Negotiating the allocation of benefits
Phase 3 of the demutualization process involved two policyholder committees, one representing eligible mutual policyholders and one representing eligible non-mutual policyholders, negotiating the allocation of financial benefits from demutualization. These committee members, along with lawyers or “counsel” to assist them, were selected and appointed by the Ontario Superior Court of Justice.
These negotiations took place over the course of months. The confidentiality of the committees' negotiation is strictly protected by court order. This means that Economical, the members of the policyholder committees, and the policyholder counsel are not permitted to discuss or comment on the negotiations or the positions of the parties.
This confidentiality is key to the success of the negotiations. It allowed each committee the opportunity to consider their positions and the best outcome on behalf of their policyholder class without the risk of their discussions and strategy becoming public.
After the allocation was negotiated, Economical completed the conversion plan (with information relevant to the negotiated allocation) and submitted it to OSFI for its review, along with required actuarial opinions.
Eligible policyholders will have the opportunity to review the conversion plan, including the negotiated allocation, prior to any vote.