Negotiations to allocate benefits of demutualization set to begin
WATERLOO, ON, Feb. 24, 2017 /CNW/ - The process for the conversion of Economical Insurance from a mutual company to a share company reached a major milestone on February 22 when the Ontario Superior Court of Justice appointed members to serve on policyholder committees.
The committees can now begin to negotiate the allocation of financial benefits resulting from the demutualization of Economical. The details of the negotiations will be confidential, protected by court order.
In the coming months, Economical will prepare the conversion proposal that outlines how Economical will demutualize into a share company, including the allocation of financial benefits to be negotiated by the policyholder committees. Economical expects to submit the conversion proposal to the Office of the Superintendent of Financial Institutions (OSFI) before February 22, 2018, the one-year anniversary of the appointment of policyholder committees, as required by the demutualization regulations.
With OSFI approval, eligible mutual policyholders will then be able to vote to amend the company's bylaws in a manner which would allow eligible non-mutual policyholders to vote on the conversion proposal itself. If that vote is successful, both eligible mutual and eligible non-mutual policyholders will vote together as a single class to approve the conversion proposal and to proceed with the demutualization. If the vote succeeds, Economical will send the conversion proposal to the Minister of Finance and, once the Minister approves it, Economical will be able to initiate an initial public offering.
"Demutualization remains critical to our long-term strategy and will give Economical the tools it needs to take its place among the leaders of Canada's P&C industry," said John Bowey, Board Chair of Economical Insurance. "It is a future we look forward to sharing with our broker partners, employees, and future investors."
About Economical Insurance
Founded in 1871, Economical is one of Canada's leading property and casualty insurers, with $2.0 billion in premiums during 2016 and $5.4 billion in assets as at December 31, 2016. Based in Waterloo, this Canadian-owned and operated company services the insurance needs of more than one million customers across the country. Economical conducts business under the following brands: Economical Insurance, Economical, Western General, Economical Select, Perth Insurance, Sonnet, Petsecure, Economical Financial, and Family Insurance Solutions.
SOURCE Economical Insurance
For further information: Doug Maybee, Manager, Public and Media Relations, Economical Insurance, (T) 519.570.8249, [email protected]