Mutual Property and Casualty Insurance Company with Non-mutual Policyholders Conversion Regulations (SOR/2015-168)

Marginal note:Superintendent’s authorization

• 16 (1) Once a converting company’s by-laws are amended to permit the eligible non-mutual policyholders to vote on the conversion proposal and on the authorization referred to in paragraph 237(1.1)(c) of the Act, the converting company must obtain the Superintendent’s authorization to send the notice referred to in paragraph 237(1.2)(a) of the Act.

• Marginal note:Information and documents to Superintendent

  (2) To obtain the Superintendent’s authorization, the converting company must submit to the Superintendent

  • (a) if the notice is to be sent to eligible policyholders more than 120 days after the end of the most recently completed financial year of the converting company, financial statements for the portion of the current financial year ending prior to a day that is not more than 120 days before the day on which the notice is sent, and the converting company’s auditor’s comfort letter in respect of those statements;

  • (b) pro forma financial statements of the future converted company showing the effect of the conversion and any other significant transactions contemplated in relation to the conversion, including any proposed initial public offering of common shares, based on

    • (i) the annual statement for the most recently completed financial year, or

    • (ii) in the circumstances referred to in paragraph (a), the financial statements for the portion of the current financial year referred to in that paragraph;

  • (c) the compilation report of the converting company’s auditor, and a statement of reconciliation, in respect of the financial statements referred to in paragraph (b);

  • (d) a detailed description of any significant transaction contemplated in relation to the conversion;

  • (e) the notice of the special meeting, as well as the information and documents referred to in section 17 and the form of proxy and any management proxy circular to be sent with the notice;

  • (f) if the converted company is required under the laws of any jurisdiction in which it carries on business to file a prospectus in respect of its issuance of shares to the eligible policyholders or the persons or classes of persons referred to in paragraph 13(1)(c), a copy of that prospectus;

  • (g) a copy of the by-laws of the converting company indicating the amendments that have been made to them to permit all eligible non-mutual policyholders to vote on the conversion proposal;

  • (h) the proposed special resolutions referred to in subsection 237(1.5) of the Act;

  • (i) if shares in the converted company are to be issued to a holding corporation, a copy of the holding corporation’s existing or proposed incorporating instrument and by-laws;

  • (j) the summaries referred to in paragraph 17(h); and

  • (k) evidence that all amounts determined by the court under section 11 have been paid by the converting company.

• Marginal note:Information and documents already submitted

  (3) The converting company is not required to resubmit to the Superintendent any information or document referred to in subsection (2) that is unchanged from that submitted to the Superintendent under subsection 14(2).

• Marginal note:Financial statement requirements

  (4) The financial statements referred to in paragraphs (2)(a) and (b) must be

  • (a) prepared in accordance with the accounting principles referred to in subsection 331(4) of the Act; and

  • (b) accompanied by a report of the chief financial officer of the converting company stating that the financial statements have not been audited but have been prepared in accordance with the accounting principles referred to in subsection 331(4) of the Act.

• Marginal note:Decision to authorize

  (5) In deciding whether to authorize the sending of the notice, the Superintendent must consider the information and documents submitted under subsection (2) and may consider any additional information or documents relating to the converting company or any aspect of the conversion proposal.

• Marginal note:Conditions of authorization

  (6) As a condition of authorizing the sending of the notice, the Superintendent may require

  • (a) that any information that the Superintendent considers appropriate, in addition to that required under section 17, be sent with the notice; and

  • (b) that the converting company

    • (i) hold one or more information sessions for the eligible policyholders prior to the holding of the special meeting, for which the rules may be set by the Superintendent, and

    • (ii) take any other measures that the Superintendent considers appropriate to assist the eligible policyholders in forming a reasoned judgment on the conversion proposal.