Definity, RBC–HSBC Amalgamations; Asset Release

Summary#

• Notices in the Canada Gazette say several companies plan corporate moves: four insurers intend to merge into one firm called Definity Insurance Company, and Royal Bank of Canada and several HSBC-related entities intend to amalgamate under the Bank Act if a planned share purchase completes.
• Separately, United American Insurance Company plans to ask the federal regulator to release the assets it holds in Canada; anyone who objects has until July 22, 2023 to file opposition.

What it does#

• Definity Insurance Company, Perth Insurance Company, The Missisquoi Insurance Company, and Waterloo Insurance Company intend to apply for letters patent of amalgamation under section 250 of the Insurance Companies Act to continue as one company named Definity Insurance Company / Compagnie d’assurance Definity.
  • Head office would be in Waterloo, Ontario.
  • The proposed effective date is January 1, 2024, or another date set in the letters patent.
• Royal Bank of Canada and the following applicants — HSBC Bank Canada, HSBC Trust Company (Canada), HSBC Mortgage Corporation (Canada), and HSBC Finance Mortgages Inc. — intend to apply for letters patent of amalgamation under section 228 of the Bank Act to continue as Royal Bank of Canada.
  • The application is conditional on RBC completing a planned acquisition of all shares of HSBC Bank Canada under a share purchase agreement dated November 29, 2022.
  • The applicants said they would apply on or after July 8, 2023; the amalgamation would take effect only after the acquisition and on the date fixed by the letters patent.
• United American Insurance Company intends to ask the Office of the Superintendent of Financial Institutions (Canada) to authorize the release of the assets it maintains in Canada under section 651 of the Insurance Companies Act.
  • It said it would apply on or after July 22, 2023.
  • Policyholders or creditors who oppose the release were invited to file an opposition by July 22, 2023 (by mail or by email to Approvals-Approbations@osfi-bsif.gc.ca).

Note: each notice says publication is not proof that the letters patent will be granted; approvals depend on the normal regulatory review and the Minister of Finance’s discretion.

Who's affected#

• For the insurance amalgamation: customers, policyholders, employees, and business partners of Definity Insurance Company, Perth Insurance Company, The Missisquoi Insurance Company, and Waterloo Insurance Company are the most likely to notice changes.
• For the bank amalgamation: customers and shareholders of Royal Bank of Canada and HSBC Bank Canada, plus borrowers and holders of products run by the listed HSBC subsidiaries. The amalgamation is conditional on the planned acquisition, so it may not happen.
• For the asset release: policyholders and creditors of United American Insurance Company in Canada — they can file an opposition with OSFI by July 22, 2023 if they object.
• If the notices are unclear about specific impacts, the documents say that final approval depends on regulatory review, so more details may appear later.

Why it matters#

• Amalgamations change who runs and guarantees insurance policies or banking services. That can affect where accounts are managed, who services claims or loans, and which corporate rules apply.
• The RBC–HSBC move is tied to a share purchase; if that deal fails the planned amalgamation will not proceed.
• The United American notice is a step toward releasing the company’s Canadian assets; affected policyholders and creditors have a formal chance to oppose that, which could matter for claims or recoveries.