Economical Insurance announced that its 142nd Annual General Meeting will be held June 24, in Kitchener – but it won’t decide its future on demutualization.
According to the Economical, mutual policyholders will hear from management, receive the financial statements for the year ended December 31, 2013, and vote on the appointment of the external auditor and the election of directors.
But it won’t be voting on demutualization.
As previously reported, Economical is waiting for regulations from the federal Department of Finance that are required in order to proceed with the company's previously announced demutualization process. Accordingly, there will not be a vote by mutual policyholders on a demutualization proposal at the June 24 AGM.
In 2010, Economical announced its decision to become the first federally-regulated mutual property and casualty insurance company to pursue demutualization.
The legislation affecting demutualization, Bill C-31, includes amendments to the Insurance Companies Act (Canada) (ICA) that are required to broaden the Governor in Council’s authority to make regulations under the act.
These powers will support the eventual implementation of the regulations that are needed to allow federally regulated mutual property and casualty (P&C) insurance companies to demutualize.
As indicated in the February Budget announcement, the legislative and regulatory changes the Department of Finance intends to introduce will be aimed at establishing a P&C demutualization framework that “provides for an orderly and transparent process and ensures that policyholders are treated fairly and equitably,” according to the Finance Minister’s office. (continued.)
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John Bowey, chair of Economical’s special committee on demutualization, has been an active participant in that process since it began, and views the proposed legislative amendments “as a welcome sign of progress.”
The proposed amendments to the ICA indicate that the courts may play a formal role in the eventual demutualization framework, although the ultimate nature and scope of that role will not be known until draft regulations are released.
The company's 2014 management proxy circular has been mailed to mutual policyholders, along with its annual report for 2013. Attendance at this AGM is by invitation only.
Founded in 1871, Economical Insurance is one of Canada's leading property and casualty insurers, with $1.9 billion in annual premium volume and $5.0 billion in assets as at March 31.
Based in Waterloo, the group has more than one million customers across the country. Economical Insurance conducts business under the following brands: Economical Insurance, Economical, Western General, Economical Select, Perth Insurance, Family Insurance Solutions, Federation Insurance and Economical Financial.
