Assuring the Future: Reform of the Insolvency Framework for Insurance Companies and Other Financial Institutions Under the Canadian Winding-Up and Restructuring Act

ANNUAL REVIEW OF INSOLVANCY LAW 2010, pp. 123-182, Janis P. Sarra, ed., Toronto: Carswell, 2011

Posted: 25 Jul 2011

See all articles by Janis P. Sarra

Janis P. Sarra

University of British Columbia (UBC), Faculty of Law

Gordon Dunning

affiliation not provided to SSRN

Date Written: 2011

Abstract

The purpose of this article is to examine the strengths and weakness of the Winding-Up and Restructuring Act (WURA), and provide baseline information to generate a much needed policy discussion regarding its future. This lengthy statute has been amended piecemeal over its 100 year history, and it is overdue for legislative reform to meet current challenges for financially distressed banks, insurance companies and other financial institutions. While there are a myriad of issues which could potentially be addressed, this article focuses on five critically important issues for which reform should be considered: stakeholder rights, asset realization, restructuring, governance, and cross-border insolvency.

There is currently no ability to effectively restructure insurance companies and other financial institutions under the WURA; and the Companies' Creditors Arrangement Act (CCAA) does not apply to financial institutions. This article suggests that the WURA should be reformed to provide a viable restructuring scheme that takes account of the special nature of financial intuitions. The article suggests that liquidators should be authorized to undertake restructuring where it is in the best interests of the stakeholders. The article also advocates increasing protection for policyholders and employees, recognizing the special nature of financial firm failure.

Keywords: Canada, Bankruptcy, Insolvency, Insurance companies, Winding-Up and Restructuring Act, Bank insolvency, Bank financial distress

Suggested Citation

Sarra, Janis P. and Dunning, Gordon, Assuring the Future: Reform of the Insolvency Framework for Insurance Companies and Other Financial Institutions Under the Canadian Winding-Up and Restructuring Act (2011). ANNUAL REVIEW OF INSOLVANCY LAW 2010, pp. 123-182, Janis P. Sarra, ed., Toronto: Carswell, 2011, Available at SSRN: https://ssrn.com/abstract=1767409

Janis P. Sarra (Contact Author)

University of British Columbia (UBC), Faculty of Law ( email )

1822 East Mall
Vancouver, British Columbia V6T 1Z1
Canada
604-822-9255 (Phone)

HOME PAGE: http://www.law.ubc.ca/faculty/Sarra/

Gordon Dunning

affiliation not provided to SSRN

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