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What Does Economical's Plan for Demutualization Mean to Me

Mar 4, 2015 11:19:49 AM

economical-lawn-sign5 years ago Economical Insurance announced plans to pursue demutualization and with the federal government's release of new draft regulations last Saturday it looks like that journey may be coming close to an end.

The Mutual Property and Casualty Insurance Company with Non-mutual Policyholders Conversion Regulations that came out on Saturday include rules for how property and casualty insurance companies need to proceed when converting from a company owned by mutual policy holders to a company with common shares. These regulations should serve as a guideline of what Economical will need to do in order to make this transition.

Economical Insurance has outlaid the next steps involved in the process to demutualize the company in their March 2nd, 2015 news bulletin  Economical provides overview of draft P&C demutualization regulations.

What Could this Transition Mean for Economical Insurance Policy Holders

We do not have any company information on how this will all play out, but historically when a demutualization occurs, there is sometimes some distribution of funds between mutual owners. In this case, mutual owners could include Economical Insurance home policy holders, but since these funds have been accumulated over the 143 years that Economical Insurance has been in business, there is much dispute about where that money will end up. 

As an Economical Insurance broker, Armour does not have any inside information on the transition process, and are not able to answer any questions about it, but Economical has been documenting their journey and providing FAQs and public information on their "Get The Facts" website.

Economical Policy Holders click here for the most up to date information and FAQ's on Economical's demutualization plans.

The History of Economical's Demutualization Journey

Insurance today provided an overview of the draft regulations for Mutual Property and Casualty Insurance Company with Non-mutual Policyholders Conversion recently released by the federal Department of Finance. 

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Economical Insurance today welcomed a significant milestone on the path to demutualization with the federal Department of Finance’s release of draft regulations that are intended to allow federally regulated mutual property and casualty insurance companies to demutualize. Read More...
Economical Insurance, one of Canada’s leading property and casualty insurers, achieved a major milestone in its business transformation program with the opening of its new national processing centre at the company’s Riverbend facility in Kitchener, ON. 

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Economical Mutual Insurance Company today announced that Bill C-31 , the 2014 budget implementation bill, has recently received Royal Assent enacting, among other things, amendments to the Insurance Companies Act (Canada) (ICA) to broaden the Governor in Council’s regulation-making authority under the act. 

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Economical Insurance today welcomed an important step in its efforts to demutualize, as Minister of Finance Joe Oliver has tabled Bill C-31 to implement the 2014 Federal Budget. Read More...

The Economical Mutual Insurance Company, one of Canada’s largest property and casualty insurance providers, today announced that its Board of Directors intends to pursue a process to convert the Company from its existing mutual ownership structure. 

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Rob Stevenson

Written by Rob Stevenson

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