OSFI publishes demutualization guide for insurance providers
Published: December 28, 2015
Updated: July 24, 2018
Author: Luke Jones
CATEGORY: Industry News
The Office of the Superintendent of Financial Institutions (OSFI) has published a demutualization guide on its website aimed at property and personal insurance providers in Canada. The guide is in tandem with the allowance of companies to demutualize and become public and gives those providers a process for passing the demutualization process correctly.
The “Guide for the Demutualization of Mutual Property and Casualty Insurance Companies with Non-mutual Policyholders” details the information that must be provided by companies looking to demutualize and give administrative guidance.
The guide is divided into four parts:
• Part I provides an overview of the demutualization process set out in the ICA and Regulations;
• Part II sets out the information that the MPCC is expected to submit to OSFI in connection with each of the four approvals that are required as part of the demutualization process;
• Part III provides administrative guidance relative to the demutualization process and the related approvals; and
• Part IV provides administrative guidance relative to the role of the independent actuary retained for the purpose of the demutualization, as well as the appointed actuary of the MPCC.
“OSFI will generally evaluate the applications for approval against the criteria in this Guide; however, as the particular circumstances and facts of each demutualization are different, this Guide should not be viewed as an exhaustive set of criteria and information requirements,” the guide said. “OSFI officers from the Legislation and Approvals Division, Insurance Supervision Sector and the Actuarial Division jointly review and assess each application for the demutualization of an MPCC.”
One Ontarian based insurance company known to moving towards demutualization is Economical Insurance, a leading Canadian provider of property and personal coverage. The company announced its decision early in November and since then has seen its plans to demutualize approved by policy holders, paving the way for demutualization in 2016.