Regulations Amending Certain Regulations made under the Insurance Companies Act (Mutual P&C Companies Conversion)

Enabling act: Insurance Companies Act (ICA)


This regulatory initiative would amend the regulations setting out the rules to demutualize property and casualty (P&C) insurance companies: the Mutual Property and Casualty Insurance Company with Non-mutual Policyholders Conversion Regulations and the Mutual Property and Casualty Insurance Company Having Only Mutual Policyholders Conversion Regulations. The proposed amendments would (1) increase from two to four years the duration of the protection period during which a demutualized company is required to remain widely held; and (2) create a legal path to enable the holding company of a converted company to discontinue from the ICA and apply for continuance as a corporation under the Canada Business Corporations Act, while the takeover protection period is in effect.

Regulatory cooperation efforts (domestic and international)

The regulatory initiative would only apply to federally regulated P&C insurance companies incorporated under the ICA. Provincially regulated insurance companies are subject to province-specific conversion regulatory regimes.

Canada’s international trade agreement obligations focus on ensuring non-discriminatory treatment between Canadian and foreign financial institutions.  This policy framework applies equally to Canadian-controlled insurance companies as well as foreign insurance company subsidiaries, and as such, is in accordance with Canada’s international trade agreement obligations.

Financial institutions are generally subject to the regulatory regime of the jurisdiction in which they are incorporated. Federally regulated P&C insurance companies are subject to the ICA and its regulations, but their foreign subsidiaries (if any) are subject to the regulatory regimes of the foreign jurisdictions in which they operate. Similarly, foreign P&C insurance companies are regulated in their home jurisdictions, but their Canadian subsidiaries are subject to the same regulatory regime as Canadian P&C insurance companies. As such, the regulatory initiative would have no impact on the ability of a Canadian company to operate in a foreign jurisdiction or of a foreign company to operate in Canada.

Potential impacts on Canadians, including businesses

The regulatory initiative would provide a more level playing field by allowing a demutualized company to adopt a corporate structure that is widespread in the federally regulated P&C industry, even while the takeover protection period is in effect. The regulatory initiative would also give a demutualized company more time after demutualization to adjust to its new corporate structure and strengthen its competitive position and would increase the likelihood the converted company can remain an independent source of competition once the takeover protection ends.


The Department consulted with the Canadian Association of Mutual Insurance Companies and a number of individual mutual and non-mutual P&C insurance companies in April 2021. Other interested stakeholders will have an opportunity to review and comment on the proposed regulations as part of the formal regulation-making process when the regulatory proposal is pre-published in the Canada Gazette, Part I.

Departmental contact information

Manuel Dussault
Director General, Financial Institutions Division
Financial Sector Policy Branch
Department of Finance Canada
90 Elgin St.
Ottawa, Ontario K1A 0G5

Date the regulatory initiative was first included in the Forward Regulatory Plan: November 2021

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