Negotiating the allocation of benefits
Phase 3 of the demutualization process involves 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 will take place over the course of months and may not finish until the end of this year. During that time, there may be infrequent updates on the progress of demutualization. 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 allows 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 is negotiated, Economical will complete the conversion proposal (with information relevant to the negotiated allocation) and submit it to OSFI for its review, along with required actuarial and expert opinions. The deadline for submission to OSFI is Feb 22, 2018.
Eligible policyholders will have the opportunity to review the conversion proposal, including the negotiated allocation, before they vote on the approval of the conversion proposal and demutualization.