Economical Holdings and PURE Assurances Notices

Summary#

Two insurance notices were published in the Canada Gazette on January 30, 2021. One, from Economical Mutual Insurance Company, says it will apply to create a new Canadian insurance company. The other, from Privilege Underwriters Reciprocal Exchange / PURE Assurances, says it will apply to open a Canadian branch to sell personal property and casualty insurance.

What it does#

• Economical Mutual Insurance Company

  • Plans to file, on or after February 1, 2021, an application under the Insurance Companies Act (Canada) to get letters patent to incorporate a new company that would own and run property-and-casualty insurance businesses in Canada.
  • The new company would also provide services to Economical’s affiliates and do other activities the board approves.
  • Head office would be in Waterloo, Ontario. The proposed legal names are Economical Holdings Corporation (English) and Corporation Holding Économique (French).
  • Anyone who objects can write to the Office of the Superintendent of Financial Institutions (address given in the notice) on or before March 1, 2021.
  • The notice stresses that filing this notice does not mean approval is guaranteed.

• Privilege Underwriters Reciprocal Exchange / PURE Assurances

  • Plans to file, on or after January 30, 2021, an application under section 574 of the Insurance Companies Act (Canada) for approval to insure risks in Canada through a Canadian branch.
  • It is a Florida-based reciprocal insurer that intends to offer personal-lines property and casualty insurance in Canada, including property, liability and automobile coverage.
  • Principal office is in Fort Lauderdale, Florida; administrative office in White Plains, New York; and the Canadian chief agency would be in Toronto, Ontario.

Who's affected#

• Customers and potential customers of property-and-casualty insurance in Canada, especially people shopping for personal-lines insurance (home, auto, liability).
• Insurance brokers and agents who might sell new products from these entities.
• Competing insurers, because new entrants or a corporate restructuring can affect competition.
• The public who want to file objections about the Economical application (deadline March 1, 2021).
• Regulators and the federal government, since these are subject to review by the Office of the Superintendent of Financial Institutions and the Minister of Finance.

Why it matters#

• If approved, Economical’s corporate reorganization could change how one of Canada’s insurers is owned and structured. That may affect corporate governance, how affiliate services are provided, or how products are offered — though the notice gives no details on specific business changes.
• If the Florida-based insurer’s branch is approved, Canadians could see another option for personal property, liability and auto insurance in the market.
• Neither notice is an approval. Both applications must pass federal review, so any real changes depend on regulators and the Minister of Finance.