Our demutualization is complete

Economical Insurance wrote its first policy in Berlin (now Kitchener), Ontario in 1871 and operated as a mutual insurance company for its first 150 years.

Economical engaged in a complex, regulated process called “demutualization” to transition from a mutual insurance company to a publicly listed company with corporate shareholders. On November 23, 2021, we completed our demutualization process and the initial public offering (IPO) of our new parent company, Definity Financial Corporation. As part of our demutualization, we distributed financial benefits to our eligible policyholders in accordance with the Conversion Plan (PDF).

Demutualization benefits are financial benefits that were distributed to eligible policyholders after the demutualization of Economical Insurance. Cash benefits came from selling the shares of Definity Financial Corporation to investors in its IPO and concurrent private placements. Nothing was paid from the company’s assets or insurance premiums, and there is no impact on our provision of insurance.

The Conversion Plan, which was approved by eligible policyholders at a special meeting in May 2021 and by the Minister of Finance in November 2021, detailed the methodology to distribute the benefits to eligible policyholders.

Eligibility to receive benefits depended on holding policies of Economical Mutual Insurance Company (including those sold by Family Insurance Solutions and Western General) at least from November 4, 2014 to December 14, 2015.

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

• An eligible mutual policyholder is a person who held an Economical mutual policy until December 14, 2015. All of these policies have policy numbers starting with “25” and have been held at least since 2010.
• An eligible non-mutual policyholder is a person who held an Economical non-mutual policy at least from November 4, 2014 to December 14, 2015. It must be the same policy for the whole period, subject to certain special circumstances as described in the Conversion Plan (PDF).

At various points during our demutualization, Economical has mailed information to both mutual and non-mutual eligible policyholders. The information described the demutualization process and told the recipient whether they were an eligible mutual policyholder or an eligible non-mutual policyholder. If you were eligible, you should have received a letter from us.

The names of eligible policyholders that received demutualization benefits were determined in accordance with our Conversion Plan. Generally, these were the named insured(s) on our policies on the eligibility date (November 3, 2015). To ensure the accuracy of our data, we reached out to eligible policyholders during our demutualization process to verify their names before the process was completed. In our last communication sent before demutualization, we asked that any changes to this information be made by October 1, 2021.

Our demutualization process is now complete. Unfortunately, at this point it is not possible to revise the recipient(s) of the benefits. If you are the eligible policyholder but are unable to deposit the cheque due to an incorrect name, please contact our support team by using the Contact Us form below.

Economical determined the amount of benefits in accordance with the Conversion Plan (PDF). The Conversion Plan, which was approved by eligible policyholders at a special meeting in May 2021 and by the Minister of Finance in November 2021, detailed the methodology to distribute the benefits to eligible policyholders. Under the Conversion Plan, the amount of benefits an individual eligible policyholder received depended on various factors, including the total number of eligible policyholders in each class of policyholder, the type of policy held, and the length of time a policyholder held a policy with Economical.

Yes, this letter will provide you with the next steps to claim your demutualization benefits. Please follow the instructions included in the letter.

Cash benefits will be reported as dividends and have been designated as eligible dividends for purposes of the enhanced dividend tax credit rules contained in the Income Tax Act (Canada) and any corresponding provincial and territorial tax legislation. Download the designation notice for more details. We recommend that you consult your own tax advisor to answer any questions about your individual circumstance.

We mailed T5 slips to eligible policyholders who were sent cash benefits at the address on file. If you received a cheque but did not receive a T5 slip, please contact our support team by using the Contact Us form below.

Economical doesn’t give advice on legal, tax, or estate issues. We recommend that you contact your own advisor if you have further questions.