BNY capital reduction and PACICC insurer

Summary#

This Canada Gazette item publishes two short notices. One says BNY Trust Company of Canada plans to ask the regulator to reduce the stated capital of its common shares by up to $26.5 million. The other says Property and Casualty Insurance Compensation Corporation (PACICC) plans to apply to incorporate a standby insurer called PACICC‑SIMA General Insurance Company and that objections must be filed by October 22, 2024.

What it does#

• BNY Trust Company of Canada intends to apply to the Superintendent for approval under the Trust and Loan Companies Act (Canada) to reduce the stated capital account for its common shares by up to $26.5 million. A special resolution approving this was passed by the sole shareholder on September 12, 2024, and the company published the notice on September 21, 2024. The company says the Chief Financial Officer will decide the exact amount within the $26.5 million limit. The notice says publication is not proof that approval will be granted.
• Property and Casualty Insurance Compensation Corporation (PACICC) intends to apply for letters patent under the Insurance Companies Act (Canada) to create PACICC‑SIMA General Insurance Company / Compagnie d’Assurance Générale PACICC‑SIMA with a head office in Toronto. PACICC says the new company would not do normal business unless the PACICC board decides it is needed in special circumstances. Objections can be sent to the Office of the Superintendent of Financial Institutions (OSFI) (address and email provided in the notice) by October 22, 2024. The notice says publication is not proof that letters patent will be issued.

Who's affected#

• The sole shareholder of BNY Trust Company of Canada (unnamed) is the direct recipient of any distributed funds.
• Customers, creditors, and other stakeholders of BNY Trust Company of Canada could be indirectly affected if the change alters the company’s capital position.
• Members of or claimants against PACICC, and the wider property and casualty insurance sector, may notice the proposed creation of PACICC‑SIMA as a contingency tool.
• The federal regulator, Office of the Superintendent of Financial Institutions (OSFI), and the Minister of Finance are the officials who will review and decide on these applications.
• If it is unclear who will be affected in a specific way, the notices themselves do not provide further detail.

Why it matters#

• Reducing stated capital lets a company take money out of its formal capital accounts and distribute it to shareholders. That can matter to customers, creditors, and regulators because it changes a firm’s capital structure and the buffer available against losses.
• Incorporating PACICC‑SIMA would give PACICC a ready legal entity to use in unusual or emergency situations involving property and casualty insurers. That could affect how failures in that insurance sector are handled, though PACICC says the new company would only be used when needed.
• Both notices are preliminary: publication does not mean the regulator or Minister will approve the changes. Public objections are possible for the PACICC item until October 22, 2024.