Definity Financial Corporation has announced its decision to shift its incorporation to the Canada Business Corporations Act (CBCA), effective January 1, 2024.
Definity said the move aims to enhance operational flexibility in pursuit of its goal to rank among the country’s top five property and casualty (P&C) insurance providers.
Corporations incorporated under the CBCA are subject to federal regulations, making it particularly relevant for businesses with operations that extend beyond a single province.
With this transition, Definity will no longer be incorporated under the Insurance Companies Act (ICA), nor will it be bound by its associated leverage restrictions.
Consequently, the financing commitment under Definity’s unsecured committed credit facility will see an automatic increase from $150 million to $700 million, as per the terms stipulated in the facility.
Definity’s operating insurance company subsidiaries, including Definity Insurance Company, Sonnet Insurance Company, and Petline Insurance Company, will continue to be governed by the ICA.
“Continuing to the CBCA puts us on a level playing field with our largest competitors and gives us flexibility to deploy our capital more strategically and efficiently as attractive opportunities come into focus,” said president and CEO Rowan Saunders.
“We are maintaining financial discipline and strong governance practices while building innovative capabilities to position us for success in the future.”
Definity reported over $3.9 billion in gross written premiums for the twelve months ended September 30, 2023. Additionally, it saw approximately $2.6 billion in equity attributable to common shareholders as of the same date.
In its recently released third-quarter financials, Definity’s operating net income sat at $17.6 million, while its gross written premium growth was at 9%.
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