Non-Financial Activities Regulations for Insurers

Summary#

These are proposed regulations called the Non-Financial Activities (Insurance Companies, Societies and Insurance Holding Companies) Regulations under the Insurance Companies Act. They would set limits and reporting rules for how insurance companies and related holding companies can invest in or run non-financial businesses. The proposal is open for comment for 30 days after its Canada Gazette publication (October 17, 2026).

What it does#

• Defines key terms, including what counts as a “majority” of a business (60%) and what counts as a non-financial activity.
• Sets revenue limits on non-financial activities:
  • Firms with equity under $12 billion must keep those activities to no more than 15% of their annual revenue.
  • Firms with equity of $12 billion or more must keep them to no more than 10% of their annual revenue.
• Limits exposure measured against regulatory capital:
  • The combined value of ownership stakes, loans and guarantees to majority financial services entities or non-financial entities must not exceed 10% of a company’s regulatory capital.
• Reporting and disclosure rules for larger firms:
  • A company, society or insurance holding company with equity of $12 billion or more must provide specified transaction details to the Deputy Minister of Finance within 30 days of certain acquisitions, and annual descriptions within six months after each financial year.
• Prohibits a specific business model:
  • A company must not run a business that gives customers temporary use of property or movables (including motor vehicles) in Canada for a purpose other than financing the purchase.
• Transitional and exemption rules:
  • Some activities (including certain overseas or tech-related activities) are exempt from the new limits for two years after the regulations come into force.
  • The proposal would repeal several existing information-technology rules, including the Information Technology Activities (Canadian Societies) Regulations, Information Technology Activities (Insurance Holding Companies) Regulations, Information Technology Activities (Life Companies) Regulations, and Information Technology Activities (Property and Casualty Companies and Marine Companies) Regulations.
• Timing:
  • The regulations would come into force on the day section 332 of the Budget Implementation Act, 2018, No. 1 comes into force, or on registration if that day has already passed.

Who's affected#

• Insurance companies, societies, and insurance holding companies operating in Canada.
• Their subsidiaries and any entities they might buy, control, or take large stakes in — described in the rules as “majority financial services entities” or entities engaging in non-financial activities.
• Firms involved in technology, fintech, or non-financial lines of business that are owned by or tied to insurance groups.
• It is unclear from the notice whether smaller firms with little cross-border activity will be materially affected beyond routine compliance.

Why it matters#

• The rules limit how far insurers can diversify into non-insurance businesses. That could reduce the amount of an insurer’s capital tied up in unrelated businesses.
• Companies planning acquisitions, investments in fintech, or business models that lend customers temporary use of goods (for example, certain vehicle subscription or rental models not tied to financing) may need to change plans or seek exemptions.
• Larger insurers (those at or above $12 billion in equity) will face new reporting requirements, increasing transparency for regulators and possibly the public.
• The two‑year transition period and the list of repealed IT rules mean some existing arrangements will be grandfathered short term, but longer-term limits will apply once the exemptions end.