Securities Law & Instruments


MI 11-102 -- Exemption from requirement to register as investment fund manager -- accumulation of assets of individual subsidiary insurance companies resulted in an investment fund -- insurance companies regulated under separate legislation, no offer to the public of units of limited partnership -- Section 25(4) Securities Act (Ontario) and Section 7.3 of NI 31-103.

Applicable Legislative Provisions

National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations, s. 7.3.

Securities Act (Ontario), ss. 25(4), 74.

January 31, 2014

(the “Jurisdiction”)

(the “Filer”)



The Ontario Securities Commission (the "Decision Maker") has received an application from the Filer for a decision under the securities legislation of the Jurisdiction (the "Legislation") for exemptive relief from Subsection 25(4) of the Securities Act (Ontario) (the "Act") exempting the Filer from the investment fund manager registration requirement contained in Subsection 25(4) of the Act (the "Requested Relief") with respect to the Limited Partnership (as defined below). The exemption is being sought pursuant to Section 74(1) of the Act.


Terms defined in National Instrument 14-101 -- Definitions have the same meaning if used in this decision, unless otherwise defined.


This decision is based on the following facts represented by the Filer:

1. The Filer is a corporation incorporated under the laws of the Province of Ontario, with its head office in Toronto, Ontario.

2. The Filer, through its operating subsidiaries, provides property and casualty insurance in Canada.

3. The Filer and six of its subsidiaries that are insurance companies, being Aviva Insurance Company of Canada, Traders General Insurance Company, Elite Insurance Company, Pilot Insurance Company, Scottish & York Insurance Co. Limited and S&Y Insurance Company (each, an "Insurer", and, collectively, the "Insurers") propose to establish a limited partnership (the "Limited Partnership") to hold investments that would otherwise be held individually by the Insurers.

4. The Filer will be the general partner of the Limited Partnership, a limited partnership to be established under the Limited Partnership Act (Ontario) whose principal place of business will be located in Toronto, Ontario.

5. The Insurers will be the limited partners of the Limited Partnership. The Insurers would be able from time to time to subscribe for additional limited partnership interests in the Limited Partnership and to redeem some or all of their limited partnership interests in the Limited Partnership.

6. The Limited Partnership will be an "investment fund" in Ontario, as such term is defined in the Act.

7. Aviva Investors Canada Inc., which is an affiliate of the Filer and the Insurers and provides investment advisory services to the Insurers, will be the initial portfolio manager of the investment portfolio of the Limited Partnership. Aviva Investors Canada Inc. is registered in Ontario as a portfolio manager and exempt market dealer. Aviva Investors Canada Inc. may engage one or more other affiliates of the Filer and the Insurers as a sub-adviser in respect of its portfolio management services in connection with the Limited Partnership.

8. The Limited Partnership, directly or through the Filer, is expected to pay any portfolio manager compensation for investment management services rendered in connection with the Limited Partnership.

9. The Filer is not in default of securities legislation in Ontario.

10. Pursuant to the limited partnership agreement (the "Partnership Agreement") that will govern the relationship between the Filer, as general partner, and the Insurers, as limited partners (the "Limited Partners") the limited partnership interests of the Limited Partners will not be transferable without the prior written consent of the general partner of the Limited Partnership (the "General Partner") and no party may become a limited partner of the Limited Partnership unless it is an insurance company that is a wholly-owned subsidiary of the Filer. The Limited Partnership initially will have seven (7) beneficial security holders, being the Filer and the Insurers. The Limited Partnership is not intended to ever have more than fifty (50) beneficial security holders.

11. The Limited Partnership is being formed to manage the investments of the Insurers. The pooling of the investment portfolios of the Insurers is intended to achieve improved risk management, capital management and operating performance.

12. As all the Insurers are regulated insurance companies in Canada, the structure of the Limited Partnership requires approval from the Office of the Superintendent of Financial Institutions (Canada) ("OSFI"), which approval has been obtained.

13. The structure that was approved by OSFI contemplates that the investment portfolio of the Limited Partnership would be managed in compliance with the requirements of the Insurance Companies Act (Canada), the regulations made thereunder, guidance issued by OSFI and the investment policies applicable to the Limited Partners.

14. The Partnership Agreement will include a covenant by the General Partner to exercise its powers, and discharge its duties, under the Partnership Agreement honestly, in good faith, with a view to the best interests of the Limited Partnership, and to exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

15. It is not intended that the Limited Partnership would seek to borrow money from the public.

16. It is not intended that the Limited Partnership would become a reporting issuer, as such term is defined in the Act, and its securities will not be listed on any stock exchange. As such, it is not intended that the Limited Partnership would distribute its securities to the public.


The Decision Maker is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.

The decision of the Decision Maker under the Legislation is that the Requested Relief is granted.

January 31, 2014

"Deborah Leckman"
Ontario Securities Commission
"Judith Robertson"
Ontario Securities Commission