Insurance Companies Act (S.C. 1991, c. 47)
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Act current to 2024-11-11 and last amended on 2024-07-11. Previous Versions
PART VICorporate Governance (continued)
DIVISION XIIIAuditors (continued)
Qualifications (continued)
Marginal note:Duty to resign
339 (1) An auditor who ceases to be qualified under section 338 shall resign forthwith after the auditor, where the auditor is a natural person, or any member of the firm of accountants, where the auditor is a firm of accountants, becomes aware that the auditor or the firm has ceased to be so qualified.
Marginal note:Disqualification order
(2) Any interested person may apply to a court for an order declaring that an auditor of a company has ceased to be qualified under section 338 and declaring the office of auditor to be vacant.
Vacancies
Marginal note:Revocation of appointment
340 (1) The shareholders and policyholders of a company may, by ordinary resolution at a special meeting, revoke the appointment of an auditor.
Marginal note:Idem
(2) The Superintendent may at any time revoke the appointment of an auditor made under subsection (3) or 337(1) or section 342 by notice in writing signed by the Superintendent and sent by registered mail to the auditor and to the company addressed to the usual place of business of the auditor and the company.
Marginal note:Filling vacancy
(3) A vacancy created by the revocation of the appointment of an auditor under subsection (1) may be filled at the meeting at which the appointment was revoked and, if not so filled, shall be filled by the directors under section 342.
Marginal note:Ceasing to hold office
341 (1) An auditor of a company ceases to hold office when
(a) the auditor resigns;
(b) the auditor, where the auditor is a natural person, dies; or
(c) the appointment of the auditor is revoked by the shareholders and policyholders or the Superintendent.
Marginal note:Effective date of resignation
(2) The resignation of an auditor becomes effective at the time a written resignation is sent to the company or at the time specified in the resignation, whichever is later.
Marginal note:Filling vacancy
342 (1) Subject to subsection 340(3), where a vacancy occurs in the office of auditor of a company, the directors shall forthwith fill the vacancy, and the auditor so appointed holds office for the unexpired term of office of the predecessor of that auditor.
Marginal note:Where Superintendent may fill vacancy
(2) Where the directors fail to fill a vacancy in accordance with subsection (1), the Superintendent may fill the vacancy and the auditor so appointed holds office for the unexpired term of office of the predecessor of that auditor.
Marginal note:Designation of member of firm
(3) Where the Superintendent has, pursuant to subsection (2), appointed a firm of accountants to fill a vacancy, the Superintendent shall designate the member of the firm who is to conduct the audit of the company on behalf of the firm.
Marginal note:Right to attend meetings
343 (1) The auditor of a company is entitled to receive notice of every meeting of shareholders or policyholders and, at the expense of the company, to attend and be heard at those meetings on matters relating to the duties of the auditor.
Marginal note:Duty to attend meeting
(2) If a director, a shareholder of a company, whether or not the shareholder is entitled to vote at the meeting, or a policyholder who is entitled to vote at the meeting gives written notice, not less than ten days before a meeting of shareholders or policyholders, to an auditor or former auditor of the company that the director, shareholder or policyholder wishes the auditor’s attendance at the meeting, the auditor or former auditor shall attend the meeting at the expense of the company and answer questions relating to the auditor’s or former auditor’s duties as auditor.
Marginal note:Notice to company
(3) A director, shareholder or policyholder who gives notice under subsection (2) shall send concurrently a copy of the notice to the company and the company shall forthwith send a copy thereof to the Superintendent.
Marginal note:Superintendent may attend
(4) The Superintendent may attend and be heard at any meeting referred to in subsection (2).
Marginal note:Statement of auditor
344 (1) An auditor of a company who
(a) resigns,
(b) receives a notice or otherwise learns of a meeting of shareholders and policyholders called for the purpose of revoking the appointment of the auditor, or
(c) receives a notice or otherwise learns of a meeting of directors or shareholders and policyholders at which another person is to be appointed in the auditor’s stead, whether because of the auditor’s resignation or revocation of appointment or because the auditor’s term of office has expired or is about to expire,
shall submit to the company and the Superintendent a written statement giving the reasons for the resignation or the reasons why the auditor opposes any proposed action.
Marginal note:Other statements
(1.1) In the case of a proposed replacement of an auditor whether because of removal or the expiry of their term, the company shall make a statement of the reasons for the proposed replacement and the proposed replacement auditor may make a statement in which they comment on those reasons.
Marginal note:Statements to be sent
(2) The company shall send a copy of the statements referred to in subsections (1) and (1.1) without delay to every shareholder entitled to vote at the annual meeting of shareholders and policyholders, to every policyholder entitled under paragraph 143(1)(b) to receive notice of an annual meeting of shareholders and policyholders and to the Superintendent.
- 1991, c. 47, s. 344
- 2005, c. 54, s. 288
Marginal note:Duty of replacement auditor
345 (1) Where an auditor of a company has resigned or the appointment of an auditor has been revoked, no person or firm shall accept an appointment or consent to be appointed as auditor of the company until the person or firm has requested and received from the other auditor a written statement of the circumstances and reasons why the other auditor resigned or why, in the other auditor’s opinion, the other auditor’s appointment was revoked.
Marginal note:Exception
(2) Notwithstanding subsection (1), a person or firm may accept an appointment or consent to be appointed as auditor of a company if, within fifteen days after a request under that subsection is made, no reply from the other auditor is received.
Marginal note:Effect of non-compliance
(3) Unless subsection (2) applies, an appointment as auditor of a company is void if subsection (1) has not been complied with.
Examinations and Reports
Marginal note:Auditor’s examination
346 (1) The auditor of a company shall make such examination as the auditor considers necessary to enable the auditor to report on the annual statement and on other financial statements required by this Act to be placed before the shareholders and policyholders, except such annual statements or parts thereof as relate to the period referred to in subparagraph 331(1)(a)(ii).
Marginal note:Auditing standards
(2) The auditor’s examination referred to in subsection (1) shall, except as otherwise specified by the Superintendent, be conducted in accordance with generally accepted auditing standards, the primary source of which is the Handbook of the Chartered Professional Accountants of Canada.
Marginal note:Reliance on actuary
(3) An auditor of a company may, in conducting the examination referred to in subsection (1), use the valuation by the actuary of the company, or by any other actuary, of
(a) the actuarial and other policy liabilities of the company as at the end of a financial year; and
(b) the increase in the actuarial liabilities of the company for a financial year.
Marginal note:Actuarial practices
(4) A valuation by an actuary other than the actuary of the company may be used only if it was done in accordance with generally accepted actuarial practice and with any changes that may have been determined by the Superintendent and by following any additional directions that may have been made by the Superintendent.
- 1991, c. 47, s. 346
- 2007, c. 6, s. 214
- 2017, c. 26, s. 62
Marginal note:Right to information
347 (1) On the request of the auditor of a company, the present or former directors, officers, employees or representatives of the company shall, to the extent that they are reasonably able to do so,
(a) permit access to such records, assets and security held by the company or any entity in which the company has a substantial investment, and
(b) provide such information and explanations
as are, in the opinion of the auditor, necessary to enable the auditor to perform the duties of auditor of the company.
Marginal note:Directors to provide information
(2) On the request of the auditor of a company, the directors of the company shall, to the extent that they are reasonably able to do so,
(a) obtain from the present or former directors, officers, employees and representatives of any entity in which the company has a substantial investment the information and explanations that such persons are reasonably able to provide and that are, in the opinion of the auditor, necessary to enable the auditor to perform the duties of auditor of the company; and
(b) provide the auditor with the information and explanations so obtained.
Marginal note:No civil liability
(3) A person who in good faith makes an oral or written communication under subsection (1) or (2) shall not be liable in any civil action arising from having made the communication.
Marginal note:Auditor’s report and extended examination
348 (1) The Superintendent may, in writing, require that the auditor of a company report to the Superintendent on the extent of the auditor’s procedures in the examination of the annual statement and may, in writing, require that the auditor enlarge or extend the scope of that examination or direct that any other particular procedure be performed in any particular case, and the auditor shall comply with any such requirement of the Superintendent and report to the Superintendent thereon.
Marginal note:Special examination
(2) The Superintendent may, in writing, require that the auditor of a company make a particular examination relating to the adequacy of the procedures adopted by the company for the safety of its creditors, shareholders and policyholders, or any other examination as, in the Superintendent’s opinion, the public interest may require, and report to the Superintendent thereon.
Marginal note:Idem
(3) The Superintendent may direct that a special audit of a company be made if, in the opinion of the Superintendent, it is so required and may appoint for that purpose an accountant or a firm of accountants qualified pursuant to subsection 338(1) to be an auditor of the company.
Marginal note:Expenses payable by company
(4) The expenses entailed by any examination or audit referred to in any of subsections (1) to (3) are payable by the company on being approved in writing by the Superintendent.
- 1991, c. 47, s. 348
- 1999, c. 31, s. 142(F)
Marginal note:Auditor’s report
349 (1) The auditor shall, not less than twenty-one days before the date of the annual meeting of the shareholders and policyholders of the company, make a report in writing to them on the annual statement.
Marginal note:Audit for shareholders and policyholders
(2) In each report required under subsection (1), the auditor shall state whether, in the auditor’s opinion, the annual statement presents fairly, in accordance with the accounting principles referred to in subsection 331(4), the financial position of the company as at the end of the financial year to which it relates and the results of the operations and changes in the financial position of the company for that financial year.
Marginal note:Auditor’s remarks
(3) In each report referred to in subsection (2), the auditor shall include such remarks as the auditor considers necessary when
(a) the examination has not been made in accordance with the auditing standards referred to in subsection 346(2);
(b) the annual statement has not been prepared on a basis consistent with that of the preceding financial year; or
(c) the annual statement does not present fairly, in accordance with the accounting principles referred to in subsection 331(4), the financial position of the company as at the end of the financial year to which it relates or the results of the operations or changes in the financial position of the company for that financial year.
Marginal note:Report on directors’ statement
350 (1) The auditor of a company shall, if required by the shareholders and policyholders, audit and report to them on any financial statement submitted to them by the directors, and the report shall state whether, in the auditor’s opinion, the financial statement presents fairly the information required by the shareholders and policyholders.
Marginal note:Making of report
(2) A report of the auditor made under subsection (1) shall be attached to the financial statement to which it relates and a copy of the statement and report shall be sent by the directors to every shareholder, to every policyholder who is entitled pursuant to paragraph 143(1)(b) to receive notice of an annual meeting of shareholders and policyholders and to the Superintendent.
Marginal note:Report to officers
351 (1) It is the duty of the auditor of a company to report in writing to the chief executive officer and chief financial officer of the company any transactions or conditions that have come to the auditor’s attention affecting the well-being of the company that in the auditor’s opinion are not satisfactory and require rectification and, without restricting the generality of the foregoing, the auditor shall, as occasion requires, make a report to those officers in respect of
(a) transactions of the company that have come to the auditor’s attention and that in the auditor’s opinion have not been within the powers of the company, and
(b) in the case of a life company, loans owing to the company by any person the aggregate amount of which exceeds 0.5 per cent of the regulatory capital of the company and in respect of which, in the auditor’s opinion, loss to the company is likely to occur,
but when a report required under paragraph (b) has been made in respect of loans to any person, it is not necessary to report again in respect of loans to that person unless, in the opinion of the auditor, the amount of the loss likely to occur has increased.
Marginal note:Transmission of report
(2) Where the auditor of a company makes a report under subsection (1),
(a) the auditor shall transmit the report, in writing, to the chief executive officer, chief financial officer and the actuary of the company;
(b) the report shall be presented to the first meeting of the directors following its receipt;
(c) the report shall be incorporated in the minutes of that meeting; and
(d) the auditor shall, at the time of transmitting the report to the chief executive officer and chief financial officer, provide the audit committee of the company and the Superintendent with a copy.
- 1991, c. 47, s. 351
- 2005, c. 54, s. 289
Marginal note:Auditor of subsidiaries
352 (1) A company shall take all necessary steps to ensure that its auditor is duly appointed as the auditor of each of its subsidiaries.
Marginal note:Subsidiary outside Canada
(2) Subsection (1) applies in the case of a subsidiary that carries on its operations in a country other than Canada unless the laws of that country do not permit the appointment of the auditor of the company as the auditor of that subsidiary.
Marginal note:Exception
(3) Subsection (1) does not apply in respect of any particular subsidiary where the company, after having consulted its auditor, is of the opinion that the total assets of the subsidiary are not a material part of the total assets of the company.
- Date modified: