5 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.
The History of Economical's Demutualization Journey
August 11, 2014 - Economical Insurance launches national processing centre in Kitchener
March 31, 2014 - Finance Minister Oliver tables amendments to Insurance Companies Act
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...
December 14, 2010 - Economical announces intention to demutualize