ICA

Question 1

ICA: Section 165: Duties

Directors and officers

Answer 1

1 - Directors shall supervise the management of the business and affairs of the cie
2 - Specific duties
• Appoint the actuary of the cie
Establish:
• Audit committee
• A conduct review committee
• Procedures regarding conflicts of interest
• A policy for dividends and bonuses
• Procedures to provide required disclosures
• Investment and lending policies

Question 2

ICA: Section 203: Audit Committee

Directors and officers

Answer 2

• Consist of at least 3 directors
• Majority of members must be unaffiliated; none may be officers or employees
• Must report to the directors
• May call a meeting of the directors

• Duties
1 - Review the AS before approved by directors
2 - Review returns of the cie specified by the Supt
3 - Require, review, evaluate, and approve internal control procedures
4 - Review invest/trans that could adv affect cie
5 - Meet with auditor and actuary
6 - Meet with chief internal auditor and management regarding control procedures

Question 3

ICA: Section 331: Annual Financial Statement

Financial Statement

Answer 3

Directors to put before shareholders and PH:
1 - Comparative AS for the last and previous years
2 - Appointed Auditor’s and AA Report
3 - Description of the roles of the auditor and actuary
4 - Further info required by the by-laws of the cie

AS to contain:
1 - BS
2 - Income statement
3 - Statement of Change in Financial Position, Shareholder’s Equity and Participating Accounts

Question 4

ICA: Section 346: Auditor’s Examination

Auditors

Answer 4

• Auditor to make an examination so as to report on FS
• Can use the actuary’s valuation for year-end and increases in policy liabs
• Valuation by other than the actuary of the cie may be used only if it was done in accordance with GAAP and with any changes or additional directions from the Supt.

Question 5

ICA: Section 357: Notice of Appointment

Actuaries

Answer 5

Cie shall notify the Supt. in writing of the appointment of the actuary

Question 6

ICA: Section 359: Officer Precluded

Actuaries

Answer 6

• CEO/CFO can be appointed, but must be authorized by the Supt

• CEO - Can hold position no longer than 6 months
• CFO
- Authorization may contain tim limit and conditions
- Requires proof from the audit committee that can hold jobs satisfactorily

Question 7

ICA: Section 360: Revocation of Appointment

Actuaries

Answer 7

Company (directors) may revoke the appointment of the actuary, but must notify the Supt in writing

Question 8

ICA: Section 361: Ceasing to Hold Office

Actuaries

Answer 8

• Actuary ceases to hold office if resigns, ceases to be an actuary, dies, or had appointment revoked by directors

Question 9

ICA: Section 362-364: Filling Vacancy

Actuaries

Answer 9

• If vacancy, directors to notify the Supt and fill it
• If resignation/revocation, actuary needs to submit a Statement to the Supt explaining why, in actuary’s
opinion, this change happened
• Replacement actuary must receive a Statement from prior actuary regarding resignation/revocation before accepting the position (must not accept before receiving or until 15 days have passed)

Question 10

ICA: Section 365: Actuary’s Valuation

Actuaries

Answer 10

• Actuary to value actuarial and other policy liabs at year-end and other matters specified by Supt.
• Be in accordance with GAAP modified by Supt.
• Supt may appoint an actuary to value liabs; may not be an actuary of the cie
• Expenses to be approved by Supt and paid by the cie

Question 11

ICA: Section 366: Right to Information; Liability

Actuaries

Answer 11

• Company to provide the actuary with access to records and info, which actuary views as needed
• Communication in response to the actuary will not result in civil liability

Question 12

ICA: Section 367: Actuary’s Report

Actuaries

Answer 12

• Actuary to make a report on the valuation and other prescribed matters at least 21 days before the annual meeting
• Actuary to indicate whether the AS presents fairly the results of the valuation

Question 13

ICA: Section 368: Report to Directors

Actuaries

Answer 13

Actuary to meet at least once a year with the directors or audit committee to discuss the financial condition of cie, and when directed, the future financial condition of the cie

Question 14

ICA: Section 369: Report to the Officers

Actuaries

Answer 14

• Actuary to provide written report to cie (CEO/CFO) matters with material adv effects and needing rectifying
• Actuary to provide a copy of report to directors
• If actuary believes suitable action not being taken, should send a report to the Supt.

Question 15

ICA: Section 370: Qualified Privilege

Actuaries

Answer 15

• Qualified privilege given to the actuary’s oral/written statements
• Actuary has no civil liab for statements made in good faith

Question 16

ICA: Section 464: Declaration of Policy Dividend or Bonus

Business and power

Answer 16

• Directors may declare such in accordance with policy
• Actuary to make a report that declaration in accordance with cie policy. Directors must consider report before declaring dividend/bonus
• Must be prepared in accordance with GAAP

Question 17

ICA: Section 465: Regulations

Business and power

Answer 17

• Governor in Council may enact regulations limiting a cie’s Re
• Supt may be given discretion in this regard

Question 18

ICA: Section 476: General Restriction on P&C Companies

Business and power

Answer 18

PC cie should not agree to a debt obligation or issue, other than a common share, if total debt and stated capital would exceed the prescribed % of total assets

Question 19

ICA: Section 477: Restriction on Guarantees

Business and power

Answer 19

• PC insurer not to guarantee another’s obligation unless that of a subsidiary who will reimburse
• Not prevented from insuring a risk in a class specified in the Supt.’s order

Question 20

ICA: Section 478: Restriction on Leasing

Business and power

Answer 20

PC cie shall not lease personal property in Canada

Question 21

ICA: Section 517: Notice of Value

Adequacy of capital and liquidity ans assets

Answer 21

Supt to notify the cie auditor, and actuary regarding the value of an appraised asset that differs materially from the cie

Question 22

ICA: Section 581: Conditions for Order

Foreign Company

Answer 22

• Supt shall not allow the insuring of risks until shown that the cie has assets with a prescribed value (at least 5M$), an AA, an appointed auditor, and a location
for its chief agency, and has complied with other relevant requirements of the act
• Until returned, such assets form part of the Canadian assets of the cie

Question 23

ICA: Section 664: Required Information

Regulation of cies, societies, foreign and provincial cies

Answer 23

Information to be provided when and in the form the Supt requires

Question 24

ICA: Section 665: Annual Return

Regulation of cies, societies, foreign and provincial cies

Answer 24

• Shall prepare AR showing info required by the supt

* AR filed within 105 days of the year-end for the cie involved only in Re and within 60 days otherwise

Question 25

ICA: Section 667: Valuation of Actuarial and Other Policy Liabs

(Regulation of cies, societies, foreign and provincial cies)

Answer 25

• AR reserve to reflect actuarial and other policy liabs

* Company to file the AA’s Report with the AR

Question 26

ICA: Section 674: Inspection of Cies, Societies, Foreign Cies and Provincial Cies

(Regulation of cies, societies, foreign and provincial cies)

Answer 26

• Supt may examine company and report to Minister
• Inquiry made triennially except for fraternal benefit society (no specific)
• Supt can access any records and require explanations