BILL NO. 238
(as introduced)
2nd Session, 63rd General Assembly
Nova Scotia
69 Elizabeth II, 2020
Government Bill
Insurance Act
(amended)
The Honourable Karen Casey
Minister responsible for the Insurance Act
First Reading: February 28, 2020
Second Reading: March 3, 2020
Third Reading: March 9, 2020 (LINK TO BILL AS PASSED)
Explanatory Notes
Clause 1 allows the Governor in Council to make regulations authorizing persons to trade in life insurance and life insurance benefits.
Clause 2 prevents the payment into contracts of life insurance of amounts not related to the costs of that insurance.
Clause 3 prohibits the trading of life insurance or benefits except by insurers, authorized agents of insurers and those authorized by the regulations.
An Act to Amend Chapter 231
of the Revised Statutes, 1989,
the Insurance Act
Be it enacted by the Governor and Assembly as follows:
1 (1) Subsection 5(3) of Chapter 231 of the Revised Statutes, 1989, the Insurance Act, as amended by Chapter 1 of the Acts of 2003 (Second Session), is further amended by
(a) relettering clause (na) as (nb); and
(b) adding immediately before clause (nb) the following clause:
- (na) authorizing persons or classes of persons for the purpose set out in subsection 226A(2);
(2) Subsection 5(3A) of Chapter 231, as enacted by Chapter 18 of the Acts of 2010, is amended by striking out "(na)" in the first line and substituting "(nb)".
2 Chapter 231 is further amended by adding immediately after Section 203 the following Section:
- 203A (1) In this Section,
(a) "actuarial basis" means the assumptions and methods generally accepted and used by fellows of the Canadian Institute of Actuaries to establish the cost of insurance;
(b) "side account" means an account associated with or a part of a contract that is intended to hold amounts in excess of the maximum amount permitted to be held in a contract that is exempt from accrual taxation pursuant to the Income Tax Act (Canada).
(2) Subject to any lesser limit provided under the terms of a contract,
(a) with respect to a contract that is exempt from accrual taxation pursuant to the Income Tax Act (Canada), the amount that may be held in a side account must not exceed the sum of
- (i) the amount required to pay future costs of insurance, related premium taxes and administrative fees or charges, and
(ii) the additional amount, if any, that could in the future be held in the contract on an accrual tax exempt basis under the Income Tax Act (Canada); and
(b) with respect to a contract that is not exempt from accrual taxation pursuant to the Income Tax Act (Canada), the amount that may be held in a contract together with any associated side account must not exceed the amount required to pay future costs of insurance, related premium taxes and administrative fees or charges.
(3) The amounts referred to in clauses (a) and (b) of subsection (2) are as determined from time to time by the insurer on an actuarial basis using the remaining lifetime of the persons then insured under the contract.
(4) Any amount that exceeds the limits set out in subsection (2)
(b) is deemed to have never been a premium; and
(c) cannot be held in a contract or its associated side account regardless of the date of issue of the contract.
(5) Where an amount exceeds the limits set out in subsection (2), the insurer shall refund the amount, including any gain or interest, to the person or persons who paid the amount.
3 Chapter 231 is further amended by adding immediately after Section 226 the following Section:
- 226A (1) Any person, other than an insurer or its authorized agent, who advertises or purports to be a purchaser of insurance or of benefits under insurance or who deals or trades in insurance for the purpose of procuring the sale, surrender, transfer, assignment, pledge or hypothecation of insurance to the person or any other person is guilty of an offence.
(2) Subsection (1) does not apply to a person or class of person authorized by the regulations to advertise or purport to be a purchaser of insurance or of benefits under insurance.
(3) Any sale, surrender, transfer, assignment, pledge or hypothecation of insurance that would result in an offence under subsection (1) is void.
This page and its contents published by the Office of the Legislative Counsel, Nova Scotia House of Assembly, and © 2020 Crown in right of Nova Scotia. Created March 10, 2020. Send comments to legc.office@novascotia.ca.
