Intact merger and Pacific Life Re branch

Summary#

• Two notices in the Canada Gazette say major insurance-company changes are planned.
• Intact Insurance Company and The Guarantee Company of North America intend to apply to merge and continue under the Intact Insurance Company / Intact Compagnie d’assurance name, with a proposed effective date of April 1, 2021. Separately, Pacific Life Re International Limited (a Bermuda company) plans to apply to open a Canadian branch to do life reinsurance.

What it does#

• Intact Insurance Company and The Guarantee Company of North America:
  • Will make a joint application to the Minister of Finance on or after August 31, 2020 for letters patent of amalgamation.
  • Proposes the merged company's head office be in Toronto, Ontario.
  • Proposes the amalgamation take effect on April 1, 2021, or another date set in the letters patent.
• Pacific Life Re International Limited:
  • Intends to file with the Superintendent of Financial Institutions on or after September 10, 2020 for permission under the Insurance Companies Act to insure risks in Canada under the name Pacific Life Re International Limited.
  • Plans to operate in Canada as a life reinsurer, including life and accident and sickness reinsurance.
  • Its global head office is in Hamilton, Bermuda, and its planned Canadian chief agency is in Toronto, Ontario.

Who's affected#

• Customers and policyholders of Intact Insurance Company and The Guarantee Company of North America may notice changes if the merger goes ahead.
• Employees and business partners of those two companies could be affected by operational or administrative changes.
• Canadian life insurers and companies that buy reinsurance, and existing reinsurers, may be interested in Pacific Life Re International Limited entering the Canadian market.
• The Minister of Finance and the Superintendent of Financial Institutions are the regulators who will review these applications.
• If it’s unclear who else will be affected, it’s because these are notices of intended applications, not final regulatory decisions.

Why it matters#

• A completed amalgamation would combine two insurers into one legal company, which can change branding, where decisions are made, and how customers interact with the insurer.
• A new foreign reinsurer opening a Canadian branch could increase the supply of reinsurance capacity. That can affect pricing and options for Canadian insurers and their customers.
• Both items are regulatory steps that need approval before they take legal effect. The Gazette notice is a public announcement of those planned steps.