August 11, 2017 - Since their appointment in February, the policyholder committees have begun the process to negotiate the allocation of benefits resulting from a demutualization of Economical. As Economical is the first insurance company proceeding to demutualize under new federal regulations, these negotiations are breaking new ground. The committees, along with their appointed counsel and advisors, have been working diligently to understand the complex issues that affect the allocation of financial benefits that would result from a demutualization of a 146-year-old company.
Economical has been actively providing information to all parties so that the committees can negotiate from an informed position. Each policyholder committee has hired financial advisors and actuarial consultants who, along with appointed counsel, will assist in the negotiations and work to promote a demutualization process that is efficient, effective, and reaches completion. They have also received information from the appointed actuary and independent actuary, who are required to assess the allocation the committees negotiate and provide fairness opinions.
The policyholder committees must reach an agreement on allocation, and the appointed and independent actuaries must provide their opinions on that allocation, before Economical can submit its conversion proposal to OSFI. The conversion proposal must be submitted by February 22, 2018*.
The details and substance of negotiations will remain confidential pursuant to court order.
*In January 2018, OSFI extend this deadline to June 30, 2018.