These questions and answers are provided for general information purposes only and do not constitute legal, business or other general advice. Persons seeking advice with regard to legal, business or other matters should contact a licensed professional. Please review the terms and conditions for use of this site.

We will update our questions and answers as events occur.

General questions about demutualization

  1. What is demutualization?

    Economical is a mutual company. This means we do not have any shareholders. Instead, we have mutual policyholders. Demutualization is the process where a mutual company converts into a share company. After the demutualization, there will be shareholders and regular policyholders, but no mutual policyholders.

  2. What are the advantages of demutualizing?

    Economical believes demutualization will help it compete with other insurance companies, many of which are share companies. Mutual companies have limited options to raise capital for their business and so Economical is limited in its ability to compete with other insurers.

    After demutualization, Economical would be a share company and have more access to the funds it needs to grow. Economical could use these funds to strengthen its finances, acquire other companies, or invest in its business.

  3. Why is this process taking so long compared to other demutualizations / transactions?

    This process is complex and very different from a typical IPO. Significantly, our demutualization requires broad stakeholder participation and has a number of procedural checks and balances which make it much more complex than other typical corporate transactions. Because we are the first company to follow this complex process, we have no benchmarks to follow, making it difficult to provide accurate estimates of timing.

  4. Why is Economical Demutualizing?

    In 2015, Economical decided to pursue demutualization — the process to become a public share company.

    Demutualization is an exciting opportunity for Economical to gain access to the capital that will allow us to invest in our business and innovation, acquire other companies, and strengthen our financial position for long-term success.

    If you would like lean more about Economical Insurance, we would encourage you to use the resources available on our corporate site including information about our management team, our heritage and future focus, our business performance, our products and services, and what we’ve been up to most recently.

  5. What factors impact the timing of an IPO?

    As we work to complete the remaining steps of the regulatory requirements for demutualization, there are three key areas we are focusing on to increase the chances of a successful IPO, and a strong Economical after:

    1. Improving our performance. Our 2020 financial results reflect the efforts we made to turn around our financial performance. The momentum we have built in our operations through our transformation initiatives and strategic investments has continued into 2021.
    2. Completing regulatory steps. We have called the final special meeting and continue to advance steps to establish our footing as a public company.
    3. Identifying favourable capital market conditions to support a successful IPO. This is a necessary condition to ensure we begin life as a public company on a strong footing and keep our trajectory to become a public company on the right track.

    In February 2021, the Chair of the Economical Board of Directors provided an update on the momentum we are building in each of these areas.

  6. How will the outbreak of COVID-19 affect our demutualization?

    The outbreak of COVID-19 has adversely affected economic and capital market conditions in Canada and around the world.

    To manage and minimize the impact of these changes on our business, Economical has initiated a comprehensive and highly responsive business continuity plan to ensure we meet the needs of our policyholders, broker partners, and employees. We continue to be thoughtful, measured, and adaptable through these new realities.

    We are actively managing the potential impacts of the current situation on our demutualization process. We continue preparing for the next steps of the regulatory approval process and holding the third special meeting. At the same time, our Board and management is actively monitoring capital market dynamics to determine any impacts to our planned initial public offering. For more details, please review the update from March 24, 2021.

    As we manage through these circumstances, we will keep stakeholders apprised of any developments in our demutualization process on this website.

Third special meeting

  1. When is the third special meeting?

    • The third and final special meeting on demutualization is scheduled for May 20, 2021. More information on the meeting is available here.
  2. Why is the third special meeting being held online?

    • In light of the ongoing pandemic, we have taken concrete steps to ensure we provide eligible policyholders with safe access to the third special meeting, while complying with expected public health restrictions on large gatherings.
    • As we did with our 2020 AGM, we secured permission from the court to use a virtual meeting format for our upcoming third special meeting.
  3. How do I attend or participate in the virtual meeting?

    • The meeting will be hosted in a virtual format including online voting capability and the ability to post questions into our live online forum.
    • Eligible policyholders will have the option, if they choose, to submit their vote by phone, postal mail or online and share in advance any questions they wish to pose related to demutualization. Economical will respond directly to questions asked by eligible policyholders and will consider including relevant and appropriate questions in the special meeting as time permits.
    • Eligible policyholders can also choose to vote on the day of the meeting which is now scheduled for 9:00 a.m. ET on May 20, 2021. Once they have used the appropriate login information to the online link provided, eligible policyholders or their duly appointed proxyholders can register their vote, attend the meeting online, and pose questions to the meeting.
    • Once the vote is completed, the results of the resolution will be announced.
    • Click here for more detailed information on how you can vote and participate in Special Meeting Three.
  4. Is the online meeting secure? What steps have been taken to ensure that everyone has one vote that is counted once and accurately reflected in the result?

    • In setting up this virtual meeting, Economical has enlisted the support of industry leading providers who offer secure and accurate online shareholder meetings to clients across North America.
    • Secure platform access, accuracy and transparency are crucial when it comes to matters of ensuring our meeting adheres to the highest standards of corporate governance.
  5. How many votes are required to allow the demutualization resolution to pass?

    • In order to continue the demutualization process, not less than two-thirds of eligible policyholders voting in person or by proxy at the Special Meeting must approve the Conversion Approval Resolution, with a minimum of 500 eligible policyholders voting.
    • If the Conversion Approval Resolution is not passed, the demutualization process will terminate.
  6. If there is no "in-person meeting" how do I vote and participate?

    • The process for voting and participating in the meeting is somewhat similar in that you can submit your vote ahead of time by mail, online or by phone.
    • By using the instructions provided on the materials you received by postal mail or email you can submit your vote and questions you would like to have addressed in the meeting.
    • More details on how to do this is available on our website at or review the step by step guidelines provided in the first page of the Circular you received in the mail or via email.
  7. Is Economical really prepared to have this meeting online and be successful in this format?

    • Special meeting three is different because there is no physical event. This is being done so that we adhere to the public health and safety requirements associated with the pandemic. The online meeting will be accessed over the internet and allow eligible policyholders to connect with the meeting, vote, and pose questions all from the safety of their own home or office.
    • More information on how the meeting works can be found online here and in the instructions that come with the circular and proxy material provided to each eligible policyholder.
    • Those who login to the site as an eligible policyholder can also access a blank proxy form and additional resources and information on our virtual special meeting.
  8. How do we know if the online vote count is accurate?

    • The platform for hosting our meeting includes providing every eligible policyholder with individualized control numbers so that their vote is unique to their policy and is accurately recorded and tracked in our online database.
    • A full audit trail of voting activity will also be provided to the company.
  9. What if I send my vote in advance by phone, postal mail or through the online voting system?

    • All votes submitted either by phone, mail, in advance by online submission or live during the meeting will be captured and tabulated in our results.
    • To ensure mail in votes as captured and included in our meeting results we are asking eligible policyholders to submit phone, mail in, or advance online ballots no later than May 10, 2021.
  10. What if I have misplaced, not received or lost my voting information?

    • If you are an eligible policyholder and time permits, you can ask our Call Centre to have the required information re sent to you during the period ahead of Special Meeting Three.
    • If time does not allow for you to have materials resent, we recommend that you go online to, login to your account and access the policyholder circular and, for mail-in ballot, a blank proxy form that you can submit ahead of the meeting.
    • You may also choose to go online at the time of the meeting on May 20th at 9:00 a.m. ET and choose to vote and participate in the live meeting itself.
  11. Who will vote at the third special meeting?

    All eligible policyholders, both mutual and non-mutual, will participate in the third special meeting. With approximately 630,000 eligible policyholders, it is anticipated that this will be one of the largest stakeholder meetings in recent Canadian history.

  12. What happens at the third special meeting?

    At the third special meeting, all eligible policyholders, both mutual and not mutual, will be asked to approve the Conversion Plan that will authorize Economical to apply to the Minister of Finance for approval to demutualize.

  13. What is the Conversion Plan?

    The conversion plan is the detailed document that outlines how Economical will transition from a mutual company to a widely-held company with common shares. Available as Appendix “A” of the 2021 Special Meeting of Eligible Policyholders Information Circular, the conversion plan details the creation of a new corporate structure for the company, outlines the immediate effects of our demutualization, and provides a valuation of the company that was done in the spring of 2018.

    The circular also provides detailed information on the allocation of financial benefits as negotiated by the policyholder committees, including the rationale used to guide the negotiations.

  14. Is Economical a public company after the third special meeting?

    No. After an affirmative vote at the third special meeting, Economical will apply to Minister of Finance for approval to demutualize. Once approval is received, Economical can finalize its process to become a public company and have its shares listed on a stock market exchange.

Second special meeting

  1. When was the second special meeting?

    The second special meeting was held on March 20, 2019.

  2. Who was involved in the second special meeting?

    Only eligible mutual policyholders could participate in the second special meeting. Eligible non-mutual policyholders will have the opportunity to participate in the third special meeting.

  3. What was voted on at the second special meeting?

    Economical’s previous by-laws stated that only a mutual policyholder (or their proxyholder) may vote at Economical’s annual and special meetings. Eligible mutual policyholders voted on the By-law Amendment Resolution, which was required to allow eligible non-mutual policyholders to vote at the third special meeting and continue the demutualization process.

    At the second special meeting, eligible mutual policyholders overwhelmingly supported changing the by-laws.

Demutualization process

  1. What happens in the demutualization process?

    Demutualization is a four-phase process:

    Phase 1: Board decision to proceed with the demutualization process. The Economical Board of Directors initiated the process by passing a formal resolution recommending demutualization on November 3, 2015.

    Phase 2: First special meeting of eligible mutual policyholders. After the board resolution, there must be a meeting of eligible mutual policyholders to vote on whether to move to the next phase of the demutualization or terminate the process. On December 14, 2015, the eligible mutual policyholders of Economical voted to move to the next phase — negotiations over how to divide up (or “allocate”) the benefits from demutualization. As a result of this vote, a formal notice was mailed to eligible policyholders (both mutual and non-mutual). The notice describes the demutualization process and how eligible policyholders participate.

    Phase 3: Policyholder committee negotiation and conversion plan development. Two policyholder committees were formed: one representing eligible mutual policyholders and one representing eligible non-mutual policyholders. These two committees, with the assistance of court-appointed lawyers, negotiated the method of allocating the financial benefits from demutualization and whether any benefits will be provided to persons other than eligible policyholders. This allocation was incorporated into the conversion plan, which Economical prepared. The conversion plan contains all of the detailed terms of the company’s demutualization, including the non-allocation aspects of the demutualization. The conversion plan (including the committees’ determination of allocation) was submitted to the Office of the Superintendent of Financial Institutions (OSFI) for its review, along with required actuarial opinions.

    Phase 4: Second special meeting of eligible mutual policyholders and third special meeting of all eligible policyholders. After OSFI completed its review of the conversion plan, Economical called the second special meeting of eligible mutual policyholders. On March 20, 2019, eligible mutual policyholders continued the demutualization process by supporting changes to Economical by-laws to permit eligible non-mutual policyholders to vote at the third special meeting. These by-law changes were crucial because demutualization can only occur if there is a vote to approve the conversion plan that includes eligible non-mutual policyholders.

    The third special meeting is being held where all eligible policyholders can vote to approve the conversion plan and to authorize Economical to seek final approval from the federal Minister of Finance.

    After the four phases, the Minister of Finance decides whether to approve the conversion plan, allowing Economical to demutualize and begin the process of listing our shares on a public stock exchange.

    Here is a more detailed description of the four phase process of demutualization.

  2. What steps have been completed in Economical’s demutualization?

    Our demutualization journey is a long and complex one, and we are now in the fourth phase of the process. We are proud of the achievements we have made, and are excited to continue moving forward and unlocking our full potential as a leading Canadian property and casualty insurer. To learn more about our demutualization progress, please click here to explore our interactive timeline.

  3. Are there any alternatives to demutualization?

    Alternatives to demutualization considered by the Board are listed in the policyholder information circular. The Board concluded that the alternatives do not give Economical the advantages of demutualization, and none of them result in benefits being distributed to eligible policyholders or the new charitable foundation.

Committee negotiation process

  1. How are the courts involved in the demutualization process?

    The Ontario Superior Court of Justice supervised the policyholder committee process. The court was responsible for appointing the members of the policyholder committees who negotiated the allocation of benefits from demutualization, along with two law firms who assisted them in the negotiations. The court made these appointments on September 22, 2016 and February 22, 2017. McCarthy Tetrault LLP was appointed to represent the eligible mutual policyholders and Thornton Grout Finnigan LLP was appointed to represent eligible non-mutual policyholders. Our policyholder committee process page has more details on the committee process and negotiations.

  2. What information is available about the negotiations?

    During the negotiations, Economical provided general progress updates. However, the negotiation process was governed by a confidentiality order that required information about the negotiations, including information about the work of the policyholder committees, be kept confidential. Under this court order, the members of the policyholder committees were not permitted to discuss or comment on the negotiations with anyone not directly involved, including with their friends and family.

    Details of the conversion plan, including an overview of the negotiations, are available in the policyholder information circular.

  3. How were the policyholder committee members selected?

    The court appointed the policyholder committee members on the recommendation of policyholder counsel. There were nine members of the eligible mutual policyholder committee and six members of the eligible non-mutual policyholder committee. More details are available on the policyholder committee process page.

  4. What was the company's role in the policyholder committee negotiations?

    The policyholder committees, with the assistance of policyholder counsel, negotiated and determined the allocation of benefits resulting from demutualization. Economical provided support and information to the policyholder committees, but did not take part directly in the negotiations.

    Economical wanted the negotiations to succeed and result in an allocation that met legal and actuarial requirements that will be approved by regulators and eligible policyholders in the policyholder votes. Economical assisted both committees equally and provided the same information to both.

  5. Why was the OSFI extension necessary?

    The process laid out in the regulations was unprecedented and extremely complex. In addition to an agreement by the committees, the process requires input from actuarial, legal, financial, and market experts. Simply put, all the participants needed more time to finalize the agreement and to fully document both it and our detailed submission to OSFI.

  6. Are the policyholder committee members still involved in the process?

    The policyholder committees have been disbanded pursuant to the regulations.

Eligibility to participate in demutualization

  1. Who are eligible policyholders?

    Eligibility depends on holding policies of Economical Mutual Insurance Company (including those sold by Family Insurance Solutions and Western General). Policies issued by Perth Insurance, Waterloo Insurance (Economical Select), Federation Insurance, or Missisquoi Insurance (Economical in Quebec) are not taken into account.

    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 Economical Board of Directors 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.

    Economical mailed a letter to each eligible policyholder (both mutual and non-mutual). The letter describes the demutualization process and states if the person is an eligible mutual policyholder or an eligible non-mutual policyholder. If you have not received a letter from us and you believe you meet the criteria for being an eligible policyholder, contact us as at or 1-866-302-6046.

    If you have received a letter from us, you can log in and set up your demutualization account.

    Read more information about eligibility.

  2. What are the special circumstances for eligible non-mutual policyholders?

    There are special circumstances where a person who holds a non-mutual policy will be eligible even if they do not meet the eligibility requirements above. 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.
    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.
    3. A 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 (to a maximum of 30 days). A gap in coverage occurs when none of the applicable policies are in force.
  3. 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 approvals of the demutualization and the conversion plan (without change) by eligible policyholders in a policyholder vote and 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.

    Economical mailed a notice to eligible policyholders describing the demutualization process and informing them of their eligibility. If you have not received a letter from us and you believe you meet the criteria for being an eligible policyholder, contact us as soon as possible at or 1-866-302-6046.

    If you have received a notice from us, you can log in and set up your demutualization account.

  4. I have not received a letter yet. Does that mean I am not eligible?

  5. How do eligible policyholders participate?

    Eligible policyholders have a significant role in the demutualization process:

    1. They had the opportunity to apply to serve on the policyholder committees that represented eligible mutual and eligible non-mutual policyholders to negotiate and determine the allocation of demutualization benefits (i.e., how to divide the financial benefits).
    2. They have the right to vote for or against the conversion plan in the final policyholder vote.
    3. They will receive financial benefits (e.g., shares or cash) in accordance with the negotiated allocation and the conversion plan, if the demutualization is approved.

    You can subscribe for updates on demutualization to stay up to date on the latest developments.

  6. What types of policies are relevant in determining whether a person is eligible?

    All types of policies that Economical Mutual Insurance Company issues are being taken into account in determining eligibility, including auto, property, or commercial policies and those sold under the Family Insurance Solutions and Western General brands. This does not include policies issued by our subsidiaries (Perth Insurance Company, Waterloo Insurance Company [also known as Economical Select], The Missisquoi Insurance Company, and Federation Insurance Company of Canada).

Benefits of demutualization

  1. What are demutualization benefits?

    Demutualization benefits are the cash and shares that would be distributed to eligible policyholders if there is a demutualization of Economical. These cash and shares do not come from the assets of Economical. The shares are newly created during demutualization and the cash would be from selling shares in our new holding company to investors in an initial public offering (IPO).

  2. What amount of demutualization benefits does each policyholder receive? Do all policyholders receive the same amount?

    The amount of benefits individuals receive will depend on various factors including the total amount of benefits to be distributed, the total number of eligible policyholders in each class of policyholder, and the length of time a policyholder held a policy with Economical.

    Details on the allocation of financial benefits, as negotiated by the policyholder committees, is available in the policyholder information circular. The exact value of the benefits will not be known until demutualization is essentially complete and will be distributed after our initial public offering.

  3. How was the allocation of benefits decided?

    The allocation was negotiated by the two policyholder committees, one representing eligible mutual policyholders and one representing eligible non-mutual policyholders. Each committee was represented by their own counsel as well as their own legal, financial, and actuarial experts. After a complex and extensive negotiation, the outcome was reviewed by both the Appointed Actuary of Economical and an Independent Actuary, both who wrote opinions stating that the benefits and method of allocation are fair and equitable.

    You can read more about the allocation of financial benefits, including an overview of the negotiations, in the policyholder information circular.

  4. Can the negotiated allocation be changed?

    No, the negotiated allocation cannot be changed. It has been approved by the policyholder committees, and also reviewed by our regulator. The policyholder committees have now been disbanded, and there is no opportunity to reopen negotiations.

  5. When will I choose whether I want cash or shares?

    Later in the demutualization process (after all three special meetings), eligible policyholders will be sent an Election Form. This will allow certain eligible recipients to indicate their preferences to receive their demutualization benefits in the form of common shares or cash. This election does not guarantee that eligible recipients will receive their preferred form of demutualization benefits.

  6. When will I receive my benefits?

    There are many events that still need to happen before Economical could have an IPO. If the vote is successful at the third, and final, special meeting, OSFI will review our application to the Minister of Finance for approval to demutualize.

    Only after the Minister of Finance approves can Economical become a public company. Due to the number of steps and variables, a timing estimate for the IPO cannot be given.

  7. What will determine the actual value of my benefits?

    The value of benefits that have been allocated to you will be determined by the share price at the time of IPO. The actual value of our IPO won’t be known until the time of the transaction, and will depend on many factors.

  8. What do you expect the actual IPO value to be?

    We expect investor demand will depend on numerous factors, including market conditions, company performance, and overall outlook at the time of IPO. The valuation report has no bearing on our future IPO value.

  9. I think I'm a "Government" as defined in the policyholder information circular. What should I do?

    If you aren’t sure whether you are a “Government” you should consult your own legal advisors. It depends on the specific facts and circumstances. We are not able to give you that advice.

  10. What is the share selling service?

    The share selling service provides eligible policyholders who receive shares with a convenient and low-cost way to sell their shares. We expect the service will be made available 180 days after the date of the IPO, and will remain available for two years after the IPO. You can read more about this service in the policyholder information circular.

Charitable Foundation

  1. What led to a charitable foundation being created?

    Recognizing the contributions that Economical’s subsidiaries and ineligible and former policyholders have made to the value of Economical, the policyholder committees agreed to make a meaningful allocation to a new charitable foundation, to be known as the Economical Insurance Heritage Foundation.

    The creation of this foundation will create a positive, enduring legacy of this demutualization and the people who participated in it.

  2. What is the mandate of the foundation?

    The mission of the Foundation is to honour the Economical policyholders and employees past and present by working to have the greatest impact on our communities.

  3. How will the foundation be funded?

    The two policyholder committees negotiated a meaningful contribution from our demutualization to create this new charitable foundation, starting an important legacy for our policyholders and demutualization. The foundation will be allocated $100 million of demutualization proceeds upon successful completion of the process.

    We expect the charitable foundation will also be able to accept additional donations. More information will be available in the future.

Policy changes and impact on insurance coverage, insurance claims, or insurance benefits

  1. Who do I contact to make a change to my policy?

    Changing your policy is the same as it was before demutualization. You should contact your broker to discuss any policy changes.

  2. How will demutualization affect my insurance coverage, claims, or the payment of benefits?

    The demutualization process does not impact coverage, ongoing claims for insurance benefits, ongoing payments of accident or insurance benefits, or the other terms under your insurance policy.

  3. What will happen if I cancel my policy or move to a different insurance company?

    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 approvals of the demutualization and the conversion plan (without change) by eligible policyholders in a policyholder vote and 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..

General questions about the regulations governing demutualization

  1. Where can I find the regulations?

    The regulations are available on the Government of Canada's website for federal laws.

    There are two sets of regulations, one for insurers with only mutual policyholders and one for insurers with both mutual and non-mutual policyholders. As Economical has both mutual and non-mutual policyholders, the Mutual Property and Casualty Insurance Company with Non-mutual Policyholders Conversion Regulations are relevant to Economical.

  2. Why are regulations required in order to demutualize?

    Economical is governed by the Insurance Companies Act and it permits a mutual company like Economical to demutualize, but only if there are regulations that set out the specific requirements for such a demutualization. This means that without regulations, Economical couldn't demutualize.

Other questions

  1. I have a question about a legal/tax/estate matter that relates to demutualization.

    Economical does not give advice on legal, tax, or estate issues. We recommend you contact your own advisors to discuss.

Last updated: March 24, 2021

Please note that new questions and answers may be added as more information becomes available.

Should you have additional questions about demutualization, you may call 1-866-302-6046 (toll-free) or 1-647-777-8911 (local/international); or you can submit questions online by clicking on Contact us.

Back to Top