Grass Roots
There is a strong network of purely mutual insurance
companies operating in Ontario, commonly referred to as
"the farm mutuals". These are community based
property and casualty (P&C) insurance companies that are
owned by their policyholders. There are no stockholders. Any
surplus either remains in the company's surplus account or may
be refunded to the policyholders - at the discretion of the
policyholder directors.
Almost all of these companies are now over 100 years old.
They have remained strong and stable throughout the years and
have provided solid, reliable service to the communities in
which they operate. Ontario's farm mutuals provide a broad
range of insurance and financial products to participants..
The mutual companies cooperate with each other and are
members of the Ontario Mutual Insurance Association. The
Association was formed in 1882 and originally went by the name
Purely Mutual Underwriters Association, and later Mutual Fire
Underwriters Association. The Canadian Association of Mutual
Insurance Companies networks mutuals across Canada.
1920s convention delegates of the Mutual Fire Underwriters’ Association.
Ontario's purely mutual insurance companies participate in
what is called the Fire Mutuals Guarantee Fund. Formed in
1975, "the Fund" places the surplus of all member
companies behind any one of the members. In the very unlikely
event of the insolvency of one of the members, all other
member mutuals would respond to 100% of current insurance
claims, and policyholders would not lose any unused premiums
already paid.
The mutuals also own their own reinsurance company. The
Farm Mutual Reinsurance Plan Inc. was the first Canadian-owned
reinsurance company when formed in 1959 and is one of a very
few Canadian-owned reinsurers in existence today.
|
