BNY capital reduction; PACICC insurer incorporation

Summary#

This Canada Gazette page carries two short notices.
One says BNY Trust Company of Canada intends to ask the federal regulator for permission to reduce the stated capital of its common shares and distribute up to $26.5 million to its sole shareholder (special resolution passed September 12, 2024; notice published September 21, 2024).
The other says Property and Casualty Insurance Compensation Corporation (PACICC) plans to apply for letters patent to create a new insurer called PACICC-SIMA General Insurance Company / Compagnie d’Assurance Générale PACICC-SIMA (notice dated August 31, 2024); the public can object by October 22, 2024.

What it does#

• BNY Trust Company of Canada
  • Proposes to reduce the stated capital account for its common shares by up to $26.5 million and distribute that amount to its sole shareholder.
  • The company will apply to the Superintendent under the Trust and Loan Companies Act (Canada) for approval. Publication of the notice does not mean approval has been granted.
• Property and Casualty Insurance Compensation Corporation (PACICC)
  • Intends to apply to the Minister of Finance under the Insurance Companies Act (Canada) for letters patent to incorporate PACICC-SIMA General Insurance Company / Compagnie d’Assurance Générale PACICC-SIMA with its head office in Toronto, Ontario.
  • The proposed company says it will not operate normally and would only carry on business if certain special circumstances arise (as determined by the PACICC board).
  • Anyone who objects can send a written objection to the Office of the Superintendent of Financial Institutions (OSFI) by October 22, 2024 (email: approvals-approbations@osfi-bsif.gc.ca; mail: 255 Albert Street, Ottawa, Ontario K1A 0H2).

Who's affected#

• For the BNY notice:
  • The direct, obvious effect is on the sole shareholder of BNY Trust Company of Canada, who would receive any amount approved up to $26.5 million.
  • The company’s directors and finance officers are named as the people who will carry out the application to the regulator.
  • The final decision rests with the Superintendent (OSFI).
• For the PACICC notice:
  • PACICC and the federal finance authorities who will review the incorporation application are the main parties involved.
  • Members of the public, industry stakeholders or competitors who want to object can do so by October 22, 2024.
  • It is not clear from the notice exactly which businesses or policyholders would ever deal with the new company, since it says the company would act only in special circumstances.

Why it matters#

• The BNY item is a proposed internal capital change that could move up to $26.5 million out of the company’s stated capital to the shareholder—if the federal regulator approves. That matters for the company’s financial picture and for transparency about where corporate funds go, even though approval is not guaranteed.
• The PACICC item signals planning for an additional insurer that would exist mainly as a contingency. That could matter for the insurance sector’s emergency planning and for anyone watching how the sector prepares for rare, high-impact events. The public objection deadline (October 22, 2024) gives people a chance to raise concerns before a final decision.