Transaction will involve Canada's first sponsored demutualization
TORONTO, Aug. 9 /CNW/ - Foresters(TM) and Unity Life of Canada today
announced that they have entered into an agreement under which Foresters will
acquire Unity Life and Unity Life will represent Foresters in the Canadian
market as a member of the Foresters group of companies.
Under the agreement, which is subject to approval by regulatory
authorities and eligible voting policyholders of Unity Life, Foresters will
sponsor the demutualization of Unity Life and subsequently subscribe to Unity
Life for common shares, payable in cash. Following the demutualization and the
share subscription by Foresters, Unity Life will become a wholly owned
subsidiary of Foresters.
If the demutualization is approved, eligible Unity Life policyholders
will receive cash payments on demutualization in exchange for their voting
control and their share of the value of Unity Life. Their insurance coverage,
policy values, premiums and policy dividends would be unaffected by
In announcing the agreement, Foresters President and CEO George Mohacsi
said: "This transaction will greatly strengthen Foresters market position in
Canada, which has traditionally been our smallest market. In Unity Life, we
will be acquiring an attractive life insurance operation with strong
marketing, product development and distribution capabilities and a
demonstrated track record of growth. These qualities will enable us to achieve
our strategic goals for Canada of improving our financial results, growing our
membership and strengthening our members' communities."
"We see our partnership with Foresters as a meshing of the complementary
strengths of the two organizations," said Anthony Poole, President and CEO of
Unity Life. "Foresters size, exceptional financial strength and existing
Canadian infrastructure will provide us with access to capital and additional
product and distribution capability that will enable us to accelerate our
Canadian growth strategy."
The value of the transaction, which is subject to independent valuation,
was not disclosed. Based on the experience of other Canadian insurers that
have undergone demutualization, it is expected that the demutualization
process could take up to 12 months.
On completion of the transaction, Unity Life will continue to operate as
a separate entity in the Canadian market under its current leadership as a
member of the Foresters group of companies. Future Foresters sales activities
in Canada will be conducted through Unity Life, and Foresters current Canadian
sales representatives will be offered distribution contracts with Unity Life.
The Unity Life sales organization will be able to market both Unity Life and
Eligible Policyholders to Receive Policyholder Guide
Eligible Unity Life policyholders will receive a policyholder guide
containing full details on the demutualization and will have the opportunity
to vote on the demutualization proposal at a special policyholder meeting.
Generally, to be eligible for cash payments under the demutualization,
policyholders must have one or more eligible policies in force on the August 9
About Unity Life
Unity Life of Canada is a Canadian incorporated mutual life insurance
company owned by its participating policyholders. The company provides
financial security to Canadians through innovative life insurance products and
services. The company originated in 1898 as the Insurance Department of the
Subsidiary High Court of the Ancient Order of Foresters. It was incorporated
as a mutual company in 1934, subsequently changing its name to Toronto Mutual
Life Insurance Company. In 2002, Toronto Mutual Life amalgamated with its
subsidiary, The Western Life Assurance Company, as Unity Life of Canada. Based
in Mississauga Ontario, Unity Life currently has 175,000 policyholders,
$13 billion of insurance in force, and assets of $473 million. Unity Life's
Web address is www.unitylife.ca.
Founded in 1874, Foresters(TM) helps individuals and families achieve
financial security with its innovative portfolio of life insurance products
and annuities. Foresters has assets of more than $5.7 billion with liabilities
of $4.5 billion resulting in a surplus of $1.2 billion (all figures in
Canadian dollars as of December 31, 2006) and an "A" (Excellent) rating by
A.M. Best(*). Foresters shares its financial strength with its members, who are
customers, through complimentary life, health and education benefits that help
its more than 750,000 eligible members and their families in the United
States, Canada and the United Kingdom. Foresters provides opportunities that
inspire its members to make a difference in their communities. Foresters
Equity Services, Inc.(xx) and Foresters Securities (Canada) Inc. are wholly
owned subsidiaries of Foresters that offer investment products in the United
States and Canada respectively. For more information, please visit
Foresters(TM) is a trademark of The Independent Order of Foresters, a
fraternal benefit society, 789 Don Mills Road, Toronto, Canada M3C 1T9.
(*) An "A" (Excellent) rating is assigned to companies that have a
strong ability to meet their ongoing obligations to policyholders
and have, on balance, excellent balance sheet strength, operating
performance and business profile when compared to the standards
established by A.M. Best Company. In assigning Foresters rating,
A.M. Best stated that Foresters rating outlook is "stable", which
means it is unlikely to change in the near future, assuming
Foresters financial strength is maintained and operations grow. A.M.
Best assigns ratings from A++ to F, A++ being superior ratings and
A and A- being excellent ratings.
(xx) Foresters Equity Services, Inc., 6640 Lusk Blvd, Suite A-202,
San Diego, CA. Member NASD and SIPC
For further information:
For further information: For media inquiries, please contact: Foresters,
Irene Shimoda, 1-877-664-6602 (toll free), email@example.com; Unity Life,
Alison Stemp, (905) 219-8008, firstname.lastname@example.org