This section pertains to the obtaining of the Minister’s approval of an acquisition of control or an acquisition of a significant interest in the decisions of a business corporation regulated under Title III of the Insurers Act, i.e., a Québec insurer that is a business corporation.
Section 535 IA sets out presumptions regarding the legal regime applicable to certain Québec insurers constituted under a private Act that will determine whether this section applies or not.
The provisions relating to an acquisition of control or an acquisition of a significant interest in a regulated business corporation’s decisions are found in sections 248 to 254 of the Insurers Act This link will open in a new window, CQLR, c. A-32.1 (“IA”).
Anyone who intends to become the holder of a significant interest in a regulated business corporation’s decisions must send a notice of intention to the AMF. The same is true for whoever is already the holder of such an interest but not the holder of control of the corporation and intends to become the holder of control (s. 248 IA
The holder of a significant interest in the decisions of a business corporation is whoever can exercise 10% or more of the voting rights attached to the shares issued by the corporation (s. 10, 1st par. (1) IA).
The holder of control of a business corporation is the holder of shares conferring more than 50% of the voting rights or whoever can otherwise choose the majority of its directors (s. 9, 1st par. (1) IA). These two concepts must be interpreted in the light of sections 11 to 14 IA.
Under section 139 IA, a business corporation that is the subject of an acquisition of control or an acquisition of a significant interest must also send a notice to the AMF.
Notice of intention
The notice of intention must be sent to the AMF not later than the 30th day before the day on which the person will become the holder of a significant interest in a regulated business corporation’s decisions or the holder of control (s. 248 IA).
This mandatory disclosure enables the AMF to ensure, among other things, that there are no serious reasons to believe that a holder of a significant interest in the business corporation’s decisions is likely to interfere with the corporation’s adherence to sound commercial practices or sound and prudent management practices, and enables the Minister to assess the effect of the transaction on the regulated business corporation and on its development as well as on the insurance industry in Québec.
The contents of the notice are set out in section 249 IA.
The following checklist indicates the information to be included in the notice of intention.
Contents of the notice of intention set out in section 248 IA
|Information/Documents||Source||Clarification by the AMF|
|1. The name and address of the person or group that intends to become the holder of the interest referred to;||s. 249, 1st par. (1) IA||n/a|
|2.In the case of a natural person, his or her résumé;||s. 249, 1st par. (1) IA||n/a|
|3. In the case of a group, its juridical form and, if applicable, the identity of the holder of control of the group;||s. 249, 1st par. (1) IA||n/a|
|4. A description of the shares issued by an insurance company the voting rights attached to which would make the person or group the holder of the interest referred to in section 248.||s. 249. 1st par. (2) IA||n/a|
On receipt of the notice of intention, the AMF must prepare a report on the effect of the transaction on the regulated business corporation and on its development as well as on the insurance industry in Québec (s. 250, 1st par. IA). The AMF must then send the report to the Minister (s. 250, 2nd par. IA).
The Minister may, if the Minister considers it advisable, approve the acquisition of control or the acquisition of another significant interest referred to in section 248 IA (s. 251 IA).
Fees and costs payable
No fees are prescribed for the time being.
Refer to the complete list of fees and costs payable to the AMF for more information.
Except in specific circumstances, the AMF will send its report to the Minister within 90 days from the date the application is complete.