Saskatchewan Insurance Compensation Plan Regulations, 1990, R.R.S. c. S-26 Reg. 5
- Citation: Saskatchewan Insurance Compensation Plan Regulations, 1990, R.R.S. c. S-26 Reg. 5
- Information about this text: under The Saskatchewan Insurance Act Chapter S-26 Reg 5 (effective May 4, 1990) as amended by Saskatchewan Regulations 49/90.
- Enabling Statute: Saskatchewan Insurance Act, S.S. 1978, c. S-26
- Version downloaded by CanLII on 2005-11-14
Warning: This document predates the last update of the collection. It might have been modified or omitted since this last update.
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SASKATCHEWAN INSURANCE
S-26 REG 5
COMPENSATION PLAN
The
Saskatchewan
Insurance
Compensation Plan
Regulations, 1990
being
Chapter S-26 Reg 5 (effective May 4, 1990)
as amended by Saskatchewan Regulations 49/90.
NOTE:
This consolidation is not official. Amendments have been
incorporated for convenience of reference and the original statutes
and regulations should be consulted for all purposes of interpretation
and application of the law. In order to preserve the integrity of the
original statutes and regulations, errors that may have appeared are
reproduced in this consolidation.
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Table of Contents
PART I 14 Aggregate amount
Title and Interpretation 15 Value of liabilities
1 Title 16 Alternate margin factor
2 Interpretation, "Act" 17 Reinsurance
18 Calculations
PART II
Property and Casualty Insurance PART III
Compensation Plan Life and Health Insurance
3 Interpretation of Part Compensation Plan
4 Compensation association 19 Interpretation of Part
5 Members of association 20 Compensation association
6 Reciprocal insurers exempted 21 Members of association
7 Compliance 22 Compliance
8 Authorization to collect fees and levies 23 Authorization to collect fees and levies
9 Minimum asset requirements
PART IV
10 Determination of reasonable relationship
Repeal and Coming into Force
11 Rules of calculation
24 R.R.S. c.S-26 Reg 4 repealed
12 Asset value
13 Book value and market value Appendix
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CHAPTER S-26 REG 5
The Saskatchewan Insurance Act
PART I
Title and Interpretation
Title
1 These regulations may be cited as The Saskatchewan Insurance Compensation
Plan Regulations, 1990.
Interpretation, "Act"
2 In these regulations, "Act" means The Saskatchewan Insurance Act.
4 May 90 cS-26 Reg 5 s2.
PART II
Property and Casualty Insurance Compensation Plan
Interpretation of Part
3 In this Part:
(a) "calculation date" means the date at which calculations are made for
the purposes of this Part;
(b) "compensation levy" means a levy assessed on members pursuant to
the provisions of the memorandum of operation;
(c) "designated compensation association" means the corporation
designated as a compensation association pursuant to section 4;
(d) "member" means every insurer who is or is required to be a member of
the designated compensation association;
(e) "memorandum of operation" means a memorandum enacted by
resolution of the board of directors or provisional board of directors of the
designated compensation association setting forth the detailed rules and
procedures that are to be followed by the designated compensation association
in making voluntary payments to policy holders and other claimants with
respect to claims under insurance policies which are unpaid by reason of a
member becoming an insolvent insurer;
(f) "published market" means a published market as defined in section 98
of The Securities Act, 1988.
4 May 90 cS-26 Reg 5 s3.
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Compensation association
4 The Property and Casualty Insurance Compensation Corporation is designated
as a compensation association for the purposes of the Act and this Part.
4 May 90 cS-26 Reg 5 s4.
Members of association
5(1) In this section:
(a) "accident and sickness insurance" means personal accident insurance
or sickness insurance;
(b) "aircraft insurance" means insurance against:
(i) liability arising out of:
(A) bodily injury to or the death of a person; or
(B) the loss of or damage to property;
caused by an aircraft or the use or operation of an aircraft; or
(ii) the loss of or damage to an aircraft;
(c) "credit insurance" means insurance against loss to a person who has
granted credit where the loss is the result of the insolvency or default of the
person to whom credit is given but does not include mortgage insurance;
(d) "crop insurance" means insurance against the loss of or damage to
crops in the field caused by:
(i) drought;
(ii) excessive rain;
(iii) fire;
(iv) flood;
(v) frost;
(vi) hail;
(vii) hurricane;
(viii) insect infestation;
(ix) lightning;
(x) plant disease;
(xi) snow;
(xii) tornado;
(xiii) wildlife;
(xiv) wind; or
(xv) any other peril;
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(e) "directors' and officers' insurance" means an undertaking by an
insurer:
(i) to indemnify the directors and officers of a company with respect to
losses resulting from any claim made against them for a negligent or
wrongful act; or
(ii) to indemnify a company for all loss for which the company may be
required or permitted by law to indemnify its directors and officers with
respect to claims made against the directors and officers for a negligent
or wrongful act;
(f) "employer's liability insurance" means insurance against liability
arising out of bodily injury to or the disability or death of an employee of the
insured occurring as a result of or in the course of the employee's employment,
and where the insurance:
(i) is limited to accidents occurring as a result of or in the course of the
employee's employment; and
(ii) is included in a contract that provides insurance against liability
arising out of bodily injury to or the disability or death of an employee of
the insured;
includes personal accident insurance covering an employee of the insured
whether or not liability exists;
(g) "errors and omissions insurance" means an undertaking by an
insurer to pay on behalf of an insured sums that the insured is legally
obligated to pay as damages because of any act, error or omission of:
(i) the insured; or
(ii) any other person for whose acts, errors or omissions the insured is
legally responsible;
arising out of the performance, intended performance or failure to perform
professional services other than professional medical services;
(h) "fidelity insurance" means insurance:
(i) against loss caused by the unfaithful performance of duties by a
person in a position of trust; or
(ii) whereby an insurer undertakes to guarantee the proper fulfilment
of the duties of an officer of a corporation;
(i) "financial guarantee insurance" means an undertaking by an insurer:
(i) on default of the person liable for the performance of an agreement
or contract or the discharge of a trust, duty or obligation:
(A) to perform the agreement or contract; or
(B) to discharge the trust, duty or obligation; or
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(ii) on default:
(A) in the performance of an agreement or contract or discharge
of a trust, duty or obligation in lieu of that performance or
discharge; or
(B) where there is loss or damage through that default;
to pay money;
(j) "life insurance" means an undertaking by an insurer to pay insurance
money:
(i) on death;
(ii) on the occurrence of an event or contingency dependent on
human life;
(iii) at a fixed or determinable future time; or
(iv) for a term dependent on human life;
and includes an undertaking entered into by an insurer to provide an annuity
or what would be an annuity except that the periodic payments may be
unequal in amount;
(k) "marine insurance" means insurance against liability arising out of:
(i) bodily injury to or the death of a person; or
(ii) the loss of or damage to property;
occurring during a voyage or marine adventure at sea, or on an inland water-
way or during delay incident to the voyage or adventure or during transit,
other than by water, incident to the voyage or adventure;
(l) "mortgage insurance" means insurance against loss caused by default
on the part of a borrower under a loan secured by:
(i) a mortgage on real property;
(ii) a hypothec on immovable property; or
(iii) an interest in real or immovable property;
(m) "personal accident insurance" means:
(i) insurance against loss resulting from bodily injury to or the death of
a person caused by an accident; or
(ii) where, in the event of bodily injury to or the death of a person
caused by an accident, an undertaking by an insurer to pay a certain
sum or sums of money;
(n) "property and casualty insurance" means all insurance other than:
(i) accident and sickness insurance;
(ii) aircraft insurance;
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(iii) automobile insurance;
(iv) credit insurance;
(v) crop insurance;
(vi) directors' and officers' insurance;
(vii) employer's liability insurance;
(viii) errors and omissions insurance;
(ix) fidelity insurance;
(x) financial guarantee insurance;
(xi) life insurance;
(xii) marine insurance;
(xiii) mortgage insurance;
(xiv) personal accident insurance;
(xv) sickness insurance;
(xvi) surety insurance; or
(xvii) title insurance.
(o) "property and casualty insurers" means a class of insurers comprised
of those insurers who enter into, or have entered into, a contract or policy of
property and casualty insurance;
(p) "sickness insurance" means:
(i) insurance against loss resulting from the illness or disability of a
person, other than loss resulting from death;
(ii) where, in the event of an illness or disability of a person, an
undertaking by an insurer to pay a certain sum or sums of money; or
(iii) insurance against expenses incurred for dental care;
other than insurance against loss resulting from, or an undertaking by an
insurer to pay a certain sum or sums of money in the event of an illness or
disability arising out of an accident or insurance against expenses incurred
for dental care arising out of an accident;
(q) "surety insurance" means insurance whereby an insurer undertakes
to guarantee:
(i) the due performance of a contract or undertaking; or
(ii) the payment of a penalty or indemnity for any default in the due
performance of a contract or undertaking;
but does not include credit insurance or mortgage insurance;
(r) "title insurance" means insurance against loss or damage caused by:
(i) a defect in the title to real property;
(ii) the existence of a lien, encumbrance or servitude on real property;
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(iii) a defect in the execution of a mortgage, hypothec or deed of trust
with respect to real property; or
(iv) any other matter affecting the title to, or the right to the use and
enjoyment of, real property.
(2) Property and casualty insurers are designated as a class of insurers who are
required to be members of the designated compensation association.
4 May 90 cS-26 Reg 5 s5.
Reciprocal insurers exempted
6 Notwithstanding subsection 5(2), the class of licensees comprised of:
(a) members of an exchange or a reciprocal or inter-insurance exchange; and
(b) reinsurers who are engaged only in the business of reinsurance;
are not required to be members of the designated compensation association.
4 May 90 cS-26 Reg 5 s6.
Compliance
7(1) Every member of the designated compensation association shall:
(a) comply with the bylaw and any memorandum of operation of; and
(b) pay any fee or compensation levy imposed by;
the designated compensation association.
(2) The superintendent may suspend or cancel the licence of any member who
fails to comply with the requirements imposed pursuant to subsection (1).
4 May 90 cS-26 Reg 5 s7.
Authorization to collect fees and levies
8 The designated compensation association may collect from any member only
those fees or levies, the imposition of which the member has been given prior notice
by the designated compensation association.
4 May 90 cS-26 Reg 5 s8.
Minimum asset requirements
9(1) Subject to subsections (2) and (3), every member shall maintain assets in an
amount that bears not less than a reasonable relationship to the outstanding
liabilities, premiums and loss experience of the member as calculated pursuant to
section 10.
(2) Every member shall ensure that assets maintained pursuant to subsection (1)
are in addition to and are not to include any investments of the member that:
(a) are not authorized by the Act; or
(b) were not authorized by law at the time the investments were acquired.
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(3) Subsection (1) does not apply for a period of five years after the coming into
force of The Saskatchewan Insurance Compensation Plan Regulations, to any
member who on July 31, 1988:
(a) was licensed under the Act; and
(b) did not meet the minimum asset requirements prescribed in
subsection (1);
if the member has provided to the superintendent an undertaking and any other
written assurances that the superintendent may require that the member, prior to
the expiration of the five-year period, will comply with the minimum asset
requirements prescribed in subsection (1).
(4) Every member mentioned in subsection (3) shall file with the superintendent
an annual return reconciling, to the satisfaction of the superintendent, its
performance with its undertaking made pursuant to subsection (3).
(5) If a member mentioned in subsection (3) fails to:
(a) comply with an undertaking made to the superintendent pursuant to
subsection (3); or
(b) file the annual return mentioned in subsection (4);
the superintendent may cancel the licence of the member.
4 May 90 cS-26 Reg 5 s9.
Determination of reasonable relationship
10 For the purposes of section 9, if the value of the assets determined pursuant to
section 12 is greater than or equal to the aggregate amount determined pursuant
to section 14, the amount of the assets of a member is deemed to bear a reasonable
relationship to the outstanding liabilities, premiums and loss experience of the
insurer.
4 May 90 cS-26 Reg 5 s10.
Rules of calculation
11(1) In this Part:
(a) the amount of a claim or a reserve for a claim includes all costs incurred
or likely to be incurred by the member in adjusting and settling the claim; and
(b) when a member has issued contracts on a premium note system, unpaid
assessments levied with respect to all outstanding premium notes held by the
member are deemed to be a reserve for unearned premiums.
(2) For the purposes of subsection (1), the amount of a reserve and the amount of
the liabilities of a member are net of adjustments for reinsurance, if any, made in
accordance with section 17.
4 May 90 cS-26 Reg 5 s11.
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Asset value
12(1) In this section:
(a) "book value" means the amount determined pursuant to subsection
13(1) or (2);
(b) "market value" means the amount determined pursuant to subsection
13(3), (4) or (5).
(2) Where:
(a) "A" is the sum of:
(i) the lesser of:
(A) the value of the member's assets determined in accordance
with generally accepted accounting principles used in Canada; and
(B) the value of the member's assets set out in the most recent
statement filed with the superintendent by the member pursuant
to subsection 86(1) of the Act;
and
(ii) if the market value of the member's assets is greater than the book
value, the amount determined by subtracting the book value from the
market value of the debt securities, equity assets and real estate,
respectively, as set out in the Appendix to these regulations;
(b) "B" is an amount equal to the sum of:
(i) any amounts owing on the calculation date to the member by agents
or other insurers with respect to contracts that are in force more than 65
days after the billing date;
(ii) any unpaid capital or unpaid premium with respect to subscribed
shares of capital stock of the member;
(iii) the book value of office furnishings and equipment;
(iv) any investments that are not authorized by a special or general Act
or statute to which the member is subject; and
(v) any amount recorded by the member as a deferred income tax debit;
(c) "C" is the amount of the member's investment valuation reserve
calculated in accordance with the Appendix to these regulations;
(d) "D" is the member's deferred policy acquisition expense, being an
amount equal to the lesser of:
(i) the portion of unearned premiums that is required as a reserve for
policy acquisition expenses recoverable by the member if a policy is
cancelled; and
(ii) the portion of unearned premiums that is not required as a reserve
for general expenses, excluding policy acquisition expenses and claims;
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(e) "E" is the amount, if any, determined pursuant to subsection (3); and
(f) "F" is the amount, if any, greater than zero that is determined pursuant
to subsection (4);
the value of the assets of a member is the amount determined by the formula:
value of assets = A - (B + C + D + E + F).
(3) Where:
(a) "A" is the book value of all the member's assets in Canadian dollars;
(b) "B" is the book value of all the member's liabilities in Canadian dollars;
(c) "C" is the book value of all the member's assets in Canadian dollars,
adjusted to reflect the exchange rate in effect on the calculation date; and
(d) "D" is the book value of all the member's liabilities in Canadian dollars,
adjusted to reflect the exchange rate in effect on the calculation date;
(e) "E" means the amount mentioned in clause (2)(e);
if the member records any of its assets or liabilities in a currency other than
Canadian dollars, the value of "E" is the amount determined by the formula:
E = (A - B) - (C - D).
(4) Where:
(a) "A" is the book value of the member's investment in the shares of the
investee corporation;
(b) "B" is the value of the paid-up capital stock of the investee corporation
owned by the member;
(c) "C" is the value of the paid-up capital stock of the investee corporation;
(d) "D" is the value of the assets of the investee corporation, calculated in
accordance with this section;
(e) "E" is the aggregate amount for the investee corporation, calculated in
accordance with section 14;
(f) "F" means the amount mentioned in clause (2)(f); and
(g) "investee corporation" means another corporation that transacts the
business of insurance, other than life insurance, in which a member has made
an investment;
and if the assets of the member include an investment in shares of an investee
corporation, the amount used in the calculation of "F" is determined by the
formula:
F = A - (B/C x (D - E)).
(5) Section 14 applies, with any necessary modification, for the purpose of
calculating the aggregate amount for the investee corporation for the purposes of
subsection (4).
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(6) Notwithstanding subsection (4), if the member has insufficient information to
calculate either "D" or "E" as defined in subsection (4), the value for "D" and "E" for
the purposes of that subsection is zero.
4 May 90 cS-26 Reg 5 s12.
Book value and market value
13(1) The book value of an asset is the cost or amortized cost of the asset less the
sum of:
(a) any accumulated depreciation; and
(b) any allowance for loss.
(2) Notwithstanding subsection (1), if the interest payable to a member with
respect to an asset that is a debt security is more than six months in arrears, the
book value of the asset is deemed to be its market value.
(3) For the purposes of subsection (2), but subject to subsection (4), market value
of an asset is deemed to be the most probable price that a buyer would pay to a
seller, both acting prudently, knowledgeably and willingly, in an arm's-length
transaction in an open market under conditions requisite for a fair sale.
(4) The market value of a security listed on a published market is deemed to be its
closing sale price on the calculation date or, if no such price is reported, is the more
recent of:
(a) the average of the most recent bid and asked prices for the security; and
(b) the most recent listed sale price for the security.
(5) If bid and asked prices for a security, other than a security to which
subsection (4) applies, have been available to the public in the 60 days
preceding the calculation date, the market value of the security is deemed to be
the average of the most recent bid and asked prices.
4 May 90 cS-26 Reg 5 s13.
Aggregate amount
14(1) In this section, "alternate margin factor" means the alternate margin
factor determined pursuant to section 16.
(2) The aggregate amount for a member, for the purposes of section 10, is the sum of:
(a) the amount of the member's reserve for claims with respect to non-
cancellable accident and sickness contracts;
(b) the amount of the member's reserve for claims with respect to accident
and sickness contracts that are payable in instalments;
(c) the total amounts of the member's liabilities, as determined pursuant to
section 15, less the amount of any liabilities that are included in clauses (a)
and (b);
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(d) the product of:
(i) the amount of the member's reserve for claims with respect to
accident and sickness contracts, other than contracts that are described
in clause (a) or (b); and
(ii) 0.15;
(e) the product of:
(i) the amount of the member's reserve for unearned premiums with
respect to accident and sickness contracts, other than non-cancellable
contracts; and
(ii) 0.15 or the alternate margin factor, if any;
(f) an amount with respect to contracts, other than accident and sickness
contracts, that is the greatest of:
(i) the sum of:
(A) the product of:
(I) the amount of the member's reserve for unearned
premiums with respect to the contracts; and
(II) 0.15 or the alternate margin factor, if any; and
(B) the product of:
(I) the amount of the member's reserve for claims with
respect to the contracts; and
(II) 0.15;
(ii) the sum of:
(A) the product of:
(I) the amount of the gross premiums written by the member
with respect to the contracts written in the 12 months
preceding the calculation date; and
(II) 0.15; and
(B) the lesser of:
(I) $500,000; and
(II) the product of the amount of the gross premiums written
as described in paragraph (A) and 0.05; and
(iii) the sum of:
(A) the product of 0.22; and
(I) in the case of a member that has been in business for 36
months or longer, the average annual amount of claims
incurred by the member during the 36 months preceding the
calculation date with respect to the contracts;
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(II) in the case of a member to whom subparagraph (I) does
not apply, the product of the average monthly amount of
claims incurred by the member during the period that the
member has been in business and 12, with respect to the
contracts; and
(B) the lesser of:
(I) $500,000; and
(II) the product of the amount calculated pursuant to
subparagraph (A)(I) or (II), as the case may be, and 0.07.
4 May 90 cS-26 Reg 5 s14.
Value of liabilities
15(1) The value of the liabilities of a member is the sum of:
(a) the greater of:
(i) the value of the member's liabilities determined in accordance with
generally accepted accounting principles used in Canada; and
(ii) the value of the member's liabilities set out in the most recent
statement filed with the superintendent pursuant to subsection 86(1) of
the Act;
(b) the lesser of:
(i) 50% of the accumulated profit realized from the member's hail
insurance business, during the time the member has transacted the
business of hail insurance; and
(ii) 50% of the member's net premiums written for hail insurance
written during the 12 months preceding the date that is one year before
the calculation date;
(c) the absolute value of the member's reserve for claims for non-cancellable
accident and sickness contracts, where the amount of the reserve is less than
zero; and
(d) the amount, if any, that is determined pursuant to subsection (2).
(2) Where:
(a) "A" is the total of the member's reserves for unearned premiums with
respect to the risks reinsured with the reinsurer, other than non-cancellable
accident and sickness risk;
(b) "B" is the total of the member's liabilities with respect to the risks
reinsured with the reinsurer under non-cancellable accident and sickness
contracts;
(c) "C" is the member's additional policy reserves with respect to the risks
reinsured with the reinsurer, which equals the sum of:
(i) the product of 0.105 and the reinsurer's original premium for every
surety contract;
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(ii) the product of 0.3 and the reinsurer's original premium for every
fidelity contract; and
(iii) the reinsurer's reinsurance premium less the reinsurer's commission
for every current nuclear contract;
(d) "D" is the amount of the reserve for claims that the member is entitled to
recover but has not recovered from the reinsurer;
(e) "E" is the amount payable to the member by the reinsurer;
(f) "F" is the amount payable to the reinsurer by the member; and
(g) "G" is, subject to subsection (3), the value of all security including cash
given to the member by the reinsurer;
and if a member has reinsured any risk pursuant to contracts of insurance written
by it with a reinsurer that is not licensed in Saskatchewan, the amount used in the
calculation under subsection (1) is the sum of the amounts that are greater than
zero, calculated separately for each such reinsurer, using the formula:
amount = (A + B + C + D + E) - (F + G).
(3) For the purpose of calculating "G" in subsection (2), if a reinsurer has given
one or more letters of credit to a member as security, the amount by which the total
value of the letters of credit exceeds the product of:
(a) 0.15 and
(b) the sum of "A" and "D" as calculated pursuant to that subsection;
is not to be included as part of the value of all security.
4 May 90 cS-26 Reg 5 s15.
Alternate margin factor
16(1) In this section:
(a) "claims ratio", in relation to contracts issued by a member, means the
ratio of the claims incurred under the contracts during a given period to the
premiums earned under the contracts during that period;
(b) "expected claims ratio" means a claims ratio that the member
reasonably expects for the period of the unexpired terms of the contracts to
which it applies.
(2) If a member's expected claims ratio is less than 0.95, the member may select a
claims ratio that is greater than or equal to the greater of:
(a) the expected claims ratio; and
(b) the actual claims ratio for the 12 months immediately preceding the
calculation date.
(3) The alternate margin factor is equal to the sum of:
(a) 0.20; and
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(b) the claims ratio selected by the member under subsection (2);
less 1.00.
(4) For the purposes of clause 14(2)(e) and subparagraph 14(2)(f)(i)(A)(II), where
the applicable alternate margin factor is less than zero, it is deemed to be zero.
4 May 90 cS-26 Reg 5 s16.
Reinsurance
17(1) In this section:
(a) "reinsurer", in relation to a member, means an insurer that insures all
or part of the liabilities of the member under contracts issued by the member;
(b) "reinsured claims" means the total amount of claims, excluding claims
under accident and sickness contracts, that:
(i) were incurred by the member during the 12 months preceding the
calculation date; and
(ii) the member has recovered or is entitled to recover from reinsurers;
(c) "total claims" means the total amount of claims, excluding claims
under accident and sickness contracts, incurred by the member during the
period mentioned in clause (b).
(2) In this section, a member's reinsurance ratio is the ratio of reinsured claims to
total claims.
(3) For the purpose of calculating the aggregate amount pursuant to section 14, if
a member has reinsured any risk under contracts of insurance issued by it:
(a) subject to subsection (4), the amounts determined pursuant to
clauses 14(2)(a) to (e) and subclause 14(2)(f)(i) may be reduced by the
amount attributable to the risk transferred to reinsurers in each instance;
and
(b) the amounts determined pursuant to subclauses 14(2)(f)(ii) and (iii) may
be reduced:
(i) for a member whose licence restricts it to undertaking reinsurance,
by an amount that does not exceed the product of the amount determined
pursuant to the subclause and the reinsurance ratio; and
(ii) if subclause (i) does not apply, by an amount that does not exceed
the product of the amount determined pursuant to the subclause and the
lesser of:
(A) 0.5; and
(B) the reinsurance ratio.
(4) For the purposes of clause (3)(a), the amount attributable to the risk
transferred by the insurer to reinsurers that are not licensed pursuant to:
(a) the Act;
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(b) the Canadian and British Insurance Companies Act (Canada), as
amended from time to time; or
(c) the Foreign Insurance Companies Act (Canada), as amended from time to
time;
is deemed to be the amount of the security respecting the transferred risk, if any,
that has been given to the insurer by the reinsurers and is kept in Canada.
4 May 90 cS-26 Reg 5 s17.
Calculations
18 Except where otherwise permitted pursuant to this Part, calculations required
to be made pursuant to this Part are to be made in accordance with generally
accepted accounting principles used in Canada.
4 May 90 cS-26 Reg 5 s18.
PART III
Life and Health Insurance Compensation Plan
Interpretation of Part
19 In this Part:
(a) "compensation levy" means a levy assessed on members pursuant to
the provisions of the memorandum of operation;
(b) "designated compensation association" means the corporation
designated as a compensation association pursuant to section 20;
(d) "member" means every insurer who is or is required to be a member of
the designated compensation association;
(e) "memorandum of operation" means a memorandum enacted by
resolution of the board of directors or provisional board of directors of the
designated compensation association setting forth the detailed rules and
procedures that are to be followed by the designated compensation association
in making voluntary payments to policy holders and other claimants with
respect to claims under insurance policies which are unpaid by reason of a
member becoming an insolvent insurer.
4 May 90 cS-26 Reg 5 s19.
Compensation association
20 The Canadian Life and Health Insurance Compensation Corporation is
designated as a compensation association for the purposes of the Act and this Part.
4 May 90 cS-26 Reg 5 s20.
Members of association
21 The classes of insurers comprised of those insurers who:
(a) are eligible for membership in the designated compensation association;
and
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(b) enter into, or have entered into, a contract or policy of:
(i) accident insurance
(ii) life insurance; or
(iii) sickness insurance;
are designated as classes of insurers who are required to be members of the
designated compensation association.
13 Jly 90 SR 49/90 s2.
Compliance
22 Every member of the designated compensation association shall:
(a) comply with the bylaw and any memorandum of operation of; and
(b) pay any fee or compensation levy imposed by;
the designated compensation association.
(2) The superintendent may suspend or cancel the licence of any member who
fails to comply with the requirements imposed pursuant to subsection (1).
4 May 90 cS-26 Reg 5 s22.
Authorization to collect fees and levies
23 The designated compensation association may collect from any member only
those fees or levies, the imposition of which the member has been given prior notice
of by the designated compensation association.
4 May 90 cS-26 Reg 5 s23.
PART IV
Repeal and Coming into Force
R.R.S. c.S-26 Reg 4 repealed
24 The Saskatchewan Insurance Compensation Plan Regulations are repealed.
4 May 90 cS-26 Reg 5 s24.
Appendix
[Section 12]
Calculation of the Investment Valuation Reserve
1 In the Tables to this Appendix:
(a) "long-term," in relation to a debt security, means maturing within a
period of five years or longer;
(b) "mortgage loans" include hypothecs, charges and agreements of sale;
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COMPENSATION PLAN
(c) "real estate" includes leaseholds;
(d) "short-term," in relation to a debt security, means maturing within a
period of less than five years.
4 May 90 cS-26 Reg 5.
2(1) For the purposes of calculating an insurer's investment valuation reserve, an
insurer must complete Tables 1 and 2 to this Appendix.
(2) An insurer's investment valuation reserve is the amount set out as Item 11 in
Column 2 of Table 2 to this Appendix.
4 May 90 cS-26 Reg 5.
3(1) The amount to be entered for an item in Column 4 of Table 1 to this Appendix
is calculated by subtracting the book value set out in Column 2 from the market
value set out in Column 3; and
(a) if that number is positive, entering it in Column 4; or
(b) if that number is not positive, entering zero in Column 4.
(2) The amount to be entered for an item in Column 5 of Table 1 to this Appendix
is calculated by subtracting the market value in Column 3 from the book value in
Column 2; and
(a) if that number is positive, entering it in Column 5; or
(b) if that number is not positive, entering zero in Column 5.
4 May 90 cS-26 Reg 5.
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TABLE 1
Item Column 1 Column 2 Column 3 Column 4 Column 5
Book Market Market Market
Value Value Excess Deficiency
Category of Assets ($000s) ($000s) ($000s) ($000s)
Debt Securities
1 Short-term bonds, debentures
and other evidences of
indebtedness A
2 Short-term mortgage loans D
3 Long-term bonds, debentures
and other evidences of
indebtedness
4 Long-term mortgage loans
5 Total debt securities
Equity Assets
6 Preferred and common
shares B E
Real Estate
7 Real estate
8 Total debt securities, equity
assets and real estate F
9 Total long-term bonds,
debentures and other
evidences of indebtedness,
long-term mortgage loans
and real estate G
10 Total debt securities and
real estate C
11 Total long-term bonds,
debentures and other
evidences of indebtedness,
long-term mortgage loans,
equity assets and real estate H
4 May 90 cS-26 Reg 5.
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TABLE 2
Item Column 1 Column 2
Amount
Description of Calculation ($000s)
Debt Securities
1 Net deficiency for reserve purposes for long-term debt securities
and real estate, equal to G minus B, from Table 1 if that amount
is positive; zero, if it is negative I
Equity Assets
2 Net deficiency for equity assets, equal to E minus C, from Table 1,
if that amount is positive; zero, if it is negative J
3 The amount of J for the preceding year K
4 The two-year average of the net deficiencies for equity assets,
which equals 0.5 times the sum of J and K L
5 Net deficiency for reserve purposes for equity assets, equal to the
lesser of J or L M
Mortgage Loans
6 Market deficiency for short-term mortgage loans, equal to D,
from Table 1, if the book value of the total mortgage loans
exceeds 20% of the book value of the assets as determined
under subsection 13(2) of the Schedule; if it does not, the amount
is equal to zero N
7 The amount equal to D minus A, from Table 1, if that amount
is positive and if the book value of the total mortgage loans
exceeds 20% of the book value of the assets as determined
pursuant to subsection 13(2) of the Schedule; if they do not,
the amount is equal to zero P
Investment Valuation Reserve
8 The sum of I, M and N Q
9 The amount of F from Table 1 R
10 The sum of H and P S
11 The amount of the Investment Valuation Reserve,
equal to the least of Q, R and S
4 May 90 cS-26 Reg 5.
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SASKATCHEWAN INSURANCE
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REGINA, SASKATCHEWAN
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