Insurance amalgamation, capital and asset notices

Summary#

This Canada Gazette notice lists three insurance-related items. It announces a planned merger of four insurers into a single company called Definity Insurance Company, a proposed reduction of stated capital at Unifund Assurance Company by up to $800,000,000, and an application by United American Insurance Company to release assets held in Canada with an opposition deadline of July 22, 2023.

What it does#

• Amalgamation

  • Definity Insurance Company, Perth Insurance Company, The Missisquoi Insurance Company and Waterloo Insurance Company say they will apply to the Minister of Finance on or after June 26, 2023 for letters patent to continue as one company under the name Definity Insurance Company (French: Compagnie d’assurance Definity).
  • The planned head office is in Waterloo, Ontario. The proposed effective date is January 1, 2024 (or another date fixed in the letters patent).
  • The notice warns that publication does not guarantee the letters patent will be issued.

• Reduction of stated capital

  • Unifund Assurance Company intends to ask the Superintendent of Financial Institutions (Canada) for approval to reduce the stated capital of its common shares by up to $800,000,000, under the Insurance Companies Act (Canada).
  • A special resolution authorizing this was passed by the sole shareholder on May 26, 2023. The company’s CFO would decide the exact amount within that limit.
  • The notice says regulator approval is required and not assured.

• Release of assets

  • United American Insurance Company intends to apply to the Superintendent of Financial Institutions (Canada) on or after July 22, 2023 for an order allowing it to release assets it holds in Canada under the Insurance Companies Act (Canada).
  • Any policyholder or creditor in Canada who opposes the release was invited to file an opposition by July 22, 2023 (mail or email to Approvals-Approbations@osfi-bsif.gc.ca).

Who's affected#

• Customers and policyholders of Definity Insurance Company, Perth Insurance Company, The Missisquoi Insurance Company, Waterloo Insurance Company, Unifund Assurance Company, and United American Insurance Company.
• Creditors and anyone with claims against United American Insurance Company in Canada who may want to oppose the asset release.
• The sole shareholder of Unifund Assurance Company, who stands to receive any distributed amount if the capital reduction is approved.
• Insurance agents, brokers, and employees who work with these companies.
• Regulators such as the Minister of Finance and the Superintendent of Financial Institutions (Canada).

Why it matters#

• A completed amalgamation could simplify corporate structure and change which legal company holds policies and where corporate decisions are made. That can affect where customers file claims or how service is organized, although approvals are still required.
• A capital reduction at Unifund of up to $800,000,000 would move a large sum from the insurer’s capital account to its sole shareholder if approved. That could matter to people tracking the company’s financial cushion, but regulator approval is required.
• If United American Insurance Company is allowed to release its Canadian assets, the move could affect how Canadian claims are paid or secured. Policyholders and creditors had a formal chance to object by July 22, 2023.