Important changes to Ontario Auto Insurance
Please take a look at this video highlighting changes to Ontario Accident Benefits.
Important changes to Ontario Auto Insurance
Please take a look at this important video highlighting changes to Ontario Auto Insurance.
Economical is proceeding with the demutualization process
Here is some important news from Economical Insurance we wanted to share with you. Economical Insurance is demutualizing. If you are an Economical policy holder you may be entitled to a financial benefit. Please read the attached press release for further information.
Released Tuesday, November 3, 2015
Economical is proceeding with the demutualization process — how are your clients affected?
Please read this carefully as it contains eligibility information for your clients
Earlier today the Economical Board of Directors announced its decision to proceed with the demutualization process within the regulatory framework developed by the federal Department of Finance.
You can read the news release on our website here .
Today’s news may bring on questions posed to you by your clients holding Economical policies and many of them will have the opportunity to participate in our demutualization as “eligible policyholders.” The eligible policyholders will play an important role throughout the demutualization process, including voting to approve the company’s formal proposal to demutualize and to receive financial benefits at the end of the process.
Most of your Economical clients are non-mutual policyholders. This means that, in general, their eligibility requires that they hold a policy of Economical and have done so for the 12-month period ending on November 3, 2015 (the date the board decided to proceed with demutualization). In addition, the following groups of policyholders may qualify as eligible non-mutual policyholders:
· a policyholder who held a policy that was at least 12 months old on November 3, 2015 even if they themselves did not hold the policy for those 12 months (e.g. a joint policyholder added to an existing policy)
· a policyholder who, for whatever reason, did not hold any one policy that was 12 months old on November 3, 2015, but had held two or more similar policies during that 12-month period which added up to 12 months of coverage (two policies are similar if they are both personal property policies, both are auto policies or both are commercial policies)
· a policyholder who would have been eligible (including in the above circumstances) but for gaps in coverage each up to 30 days
· a policyholder who has a combination of the above circumstances
However, a policyholder that was eligible on November 3, 2015 might still lose their eligibility if their policy (and any similar policies) is cancelled or lapses after November 3, 2015.
We have requested guidance from our primary regulator, the Office of the Superintendent of Financial Institutions (OSFI), on whether policies must be held past the board decision date in order for policyholders to remain eligible. Once we have this guidance, you will receive more information from us about eligibility. In the meantime, if it appears a policyholder may be eligible and they do not want to affect that potential eligibility, Economical recommends they consider maintaining their policy beyond November 3, 2015.
As part of the demutualization process, we will be sending a letter to all policyholders describing the demutualization process and setting out the criteria for determining eligibility. The letter will be sent some time after the vote of eligible mutual policyholders (see below).
In the interim, you should
· Avoid any suggestion to clients that cancelling or lapsing their policy will not affect eligibility.
· Direct any interested clients to Economical’s website on demutualization ( www.joininourfuture.com ).
Please note only persons holding policies issued by Economical Mutual Insurance Company are eligible to participate in demutualization. This includes include policies sold by Family Insurance Solutions Inc., or under the Western General brand. On the other hand, policies issued by our subsidiaries (Perth Insurance, Waterloo Insurance (Economical Select), Federation Insurance or Missisquoi Insurance) are not taken into account for eligibility.
The next step will be a special meeting, where eligible mutual policyholders will decide whether to continue with the demutualization process.
At this meeting, the eligible mutual policyholders will vote on whether to negotiate the allocation of demutualization benefits with eligible non-mutual policyholders. A positive vote at this meeting will trigger the next phase of the demutualization process which will initiate the involvement of hundreds of thousands of Economical’s policyholders. The date of the meeting will be announced in the future.
Ensuring policyholder records are up-to-date
As we have said before, Economical will rely on its internal records to determine which policyholders are eligible to participate in demutualization and to determine entitlement for demutualization benefits. This is a significant task and requires all information about policyholders to be up-to-date. Otherwise, some policyholders may be inadvertently excluded from the process or receive less than they would be eligible for.
Our broker partners play a critical role in ensuring we have accurate and up-to-date information about their clients. Over the next few months, and throughout the demutualization process, it will be vitally important for brokers to update Economical with policy changes on a timely basis – as soon as possible after the client makes the change. This will help avoid confusion about eligibility and other inconveniences for your clients.
A new look and support for your clients
The Economical team remains committed to keeping stakeholders informed throughout the demutualization process, and has launched a website where you can direct your clients ( www.joininourfuture.com ). This website provides information, updates, and access to demutualization-related resources. It will be where we provide regular updates and stakeholders are encouraged to visit frequently. Those interested can also sign up to receive automated alerts when new information is posted.
In addition, we’ve prepared a short summary document with answers to key questions and details on who to contact for more information. This is an updated version from what we provided you in late August. Please feel free to share it with your clients if you think it would help them.