Brookfield Reinsurance Ltd.

Headnote

Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions and National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- exemption from the requirement to call a meeting of holders of affected securities to consider a proposed related party transaction and to send an information circular to such holders -- issuer is a paired entity whose exchangeable securities are exchangeable into securities of the paired entity -- paired entity is the sole beneficial holder of all of the issuer's equity securities and the only party eligible to vote for the purposes of minority approval under Part 8 of MI 61-101 -- issuer and the paired entity filed a preliminary prospectus with respect to the exchange of a specified number of shares of the paired entity for exchangeable shares of the issuer, on a one-for-one basis -- insiders of the issuer who hold shares of the paired entity may elect to participate in the exchange offer -- the degree of participation by insiders and the availability of an exemption from the minority approval requirement in MI 61-101 will not be known until the expiry of the exchange offer -- concurrently with the filing of the preliminary prospectus, the paired entity, as the sole beneficial holder of affected securities of the issuer, provided its written consent to the exchange offer -- the issuer held a meeting and obtained disinterested shareholder approval, excluding the votes attached to shares held by its insiders, in accordance with exchange requirements -- the sole affected securityholder was familiar and aware of the terms of the exchange offer, is a co-issuer of the preliminary prospectus, and had significant advance notice of the exchange offer -- exemption sought granted, subject to conditions, including that the written consent is not revoked or withdrawn prior to the expiry time of the exchange offer.

Applicable Legislative Provisions

Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions, ss. 5.3, 5.6, 8.1 and 9.1(2). Companion Policy 61-101CP to Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions, s. 3.1.

October 16, 2023

IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the Jurisdiction)

AND

IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF BROOKFIELD REINSURANCE LTD.

DECISION

Background

The principal regulator in the Jurisdiction has received an application from Brookfield Reinsurance Ltd. (the Filer) for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) exempting the Filer from the requirement in subsection 5.3(2) of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (MI 61-101) to call a meeting of holders of affected securities to consider the Proposed Transaction (as defined below) and to send an information circular to such holders (the Exemption Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(a) the Ontario Securities Commission is the principal regulator for this application; and

(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in Alberta, Manitoba, New Brunswick, Québec and Saskatchewan.

Interpretation

Terms defined in National Instrument 14-101 Definitions, MI 11-102, and MI 61-101 have the same meaning if used in this decision, unless otherwise defined.

Representations

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

Relevant Entities

The Filer

1. The Filer is an exempted company limited by shares established, registered and in good standing under the laws of Bermuda. The Filer's head and registered office is located at Ideation House, 1st Floor, 94 Pitts Bay Road, Pembroke HM08, Bermuda.

2. The Filer is a reporting issuer in all of the provinces and territories of Canada and is an SEC foreign issuer within the meaning of section 1.1 of National Instrument 71-102 Continuous Disclosure and Other Exemptions Relating to Foreign Issuers (NI 71-102) and satisfies its continuous disclosure obligations by complying with U.S. federal securities laws as is permitted under NI 71-102. The Filer is not in default of any requirement of securities legislation in the jurisdictions in which it is a reporting issuer.

3. The authorized capital of the Filer consists of:

(a) 1,000,000,000 class A exchangeable limited voting shares, of which there were 10,450,952 class A exchangeable limited voting shares issued and outstanding as of September 13, 2023;

(b) 500,000,000 class A-1 exchangeable non-voting shares (and together with the class A exchangeable limited voting shares, the exchangeable shares), of which there were no class A-1 exchangeable non-voting shares issued and outstanding as of September 13, 2023;

(c) 500,000 class B limited voting shares, of which there were 24,000 class B limited voting shares issued and outstanding as of September 13, 2023;

(d) 1,000,000,000 class C non-voting shares, of which there were 102,056,784 class C non-voting shares issued and outstanding as of September 13, 2023;

(e) 1,000,000,000 class A junior preferred shares (issuable in series), of which there were 98,351,547 class A junior preferred shares, series 1, and 2,108,733 class A junior preferred shares, series 2 issued and outstanding, in each case, as of September 13, 2023;

(f) 1,000,000,000 class B junior preferred shares (issuable in series), of which there were no class B junior preferred shares issued and outstanding as of September 13, 2023;

(g) 100,000,000 class A senior preferred shares (issuable in series), of which there were no class A senior preferred shares issued and outstanding as of September 13, 2023; and

(h) 100,000,000 class B senior preferred shares (issuable in series), of which there were no class B senior preferred shares issued and outstanding as of September 13, 2023.

4. The class A exchangeable limited voting shares are listed on the Toronto Stock Exchange (the TSX) and the New York Stock Exchange (NYSE) under the symbol "BNRE".

Brookfield Corporation

5. Brookfield Corporation is a corporation existing and in good standing under the Business Corporations Act (Ontario). Brookfield Corporation's head and registered office is located at Brookfield Place, 181 Bay Street, Suite 100, Toronto, Ontario M5J 2T3.

6. Brookfield Corporation is a reporting issuer in all of the provinces and territories of Canada and is not in default of any requirement of securities legislation in the jurisdictions in which it is a reporting issuer.

7. The class A limited voting shares of Brookfield Corporation (the Brookfield Class A Shares) are listed on the NYSE and the TSX under the symbol "BN".

8. Brookfield Corporation is the sole beneficial owner of all of the issued and outstanding class C non-voting shares.

The Proposed Transaction

9. On August 18, 2023, the Filer and Brookfield Corporation filed a preliminary short form prospectus on SEDAR+ (the Preliminary Prospectus) with respect to the exchange of up to 40,000,000 Brookfield Class A Shares for class A-1 exchangeable non-voting shares (the Proposed Transaction). Pursuant to the Proposed Transaction, each holder of Brookfield Class A Shares who has properly tendered Brookfield Class A Shares, and who has not properly withdrawn such Brookfield Class A Shares, will receive one class A-1 exchangeable non-voting share for each Brookfield Class A Share tendered, on the terms and subject to the conditions described in the Preliminary Prospectus.

10. The Proposed Transaction was approved by the Governance and Nominating Committee of the board of directors of the Filer, which consists solely of independent directors who hold, in aggregate, less than 0.01% of the Brookfield Class A Shares and none of whom intends to tender any Brookfield Class A Shares in the Proposed Transaction.

11. Insiders of the Filer who hold Brookfield Class A Shares may elect to participate in the Proposed Transaction (each such participating insider, a Participating Insider). As each Participating Insider is a related party, if any of them tenders (and does not withdraw) Brookfield Class A Shares held by them in the Proposed Transaction, the Proposed Transaction, if consummated, would constitute a related party transaction for the purposes of MI 61-101 and would require the provision of a formal valuation and the receipt of minority approval, subject to the availability of applicable exemptions.

12. If Participating Insiders participate in the Proposed Transaction, absent the availability of an exemption, the Filer would be required to obtain a formal valuation in respect of the non-cash assets involved in the Proposed Transaction pursuant to subsection 6.3(1)(d) of MI 61-101. However, the Filer would be entitled to rely on the exemption from the requirement to obtain a formal valuation of non-cash consideration or assets set out in subsection 6.3(2) of MI 61-101 as:

(a) the non-cash assets in respect of the Proposed Transaction (being the class A-1 exchangeable non-voting shares and any class A exchangeable limited voting shares or Brookfield Class A Shares issuable on conversion or exchange thereof) are securities of a reporting issuer;

(b) the final short form prospectus of the Filer and Brookfield Corporation in respect of the Proposed Transaction (the Final Prospectus) will contain a statement that (i) the Filer has no knowledge of any material information concerning the Filer or its securities that has not been generally disclosed, and (ii) to the knowledge of the Filer after reasonable inquiry, none of the Participating Insiders have knowledge of any material information concerning the Filer or its securities that has not been generally disclosed; and

(c) the Final Prospectus will include a description of the effect of the Proposed Transaction on the direct or indirect voting interest of the Participating Insiders.

13. If Participating Insiders participate in the Proposed Transaction, absent the availability of an exemption, the Filer would be required, pursuant to section 5.6 of MI 61-101, to obtain minority approval in accordance with Part 8 of MI 61-101 (the Minority Approval). Subsection 5.3(2) of MI 61-101 would require that the Filer call a meeting of holders of affected securities and send an information circular to those holders.

14. Until the expiry of the Proposed Transaction, it will not be known whether and to what degree Participating Insiders will tender to the Proposed Transaction, and whether the Filer would be entitled to rely on the exemption from the minority approval requirement set out in subsection 5.7(1)(a) of MI 61-101.

15. The Preliminary Prospectus includes a statement that certain insiders of the Filer who hold Brookfield Class A Shares may elect to participate in the Offer and that, as a result, the Offer, if consummated, may constitute a related party transaction for the purposes of MI 61-101. The Preliminary Prospectus also indicates that Brookfield Corporation, as the sole holder of affected securities of the Filer, has provided its consent to the Proposed Transaction.

16. As required by section 611(b) of the TSX Company Manual, at its annual and special meeting on August 17, 2023 (the Meeting), the Filer sought and obtained disinterested shareholder approval from the holders of the class A exchangeable limited voting shares and the class B limited voting shares, each voting as a separate class, to permit the Filer to issue up to a maximum of 101,899,808 exchangeable shares during the twelve-month period from the date of the Meeting in connection with one or more exchange transactions whereby holders of Brookfield Class A Shares would have the option to exchange their Brookfield Class A Shares for newly-issued exchangeable shares on a one-for-one basis (the Reverse Exchange Resolution, and each such exchange transaction, a Reverse Exchange).

17. The information circular in respect of the Meeting (the Meeting Circular) included a statement that insiders of the Filer who hold Brookfield Class A Shares may elect to participate in one or more Reverse Exchange.

18. At the Meeting, 7,466,977 class A exchangeable limited voting shares (or 71.45% of the issued and outstanding class A exchangeable limited voting shares as of the record date for the Meeting) were represented. 5,597,476 class A exchangeable limited voting shares (or 96.98% of the class A exchangeable limited voting shares cast on the Reverse Exchange Resolution) were cast in favour of the Reverse Exchange Resolution, excluding the 1,274,532 class A exchangeable limited voting shares held by insiders of the Filer. All of the class B limited voting shares, which are held by BAM Re Partners Trust, voted in favour of the Reverse Exchange Resolution.

19. An affected security for a related party transaction is defined to mean an equity security of the issuer. The Filer's only class of equity securities are the class C non-voting shares, all of which are beneficially owned by Brookfield Corporation. Accordingly, Minority Approval for the Proposed Transaction would be approval by Brookfield Corporation.

20. Concurrently with filing of the Preliminary Prospectus, the Filer obtained a written consent from Brookfield Corporation evidencing its consent to the Proposed Transaction (the Consent).

21. As Minority Approval for the Proposed Transaction is certain, the Filer wishes for the Consent to evidence receipt of Minority Approval for the Proposed Transaction and not to be required to call a meeting of class C non-voting shares in order to obtain Minority Approval for the Proposed Transaction from Brookfield Corporation.

22. The Filer is a "paired entity" to Brookfield Corporation because (a) the exchangeable shares (i) are exchangeable into Brookfield Class A Shares on a one-for-one basis and (ii) receive distributions at the same time and in the same amounts as dividends on the Brookfield Class A Shares, and (b) Brookfield Corporation owns all of the equity securities of the Filer. As a result of this relationship and the nature of the Proposed Transaction, Brookfield Corporation was actively involved in the Proposed Transaction, and familiar and aware of its terms.

23. Brookfield Corporation, as a shareholder of the Filer, received the Meeting Circular in advance of executing the Consent. Brookfield Corporation is also a co-issuer of the Preliminary Prospectus and was involved in its preparation. Accordingly, Brookfield Corporation has had significant advance notice of the Proposed Transaction.

Decision

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

The decision of the principal regulator under the Legislation is that the Exemption Sought is granted provided that:

(a) Brookfield Corporation does not revoke or withdraw the Consent prior to the expiry time of the Proposed Transaction;

(b) each of the news release announcing the making of the Proposed Transaction and the Final Prospectus discloses that the Filer has applied for the Exemption Sought, and describes the nature of the Exemption Sought and its implications;

(c) Brookfield Corporation receives of a copy of this decision; and

(d) there are no other outstanding approvals required in respect of the Proposed Transaction which must be obtained at a meeting of shareholders of the Filer.