for Canada's mutual insurance industry


Demutualization is a process by which mutual insurance companies are converted to public stock companies.

Some general insurance companies have asked the Government to develop a process that would allow demutualization, in accordance with the law on insurance companies.

The demutualization of a general insurance company requires the Government to put in place regulations. Given the large number of stakeholders, the development of these regulations will require consultations.

The Government will be able to consider applications for demutualization, or any other type of transaction that may indirectly cause a demutualization, once the regulations are in place. The regulations will allow an orderly and transparent procedure and ensure that policy holders will be treated fairly and equitably.

If the Minister of Finance decides to draft demutualization regulations, CAMIC recommends that significant consideration be given to the distribution of the value of a mutual company with the objective of eliminating the circle of self-interest. In this respect, one of the many options that could be considered is the adoption of a model based on the French legislation which, upon demutualization, requires distribution of the company’s surplus or sales proceed, whichever is higher, to other mutual insurance companies or to registered charities.


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