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Credit Unions and Caisses Populaires Act, 1994

ONTARIO REGULATION 78/95

DEPOSIT INSURANCE CORPORATION OF ONTARIO

Note: This Regulation was revoked on October 1, 2009. See: O. Reg. 237/09, ss. 119, 120 (1).

Last amendment: O. Reg. 237/09.

This is the English version of a bilingual regulation.

Definition

1. In this Regulation,

“deposit”, for the purpose of deposit insurance, has the meaning set out in the by-laws of the Corporation. O. Reg. 78/95, s. 1.

Investment of Funds

2. (1) For the purposes of section 269 of the Act, the Corporation may invest any funds not required in carrying out its objectives in the classes of securities in which a credit union may invest its funds.

(2) The Corporation shall keep invested more than 50 per cent of the book value of its investments in the following:

1. Cash on hand or on deposit in a bank listed in Schedule I or II to the Bank Act (Canada), a loan or trust corporation registered under the Loan and Trust Corporations Act, a league, Credit Union Central of Canada or Caisse Centrale Desjardins.

2. Subject to subsection (3), unencumbered debentures, bonds, stocks or other securities of or guaranteed by the Government of Canada, the government of a province or territory, a municipality or an agency of any of them.

3. Subject to subsection (3), guaranteed investment certificates issued by a trust corporation registered under the Loan and Trust Corporations Act.

(3) The Corporation shall not keep invested more than 20 per cent of the book value of its total assets in any one of the investments referred to in paragraph 2 or 3 of subsection (2). O. Reg. 78/95, s. 2.

3. For the purposes of section 269 of the Act, the Corporation’s investments are subject to the same restrictions that apply with respect to investments made by credit unions. O. Reg. 78/95, s. 3.

Deposit Insurance Limit

4. For the purposes of clause 270 (1) (b) of the Act, the Corporation shall not insure the amount of any one deposit that exceeds $100,000. O. Reg. 78/95, s. 4; O. Reg. 620/99, s. 1.

Payment of Interest

5. Interest is payable under subsection 270 (5) of the Act for the period beginning when the obligation to make a payment under subsection 270 (2) of the Act arises and ending when the payment is made. O. Reg. 78/95, s. 5.

6. The maximum amount of interest payable under subsection 270 (5) of the Act on a deposit is the amount that, when added to the amount of the deposit, equals $100,000. O. Reg. 78/95, s. 6; O. Reg. 620/99, s. 2.

Amalgamations

7. For the purposes of subsection 271 (3) of the Act (deposits with amalgamated credit union), the prescribed amount is $100,000. O. Reg. 78/95, s. 7; O. Reg. 620/99, s. 3.

8. Revoked: O. Reg. 316/98, s. 1.

Annual Premium

9. (1) For the purposes of subsection 276 (2) of the Act, the prescribed conditions under which the Corporation may establish, assess and collect an annual premium are set out in this section. O. Reg. 78/95, s. 9 (1).

(2) The Corporation shall determine the risk rating of each credit union and league in accordance with this section and with the rules set out in DICO Risk Classification System, dated November 10, 2000, as amended from time to time, and published by the Corporation in The Ontario Gazette on November 25, 2000. O. Reg. 681/00, s. 1 (1).

(3) The risk rating of a credit union or league at a particular time is determined with reference to the following components:

1. Capital: the level of regulatory capital of the credit union or league.

2. Asset quality: the loan loss experience of the credit union or league.

3. Management: the effectiveness of the risk management practices of the credit union or league, as determined with reference to the Act and By-law No. 5 of the Corporation (“Standards of Sound Business and Financial Practices”).

4. Earnings: the average return on assets of the credit union or league.

5. Asset and liability management: the level of interest rate risk of the credit union or league. O. Reg. 681/00, s. 1 (1).

(4) The annual premium payable by a credit union or league is calculated at the rate set out in Column 3 of the Table to this section opposite the category of risk rating set out in Column 2 within which the credit union’s or league’s risk rating falls.

TABLE

Column 1

Column 2

Column 3

Premium Class

Risk Rating

Premium Rate

1

85 points or more

$0.90 per $1,000 of the funds described in subsection (5) for a credit union and in subsection (6) for a league

2

At least 70 points and less than 85 points

$1.00 per $1,000 of those funds

3

At least 55 points and less than 70 points

$1.15 per $1,000 of those funds

4

At least 40 points and less than 55 points

$1.40 per $1,000 of those funds

5

Less than 40 points

$2.10 per $1,000 of those funds

O. Reg. 681/00, s. 1 (1).

(5) The calculation of the annual premium for a credit union is based only on Canadian funds on deposit with the credit union, and no premium is payable with respect to that portion of a deposit that is uninsured by virtue of section 270 of the Act. O. Reg. 681/00, s. 1 (1).

(6) The calculation of the annual premium for a league is based on Canadian funds on deposit with the league for a person that is not a credit union, and no premium is payable with respect to that portion of a deposit that is uninsured by virtue of section 270 of the Act. O. Reg. 681/00, s. 1 (1).

(7) The Corporation may estimate the amount of funds on deposit with the credit union or league using the quarterly financial return of the credit union or league and may adjust the premium upon receiving the audited financial statements. O. Reg. 681/00, s. 1 (1).

(8) The annual premium payable by a credit union or league that carries on business for less than one year shall be reduced by an amount proportionate to the period during which it did not carry on business. O. Reg. 78/95, s. 9 (8)

(8.1) Despite subsections (4) and (8), the minimum annual premium payable by a credit union or league is $250. O. Reg. 681/00, s. 1 (2).

(9) The Corporation may use approximate figures in determining or calculating an amount under this section. O. Reg. 78/95, s. 9 (9).

10. A credit union or league shall pay its annual premium within 30 days after the date of the invoice for the premium. O. Reg. 78/95, s. 10.

11. A credit union or league shall file an audited statement of its deposits with the Corporation at such time as the Corporation directs and respecting such period as the Corporation directs. O. Reg. 78/95, s. 11.

12. Omitted (revokes other Regulations). O. Reg. 78/95, s. 12.

13. Omitted (provides for coming into force of provisions of this Regulation). O. Reg. 78/95, s. 13.

FORM 1 Revoked: O. Reg. 316/98, s. 2.

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