Insurance Companies Financial Requirements Regulation

Insurance Companies Financial Requirements Regulation, M.R. 219/2014 The Insurance Act , C.C.S.M. c. I40 Regulation 219/2014 Registered August 25, 2014 bilingual version (HTML) Table of Contents Section 1 Meaning of "Act" PART 1 FINANCIAL REQUIREMENTS 2 Financial requirements for insurance companies 3 Financial requirements for reciprocal insurance exchanges PART 2 COMPENSATION PLANS 4 Membership in compensation plan 5 When section 4 does not apply 6 Membership in compensation plan 7 When section 6 does not apply PART 3 GENERAL PROVISIONS 8 Repeal 9 Coming into force INTRODUCTORY PROVISIONS Meaning of "Act" 1 In this regulation, "Act" means The Insurance Act . PART 1 FINANCIAL REQUIREMENTS Financial requirements for insurance companies 2 For the purpose of subsection 30(1) of the Act, (a) a federally authorized company, an extra-provincial company, or a provincial company that is not a mutual insurance company, must have (i) capital stock of not less than $4,000,000 subscribed for in good faith, allotted and fully paid, and (ii) an unimpaired surplus of not less than $1,000,000; and (b) a mutual insurance company (i) that does not undertake hail insurance must have insurance contracts of not less than $5,000,000 that will be in force at the expiration of one year from the date of issuance of the company's licence, and (ii) that undertakes hail insurance must have insurance contracts of not less than $5,000,000 in force at the date of issuance of the company's licence. Financial requirements for reciprocal insurance exchanges 3(1) For the purpose of subsection 363(1) of the Act, the prescribed amount of the reserve fund required by a reciprocal insurance exchange is the amount calculated in accordance with the following formula: A = (0.5 × (B − C)) + (D − E) In this formula, A is the amount of the required reserve fund; B is the amount of premiums collected or credited to the accounts of subscribers on reciprocal contracts that are in force and have one year or less to run; C is the amount paid to licensed insurers to reinsure the reciprocal contracts referred to in item B; D is the amount of premiums collected or credited to the accounts of subscribers on reciprocal contracts that are in force and have more than one year to run minus the amount of those premiums that is attributable to the expired portion of the contracts; E is the amount paid to licensed insurers to reinsure the reciprocal contacts referred to in item D minus the amount that is attributable to the expired portion of the reinsurance contracts. 3(2) For the purpose of subsection 363(2) of the Act, the prescribed amount of the guarantee fund required by a reciprocal insurance exchange is the amount calculated in accordance with the following formula: A = (B − C) + D In this formula, A is the amount of the required guarantee fund; B is all liabilities associated with the operation of the exchange, including liabilities under reciprocal contracts undertaken by the exchange; C is any amount that is recoverable from licensed insurers that have reinsured the reciprocal contracts referred to in item B; D is $50,000. PART 2 COMPENSATION PLANS PROPERTY AND CASUALTY INSURERS Membership in compensation plan 4 For the purpose of subsection 30(8) of the Act, an insurer licensed to carry on one or more of the following classes of insurance is deemed to be a member of the compensation plan established and administered by Property and Casualty Insurance Compensation Corporation/Société d'indemnisation en matière d'assurances IARD: (a) automobile insurance; (b) boiler and machinery insurance; (c) liability insurance; (d) property insurance; (e) accident and sickness insurance when written in conjunction with contracts of insurance of any of the classes referred in clauses (a) to (d). When section 4 does not apply 5 Section 4 does not apply (a) to an insurer referred to in that section that is involved solely with reinsurance; (b) to a person who exchanges with another person reciprocal contracts of indemnity or inter-insurance for any class of insurance referred to in that section; or (c) to the Hutterian Bretheren Mutual Insurance Corporation. LIFE INSURERS AND ACCIDENT AND SICKNESS INSURERS Membership in compensation plan 6 An insurer licensed to carry on one or more of the following classes of insurance is deemed to be a member of the compensation plan established and administered by Canadian Life and Health Insurance Compensation Corporation/Société canadienne d'indemnisation pour les assurances de personnes: (a) life; (b) accident and sickness when not written in conjunction with a contract of insurance of any of the classes referred in clauses 4(a) to (d). When section 6 does not apply 7 Section 6 does not apply to (a) a fraternal society; (b) a mutual benefit society, including an employees' mutual benefit society; (c) a friendly society; (d) trade union society; or (e) an insurer referred to in section 5 that is involved solely with reinsurance. PART 3 GENERAL PROVISIONS Repeal 8 The Insurance Companies Financial Requirements Regulation , Manitoba Regulation 174/97, and the Guarantee Corporation for Insurers Regulation , Manitoba Regulation 140/90, are repealed. Coming into force 9 This regulation comes into force on the same day that sections 1 to 43 of The Insurance Amendment Act , S.M. 2012, c. 29, come into force.