Part 2 — Provincial Companies Subpart 1 Status and Powers of Provincial Companies
314 Affiliated directors
(a) "not in good standing", in respect of a loan, means that, in
respect of that loan,
(i) any payment of principal or interest is 90 days or more
overdue,
(ii) interest is not being accrued on the books of the lender
because it is doubtful whether the principal or interest
will be paid or recovered, or
(iii) the rate of interest is reduced by the lender because the
borrower is financially weak;
(b) "significant borrower" means
(i) an entity that has outstanding indebtedness for money
borrowed from the provincial company and from any
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affiliate of the company in an aggregate principal
amount that exceeds 25% of the equity in the entity, or
(ii) an individual who has outstanding indebtedness for
money borrowed from the provincial company and any
affiliate of the company, other than a loan secured by a
mortgage on the principal residence of that individual, in
an aggregate principal amount that exceeds 25% of the
individual's net worth.
(2) Not more than 1/3 of the directors of a provincial company
may be individuals who are, or within the preceding 2 years have
been, remunerated officers, employees, insurance agents,
insurance brokers or adjusters of the company or any of its
affiliates.
(3) No more than 2/3 of the directors may be affiliated directors.
(4) An individual is an affiliated director of a provincial company
if the individual
(a) is an officer or employee of the company or an affiliate of
the company,
(b) has a significant interest in a class of shares of the company,
(c) has a substantial investment in an affiliate of the company,
(d) is a significant borrower in respect of the company,
(e) is a director, officer or employee of an entity that is a
significant borrower in respect of the company,
(f) controls one or more entities of which the total indebtedness
to the company or to an affiliate of the company would
cause those entities, if treated as a single entity, to be a
significant borrower of the company,
(g) provides goods or services to the company, or is a partner or
an employee in a partnership that provides goods or services
to the company or an officer or employee of, or a person
who has a substantial investment in, a body corporate that
provides goods or services to the company, if the total
annual billings to the company in respect of the goods and
services provided exceeds 10% of the total annual billings
of the individual, partnership or body corporate, as the case
may be,
(h) has a loan that is not in good standing from the company or
from an affiliate of the company or is a director, an officer
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or an employee of, or an individual who controls, an entity
that has a loan that is not in good standing from the
company or from an affiliate of the company,
(i) is a professional advisor to the company,
(j) is an insurance agent, insu rance broker or adjuster of the
company,
(k) is the spouse or adult interdependent partner of an individual
described in any of clauses (a) to (j), or
(l) is a relative of an individual described in any of clauses (a)
to (j) who resides in the same home as the individual.
(5) Whether a person is affiliated with a provincial company is
determined as of the day the notice of the annual meeting is sent to
participating policyholders and shareholders and that determination
becomes effective on the day of that meeting, and a person is
deemed to continue to be affiliated or unaffiliated, as the case may
be, until the next annual meeting of participating policyholders and
shareholders.
RSA 2000 cI-3 s314;2002 cA-4.5 s45