On June 19, 2014, amendments to Section 211 of the Insurance Companies Act (Canada) (the “Act”) received Royal Assent. The Department of Finance (Canada) stated that the intention of these amendments is “to expand the Governor-in-Council’s ability to make regulations for a demutualization framework that provides for an orderly and transparent process and ensures that policyholders are treated fairly and equitably.” This provision relates to the conversion of a mutual company into an insurance company with common shares.
The Governor in Council may make regulations respecting the process that precedes the calling of a special meeting of eligible policyholders to approve the conversion proposal of a mutual company. In addition, the Governor in Council may make regulations limiting the circumstances in which the Minister of Finance (Canada) provides an approval under Section 407(1) of the Act. Regulations made by the Governor in Council in respect of the conversion proposal process may provide for court intervention, including the circumstances in which the court is to be seized of any matter in relation to that process.