Section 139 - Conversion of insurance corporations into mutual corporations

The taxpayer was entitled under the terms of annuity contract which it sold to the annuitants to make periodic percentage charges to the segregated funds that were established in respect of the policies in consideration for providing financial benefits of the policies and for various administrative services provided by it to the segregated funds. Bowie TCJ. found that the first type of service was an insurance service that was actually provided by the appellant to the annuitants although it was deemed under the definition of "recipient" in s. 123(1) to be provided to the segregated funds and that, as these insurance services were factually distinct from the administrative services actually provided to the segregated funds, there was not a single supply made by it to the segregated funds. Furthermore, as the value of the insurance services exceeded that of the fund services, s. 139 applied to deem all the amounts received by the appellant to be financial services.