Interpretation

1   In this regulation:

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

"registration" means registration for the purposes of section 6 (1) [registration of captive insurance companies] of the Act.

Sophisticated insured

2   For the purposes of paragraph (b) of the definition of "sophisticated insured" in section 1 [definitions] of the Act, 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) automobile insurance, other than fleet insurance by a corporation.

(2) Despite subsection (1), if a class of insurance described in section 289 (4.1) [regulations] 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.

Application of Insurance Act

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

(a) section 3 [contract must be consistent with Act];

(b) section 4 [liability of continuing insurer];

(c) section 5 [effect on contracts of violation of law];

(d) section 7 [electronic communications];

(e) section 9 [contracts deemed to be made in British Columbia];

(f) section 10 [gaming or wagering contracts voided];

(g) section 11 [contents of policy];

(h) section 19 [payment of refund to assignee];

(i) section 25 [third person right of action against insurer];

(j) section 26 [insurer to furnish copy of application and policy];

(k) section 27 [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 6 [application of Limitation Act];

(b) section 12 [dispute resolution];

(c) section 13 [court may relieve against forfeiture and termination];

(d) section 14 [waiver and estoppel];

(e) section 16 [effect of terms of contract not set out in policy];

(f) section 17 [misrepresentation and nondisclosure];

(g) section 18 [effect of delivery of policy or premium receipt];

(h) section 20 [effect of unpaid cheque or note for premium];

(i) section 21 [collecting unpaid premiums];

(j) section 22 [claims payable in Canadian money and in British Columbia];

(k) section 23 [limitation of actions];

(l) section 24 [payment by insurer into court].

Shareholders' equity and reserves

5   (1) The amount of shareholders' equity prescribed for the purposes of section 8 (1) (a) [shareholders' equity and reserves] of the Act is $200 000.

(2) The amount of reserves prescribed for the purposes of 8 (2) (a) of the Act is $100 000.

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

Registration requirements

6   An applicant for registration 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) for the 2-year period immediately following the end of the most recently completed fiscal year of the applicant, a statement showing separately the projections of the anticipated premium revenue from the sale of insurance and reinsurance for each class of insurance and type of risk, and

(d) for each year of the 2-year period referred to in paragraph (c), projections, in the form of balance sheets and income statements, showing the anticipated financial position of the applicant at the end of the year.

Expiry of registration

7   The registration of a captive insurance company expires 90 days after the end of the captive insurance company's fiscal year.

Renewal of registration

8   A registrant applying to have its registration renewed must provide any information requested by the superintendent.

Definition

9   In this Part, "purpose restrictions", in relation to a captive insurance company, means the applicable of the following restrictions on the purpose for which the captive insurance company may undertake insurance:

(a) for a pure captive insurance company, the restrictions, under section 5 (2) (a) and (b) [permitted business for a captive insurance company] of the Act, respecting the persons that may be insured by the pure captive insurance company;

(b) for an association captive insurance company, the restrictions, under section 5 (3) (a) and (b) of the Act, respecting the persons that may be insured by the association captive insurance company;

(c) for a sophisticated insured captive insurance company, the restrictions, under section 5 (4) (a) and (b) of the Act, respecting the persons that may be insured by the sophisticated insured captive insurance company.

Reinsurance

10   (1) The applicable purpose restrictions do not apply to a pure captive insurance company in respect of it 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 to provide insurance

(a) in one or more of the classes of insurance prescribed under section 5 (2) of the Act and not any other class of insurance, and

(b) only for the purpose of insuring a person referred to in section 5 (2) (a) or (b) of the Act.

(2) The applicable purpose restrictions do not apply to an association captive insurance company in respect of it 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 to provide insurance

(a) in one or more of the classes of insurance prescribed under section 5 (3) of the Act and not any other class of insurance, and

(b) only for the purpose of insuring a person referred to in section 5 (3) (a) or (b) of the Act.

(3) The applicable purpose restrictions do not apply to a sophisticated insured captive insurance company in respect of it 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 to provide insurance

(a) in one or more of the classes of insurance prescribed under section 5 (4) of the Act and not any other class of insurance, and

(b) only for the purpose of insuring a person referred to in section 5 (4) (a) or (b) of the Act.

Employee benefits

11   (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) The applicable purpose restrictions do not apply to a pure captive insurance company in respect of it providing employee benefits to employees, or dependants of employees, of a person referred to in section 5 (2) (a) or (b) of the Act.

(3) The applicable purpose restrictions do not apply to an association captive insurance company in respect of it providing employee benefits to employees, or dependants of employees, of a person referred to in section 5 (3) (a) or (b) of the Act.

(4) The applicable purpose restrictions do not apply to a sophisticated insured captive insurance company in respect of it providing employee benefits to employees, or dependants of employees, of a person referred to in section 5 (4) (a) or (b) of the Act.

Specified manufacturer's and retailer's warranties

12   (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 that is solely incidental to the sale of a vehicle or product by the parent of the pure captive insurance company or an affiliated corporation of that parent.

(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 that is solely incidental to the sale of a vehicle or product by a member organization of the association captive insurance company's association or an affiliated corporation of a member organization of that association.

West Fraser Captive Inc.

13   (1) The purpose restrictions for a pure captive insurance company do not apply to West Fraser Captive Inc. in respect of it 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 the superintendent, that the parent of West Fraser Captive Inc. holds an ownership interest, as a participant in the joint venture, of at least 50%, 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) For the purposes of a determination under subsection (1) (b), an auditor's report must be submitted to the superintendent annually, for each year of the joint venture, confirming the parent's ownership interest in the joint venture.

Transportation Property and Casualty Company Inc. in relation to Canada Line

14   (1) In this section, "Agreement" means the Amended and Restated RAV Concession Agreement among RAVCO, Greater Vancouver Transportation Authority and InTransit BC Limited Partnership, dated July 29, 2005, as amended from time to time.

(2) The applicable purpose restrictions for a pure captive insurance company do not apply to the Transportation Property and Casualty Company Inc. in respect of it insuring any of the following persons, but only when the person is acting in relation to the Canada Line rapid transit system and in accordance with the Agreement:

(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 Agreement;

(b) any successor or assignee of a person identified in paragraph (a).

Transportation Property and Casualty Company Inc. in relation to Golden Ears Bridge

15   (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 amended from time to time;

"person" has the same meaning as in Schedule PA-01 of the Agreement.

(2) The applicable purpose restrictions for a pure captive insurance company do not apply to the Transportation Property and Casualty Company Inc. in respect of it insuring any of the following persons, but only when the person is acting in relation to the Golden Ears Bridge and in accordance with the Agreement:

(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;

(b) any successor or assignee of a person identified in paragraph (a).

Fees

16   (1) The fee for application for registration is $10 000.

(2) The annual registration renewal fee is set out in the Schedule.

(3) The fee to process the application for consent of the superintendent for the purposes of section 7 of the Act is set out in the Schedule.

[en. B.C. Reg. 183/2024, App. 2, s. 1.]

Information

17   (1) The superintendent may, at any time, require information from a captive insurance company relating to the person who manages the company, including, without limiting this,

(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) must do so fully, promptly and in the manner required by the superintendent.

Effect of revision

18   The provisions of the Insurance (Captive Company) Act Regulation, B.C. Reg. 157/87, that are incorporated into this regulation are specified for the purpose of section 12 (2) [commencement and repeal] of the Regulations Regulation.