Insurance companies: merger, capital reduction, asset release

Summary#

This Canada Gazette page contains three short notices from insurance companies about planned corporate moves.

• Definity Insurance Company, Perth Insurance Company, The Missisquoi Insurance Company, and Waterloo Insurance Company plan to merge into one company called Definity Insurance Company (English) / Compagnie d’assurance Definity (French).
• Unifund Assurance Company plans to apply to reduce its stated capital and distribute up to $800,000,000 to its sole shareholder.
• United American Insurance Company plans to ask the federal regulator to allow the release of assets held in Canada, and interested parties can oppose that plan by July 22, 2023.
  All of these actions are notices of intent; federal approvals are still required.

What it does#

• Amalgamation:
  • The four insurers — Definity Insurance Company, Perth Insurance Company, The Missisquoi Insurance Company, and Waterloo Insurance Company — say they will apply to the Minister of Finance to continue as a single company named Definity Insurance Company.
  • The proposed head office would be in Waterloo, Ontario, and the planned effective date is January 1, 2024 (or another date the minister sets).
  • This is an application under the Insurance Companies Act (Canada) and approval is not guaranteed.
• Reduction of stated capital:
  • Unifund Assurance Company plans to apply to the federal regulator to reduce the stated capital of its common shares by up to $800,000,000 and distribute that money to its sole shareholder.
  • The company’s chief financial officer would set the exact amount to be reduced, within that limit. Approval from the Superintendent of Financial Institutions is required.
• Release of assets:
  • United American Insurance Company intends to apply for an order allowing it to release the assets it holds in Canada (an action under the Insurance Companies Act (Canada)).
  • Policyholders or creditors who oppose that release were invited to file an objection by July 22, 2023.

Who's affected#

• Customers and policyholders of the four merging insurers (listed above) could notice changes in where the company is based, how policies are managed, or who handles claims.
• The sole shareholder of Unifund Assurance Company stands to receive any funds if the capital reduction is approved. Policyholders or creditors may be indirectly affected if the company’s financial position changes.
• Policyholders and creditors of United American Insurance Company in Canada are directly affected because the company is proposing to release the assets it holds in Canada; they were given the chance to oppose the move by July 22, 2023.
• In all three cases, final effects depend on regulator decisions; the notices do not mean these changes will definitely happen.

Why it matters#

• Mergers can change who manages your insurance policy, where records are kept, and how claims are processed. Customers may need to update contact information or watch for communications.
• A big reduction in a company’s stated capital (up to $800,000,000) could mean money is moving out of the insurer and into a shareholder’s hands. That can affect the insurer’s financial cushion, which matters for long‑term policy security — regulators review such moves to protect policyholders.
• If an insurer is allowed to release its Canadian assets, it could make it harder for local policyholders or creditors to enforce claims or access funds. That is why a formal opposition process and regulator review exist.
• None of these actions are final; they depend on federal regulatory approval.