CIPF's coverage is determined after all available assets of the insolvent Member are returned to customers by a trustee/receiver. For bankruptcies of a Member administered under Part XII of the Bankruptcy and Insolvency Act (Canada), the process of returning all available assets of the Member to customers is generally done by a trustee using the 4-steps outlined below.
- At the date of insolvency, CIPF or the trustee/receiver will determine the TOTAL CLIENT NET EQUITY, and the size of the CUSTOMER POOL.
and 
- CIPF/trustee will then determine EITHER:

OR
- CIPF/trustee will calculate the SHORTFALL, if there is one, as:
SHORTFALL = TOTAL CLIENT EQUITY less CUSTOMER POOL
-
CIPF/trustee will allocate the SHORTFALL to each customer in proportion to their claim for net equity.
HERE IS AN EXAMPLE:
CIPF/trustee determines the following:
TOTAL CLIENT NET EQUITY $2.0 BILLION
CUSTOMER POOL $1.9 BILLION
SHORTFALL $100 MILLION or 5% (100 million / $2 billion)
CLIENT 1 HAS CLIENT NET EQUITY OF $2 MILLION:
LOSS ALLOCATED = $100,000 (5% OF $2 MILLION)
CIPF COVERAGE = $1 MILLION
LOSS TO CUSTOMER = NIL
CLIENT 2 HAS CLIENT NET EQUITY OF $20 MILLION:
LOSS ALLOCATED = $1,000,000 (5% OF $20 MILLION)
CIPF COVERAGE = $1 MILLION
LOSS TO CUSTOMER = NIL
CLIENT 3 HAS CLIENT NET EQUITY OF $25 MILLION:
LOSS ALLOCATED = $1,250,000 (5% OF $25 MILLION)
CIPF COVERAGE= $1 MILLION
LOSS TO CUSTOMER NOT COVERED BY CIPF= $250,000
This example is for illustrative purposes and each insolvency can produce different results.
For more information, please refer to the CIPF Coverage Policy.