What is demutualization?

Demutualization is when a mutual company - like Economical - converts to a share company.

Prior to our recent IPO, Economical was a mutual company. Unlike most companies which are share companies, mutual companies do not have shareholders who own shares of the company. Demutualization is the process where a mutual company converts into a company with shareholders. We will continue to provide home and auto insurance for personal and business needs, but after demutualization we no longer have mutual policyholders and our shareholders will have governance rights.

What is the process for demutualizing?

The process to demutualize is set out in regulations published by the federal Department of Finance.

Our demutualization has four phases:


Board decision

The Economical Board of Directors initiates the demutualization process on November 3, 2015.

First special meeting

Eligible mutual policyholders voted in favour to negotiate with eligible non-mutual policyholders on allocation of benefits on December 14, 2015.

The conversion plan

On June 26, 2018, Economical announced it had submitted its conversion plan, a detailed document that outlines how the company will demutualize, to its principle regulator. The conversion plan includes the allocation of financial benefits negotiated by the policyholder committees.

Second special meeting

On March 20, 2019, eligible mutual policyholders supported a change to the company by-laws to allow eligible non-mutual policyholders to vote at a third and final special meeting.

Third special meeting

On May 20, 2021, eligible policyholders supported the resolution to demutualize and set the stage for Economical to seek the approval of the federal Minister of Finance to demutualize.

Completion of Demutualization

The Minister of Finance has approved our Conversion Plan, which became effective on November 23, 2021. Economical has now demutualized.

To read the regulations in full, visit the Government of Canada's website for federal laws. The regulations are called Mutual Property and Casualty Insurance Company with Non-mutual Policyholders Conversion Regulations.

Am I eligible?

Eligibility depends on holding policies of Economical Mutual Insurance Company (including those sold by Family Insurance Solutions and Western General).

There are two types of eligible policyholders: eligible mutual policyholders and eligible non-mutual policyholders.

  • An eligible mutual policyholder is a person who holds an Economical mutual policy if he or she held it on November 3, 2015 (the date the board decided to proceed with demutualization).
  • An eligible non-mutual policyholder is a person who holds an Economical non-mutual policy and has done so for the 12-month period ending on November 3, 2015, or meets the special circumstances defined below.

In Spring 2016, Economical sent a letter to each eligible policyholder that describes the demutualization process and states if the person is an eligible mutual policyholder or an eligible non-mutual policyholder. In March 2021, all eligible policyholders were sent an information circular and proxy form to vote at the third Special Meeting held on May 20, 2021.

What are the special circumstances to be an eligible non-mutual policyholder?

There are special circumstances where a person who holds a non-mutual policy will be eligible. These circumstances are fixed and cannot be changed or expanded.

  1. A person added to a policy that was already in force for at least 12 months

    A policyholder can be eligible even if they did not hold their policy for the entire 12-month period, so long as the policy they held on November 3, 2015 was at least 12-months old at the time.

    Example (illustration only): sometime during the year from November 4, 2014 to November 3, 2015, you bought a house with another person. The other person has had an existing Economical home policy for many years and you were added as a joint policyholder and held the policy on November 3, 2015. You and that other person are jointly eligible under this policy.

  2. A person who changed Economical policies part way through the 12-month period, so long as they changed to a "similar" policy

    A policyholder can be eligible even if they changed Economical policies during the 12-month period before November 3, 2015, so long as they held two or more "similar" Economical policies during that 12-month period which added up to 12 months of coverage.

    A policy is "similar" to another policy if both policies are personal property policies, both policies are auto policies or both policies are commercial property policies.

    Example (illustration only): you insured your house with Economical for years. Sometime during the year from November 4, 2014 to November 3, 2015 you moved to a different province and Economical replaced your existing policy with a new policy for the new home.

  3. 12-month policyholder with small gaps in coverage

    A policyholder can be eligible (including in the above circumstances) even if there are small gaps in coverage (max. 30 days). A gap in coverage occurs when none of the applicable policies are in force.

    Example (illustration only): you have insured your business with Economical for a few years. However, you were a little late with your renewal and as a result there was a small gap in coverage (less than 30 days).

Do I have to continue to hold an in force policy to remain eligible?

The negotiated allocation does not require an eligible policyholder to continue holding a policy to receive benefits. The allocation as drafted will treat the person as eligible, even if they now cancel or lapse their policy or otherwise are removed as a named insured from their policy.

Nevertheless, Economical cannot guarantee receipt of benefits in this or any circumstances. The demutualization process is still not complete. Ultimately, receipt of benefits depends on final approval of the demutualization and the conversion plan (without change) by the Minister of Finance. Accordingly, eligible policyholders should consider holding their policy or policies throughout the process as it will ensure eligibility under demutualization for any benefits distribution.

Read more information about eligibility.

If you have questions or concerns about how eligibility applies to you, please contact us.

Back to Top