contracts respectively unexpired on the termination dates, to the extent those claims have not been paid or provided for in the administration of the deposit.

(3) The claims of insured persons for refunds of unearned premiums shall be calculated

(a) as at the termination date fixed under section 39 or 67; or

(b) as at the date the insured person cancelled the contract,

whichever date is the earlier.

(4) The refund of all or a portion of a premium under this section does not destroy or defeat another remedy the insured person may have against the insurer.

(5) Nothing in this section prejudices or affects the priority of a mortgage, lien or charge upon the property of the insurer.

RSN1970 c176 s62; 1986 c12 Sch; 1987 c38 Sch B

70. The fees, taxes and costs payable by the insurer shall be paid out of the assets of the insurer remaining after the reinsurance of the existing contracts of the insurer or after the payment of the claims of policyholders for refund of unearned premiums and the balance shall be distributed among the creditors of the insurer, other than the insured persons and preferred creditors.

RSN1970 c176 s63

71. (1) Unless otherwise ordered by the court, within 7 days after the close of each period of 3 months after a liquidator's appointment and until the affairs of the insurer are wound up and the accounts are finally closed the liquidator shall file with the court or other authority appointing him or her and with the minister detailed schedules showing, in those forms that may be required,

(a) receipts and expenditures; and

(b) assets and liabilities of the insurer.

(2) The liquidator shall, where the liquidator is required to do so by the authority appointing him or her or by the minister, exhibit the office books and vouchers and provide other information respecting the affairs of the insurer that may be required.

(3) A liquidator who refuses or neglects to provide information under subsection (2) is guilty of an offence and liable on summary conviction, for each offence, to a fine of not less than $50 or more than $200 with costs and the liquidator may in addition be dismissed or removed.

RSN1970 c176 s64

72. (1) Where a fraternal or sororal society transacts endowment or expectancy insurance and has an endowment fund separate and distinct from its life insurance fund, the society may, by resolution, determine that the endowment or expectancy insurance be discontinued, and that the endowment or expectancy fund be distributed proportionally among the members then in good standing who are contributing to the fund, to each member according to his or her total contribution.

(2) After a resolution referred to in subsection (1) is filed with and assented to by the minister, the executive officers of the fraternal or sororal society may proceed to ascertain the persons entitled to rank upon the fund and may distribute the fund among those entitled and the distribution shall discharge the society and all executive officers of the society from all liability in respect of the fund and of the endowment or expectancy contracts undertaken by the society.

(3) Where all members interested in the endowment or expectancy fund are also interested as holders of life insurance contracts, the general meeting may, instead of determining that the endowment or expectancy fund be distributed, determine that the fund be converted into or merged in a life insurance fund; and after the resolution is so assented to and filed the endowment or expectancy fund shall be a life insurance fund.

RSN1970 c176 s65

73. For the purpose of a voluntary winding up the superintendent may renew or extend the licence of an insurer.

RSN1970 c176 s66

74. The superintendent, or a person authorized by the superintendent, in writing, shall, at reasonable times, have access to the books, securities and documents of an insurer, agent or broker that relate to contracts of insurance, and an officer or person in charge, possession, custody or control of those books, securities or documents who refuses or neglects to give that access is guilty of an offence.

1981 c88 s2

75. It is the duty of the officers and agents of a licensed insurer, and of persons licensed under this Act, or of an insured, to provide the superintendent on his or her request with full information relating to a contract of insurance issued by the insurer or to the insured or relative to a settlement or adjustment under the contract.

1981 c88 s2

76. The minister may instruct the superintendent to visit the head office or chief agency from which the contract was issued, or the office of the adjuster, and inquire into the contract or settlement, and section 74 applies with the necessary changes to the inquiry.

1981 c88 s2

77. (1) The superintendent shall visit personally, or direct a representative to visit, from time to time, the head office or chief office in the province of an insurer and the superintendent shall examine the statements of the condition and affairs of each insurer filed under this Act, and make those inquiries that are necessary to ascertain its condition and ability to provide for the payment of its contracts as they mature and whether or not it has complied with all the provisions of this Act applicable to its transactions, and the superintendent shall report to the minister as to all matters requiring his or her attention and decision.

(2) Where the head office of an insurer is not in the province and the superintendent considers it necessary to make a further examination into its affairs and so reports to the minister, the minister may instruct the superintendent or a representative to visit the head office of the insurer to inspect and examine its affairs and to make those further inquiries that the minister may require.

(3) The officers and agents of an insurer shall open the books and records of the insurer for the inspection of the superintendent or his or her representative and shall otherwise facilitate the examination so far as it is in their power.

(4) In order to facilitate the inspection of the books and records of an insurer, the insurer may be required by the superintendent with the approval of the minister, to produce the books and records at the head office or chief office in the province of the insurer or at another convenient place that the superintendent directs, and the officer of the insurer who has custody of the books and records is entitled to be paid by the insurer for the actual expenses of the attendance.

1981 c88 s2; 1982 c9 s3

78. (1) The superintendent, with the approval of the minister, may prepare abstracts of the books and vouchers and a valuation to be made of the assets or liabilities of the insurer and the cost of so doing upon the certificate of the superintendent approved by the minister shall be paid by the insurer.

(2) Where the office of an insurer at which an examination is made under this section is out of the province, the insurer shall pay the account in connection with the examination upon the certificate of the superintendent approved by the minister.

(3) Upon the certificate of the superintendent, approved by the minister, an insurer shall pay the account in connection with an examination made under sections 74 to 77.

1981 c88 s2

79. An insurer shall keep the classification of its contracts and the registers and books of account that are directed or authorized by the superintendent and where it appears to the superintendent that the classification, registers or books are not kept in a business-like way as to make a proper showing of the affairs and standing of the insurer, the superintendent shall nominate an accountant, under his or her direction, to audit them and to give those instructions that will enable the insurer to keep them correctly and the expense of the audit and necessary travelling expenses of the accountant shall be paid immediately by the insurer upon being certified and approved by the superintendent.

RSN1970 c176 s67; 1985 c21 s9

80. The share register of the insurer shall at reasonable times be open to the examination of the superintendent or his or her representative without charge.

RSN1970 c176 s68; 1985 c21 s10

81. (1) A licensed insurer which carries on in the province the business of fire insurance shall keep a record of its premium income derived from risks located in the province and of claims paid in respect of those risks so as to show its experience according to the classification of occupancy hazards of the National Board of Fire Underwriters with those modifications that the superintendent may prescribe.

(2) Where it appears to the superintendent that records referred to in subsection (1) are not kept in a manner as to correctly show the experience of the insurer in the province as required by that subsection, the minister may nominate an accountant to proceed under his or her direction to audit the books and records of the insurer and to give those instructions that will enable the officers of the insurer to keep the records correctly and the expense of the audit and necessary travelling expenses of the accountant shall be paid immediately by the insurer upon being certified and approved by the superintendent.

(3) A licensed insurer undertaking the business of fire insurance in the province shall prepare and file with the superintendent before April 1 in each year in a form prescribed by the superintendent a statement of the premium income and losses experience within the province for the calender year immediately preceding the date of the return according to the records required to be kept under this section.

(4) An insurer and the principal officer within the province of an insurer which contravenes this section is guilty of an offence and liable on summary conviction to a fine not exceeding $100.

RSN1970 c176 s69

82. (1) A licensed insurer which carries on in the province the business of automobile insurance shall, where the superintendent so directs, prepare and file with the superintendent or with a statistical agency that the superintendent may designate a record of its automobile insurance premiums and of its loss and expense costs in the province in a form and manner and according to the system of classification that the superintendent may prescribe.

(2) The superintendent may require an agency designated under subsection (1) to compile the data filed under that subsection in a form that the superintendent may prescribe and the expense of making the compilation shall be apportioned among the insurers whose data is compiled by the agency by the superintendent who shall certify in writing the amount due from each insurer and the amount is payable by the insurer to the agency immediately.

(3) Subsections 81(2) and (4) apply with the necessary changes to this section.

RSN1970 c176 s70

83. A copy of every balance sheet or other statement published or circulated by an insurer purporting to show its financial condition, together with an auditor's report, shall be mailed or delivered to the superintendent concurrently with its issue to its shareholders or policyholders or to the general public.

RSN1970 c176 s71

84. The auditor of an insurer shall after the auditor has made an annual audit of the books of the insurer report to the shareholders that

(a) the auditor has audited the books of the insurer and verified the cash, bank balance and securities;

(b) in the case of insurers transacting other than life insurance, the auditor has checked the reserve for unearned premiums and that it is calculated as required by the laws of the province;

(d) the auditor has verified the balances owing by agents and other insurers;

(e) the balance sheet does not include as assets items prohibited by the laws of the province from being shown in the annual statements required to be filed;

(f) after consideration, the auditor has formed an independent opinion and according to the best of his or her information and the explanations given the auditor, the balance sheet sets out fairly the state of affairs of the insurer; and

(g) all transactions of the insurer that have come within his or her notice have been within its powers.

RSN1970 c176 s72; 1985 c21 s9

85. (1) A licensed insurer shall prepare and deliver to the superintendent before April 1 in each year a statement of the condition of affairs of the insurer as of December 31 immediately preceding and the statement shall be in a form and verified in a manner that may be prescribed by the superintendent.

(2) An insurer shall make prompt and explicit answer in reply to an inquiry directed to the insurer by the superintendent in relation to the statement referred to in subsection (1) or in relation to the transactions of the insurer in the province.

(3) In the case of insurers incorporated under the laws of the province and transacting classes of insurance other than life insurance, the statement referred to in subsection (1) shall show, as a liability of the insurer, 80% of the actual portions of unearned premiums on all business in force on December 31 immediately preceding or 80% of 50% of the premiums written in its policies and received in respect of contracts having 1 year or less to run and proportionally on those for longer periods.

(4) In the case of insurers incorporated under the laws of the province and transacting life insurance, the statement referred to in subsection (1) shall show as a liability the valuation of outstanding contracts according to the standard for the valuation of policies of life insurance that the insurer may, with the approval of the superintendent, adopt.

(5) The statement referred to in subsection (1) prepared by an insurer incorporated under the laws of the province shall not show as assets the unpaid balances owing by agents or other insurers in respect of business written before October 1 in the immediately preceding calendar year or bills receivable on account of the business or unpaid capital or premium on subscribed shares of capital or investment in office furnishings or equipment nor shall the statement include as assets investments not authorized by a special or general Act to which the insurer is subject.

(6) An insurer incorporated under the laws of the province may, in its annual statement or in a valuation of its securities required to be made, value all of its securities, having a fixed term and rate and not in default as to principal or interest,

(a) where purchased at par at the par value; and

(b) where purchased above or below par on the basis of the purchase price adjusted so as to bring the value to par at maturity and so as to yield meantime the effective rate of interest at which the purchase was made,

but the purchase price shall in no case be taken at a higher figure than the actual market value at the time of purchase, and the superintendent has full discretion in determining the method of calculating values according to this subsection.

RSN1970 c176 s73

86. A statement purporting to show the financial condition of an insurer differing from the financial condition shown by the statement filed with the superintendent, or a balance sheet or other statement in form differing from the form prescribed by the regulations, shall not be published or circulated and an insurer publishing the statement is guilty of an offence.

RSN1970 c176 s74

87. A person who represents orally or in writing that the issue of a licence to an insurer or the printing or publication of an annual statement in a report or other publication of the government of the province or any other circumstance of the supervision or regulation of the business of the insurer by law is a warranty or guarantee of the financial standing of the insurer or of its ability to provide for the payment of its contracts at maturity is guilty of an offence.

RSN1970 c176 s75

88. An insurer and an officer, director, agent and employee of an insurer who, for the purpose of inducing a person to insure with the insurer, makes or uses a misleading statement purporting to show the dividends, profits or surplus which have been paid or may be paid by the insurer in respect of a policy issued or to be issued by it, is guilty of an offence

RSN1970 c176 s76

89. A person other than an insurer or its authorized agent who advertises or holds himself or herself out as a purchaser of life insurance policies or of benefits under life insurance policies or who trafficks or trades in life insurance policies for the purpose of procuring the sale, surrender, transfer, assignment, pledge or hypothecation of them to himself or herself or another person is guilty of an offence.

RSN1970 c176 s77

90. Any information, document, record, statement or thing made or disclosed to or filed with the minister or the superintendent concerning an insurer licensed or applying for licence is absolutely privileged and shall not be used as evidence in an action or proceeding in a court brought by or on behalf of that person.

RSN1970 c176 s78

91. (1) The superintendent may require an insurer to file with the superintendent copies of all policy forms and forms of application issued or used by the insurer.

(2) Where an insurer issues a policy or uses an application which, in the opinion of the superintendent, is unfair, fraudulent or not in the public interest, the superintendent may prohibit the insurer from issuing or using that form of policy or application.

(3) An insurer which has been prohibited under subsection (2) from issuing or using a form of policy or application and later issues or uses the prohibited form is guilty of an offence.

RSN1970 c176 s79

92. (1) An insurer incorporated under the laws of the province or an extra-provincial insurer may, unless the Lieutenant-Governor in Council otherwise provides by regulation, invest its funds only in or on the security of investments in which or on the security of which a company registered under the Canadian and British Insurance Companies Act (Canada) may invest or lend its funds and only subject to the limitations and restrictions that apply to a company registered under that Act.

(2) Uninvested funds of the insurer shall be kept on deposit in the name of the insurer in an institution, authorized to take deposits, which is insured by the Canada Deposit Insurance Corporation.

1985 c21 s11

93. (1) An insurer shall not knowingly make an investment, after February 1, 1986, other than a loan on the security of a policy of life insurance issued by it

(a) by way of a loan to

(i) a director or officer of the insurer, or a spouse or child of that director or officer, or

(ii) an individual, the individual's spouse or the individual's children under 19 years of age where either the individual or a group, consisting of the individual, the individual's spouse and those children, is a substantial shareholder of the insurer;

(b) in a corporation that is a substantial shareholder of the insurer; or

(i) an individual mentioned in subparagraph (a)(i),

(ii) an individual who is a substantial shareholder of the insurer,

(iii) another corporation that is a substantial shareholder of the insurer, or

(iv) a group consisting exclusively of individuals mentioned in subparagraph (a)(i),

has a significant interest.

(2) An insurer shall not knowingly retain an investment mentioned in subsection (1).

(3) For the purpose of this section,

(a) a person has a significant interest in a corporation, or a group of persons has a significant interest in a corporation where,

(i) in the case of a person, the person owns beneficially, either directly or indirectly, more than 10%, or

(ii) in the case of a group of persons, they own beneficially, either individually or together and either directly or indirectly, more than 50%,

of the shares of the corporation for the time being outstanding;

(b) a person is a substantial shareholder of a corporation or a group of persons is a substantial shareholder of a corporation where that person or group of persons owns beneficially, either individually or together and either directly or indirectly, equity shares to which are attached more than 10% of the voting rights attached to all of the equity shares of the corporation for the time being outstanding; and in calculating the percentage of voting rights attached to equity shares owned by an underwriter, there shall be excluded the voting rights attached to equity shares acquired by that underwriter as an underwriter during the course of distribution to the public by the underwriter of those shares;

(c) "equity share" means a share of a class to which are attached voting rights exercisable under all circumstances and a share of a class to which are attached voting rights by reason of the occurrence of a contingency that has occurred and is continuing;

(d) "investment" means

(i) an investment in a corporation by way of purchase of bonds, debentures, notes or other evidences of indebtedness or shares, or

(ii) a loan to a person,

but does not include a normal working balance between an insurer and another corporation transacting the business of insurance or an advance or loan that is merely ancillary to the main business of the insurer; and

(e) notwithstanding paragraph 2(mm), "officer" means only the president, vice-president, the secretary, the treasurer, the manager, the controller and the actuary of an insurer, and another person designated as an officer of the insurer by by-law or by resolution of the directors.

(4) For the purposes of this section, where a person or a group of persons owns beneficially, directly or indirectly, or is considered by this subsection to own beneficially, shares of a corporation, that person or group of persons shall be considered to own beneficially that proportion of the shares of another corporation that is owned beneficially, directly or indirectly, by the first-mentioned corporation, that is equal to the proportion of the shares of the first-mentioned corporation that is owned beneficially, directly or indirectly, or is considered by this subsection to be owned beneficially, by that person or group of persons.

(5) Notwithstanding subsection (4), an insurer is not prohibited from making an investment in a corporation only because a person or a group of persons that owns beneficially, directly or indirectly, or is considered to own beneficially, equity shares of the insurer is, by reason of that subsection, considered to own beneficially equity shares of that corporation.

(6) Where a person or group of persons is a substantial shareholder of an insurer, and, as a consequence of that and of the application of this section, certain investments are prohibited for the insurer, the minister may, on the advice of the superintendent, and on application by the insurer, exempt from that prohibition a particular investment of a particular class where the minister is satisfied

(a) that the decision of the insurer to make or hold an investment so exempted has not been and is not likely to be influenced in a significant way by that person or group, and does not involve in a significant way the interests of that person or group apart from their interests as a shareholder of the insurer; and

(b) that the investment is to be made under the power granted to the insurer under this Act.

(7) An order of exemption made by the minister under subsection (6) may contain conditions or limitations considered by the minister to be appropriate and may be revoked by the minister.

1985 c21 s11

94. (1) All investments and deposits of the funds of an insurer shall be made in its corporate name.

(2) An insurer shall at all times retain in Canada and under its own control assets of a value at least equal to its total liabilities to its policyholders in Canada.

(3) Where the laws of a province, state or country in which an insurer transacts or is about to transact business require that the deposits made or to be made by that insurer in a province, state or country shall be made in the name of or transferred or assigned to a person or corporation other than the insurer, this section does not prohibit that insurer from making in the name of, or transferring or assigning to, that person or corporation the investments and deposits necessary to comply with those laws.

(4) A director or officer of an insurer and a member of a committee having an authority in the investment or disposition of its funds shall not accept or be the beneficiary of, either directly or indirectly, a fee, brokerage, commission, gift or other consideration for or on account of a loan, deposit, purchase, sale, payment or exchange made by or on behalf of the insurer, or be pecuniarily interested in that purchase, sale or loan, either as borrower, principal, co-principal, agent or beneficiary, except that, where the director, officer or member is a policyholder, that director, officer or member is entitled to all the benefits accruing under the terms of the contract.

(5) Except as provided in this section, all the securities of an insurer incorporated and licensed under the laws of the province shall be held at the head office of the insurer or elsewhere in the province and the holding of securities, wherever situated, is subject to those regulations respecting their safekeeping, including registration and the bonding of directors, officers and employees of the insurer, that the Lieutenant-Governor in Council may prescribe.

1985 c21 s11

95. (1) A policy of insurance shall not be issued through an underwriter's agency under its own name for an insurer unless the insurer is licensed to carry on business in the province and has obtained from the superintendent a licence to issue contracts of insurance through the underwriter's agency.

(2) A policy of insurance issued through an underwriter's agency shall be in a form approved by the superintendent and shall bear upon its face the name and address of the insurer in a prominent and conspicuous manner and the name of the underwriter's agency shall not appear on the face of the policy except as a counter-signature to the policy.

(3) On no other part of the policy shall the name of the underwriter's agency appear except that for identification purposes the words "issued through the ................. Underwriter's Agency" may be printed on the filing back of the policy following the name of the insurer and in type not larger than half the depth of that used in printing that name.

(4) Upon an application for a licence under this section an insurer shall provide to the superintendent evidence of its approval and adoption of the form of policy to be issued through the underwriter's agency and of the authority of the underwriter's agency or its agents to bind the insurer.

(5) An insurer licensed under this Act carrying on business or issuing a policy of insurance through an underwriter's agency shall file an annual return of the business transacted through that underwriter's agency in a form prescribed by the superintendent.

RSN1970 c176 s81

96. (1) An insurer and an officer, employee or agent of an insurer who, directly or indirectly, makes or attempts to make an agreement as to the premium to be paid for a policy other than as set out in the policy or pays, allows or gives or offers or agrees to pay, allow or give a rebate of the whole or part of the premium stipulated by the policy or another consideration or thing of value intended to be in the nature of a rebate of premium to a person insured or applying for insurance in respect of life, person or property in the province is guilty of an offence.

(2) Nothing in this section affects a payment by way of dividend, bonus, profit or savings which is provided for by a policy or shall be construed so as to prevent an insurer compensating a salaried employee of its head or branch office in respect of insurance issued by the employing insurer upon the life of that employee or so as to require that the employee shall be licensed as an agent of life insurance under the Life and Accident Insurance Agents Licensing Act to effect that insurance.

RSN1970 c176 s82; 1986 c36 s50

97. The Newfoundland Automobile Assigned Risk Plan established as an unincorporated association before February 1, 1986 is continued as an unincorporated non-profit association of insurers known as the Facility Association.

1985 c21 s12

98. (1) An insurer licensed to transact automobile insurance in the province is a member of the association and shall be bound by the articles of association.

(2) The association shall, in the articles of association, establish a plan, to be known as the Plan of Operation, for providing a contract of automobile insurance to owners and licensed drivers of motor vehicles who, but for the plan, would be unable to obtain that insurance.

(3) The association shall ensure, through its members, that a contract of automobile insurance is provided with respect to every application for automobile insurance submitted under the plan to an insurer by an agent, broker or representative on behalf of a person.

(4) An agent, broker or representative submitting an application under the plan to an insurer shall be bound by the applicable articles of association and by-laws of the association.

(5) The association may, in its name,

(a) be prosecuted for an offence under this Act or another applicable Act; and

(b) sue and be sued.

1985 c21 s12

99. (1) The affairs of the association shall be administered by a board of directors established in accordance with its articles of association.

(2) The association shall notify the superintendent of the names and residence addresses of the persons elected or appointed as officers and directors of the association immediately after that election or appointment, and the names and addresses may be made available to the public by the superintendent.

(3) Service on the directors or officers of the association is sufficient service on the association, and that service may be by personal service or by registered mail.

(4) Where service on the association is made by registered mail on a director or officer of the association under subsection (3), the service shall be considered to have been made on the 5th day after the day of mailing unless the notice is not delivered or the director or officer to whom notice is given establishes that that director or officer did not, acting in good faith, through absence, accident, illness or other cause beyond that director's or officer's control, receive the notice until a later date.

1985 c21 s12

100. (1) The association may pass by-laws relating to its affairs and consistent with this Act or the regulations

(a) providing for the execution of documents by the association;

(b) respecting banking and finance;

(c) fixing the financial year of the association and providing for the audit of the accounts and transactions of the association;

(d) providing for the appointment and remuneration of officers and employees of the association;

(e) respecting the calling, holding and conducting of meetings of the association and the duties of members of the association;

(f) delegating to an operating committee those powers and duties of the board of directors that are set out in the by-laws, other than the power to make, amend or revoke by-laws;

(g) prescribing forms and providing for their use;

(h) respecting management of the property of the association;

(i) respecting the application of the funds of the association and the investment and reinvestment of its funds not immediately required and for the safekeeping of its securities;

(j) imposing assessments on members of the association for the purpose of meeting the operating costs of the association and the plan and providing for the collection of those assessments;

(k) prescribing rules and procedures related to the operation of the plan; and

(l) respecting all of the things that are considered necessary for the operation of the plan and the attainment of the objects of the association and the efficient conduct of its affairs.

(2) A power of the association that may be exercised by by-law under subsection (1) may be provided for in the articles of association of the association.

1985 c21 s12

101. (1) A by-law and an amendment, revision or consolidation of the articles of association or by-laws of the association shall be filed with the superintendent at least 30 days before the effective date of the by-laws or the amendment, revision or consolidation of the articles of association or by-laws.

(2) A by-law and an amendment, revision or consolidation of the articles of association or by-laws of the association shall not come into effect unless they are approved by the superintendent.

1985 c21 s12

102. (1) The association shall file with the Public Utilities Board the rates that it proposes to charge for automobile insurance placed through the association.

(2) The Public Utilities Board shall deal with a filing under subsection (1) as if it were a filing made under subsection 49(1) of the Automobile Insurance Act.

(3) Subsection 49(2) and sections 51, 52, 54, 55, 56, 57 and 58 of the Automobile Insurance Act shall apply in connection with a filing under subsection (1).

(4) Where the rates filed in accordance with subsection (1) or the application for a change in rates under section 51 of the Automobile Insurance Act have been approved, the Public Utilities Board may investigate the rates charged for automobile insurance placed through the association, and notwithstanding approval of those rates, may order the association to make a change the Public Utilities Board considers appropriate.

(5) A member of the association shall not, after February 1, 1986, charge rates for automobile insurance placed through the association that have not been approved by the Public Utilities Board in accordance with this section.

1985 c21 s12

103. (1) The members of the board of directors and the officers and employees of the association shall provide the superintendent each year with information and financial statements with respect to the association and the plan that the superintendent may require.

(2) The superintendent shall make an annual report to the minister on the affairs of the association.

1985 c21 s12

104. (1) Where a contract of automobile insurance has been in effect for more than 60 days, the insurer may only terminate the contract under Statutory Condition 8 of section 8 of the Automobile Insurance Act for 1 or more of the following reasons:

(a) non-payment of, or a part of, the premium due under the contract or of a charge under an agreement ancillary to the contract;

(b) the insured has given false particulars of the described automobile to the prejudice of the insurer;

(c) the insured has knowingly misrepresented or failed to disclose in an application for insurance a fact required to be stated in the application; and

(d) for a material change in risk within the meaning of Statutory Condition 1 of section 8 of the Automobile Insurance Act.

(2) Subsection (1) does not apply to

(a) an insurer running off its business, where the insurer has specific approval of the superintendent to cancel a contract; or

(b) a contract in respect of a motor vehicle used in the course of carrying on a business, trade or profession.

1985 c21 s12

105. An agent, broker or representative shall

(a) provide to an owner of a motor vehicle who is a resident of the province an application for automobile insurance; and

(b) submit to an insurer a completed application for automobile insurance,

when requested to do so by the owner of a motor vehicle.

1985 c21 s12

106. An insurer licensed to issue motor vehicle liability policies shall be a member of Judgment Recovery (Nfld.) Ltd. and is bound by the provisions governing those members.

1985 c21 s12

107. The Lieutenant-Governor in Council may make regulations

(a) prescribing organizations which, in addition, to those referred to in section 7, are not considered to be insurers within the meaning of this Act or which are not required to be licensed;

(b) defining classes of insurance which, in addition to those defined in section 2, an insurer may carry on;

(c) prescribing perils against which an insurer licensed to carry on fire insurance may insure in addition to perils set out in section 13;

(d) prescribing terms and conditions upon which the superintendent may issue licences to insurers not coming within 1 of the classes referred to in subsections 14(1), (2) and (3);

(e) prescribing the requirements for membership in a compensation fund referred to in section 18;

(f) excepting insurers described in the regulations from the operation of sections 27 to 73;

(g) prescribing the form in which the balance sheet and other statements to be provided the minister or superintendent shall be prepared;

(h) extending the provisions of this Act to a class of insurance defined in the regulations;

(i) providing for investment of surplus funds and reserve by insurers incorporated under the laws of the province; and

(j) generally, to give effect to the purpose of this Act.

RSN1970 c176 s84; 1985 c21 s13

108. (1) An insurer undertaking insurance or carrying on business in the province without holding a licence is guilty of an offence and liable on summary conviction to a penalty of $50 for each day during which the default continues.

(2) Unless otherwise provided, a person guilty of an act or omission prohibited or required by this Act is liable on summary conviction to a fine of not less than $50 and not more than $250 for every offence.

(3) In case of default in making a return required by this Act to be made within a limited time, the insurer or the person required by this Act to make the return shall in addition to the penalty provided by subsection (2) incur a further penalty of $100 for every month or part of a month during which the insurer or other person neglects to file the return required.

(4) A penalty imposed under this Act shall be paid into the Consolidated Revenue Fund.

RSN1970 c176 s85; 1985 c11 s31

109. In sections 110 to 129

(a) "attorney" means a person authorized to act for subscribers as provided in section 112; and

(b) "subscribers" means persons exchanging with each other reciprocal contracts of indemnity or inter-insurance as provided in section 110.

1988 c42 s2

110. It is lawful for a person to exchange with other persons in the province and elsewhere reciprocal contracts of indemnity or inter-insurance for classes of insurance for which an insurance company may be licensed under this Act except life insurance, accident insurance, sickness insurance and guarantee insurance.

1988 c42 s2

111. A person shall not be considered to be an insurer within the meaning of this Act by reason of exchanging with other persons reciprocal contracts of indemnity or inter-insurance under this Act.

1988 c42 s2

112. Reciprocal contracts of indemnity or inter-insurance may be executed on behalf of subscribers by another person acting as attorney under a power of attorney, a copy of which has been filed as required by section 114.

1988 c42 s2

113. Notwithstanding a condition or stipulation of a power of attorney or of a contract of indemnity or inter-insurance, an action or proceeding in respect of that contract may be maintained in a court in the province.

1988 c42 s2

114. The persons constituting an exchange shall, through their attorney, file with the superintendent a declaration verified by oath or affirmation, setting out

(a) the name of the attorney and the name or designation under which the contracts are issued, which name or designation shall not be so similar to another name or designation previously adopted by an exchange or by a licensed insurer as in the opinion of the superintendent to be likely to result in confusion or deception;

(b) the classes of insurance to be effected or exchanged under the contracts;

(c) a copy of the form of the contract, agreement or policy by which the reciprocal contracts of indemnity or inter-insurance are to be effected or exchanged;

(d) a copy of the form of power of attorney under which the contracts are to be effected or exchanged;

(e) the location of the office from which the contracts are to be issued;

(f) a financial statement in a form prescribed by the superintendent;

(g) evidence satisfactory to the superintendent that it is the practice of the exchange to require its subscribers to maintain in the hands of the attorney, as a condition of membership in the exchange, a premium deposit reasonably sufficient for the risk assumed by the exchange; and

(h) evidence satisfactory to the superintendent that the management of the affairs of the exchange is subject to the supervision of an advisory board or committee of the subscribers in accordance with the terms of the power of attorney.

1988 c42 s2

115. On an exchange complying with this Act and paying the prescribed fee the superintendent may issue a licence in the prescribed form.

1988 c42 s2

116. The superintendent may, with the approval of the minister, require an exchange, as a condition of the issue or renewal of its licence, to deposit approved securities with the minister in the amount and on the terms and conditions that the superintendent considers appropriate.

1988 c42 s2

117. A licence shall not be issued to an exchange to effect or exchange contracts of indemnity or inter-insurance

(a) against loss by fire, until evidence satisfactory to the superintendent has been filed with him or her that applications have been made for indemnity on at least 75 separate risks in the province or elsewhere totalling not less than $1,500,000 as represented by executed contracts or applications made in good faith to become concurrently effective; or

(b) in respect of automobiles, until evidence satisfactory to the superintendent has been filed with him or her that applications have been made for indemnity on at least 500 automobiles as represented by executed contracts or applications made in good faith to become concurrently effective and that arrangements satisfactory to the superintendent are in effect for the reinsurance of all liabilities in excess of the limits the superintendent may establish.

1988 c42 s2

118. Where the office from which the contracts are to be issued is not in the province, service on the superintendent of notice or process in an action or proceeding in the province in respect of contracts of indemnity or inter-insurance effected by an exchange shall be considered service on the subscribers who are members of the exchange at the time of service.

1988 c42 s2

119. There shall be filed with the superintendent by the attorney, as often as the superintendent requires, a statement of the attorney under oath or affirmation showing, in the case of fire insurance, the maximum amount of indemnity on a single risk and a statement of the attorney verified by oath or affirmation to the effect that he or she has examined the commercial rating, as shown by the reference book of a commercial agency, of the subscribers of an exchange having at least 500 subscribers and that from the examination or other information in his or her possession it appears that no subscriber has assumed on a single fire insurance risk an amount greater than 10% of the net worth of the subscriber.

1988 c42 s2

120. (1) There shall at all times be maintained with the attorney, as a reserve fund, a sum in cash or approved securities equal to 50% of the annual deposits or advance premiums collected or credited to the accounts of subscribers on contracts in force having 1 year or less to run and proportionally on those for longer periods.

(2) In this section and in section 121 "approved securities" means securities the investment in which is authorized by subsection 92(1).

1988 c42 s2

121. (1) Except as provided in this section, there shall also be maintained as a guarantee fund or surplus an additional sum, in excess of all liabilities, in cash or approved securities amounting to not less than $50,000.

(2) In the case of a fire insurance exchange whose principal office is in the province, the guarantee fund or surplus referred to in subsection (1) shall not be less than $25,000.

(3) In the case of an automobile insurance exchange whose principal office is in the province, the guarantee fund or surplus referred to in subsection (1) shall, during the 1st year of operation of the exchange, be maintained at an amount not less than $10,000, and after the 1st year at an amount not less than $25,000.

1988 c42 s2

122. (1) Where at any time the amounts on hand are less than required under sections 120 and 121, the subscribers or the attorney shall immediately make up the deficiency.

(2) Where funds other than those that accrued from premiums or deposits of subscribers are supplied to make up a deficiency, the funds shall, so long as a deficiency exists, be deposited and held for the benefit of subscribers under the terms and conditions the superintendent may require, and may be afterward returned to the depositor.

1988 c42 s2

123. Where the principal office of the exchange is in the province, the surplus insurance funds and the reserve fund of the exchange shall be invested in the class of securities authorized by subsection 92(1).

1988 c42 s2

124. Where the principal office of the exchange is outside the province, it is a condition precedent to the issue of a licence under this Act that evidence satisfactory to the superintendent shall be filed with the superintendent showing that the class of securities in which funds of the exchange are required by law to be invested and are in fact invested, is within the limits of investment prescribed for the investment of the reserve funds of an insurance corporation by the jurisdiction in which the office of the exchange is situated.

1988 c42 s2

125. An exchange shall not undertake a liability on a contract of indemnity, inter-insurance or insurance except on behalf of a subscriber.

1988 c42 s2

126. An attorney or exchange shall not effect reinsurance of risks undertaken by the exchange in another reciprocal or inter-insurance exchange.

1988 c42 s2

127. (1) A person shall not

(a) act as attorney, or for or on behalf of an attorney, in the exchange of reciprocal contracts of indemnity or inter-insurance, or in acts or transactions in connection with the exchange of reciprocal contracts of indemnity or inter-insurance; or

(b) exchange a reciprocal contract of indemnity or inter-insurance with another person,

unless a licence has been issued and is in force.

(2) A person who contravenes subsection (1) is guilty of an offence.

1988 c42 s2

128. (1) Where an exchange or attorney contravenes this Act, the licence issued to the exchange may be suspended or revoked by the minister on the report of the superintendent after notice and opportunity for a hearing before the superintendent has been given to the exchange or its attorney.

(2) The suspension or revocation does not affect the validity of a reciprocal contract of indemnity or inter-insurance effected prior to the suspension or revocation or the rights and obligations of subscribers under the contract.

(3) Notice of the suspension or revocation shall be given by the superintendent in at least 2 successive issues of the Gazette as soon as reasonably possible after the suspension or revocation.

1988 c42 s2

129. (1) A person may, in an exchange not licensed under this Act, insure against fire a property situated in the province and property so insured or to be insured may be inspected and a loss incurred in respect of the property adjusted.

(2) Subsection (1) only applies where the insurance is effected outside the province and without solicitation in the province directly or indirectly on the part of the insurer.

1988 c42 s2

Back to Top Commencement
130. Paragraphs 2(g) and (vv) come into force on the day the Insurance Adjusters, Agents and Brokers Act comes into force.

RSN1990 s130