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Economical expecting protection|
(Copyright Thompson’s World Insurance News
The Economical Insurance Group that is confident it will be afforded some of the protections it has asked for in anticipated federal demutualization legislation.
“We have asked, and are fairly confident we will get, two-year takeover protection embedded in the regulations, just like the life companies obtained,” president and ceo Karen Gavan told the Ontario Young Brokers Conference earlier this month in Niagara Falls,
“Demutualization is the right thing for Economical. We have grown far beyond our local mutual company beginnings.
“It will allow us to innovate and compete more successfully,” she said. “That’s good for our broker partners and our customers. It gives them more choice and a financially stronger insurance provider.
“It’s good for our communities. It will allow us to grow and to employ Canadians. It means strength and stability for our industry and our financial sector, and that’s good for all of us.”
She said that as the company waits for the regulations it continues to pursue two tracks for demutualization — an IPO or a sponsored demutualization.
“We need to know what the final regulations will look like before making that decision.”
Ms. Gavan said demutualization will allow the company to gain access to equity capital that will help grow its core business and to be a leader in the consolidation of Canada’s p&c insurance industry.
She added: “By law, by precedent and by our by-laws, mutual policyholders are the owners of the company. They are the only people with the right to vote, the right to receive distributions and the right to surplus on wind up. Cash policyholders are customers, not owners, and are not entitled to the proceeds of demutualization.
More in our June 18, 2012 edition
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