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Mutual Property and Casualty Insurance Company with Non-mutual Policyholders Conversion Regulations (SOR/2015-168)

Regulations are current to 2020-12-28 and last amended on 2015-07-01. Previous Versions

Special Meeting of Eligible Mutual Policyholders (continued)

Marginal note:Information and documents to eligible mutual policyholders

 The notice referred to in subsection 14(1) must be sent with

  • (a) a description of the steps that have been taken in the conversion process and the steps that are to be taken;

  • (b) the conversion proposal and description referred to in paragraph 14(2)(a);

  • (c) a description of the advantages and disadvantages of the proposed conversion to the converting company and to its policyholders;

  • (d) a description of the alternatives to conversion that the directors of the converting company have considered and the reasons why, in their opinion, the conversion is in the best interests of the company and its policyholders;

  • (e) a description of the form, amount and estimated market value or range of market values of the benefits to be provided as a result of the conversion to the eligible policyholder to whom the notice is sent;

  • (f) a description of any right of policyholders to vote after the conversion, as policyholders or shareholders of the converted company;

  • (g) for each jurisdiction in which at least one per cent of all eligible policyholders reside, a description of the income tax treatment accorded the benefits referred to in paragraph (e) in that jurisdiction;

  • (h) summaries of

    • (i) the opinions referred to in paragraphs 14(2)(b) to (e), other than those that are subject to an exemption under section 22, and

    • (ii) the documents referred to in paragraph 14(2)(n);

  • (i) the financial statements referred to in paragraphs 14(2)(f) to (h), other than those that are subject to an exemption under section 22;

  • (j) the documents referred to in paragraphs 14(2)(i) and (j), other than those that are subject to an exemption under section 22;

  • (k) a brief description of the business carried on by the converting company and its subsidiaries, and the general development of that business, during the three years preceding a day that is not more than 120 days before the day on which the notice is sent to the eligible mutual policyholders, and any future business foreseen as of that day;

  • (l) a brief description of any substantial variations in the operating results of the converting company during the three most recently completed financial years preceding the notice and, if the notice is sent to the eligible mutual policyholders more than 120 days after the end of the most recently completed financial year of the converting company, during the portion of the current financial year ending on a day that is not more than 120 days before the day on which the notice is sent;

  • (m) the names of all persons who, on the day on which the notice is sent to the eligible mutual policyholders, have a significant interest in the converting company or who, as a result of the conversion, will have a significant interest in the converted company, and a description of the type and number of shares held or to be held by those persons;

  • (n) the name and address of the converted company’s auditor;

  • (o) the names and addresses of the proposed transfer agents and registrars;

  • (p) the proposed location for the securities registers for the initial issuance of common shares;

  • (q) a description of any sales by the converting company, within the 12 months preceding a day that is not more than 120 days before the day on which the notice is sent to the eligible mutual policyholders, of securities of the same type as those to be provided as benefits to the eligible policyholders under the conversion proposal;

  • (r) a copy of any prospectus referred to in paragraph 14(2)(k);

  • (s) a description of the restrictions set out in sections 23 and 24 and of any plans that the converting company has for the establishment of stock option or stock incentive plans for the persons referred to in those sections after the period referred to in section 24;

  • (t) a description of any measures, including the establishment of toll-free lines and websites, the holding of information sessions, and the placement of advertisements in widely circulated publications, that the converting company will take before holding a special meeting referred to in subsection 237(1.1) of the Act to provide eligible policyholders with information about the proposed conversion and an opportunity to raise questions or concerns about the proposed conversion;

  • (u) a description of the measures that the converting company will take to encourage eligible policyholders to vote on the conversion proposal, in person or by proxy, at the special meeting referred to in subsection 237(1.1) of the Act;

  • (v) an indication of the eligible mutual policyholders’ right under section 164.01 of the Act to appoint a proxyholder to attend and act at the special meeting on their behalf; and

  • (w) any other information that the Superintendent has required under paragraph 14(6)(a).

Special Meeting of Eligible Policyholders

Marginal note:Superintendent’s authorization

  •  (1) Once a converting company’s by-laws are amended to permit the eligible non-mutual policyholders to vote on the conversion proposal and on the authorization referred to in paragraph 237(1.1)(c) of the Act, the converting company must obtain the Superintendent’s authorization to send the notice referred to in paragraph 237(1.2)(a) of the Act.

  • Marginal note:Information and documents to Superintendent

    (2) To obtain the Superintendent’s authorization, the converting company must submit to the Superintendent

    • (a) if the notice is to be sent to eligible policyholders more than 120 days after the end of the most recently completed financial year of the converting company, financial statements for the portion of the current financial year ending prior to a day that is not more than 120 days before the day on which the notice is sent, and the converting company’s auditor’s comfort letter in respect of those statements;

    • (b) pro forma financial statements of the future converted company showing the effect of the conversion and any other significant transactions contemplated in relation to the conversion, including any proposed initial public offering of common shares, based on

      • (i) the annual statement for the most recently completed financial year, or

      • (ii) in the circumstances referred to in paragraph (a), the financial statements for the portion of the current financial year referred to in that paragraph;

    • (c) the compilation report of the converting company’s auditor, and a statement of reconciliation, in respect of the financial statements referred to in paragraph (b);

    • (d) a detailed description of any significant transaction contemplated in relation to the conversion;

    • (e) the notice of the special meeting, as well as the information and documents referred to in section 17 and the form of proxy and any management proxy circular to be sent with the notice;

    • (f) if the converted company is required under the laws of any jurisdiction in which it carries on business to file a prospectus in respect of its issuance of shares to the eligible policyholders or the persons or classes of persons referred to in paragraph 13(1)(c), a copy of that prospectus;

    • (g) a copy of the by-laws of the converting company indicating the amendments that have been made to them to permit all eligible non-mutual policyholders to vote on the conversion proposal;

    • (h) the proposed special resolutions referred to in subsection 237(1.5) of the Act;

    • (i) if shares in the converted company are to be issued to a holding corporation, a copy of the holding corporation’s existing or proposed incorporating instrument and by-laws;

    • (j) the summaries referred to in paragraph 17(h); and

    • (k) evidence that all amounts determined by the court under section 11 have been paid by the converting company.

  • Marginal note:Information and documents already submitted

    (3) The converting company is not required to resubmit to the Superintendent any information or document referred to in subsection (2) that is unchanged from that submitted to the Superintendent under subsection 14(2).

  • Marginal note:Financial statement requirements

    (4) The financial statements referred to in paragraphs (2)(a) and (b) must be

    • (a) prepared in accordance with the accounting principles referred to in subsection 331(4) of the Act; and

    • (b) accompanied by a report of the chief financial officer of the converting company stating that the financial statements have not been audited but have been prepared in accordance with the accounting principles referred to in subsection 331(4) of the Act.

  • Marginal note:Decision to authorize

    (5) In deciding whether to authorize the sending of the notice, the Superintendent must consider the information and documents submitted under subsection (2) and may consider any additional information or documents relating to the converting company or any aspect of the conversion proposal.

  • Marginal note:Conditions of authorization

    (6) As a condition of authorizing the sending of the notice, the Superintendent may require

    • (a) that any information that the Superintendent considers appropriate, in addition to that required under section 17, be sent with the notice; and

    • (b) that the converting company

      • (i) hold one or more information sessions for the eligible policyholders prior to the holding of the special meeting, for which the rules may be set by the Superintendent, and

      • (ii) take any other measures that the Superintendent considers appropriate to assist the eligible policyholders in forming a reasoned judgment on the conversion proposal.

 
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