Interpretation

1   In this regulation:

"Act" means the Insurance (Captive Company) Act.

Sophisticated insured

2   For purposes of paragraph (b) of the definition of sophisticated insured, the amount prescribed is $500 000.

Classes of insurance

3   (1) A captive insurance company may undertake any class of insurance established and defined by regulation for the purposes of the Financial Institutions Act except

(a) surety insurance, other than reinsurance of surety insurance, and

(b) Repealed. [B.C. Reg. 221/2002, s. 1.]

(c) automobile insurance, other than fleet insurance by a corporation.

(2) Despite subsection (1), if a class of insurance described in section 289 (4.1) of the Financial Institutions Act is established and defined, a captive insurance company may undertake under that class only the types of insurance business the superintendent specifies in writing in respect of the captive insurance company.

[am. B.C. Regs. 355/88, s. 1; 221/2002, s. 1; 213/2011, Sch. B, s. 2 (a) to (d).]

Application of the Insurance Act

3.1   (1) The following provisions of the Insurance Act apply to a captive insurance company:

(a) section 2.1 [contract must be consistent with Act];

(b) section 2.2 [liability of continuing insurer];

(c) section 2.3 [effect on contracts of violation of law];

(d) section 2.5 [electronic communications];

(e) section 5 [contracts deemed to be made in British Columbia];

(f) section 6 [gaming or wagering contracts avoided];

(g) section 8 [contents of policy];

(h) section 16 [payment of refund to assignee];

(i) section 24 [when third person has right of action against insurer];

(j) section 25 [insurer to furnish copy of application and policy];

(k) section 25.1 [insurer to furnish forms].

(2) The following provisions of the Insurance Act apply to an association captive insurance company and a sophisticated insured captive insurance company:

(a) section 2.4 [application of Limitation Act];

(b) section 9 [dispute resolution];

(c) section 10 [court may relieve against forfeiture and termination];

(d) section 11 [waiver and estoppel];

(e) section 12 [effect of terms of contract not set out in policy];

(f) section 13 [misrepresentation and nondisclosure];

(g) section 14 [effect of delivery of policy or premium receipt];

(h) section 17 [effect of unpaid cheque or note for premium];

(i) section 18 [unpaid premium deductible from indemnity];

(j) section 20 [claims payable in Canadian money and in British Columbia];

(k) section 22 [limitation of actions];

(l) section 23 [payment by insurer into court].

[en. B.C. Reg. 213/2011, Sch. B, s. 2 (e).]

Shareholders, equity and reserves

4   (1) The amount of shareholders equity required by a captive insurance company before and after initial registration is $200 000.

(2) The amount of reserves to be maintained by a captive insurance company after initial registration is $100 000.

(3) The amounts referred to in subsections (1) and (2) shall be calculated in accordance with generally accepted accounting principles.

Registration requirements

5   An applicant for registration under the Act must provide the superintendent with

(a) full particulars of all its directors, officers and managers,

(b) the name of every person owning shares in the organization of the applicant, the type and extent of ownership and the voting power exercised by that ownership,

(c) a statement projecting for a period of 2 years beyond the end of the last financial year of the applicant prior to application, the contemplated premium revenue from insurance and reinsurance and forecast of the types of risk insured, distinguishing income and types by projections for each class of insurance, and

(d) projections in the forms of balance sheets and income statements for a period of 2 years beyond the end of the last financial year of the applicant prior to the application showing the anticipated financial position of the applicant at the end of each of those years.

Expiry of registration

6   Every registration under section 6 (1) of the Act expires 90 days after the end of the captive insurance company's fiscal year.

[en. B.C. Reg. 355/88, s. 2.]

Renewal of registration

6.1   A captive insurance company applying to have its registration renewed shall provide any information requested by the superintendent.

[en. B.C. Reg. 355/88, s. 2.]

Pengins International Corp. exemption

6.2   Section 5 (2) (a) and (b) of the Act does not apply to Pengins International Corp. in respect of its insuring

(a) any corporation in which its parent owns no less than 50% of the voting shares, and

(b) the officers, directors, employees, agents and independent contractors of a corporation described in paragraph (a), against losses incurred while acting on behalf of that corporation.

[en. B.C. Reg. 162/97.]

West Fraser Captive Inc. exemption

6.21   (1) The requirement under paragraphs (a) and (b) of section 5 (2) of the Act, that a pure captive company that undertakes prescribed classes of insurance do so only for the purpose of insuring the persons described in those paragraphs, does not apply to West Fraser Captive Inc. in respect of its insuring

(a) a corporation in which the parent of West Fraser Captive Inc. owns at least 50% of the voting shares,

(b) a joint venture in which the superintendent determines, on evidence satisfactory to him or her, that West Fraser Captive Inc.'s parent corporation holds an interest, as a participant in the joint venture, of at least 50%, subject to an auditor's report, submitted annually to the superintendent, confirming that fact for each year of the joint venture, or

(c) a person who is an officer, director, employee, agent or independent contractor

(i) of a corporation described in paragraph (a), against losses incurred by that person while acting on behalf of the corporation, or

(ii) of a joint venture described in paragraph (b) or of a participant in the joint venture, against losses incurred by that person while acting on behalf of the joint venture.

(2) This section does not affect the application to West Fraser Captive Inc. of the requirement in section 5 (2) that a pure captive insurance company may undertake only prescribed classes of insurance.

[en. B.C. Reg. 58/2000.]

Transportation Property and Casualty Company exemption for Canada Line

6.22   (1) Section 5 (2) of the Act does not apply to the Transportation Property and Casualty Company in respect of its insuring

(a) the Province, Canada and those persons required to be named insureds on the insurance policies required to be obtained and kept in force by Canada Line Rapid Transit Inc. (formerly RAV Project Management Ltd., "RAVCO"), under paragraphs (2.1), (2.2) and (2.3) of Schedule 12 of the Amended and Restated RAV Concession Agreement (the "Agreement") among RAVCO, Greater Vancouver Transportation Authority, and InTransit BC Limited Partnership and dated July 29, 2005, as it may be amended from time to time, and

(b) any successors and assignees of the persons identified in paragraph (a),

but only when the persons identified in paragraphs (a) and (b) are acting in relation to the Canada Line Rapid Transit System and in accordance with the Agreement.

(2) This section does not affect the application to the Transportation Property and Casualty Company of the requirement in section 5 (2) that a pure captive insurance company may undertake only prescribed classes of insurance.

[en. B.C. Reg. 107/2009; am. B.C. Reg. 129/2010, ss. 1 and 2.]

Transportation Property and Casualty Company exemption for Golden Ears Bridge

6.23   (1) In this section:

"Agreement" means the Golden Ears Bridge Project Agreement between South Coast British Columbia Transportation Authority (formerly Greater Vancouver Transportation Authority) and Golden Crossing General Partnership dated February 24, 2006, as it may be amended from time to time;

"person" has the same meaning as in the Agreement.

(2) Section 5 (2) of the Act does not apply to the Transportation Property and Casualty Company in respect of it insuring

(a) the persons required under section 2.9 of Schedule PA-23 of the Agreement to be named insureds or additional insureds on the insurance policies required to be obtained and kept in force by Golden Crossing General Partnership under sections 2.1, 2.2, 2.3, and 2.6 of Schedule PA-23 of the Agreement, and

(b) any successors and assignees of the persons identified in paragraph (a),

but only when the persons identified in paragraphs (a) and (b) are acting in relation to the Golden Ears Bridge and in accordance with the Agreement.

(3) This section does not affect the application to the Transportation Property and Casualty Company of the requirement in section 5 (2) that a pure captive insurance company may undertake only prescribed classes of insurance.

[en. B.C. Reg. 304/2009; am. B.C. Reg. 129/2010, ss. 1 and 2.]

Elgin Captive Insurance Company Ltd. exemption

6.24   (1) In this section, "person" does not include an individual.

(2) Section 5 (2) of the Act does not apply to the Elgin Captive Insurance Company Ltd. in respect of its insuring any of the following:

(a) Ernst & Young LLP, a limited liability partnership formed under the laws of Ontario;

(b) Ernst & Young L.P., a limited partnership formed under the laws of Manitoba;

(c) Ernst & Young Services, a general partnership formed under the laws of Ontario;

(d) in addition to the persons referred to in paragraphs (a) to (c), any other person who has its primary place of business in Canada and is a member of Ernst & Young Global Limited, a corporation incorporated under the laws of England and Wales;

(e) a person controlled by a person to whom section 5 (2) of the Act does not apply under paragraphs (a) to (d) of this subsection;

(f) Egan LLP, a limited liability partnership formed under the laws of Ontario;

(g) Couzin Taylor LLP, a limited liability partnership formed under the laws of Ontario;

(h) a partner, officer, director, employee, agent or independent contractor of a person referred to or described in paragraphs (a) to (g) against losses incurred by the partner, officer, director, employee, agent or independent contractor while acting on behalf of the person referred to or described in paragraphs (a) to (g).

(3) This section does not affect the application to the Elgin Captive Insurance Company Ltd. of the requirement in section 5 (2) of the Act that a pure captive insurance company may undertake only prescribed classes of insurance.

[en. B.C. Reg. 129/2010, s. 3.]

Repealed

6.25   Repealed. [B.C. Reg. 157/87, s. 6.25 (2).]

Exemption

6.3   (1) Section 5 (2) of the Act does not apply to a pure captive insurance company in respect of its insuring, under a contract of reinsurance, another insurer against all or part of the risk incurred by that other insurer arising out of a contract under which that other insurer undertakes one or more of the classes of insurance prescribed under section 5 (2) of the Act, but not any other class of insurance, and does so only for the purpose of insuring

(a) the parent of the pure captive insurance company,

(b) any affiliated corporation of that parent, or

(c) all or any of the officers, directors, employees, agents and independent contractors of the pure captive insurance company, the parent of the pure captive insurance company or any affiliated corporation of that parent, against losses incurred while acting on behalf of all or any of that pure captive company, parent or affiliated corporation.

(2) Section 5 (3) of the Act does not apply to an association captive insurance company in respect of its insuring, under a contract of reinsurance, another insurer against all or part of the risk incurred by that other insurer arising out of a contract under which that other insurer undertakes one or more of the classes of insurance prescribed under section 5 (3) of the Act, but not any other class of insurance, and does so only for the purpose of insuring

(a) the member organizations of the association captive insurance company's association,

(b) any affiliated corporation of those member organizations, or

(c) all or any of the officers, directors, employees, agents and independent contractors of the association captive insurance company, the member organizations of the association captive insurance company or any affiliated corporation of those member organizations, against losses incurred while acting on behalf of all or any of that association captive company, those member organizations or that affiliated corporation.

(3) Section 5 (4) of the Act does not apply to a sophisticated insured captive insurance company in respect of its insuring, under a contract of reinsurance, another insurer against all or part of the risk incurred by that other insurer arising out of a contract under which that other insurer undertakes one or more of the classes of insurance prescribed under section 5 (4) of the Act, but not any other class of insurance, and does so only for the purpose of insuring

(a) the sophisticated insureds that comprise the sophisticated insured captive insurance company's sophisticated insured group,

(b) any affiliated corporation of those sophisticated insureds, or

(c) all or any of the officers, directors, employees, agents and independent contractors of the sophisticated insured captive insurance company, the sophisticated insureds that comprise the sophisticated insured captive insurance company's sophisticated insured group or any affiliated corporation of those sophisticated insureds, against losses incurred while acting on behalf of all or any of that sophisticated insured captive insurance company, those sophisticated insureds or those affiliated corporations.

[en. B.C. Reg. 232/96.]

Exemption — employee benefits

6.4   (1) In this section:

"employee benefits" means one or more of the following that are provided to employees or their dependants:

(a) accident and sickness insurance;

(b) disability insurance;

(c) life insurance;

"employees" includes former employees, directors, former directors, officers and former officers.

(2) Section 5 (2) of the Act does not apply to a pure captive insurance company providing employee benefits only for the purpose of insuring all or any of the employees, or their dependents, of the pure captive insurance company, the parent of the pure captive insurance company or any affiliated corporation of that parent.

(3) Section 5 (3) of the Act does not apply to an association captive insurance company providing employee benefits only for the purpose of insuring all or any of the employees, or their dependents, of the association captive insurance company, the member organizations of the association captive insurance company or any affiliated corporation of those member organizations.

(4) Section 5 (4) of the Act does not apply to a sophisticated insured captive insurance company providing employee benefits only for the purpose of insuring all or any of the employees, or their dependents, of the sophisticated insured captive insurance company, the sophisticated insureds that comprise the sophisticated insured captive insurance company's sophisticated insured group or any affiliated corporation of those sophisticated insureds.

[en. B.C. Reg. 221/2002, s. 2.]

Exemption — manufacturer's and retailer's warranties

6.5   (1) Section 5 (2) of the Act does not apply to a pure captive insurance company that provides vehicle warranty insurance or product warranty insurance which is solely incidental to the sale of the vehicle or product by its parent company or affiliated corporations of the parent company.

(2) Section 5 (3) of the Act does not apply to an association captive insurance company that provides vehicle warranty insurance or product warranty insurance which is solely incidental to the sale of the vehicle or product by the member organizations of its association or their affiliated corporations.

[en. B.C. Reg. 183/2005.]

Fees

7   (1) The fee for application for registration under the Act is $500.

(2) The fee for registration under the Act is $2 500.

(3) The fee for renewal of a registration under the Act is $2 500.

Information

8   (1) The superintendent may, at any time, require information from a captive insurance company concerning the person who manages the company, including, without limiting the generality of the foregoing,

(a) the conduct of that person's business with respect to the management of the captive insurance company, and

(b) if that person is a corporation, particulars of its directors and officers.

(2) A captive insurance company that is required to provide information under subsection (1) shall do so fully, promptly and in the manner required by the superintendent.

[en. B.C. Reg. 355/88, s. 3.]