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Economical Insurance gets policyholders' approval to demutualize

Published 2015-12-14, 08:25 p/m
© Reuters. Economical Insurance gets policyholders' approval to demutualize

Dec 14 (Reuters) - Economical Insurance's mutual
policyholders voted on Monday to allow the Canadian property and
casualty insurance firm to demutualize.
Demutualization is a regulated process in which a mutual
insurance company converts to a share company with share capital
and voting shareholders.
Mutual policyholders of the firm voted in favor of
commencing negotiations with non-mutual policyholders on the
allocation of demutualization benefits, at a special meeting in
Kitchener, Ontario, the firm said.
Economical Insurance in February welcomed rules released by
the government of Canada that paved a path for it to potentially
seek a public listing or a sale.
Many of Canada's largest life insurance firms went through
the process in the 1990s, but until now regulations did not
exist for property and casualty insurers to follow that path. In
2011, the Canadian government began a process to create a
regulatory framework to allow property and casualty insurers to
demutualize.
Economical said it would prepare and mail a formal notice to
all eligible policyholders which has to be approved by the
federal regulator, the Office of the Superintendent of Financial
Institutions.

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