Heartland and Kings merger; Virginia Surety asset release

Summary#

Two notices were published. First, Heartland Farm Mutual Inc. and The Kings Mutual Insurance Company plan to apply to merge and continue under the name Heartland Farm Mutual Inc., with the joint application to be made on or after April 27, 2021 and a proposed effective date of June 30, 2021. Second, Virginia Surety Company, Inc. intends to apply for an order to release the assets it holds in Canada on or after May 1, 2021, and policyholders or creditors wishing to oppose that release must do so by May 1, 2021.

What it does#

• Amalgamation

  • Heartland Farm Mutual Inc. and The Kings Mutual Insurance Company intend to become one company that will continue under the name Heartland Farm Mutual Inc..
  • The merged company’s head office would be in Waterloo, Ontario.
  • The merger is subject to approval by the federal regulator and the Minister of Finance. The companies plan to apply on or after April 27, 2021, with a proposed effective date of June 30, 2021 (or another date set by the final documents).
  • Policyholders can inspect the report of the independent actuary (and summary) during business hours at:
    • Heartland Farm Mutual Inc., 100 Erb Street East, Waterloo, Ontario N2J 1L9
    • The Kings Mutual Insurance Company, 200 Commercial Street, Berwick, Nova Scotia B0P 1E0
  • Policyholders may request a copy of the actuary’s report in writing from the Corporate Secretary at the addresses above.

• Release of assets

  • Virginia Surety Company, Inc. intends to apply to the federal regulator for an order allowing it to release the assets it keeps in Canada under the Insurance Companies Act (Canada).
  • Anyone (policyholder or creditor) who opposes that release can file an objection with the Office of the Superintendent of Financial Institutions by mail or email on or before May 1, 2021:
    • Mail: Regulatory Affairs Division, 255 Albert Street, Ottawa, Ontario K1A 0H2
    • Email: approvalsandprecedents@osfi-bsif.gc.ca

Who's affected#

• Policyholders of Heartland Farm Mutual Inc. and The Kings Mutual Insurance Company.
• Policyholders and creditors of Virginia Surety Company, Inc. who may want to oppose the asset release.
• The federal regulator, Office of the Superintendent of Financial Institutions (Canada), and the Minister of Finance, who must consider and approve the applications.

If it’s unclear who else may be affected, the notices do not say.

Why it matters#

• For policyholders of the two merging insurers, a merger can change who manages policies, where the head office is, and who handles claims or customer service. The actuary’s report is made available so policyholders can see the financial analysis behind the merger.
• For policyholders or creditors of Virginia Surety Company, Inc., an approved release of Canadian assets could affect how claims or debts are paid in Canada. There is a fixed deadline (May 1, 2021) to file an objection.
• These are procedural federal steps. They do not make the merger or the asset release final — approvals by the regulator and (for the merger) the Minister are still required.