Amendments to Insurance Companies Act enacted as part of budget implementation bill

Significant milestone in the implementation of a framework for P&C insurance company demutualizations

WATERLOO, ON, June 23, 2014 /CNW/ - Economical Mutual Insurance Company today announced that Bill C-31, the 2014 budget implementation bill, has recently received Royal Assent enacting, among other things, amendments to the Insurance Companies Act (Canada) (ICA) to broaden the Governor in Council's regulation-making authority under the act. These powers support the eventual implementation of the regulations that will allow federally regulated mutual property and casualty (P&C) insurance companies that choose to do so to demutualize.

"We are pleased that this step in the development of a federal demutualization framework is complete," said John Bowey, chair of Economical's special committee on demutualization. "Now that the budget implementation bill has been enacted, the next step would be for the Department of Finance to release draft demutualization regulations, which are expected to be subject to a public comment period before coming into force. At that point, Economical's board of directors will be in a position to determine whether demutualization within the final regulatory framework would be in the best interests of the company."

Economical will continue to provide regular updates on the demutualization process and stakeholders are encouraged to visit the company's website, www.economicalinsurance.com for information.

Forward looking statements
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Forward-looking statements are based on estimates and assumptions made by Economical's management based on management's experience and perception of historical trends, current conditions and expected future developments, as well as other factors that management believes are appropriate in the circumstances. Many factors could cause Economical's actual results, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the following factors: Economical's ability to implement its strategy or operate its business as management currently expects; unfavourable capital market developments or other factors; government regulations; litigation and regulatory actions; periodic negative publicity regarding the insurance industry; intense competition; the outcome of a demutualization transaction; and general economic, financial and political conditions.

All of the forward-looking statements included in this press release are qualified by these cautionary statements. These factors are not intended to represent a complete list of the factors that could impact Economical, however, these factors should be considered carefully, and readers should not place undue reliance on forward-looking statements we make. Economical is under no obligation and has no intention to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

About Economical
Founded in 1871, Economical Insurance is one of Canada's leading property and casualty insurers, with $1.9 billion in annual premium volume and $5.0 billion in assets as at March 31, 2014. Based in Waterloo, this Canadian-owned and operated group services the insurance needs of more than one million customers across the country. In 2010, Economical announced its decision to become the first federally-regulated mutual property and casualty insurance company to pursue demutualization. Economical Insurance conducts business under the following brands: Economical Insurance, Economical, Western General, Economical Select, Perth Insurance, Family Insurance Solutions, Federation Insurance and Economical Financial.

SOURCE: Economical Insurance