MEAG MUNICH ERGO Asset Management GmbH

Headnote

Application to the Ontario Securities Commission for a ruling pursuant to subsection 74(1) of the Securities Act (Ontario) (the Act) for a ruling that the Applicant be exempted from the adviser registration requirements in subsection 25(3) of the Act. The Applicant will provide advice to certain Canadian affiliates in Ontario only for so long as such affiliates remain affiliates of the Applicant. Filer acknowledged its activities did not comply with the registration requirements under applicable Canadian securities legislation. Exemptive relief granted is not retroactive.

Applicable Legislative Provisions

Securities Act, R.S.O., c. S.5, as am., ss. 25(3) and 74(1).

IN THE MATTER OF THE SECURITIES ACT, R.S.O. 1990, c. S.5, AS AMENDED (THE ACT) AND IN THE MATTER OF MEAG MUNICH ERGO ASSET MANAGEMENT GMBH

RULING (Section 74 of the Act)

UPON the application (the Application) of MEAG MUNICH ERGO Asset Management GmbH (the Applicant) to the Ontario Securities Commission (the Commission) for a ruling pursuant to subsection 74(1) of the Act that the Applicant be exempted from the adviser registration requirements in subsection 25(3) of the Act;

AND UPON considering the Application and the recommendation of staff of the Commission;

AND UPON the Applicant having represented to the Commission as follows:

1. The Applicant is a corporation existing under the laws of the Federal Republic of Germany, based in the City of Munich, Germany.

2. The Applicant is exempt from the obligation to obtain the authorization of BaFin, the Federal Financial Supervisory Authority, to provide financial services pursuant to the German Banking Act (Kreditwesengesetz) on the basis that it provides such services exclusively to affiliated entities.

3. The Applicant does not have an office or employees in Canada.

4. As of December 31, 2017, the Applicant's discretionary client assets under management totalled approximately EUR 236.6 billion.

5. The Applicant is part of a corporate group of companies headquartered in Germany and collectively known as the 'Munich Re Group'. The Applicant is an affiliated company of Munich Re (defined below), Munich Reinsurance Company of Canada, Temple Insurance Company, The Boiler Inspection and Insurance Company of Canada, and Munich Reinsurance America, Inc. (collectively, the Insurance Companies), which are insurance companies that carry on business in Canada as Canadian federally licensed insurance companies with their Canadian head offices located in Ontario. The Applicant is also an affiliated company of Munich Holdings Ltd. (the Canadian Company, and, together with the Insurance Companies, the Affiliated Companies), established under the laws of Canada with its Canadian head office located in Ontario. Each of the Affiliated Companies is a direct or indirect wholly-owned subsidiary or branch of Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München (Munich Re), a global re-insurance company. Munich Re operates as an insurance company in Canada on a branch basis.

6. With respect to the above Affiliated Companies: Munich Reinsurance Company of Canada is registered federally and licensed in Ontario, Québec and British Columbia to write the following classes of business -- property, accident and sickness, aircraft, automobile, boiler and machinery, credit, fidelity, hail, liability, surety and marine. Temple Insurance Company, a member of the Munich Re Group, is registered federally to underwrite large industrial and commercial risk management accounts. The Boiler Inspection and Insurance Company of Canada is registered federally to set the standard in equipment breakdown insurance and other specialty insurance and reinsurance coverages worldwide. Munich Reinsurance America, Inc. is a major provider of property and casualty reinsurance in the United States, and is registered federally to operate through its branch in Canada. Munich Holdings Ltd is the holding company of Munich Reinsurance Company of Canada and Temple Insurance Company, with no further insurance operations in Canada.

7. Each of the Affiliated Companies is an "affiliate" of the Applicant, as defined in the Act. Each of the Affiliated Companies is also a "permitted client" as that term is defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103).

8. The Applicant provides investment management services exclusively to entities affiliated with Munich Re, which include branches, subsidiaries and other related entities in the Munich Re Group.

9. The Applicant intends to provide investment advice and portfolio management services to the Affiliated Companies with respect to the portfolio assets of the Affiliated Companies maintained in connection with their respective Canadian businesses.

10. Currently, the Applicant has a sub-adviser agreement with MEAG New York (MEAG NY), another affiliate of Munich Re (the Sub-Adviser Agreement). MEAG NY provides investment management services to entities affiliated with Munich Re, including branches, subsidiaries and other related entities in the Munich Re Group. MEAG NY manages the assets of the Affiliated Companies under the respective investment management agreements that are in place between MEAG NY and the Affiliated Companies.

11. The Sub-Adviser Agreement sub-delegates the portfolio management and asset investment in tradeable fixed income and money market investments as well as cash/currencies and derivatives of the Affiliated Companies. There is no direct contractual relationship between the Affiliated Companies and the Applicant.

12. Under the Sub-Adviser Agreement, the Applicant provides investment advice and portfolio management services to MEAG NY to assist MEAG NY in its provision of advisory services in respect of the portfolio assets of the Affiliated Companies maintained in connection with their respective Canadian businesses. MEAG NY has responsibility for all advice it renders to the Affiliated Companies and the Applicant is fully qualified to render the specific advice sought. Such services have been provided by the Applicant since approximately 2011. The Applicant provided these services to the Affiliated Companies without obtaining adviser registration under the Act on the basis of a good faith determination that it was not providing advice to others with respect to investing in securities or buying or selling securities because it was providing such services only to affiliates within the Munich Re Group, and that its provision of such services did not constitute the "engaging in the business" of an adviser. The Applicant seeks to continue to provide such investment advice and portfolio management services on a basis that would not require registration under the Act.

13. Except as indicated above, the Applicant is not in default of any requirements of securities legislation of any jurisdiction in Canada. The Applicant is, in all material respects, in compliance with the securities laws of Germany.

14. Currently, the Applicant has no direct investment management agreement with the Affiliated Companies. The Applicant seeks to continue to provide services under the Sub-Adviser Agreement and intends to enter into a separate investment management agreement directly with one or more of the Affiliated Companies under which the Applicant will buy specific types of investments in which MEAG NY does not have the investment expertise. MEAG NY will continue to advise the Affiliated Companies.

15. The Applicant is not registered as an adviser in any jurisdiction of Canada and cannot rely on the international adviser exemption set out in section 8.26 of NI 31-103. In the advisory relationship between the Applicant and the Affiliated Companies, the Applicant is providing investment advice and portfolio management services that include advice in respect of Canadian securities (being part of the investment objectives of the Canadian portfolios of the Affiliated Companies). However, the international adviser exemption in section 8.26 of NI 31-103 is not applicable with respect to the Canadian portfolio assets of the Affiliated Companies that would be managed by the Applicant since such advice is not incidental to the advice it is providing on a "foreign security" (as defined in subsection 8.26(2) of NI 31-103).

16. There is no requirement for employees of a corporation to be registered as advisers under the Act if the employees provide investment advice to their corporate employers with respect to the portfolio assets of such corporate employers. The Affiliated Companies do not currently employ individuals to provide investment advice with respect to its Canadian portfolio assets, but rather the Affiliated Companies have outsourced the adviser function to the Applicant and MEAG NY, affiliates of the Affiliated Companies. Outsourcing the investment function is permitted under the federal or provincial insurance company legislation, as applicable.

17. All portfolio assets of the Affiliated Companies managed by the Applicant are beneficially owned by each of the respective Affiliated Companies. There are no external stakeholders (such as, for example, holders of variable annuity contracts or segregated/separate accounts for policyholders) that have any direct or indirect interest in the performance of such portfolios. Accordingly, there are no stakeholders in Ontario or elsewhere other than the Affiliated Companies and their direct or indirect owner, Munich Re, that will be directly affected by the results of the investment advice and portfolio management services to be provided by the Applicant. Therefore, it should not be prejudicial to the public interest to grant the relief requested by the Applicant.

AND WHEREAS section 74 of the Act provides that a ruling may be made by the Commission that a person or company is not subject to section 25 of the Act, subject to such terms and conditions as the Commission considers necessary, where the Commission is satisfied that to do so would not be prejudicial to the public interest;

AND UPON the Commission being satisfied that to do so would not be prejudicial to the public interest;

IT IS RULED, pursuant to section 74 of the Act, that the Applicant is exempt from the adviser registration requirements of subsection 25(3) of the Act in respect of it acting as an adviser, provided that:

(a) the Applicant provides investment advice and portfolio management services in Ontario only to its affiliates that:

(i) are licensed or otherwise duly permitted or authorized to carry on the business of an insurance company in Canada or a branch of a foreign insurance company in Canada, or

(ii) are holding companies that have as their principal business activity to hold securities of one or more affiliates that are each licensed or otherwise duly permitted or authorized to carry on business as an insurance company in Canada;

(b) with respect to any particular affiliate described in paragraph (a), the investment advice and portfolio management services are provided only as long as that affiliate remains:

(i) an "affiliate" of the Applicant, as defined in the Act, and

(ii) a "permitted client" as defined in NI 31-103;

(c) the Applicant notifies the Commission of any regulatory action initiated after the date of this Ruling in respect of the Applicant, or, to the best of the Applicant's knowledge and after reasonable inquiry, any predecessors or "specified affiliates" (as defined in Form 33-109F6 to National Instrument 33-109 Registration Information) of the Applicant, by completing and filing with the Commission Appendix "A" hereto within ten days of the commencement of such action;

(d) the Applicant, in the course of its dealings with any particular affiliate described in paragraph (a), acts fairly, honestly and in good faith; and

(e) the Applicant is in compliance with, and remains in compliance with, any applicable adviser licensing or registration requirements under applicable securities legislation in Germany; and

(f) this Ruling will terminate on the earliest of:

(i) five years after the date of this Ruling; and

(ii) the coming into force of a change in securities legislation that exempts the Applicant from the registration requirement in connection with the advising activity it provides to any particular affiliate described in paragraph (a) on terms and conditions other than those set out in this Ruling.

DATED at Toronto, Ontario, this 28th day of March, 2018.

APPENDIX "A"

NOTICE OF REGULATORY ACTION

1. Settlement agreements

Has the firm, or any predecessors or specified affiliates{1} of the firm entered into a settlement agreement with any financial services regulator, securities or derivatives exchange, SRO or similar agreement with any financial services regulator, securities or derivatives exchange, SRO or similar organization?

Yes _____ No _____

If yes, provide the following information for each settlement agreement:

- - - - - - - - - - - - - - - - - - - -

Name of entity

Regulator/organization

Date of settlement (yyyy/mm/dd)

Details of settlement

Jurisdiction

- - - - - - - - - - - - - - - - - - - -

2. Disciplinary history

Has any financial services regulator, securities or derivatives exchange, SRO or similar organization:

		Yes	No
a)	Determined that the firm, or any predecessors or specified affiliates of the firm violated any securities regulations or any rules of a securities or derivatives exchange, SRO or similar organization?	_____	_____
(b)	Determined that the firm, or any predecessors or specified affiliates of the firm made a false statement or omission?	_____	_____
(c)	Issued a warning or requested an undertaking by the firm, or any predecessors or specified affiliates of the firm?	_____	_____
(d)	Suspended or terminated any registration, licensing or membership of the firm, or any predecessors or specified affiliates of the firm?	_____	_____
(e)	Imposed terms or conditions on any registration or membership of the firm, or predecessors or specified affiliates of the firm?	_____	_____
(f)	Conducted a proceeding or investigation involving the firm, or any predecessors or specified affiliates of the firm?	_____	_____
(g)	Issued an order (other than an exemption order) or a sanction to the firm, or any predecessors or specified affiliates of the firm for securities or derivatives-related activity (e.g. cease trade order)?	_____	_____

If yes, provide the following information for each action:

Name of Entity
Type of Action
Regulator/organization
Date of action (yyyy/mm/dd)	Reason for action
Jurisdiction

3. Ongoing investigations

Is the firm aware of any ongoing investigation of which the firm or any of its specified affiliates is the subject?

Yes _____ No _____

If yes, provide the following information for each investigation:

- - - - - - - - - - - - - - - - - - - -

Name of entity

Reason or purpose of investigation

Regulator/organization

Date investigation commenced (yyyy/mm/dd)

Jurisdiction

- - - - - - - - - - - - - - - - - - - -

Authorized signing officer or partner

- - - - - - - - - - - - - - - - - - - -

Name of firm:

Name of firm's authorized signing officer or partner

Title of firm's authorized signing officer or partner

Signature

Date (yyyy/mm/dd)

- - - - - - - - - - - - - - - - - - - -

Witness

The witness must be a lawyer, notary public or commissioner of oaths.

- - - - - - - - - - - - - - - - - - - -

Name of witness

Title of witness

Signature

Date (yyyy/mm/dd)

- - - - - - - - - - - - - - - - - - - -

This form is to be submitted through the Ontario Securities Commission's Electronic Filing Portal:

https://www.osc.gov.on.ca/filings

{1} In this Appendix, the term "specified affiliate" has the meaning ascribed to that term in Form 33-109F6 to National Instrument 33-109 Registration Information.