Mutual Property and Casualty Insurance Company Having Only Mutual Policyholders Conversion Regulations — 4
Contents of conversion proposal 4 (1) A converting company must develop a conversion proposal that includes (a) a report setting out the value of the converting company as estimated by that company and a description of the method used and any assumptions made in estimating that value; (b) the eligibility date; (c) the period after the eligibility date within which a mutual policy must be issued for the purposes of paragraph (b) of the definition eligible policyholder ; (d) a statement identifying any persons or classes of persons — other than eligible policyholders — who are to be provided with benefits as a result of the conversion; (e) a detailed description of the benefits to be provided to eligible policyholders and the persons or classes of persons referred to in paragraph (d), and of the method of allocating the value of the converting company among them, indicating (i) the basis on which any variable amount of benefits will be calculated, (ii) any fixed, minimum or maximum amount of benefits to be provided to each of them, (iii) the rationale for choosing the method of determining and allocating the benefits, and (iv) the aggregate value of the benefits; (f) a description of the mechanisms proposed to effect an initial issuance of common shares or any other class of shares, including a copy of the proposed by-law authorizing the issuance of those shares; (g) if shares in the converted company are to be issued to a holding corporation, a description of the proposed activities of the holding corporation; (h) if shares have been issued and remain outstanding immediately prior to the effective date of the conversion, a statement describing how those shares will be converted into common shares following conversion; (i) if the benefits referred to in paragraph (e) include shares, a description of the measures to be taken by the converted company, in the two years following the effective date of the conversion, to assist the eligible policyholders and the persons or classes of persons referred to in paragraph (d) who receive the shares to sell those shares on a public market and to address any potential imbalances that may arise between the volume of shares offered for sale by them and the volume of shares sought for purchase by public market participants; (j) a description of how the measures referred to in paragraph (i) would be affected if the converted company were to issue additional shares in the two years following the effective date of the conversion; and (k) a statement that the directors of the converting company may terminate the conversion process at any time before letters patent of conversion are issued. Valuation day (2) The Superintendent is authorized to specify the day at which the value of the converting company must be estimated by the converting company. Calculation of variable amount (3) The variable amount of benefits referred to in subparagraph (1)(e)(i) must, in respect of each eligible policyholder, be calculated having regard to at least the following factors: (a) their obligations, rights and benefits; (b) the premiums paid by them; (c) the length of time they have held a policy with the company; and (d) the historical growth of the company’s surplus account.