Draft Federal P&C Insurer Demutualization Regulations Issued

Regulations Provide Process for Mutual P&Cs to Demutualize

On February 28, 2015, the Department of Finance issued draft regulations under the Insurance Companies Act (Canada) providing the process to enable federally regulated mutual property and casualty insurance companies (Mutual P&Cs) to demutualize. Demutualization is the process of converting a mutual company into a company with common shares. Two different sets of regulations have been issued: the Mutual Property and Casualty Insurance Company Having Only Mutual Policyholders Conversion Regulations, for Mutual P&Cs that have only mutual policyholders; and the Mutual Property and Casualty Insurance Company with Non-mutual Policyholders Conversion Regulations, for Mutual P&Cs that have both mutual policyholders and non-mutual policyholders (collectively, Regulations).