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Slide 1: Spring | 2009 reflection A newsletter of the Canadian Association of Mutual Insurance Companies • • • • • In Memoriam ShaRon P. doxtatoR (1951-2009) Sharon P. Doxtator, Manager of Usborne & Hibbert Mutual Fire Ins. Co., passed away on Friday April 10, 2009 at the age of 58. Sharon joined Usborne & Hibbert in July 1987 and was promoted Manager in 1997. Over time, Sharon has built a reputation for her prudent management. She leaves behind a very well capitalized insurance company that makes the envy of the mutual insurance industry. Two icon figures leave the mutual insurance industry ••••• Glen JohnSon retired from the Ontario Mutual Insurance Association (OMIA) on March 26, 2009 after spending 31 years with the association. He coordinated OMIA’s training program from 1978 to 1986, was promoted Vice-President in 1986 and President in 1989. Through his three decades with OMIA, he served on most of OMIA’s standing committees and on special committees that explored such initiatives as solvency monitoring, financial services, central computer, auto insurance issues and joint governance. Claude Robitaille Our mission help mutual insurers become the property and casualty insurers of choice in the Canadian market place by providing information and advocacy, by developing services and by negotiating group supply agreements. left Groupe Promutuel on April 9, 2009 after spending 6 years with the organization as Chief Executive Officer. Claude joined Groupe Promutuel in January 2003. Under his leadership, Groupe Promutuel member companies have, as a group, reached a gross premium volume exceeded by only three other insurers in the province. In October 2004, Claude joined the CAMIC Board and worked hard at strengthening the financial and managerial reporting of CAMIC’s President to the CAMIC Board. At CAMIC’s next annual meeting to the held on October 6, 2009, there will be an election to complete the one year left on Claude’s term of office. 311 McArthur Avenue, Suite 205 Ottawa, ON K1L 6P1 613.7 8 9 .6851
Slide 2: 2008-2009 Board of Directors ••••• exeCutiVe CoMMittee Ray White Chairman – Eastern Canada Manager – SouthEastern Mutual Ins. Co. Rob foRSythe 1st Vice Chairman of the Board – Ontario Senior Vice President – Farm Mutual Reinsurance Plan Inc. daRin neSSel 2nd Vice Chairmain of the Board – Western Canada Manager – Mutual Fire Ins. Co. of BC Joe dietRiCh Past Chair – Ontario Manager – Trillium Mutual Ins. Co. diReCtoRS blaiR CaMPbell Director – Eastern Canada Corporate Secretary & General Counsel – PEI Mutual Fire Ins. Co. Randy ClaRk Director – Western Canada President & CEO – The Portage la Prairie Mutual Ins. Co. fRank RideR Director – Ontario Manager – South Easthope Mutual Ins. Co. yVan RoSe Director – Quebec Manager – Promutuel L’Abitibienne aSSoCiation’S PReSident noRMand lafRenièRe
Slide 3: CAMIC’s pre-budget submission ••••• On January 9, 2009 CAMIC presented its pre-budget submission to the Federal Department of Finance. In our document, we have identified four areas of concerns and made recommendations to address them. Our recommendations were: 1. To increase funding to help municipalities address their infrastructure deficit; 2. To modify the tax treatment of Deferred Policy Acquisition Costs (DPAC); 3. To maintain the ban on banks selling insurance in their branches and the ban on their user of bank customer information to target their marketing of insurance products; and 4. To supervise credit card companies as they charge higher merchants’ discount rates for purchases made by clients with “special” credit cards. spending should be “Will this stimulus measure increase the productive capacity of our economy?” In our view, investing in sewer systems and in municipal roads and bridges meet that test but may not be as expedient as the federal government would wish. In the subsequent budget, the federal government injected significant additional money towards municipal infrastructure projects – however, these projects must be completed within 2 years and require the financial contribution of provincial and municipal governments. These conditions will prevent a significant number of worthwhile projects from being implemented. of Finance and the Canada Revenue Agency. All we are asking the federal government is to accept that insurers use, for tax purposes, the definition of policy acquisition costs and cost deferral included in generally accepted accounting principles. In a time when insurers need to rebuild their capital, it is essential to get this minimum level of cooperation from the government. Maintain ReStRiCtionS on bankS inSuRanCe RetailinG PoWeRS This issue will be revisited along with the revision of the financial services legislation in 2011. By raising this issue now, we just want to highlight that our position has not changed and that the arguments that we raised in the past are still as valid today as they were at the time of the last review. defeRRed PoliCy aCquiSition CoStS (dPaC) The Quebec Revenue Agency has assessed most of our Quebec based member companies for inadequate deferral of policy acquisition costs.The additional assessment is worth about $10 million. For its part, the Canada Revenue Agency has not yet reassessed our Quebec members for inadequate deferral of policy acquisition costs, but it has reassessed a number of stock companies and it is therefore likely that our members will be reassessed by the Canada Revenue Agency. It is to prevent such a reassessment from taking place that CAMIC raises this issue with both the Federal Department MuniCiPal infRaStRuCtuRe Our interest in addressing the municipal infrastructure deficit is related to the impact that inadequate sewer systems, and insecure roads and bridges have on insurance claims and injuries. Our document further emphasized that while we encourage the government to inject financial stimulus in the economy, it is very important to ensure that any such stimulus increase the productive capacity of the economy in the future. The test before committing to any tax cuts or government diSCount RateS ChaRGed by CRedit CaRd CoMPanieS Credit card companies, VISA and MasterCard, have changed their requirements to be able to possess a Mosaic or an Infinite credit card. Due to these changes, the proportion of the population which posses a Mosaic or an Infinite credit card has increased from 5% to 35% in one year. While these newly issued cards give their owners some more benefits than their previous card, they cost much more to merchants. Merchants, including the insurance industry, should oppose attempts by VISA and MasterCard to significantly increase their fees to merchants. This is a duopoly that deserves to be controlled by governments. Further, VISA and MasterCard are said to be attempting to purchase the Canadian and fairly priced Interac system. CAMIC will follow the lead of the Canadian retail Council and others in supporting solutions which limit the price charged for financial transactions in Canada. FUTUrE AnnUAL COnVEnTiOnS oCtobeR 4–6, 2009 the Westin harbour Castle toronto, toronto, on oCtobeR 3–5, 2010 fairmont Chateau lake louise, lake louise, ab oCtobeR 2–4, 2011 fairmont tremblant, Mont tremblant, qC
Slide 4: Gross Premium Written by Member Companies ••••• ReGion CoMPany naMe GRoSS PReMiuM WRitten ($000) 2008 2007 4,300 1,883 2,138 3,030 6,314 981 13,814 5,443 5,597 5,336 4,400 1,912 2,305 3,133 6,029 891 13,179 5,325 5,603 5,349 MaRitiMeS Antigonish Carleton Clare Fundy Kings Pictou Prince Edward Island Southeastern Stanley United General Subtotal quebeC Abitibienne Appalaches Beauce Bellechasse Bois-Francs Coaticook-Sherbrooke Deux-Montagnes Drummond Gaspésie - Les Iles Groupe Estrie-Richelieu Groupe Ledor1 Haut St-Laurent Lac St-Pierre - Les Forges Lanaudière Montmagny L’Islet2 Monts et Rivers Portneuf - Champlain Les Prairies Réassurance Des Riverains3 La Vallée Valmont Vaudreuil-Soulanges4 Verchères 48,836 27,337 26,066 26,269 13,263 14,999 15,327 20,803 8,444 21,845 43,231 69,800 15,422 20,766 31,370 13,392 11,227 36,401 16,897 124,451 20,407 11,436 18,935 20,135 14,592 48,126 24,975 22,948 24,127 13,725 14,067 14,254 19,433 7,389 18,905 41,876 66,899 13,008 19,293 31,000 17,451 9,872 33,774 15,802 143,616 20,566 10,328 17,064 17,821 12,979 Subtotal 5 1 2 518,364 487,556 The number under the 2007 column is the addition of the GPW of Promutuel Dorchester and Promutuel Lévisienne-Orléans. The number under the 2007 column is the addition of the GPW of Promutuel Montmagny and Promutuel L’Islet. 3 The number under the 2007 column is the addition of the GPW of Promutuel de L’Est and Promutuel Témiscouata. 4 The number under the 2007 column is the addition of the GPW of Promutuel Vaudreuil and Promutuel Soulanges. 5 Promutuel Réassurance is not included in the subtotal and total to avoid double counting.
Slide 5: ReGion CoMPany naMe GRoSS PReMiuM WRitten ($000) 2008 2007 9,394 16,005 15,032 9,267 5,775 1,411 5,599 1,452,610 7,396 11,139 4,921 169,077 30,132 65,021 10,968 8,594 223,511 4,828 1,934 13,566 16,778 7,407 7,794 11,555 14,983 14,946 19,788 6,273 6,310 7,343 8,885 4,856 7,485 6,113 58,260 8,538 30,051 13,543 11,398 1,265,219 8,913 4,941 10,708 30,172 8,842 15,034 14,433 8,598 5,775 1,350 5,379 1,372,196 6,983 11,308 4,722 154,809 22,914 61,200 9,885 8,296 198,192 13,304 1,633 12,992 15,536 7,148 7,250 10,799 14,286 14,126 19,883 5,976 6,038 7,249 8,418 4,608 7,170 5,785 50,341 8,758 27,887 12,780 11,118 1,139,081 8,429 4,721 10,044 29,545 ontaRio Algoma Ayr Bay of Quinte Bertie & Clinton Brant Caradoc Delaware Cayuga Co-operators Dufferin Dumfries Erie FMRP (Business outside member companies) Farmers (Lindsay) Germania Glengarry Gore Grenville Grey & Bruce Halwell HTM Hay Howard Howick Kent & Essex Lambton Lanark L&A Max Canada McKillop Middlesex Norfolk North Blenheim North Kent North Waterloo Oxford Peel Peel Maryborough South Easthope State Farm Town and Country Townsend Tradition Trillium
Slide 6: ReGion CoMPany naMe GRoSS PReMiuM WRitten ($000) 2008 2007 5,314 5,509 8,118 12,512 7,273 5,762 5,103 5,446 8,457 12,314 6,826 5,585 ontaRio Usborne & Hibbert Wabisa West Elgin West Wawanosh Westminster Yarmouth Subtotal 6 WeSteRn Canada Germania (SK) Mennonite (Alberta) Mennonite (Saskatchewan) British Columbia Portage La Prairie Red River Valley Saskatchewan Mutual 3,523,850 1,926 4,516 11,713 23,319 151,317 51,506 36,883 3,263,743 1,860 4,288 10,715 18,801 140,085 47,675 34,944 Subtotal Canada 5 6 281,180 4,372,230 258,368 4,057,793 total 5,6 Promutuel Réassurance is not included in the subtotal and total to avoid double counting. Only the sales figure of FMRP with companies who are not members are included in the subtotal and total to avoid double counting. Survey of CAMiC Members re: The 4.8 KW Construction Heater for the last 5 years, Gerry Currie, Manager Risk Management & inspections for Portage la Prairie Mutual ins. Co. has been gathering information and alerting the Canadian Standards association (CSa international) about the failure of the element of electric Construction Space heaters 240 volts, 3,000 watt and greater range, more specifically the 4.8 kW construction heater. the following repeated complaints from Gerry Currie about fires caused by these heater elements, CSa international has implemented a task force to investigate the reasons for the failures and, if necessary, to come up with corrective measures. CSa international failed to conclude that there is a design defect of these construction heaters. Consequently, it decided against a product recall and in favor of only issuing a safety notice (available on the CaMiC Web Site). ••••• in february 2009, the Manitoba office of the fire Commissioner also decided to issue a safety notice but added that a number of fires have occurred from improper use and element failures in some models of electric, fan-forced space heaters, called construction heaters (available on the CaMiC Web Site). CaMiC Member companies have been surveyed to determine if their company has experienced losses related to fires caused by these heaters and, if so, if it was following their improper use and/or improper installation. the CaMiC board will analyze the results of the survey and decide if CaMiC should lobby if favor of a product recall of those heaters already in the market.
Slide 7: February 3, 2009 – Lobby Day in Ottawa ••••• On Tuesday February 3, 2009, CAMIC held its third Lobby Day in Ottawa. The event started with a presentation by Sean Moore, one of Canada’s most experienced practitioner, writers and teachers on public-policy advocacy. Mr. Moore took in excess of 1.5 hour to explain the Art and Science of Public-Policy Advocacy (a.k.a. “Lobbying”). His successful presentation was followed by an equally successful reception for MPs and Senators. In excess of 70 MPs and Senators came to the reception, reception for which pictures can be found in the Photo Gallery section of CAMIC’s Web Site. During its subsequent meeting, the CAMIC board decided to repeat the experience on Tuesday February 2, 2010. Again the event will be held at the Chateau Laurier and will be concurrent with the reception held by the Dairy Farmers of Canada also taking place at the Chateau Laurier. Both organizations attract rural MPs and Senators. The 2009 mid-term meeting ••••• the 2009 Mid-term Meeting concentrated on the economic and financial crisis and the governance of our companies in such an environment. Doug porter, deputy Chief economist at bMo Capital Markets made a very well prepared presentation on the State of the Canadian, uS and Global economy. now that a few weeks have passed, it is clear that his reading of the state of the Canadian economy was right and that the direction was nowhere near a recovery. the Governor of the bank of Canada subsequently proved him right. Bruce Friesen, President of Global Manager Research, made a presentation related to the investments made by mutual insurers and the necessity for the board of directors to know how these investments perform. bruce gave us a process by which board members could be in a position to play their role of company supervisors. Dave Sitaram, President of the Canadian Co-operative association (CCa), made a presentation on the 100th anniversary of his organization. the very strong link between the beginnings of mutual insurers and the beginnings of other cooperative organizations was made very clear. furthermore, it was mentioned that the quebec cooperative organization and the (french) Canadian cooperative organization had recently changed their respective name to include the word mutuality in recognition of the significant contribution of mutual insurers towards the cooperative movement. these two organizations are now respectively called the Conseil québécois de la coopération et de la mutualité and the Conseil canadien de la coopération et de la mutualité (CCCM). CaMiC is a member of both the CCa and the CCCM. our last speaker is a well known individual within the association community in ottawa. paul Ledwell made a presentation on the latest trends in the governance of organizations. Well versed in organizations of all sizes, he made clear that regulators do not expect the impossible from small organizations and the “Good Sense” is the prime quality regulators look for in any boards.
Slide 8: Agreements between CAMIC and suppliers ••••• CoMPlaint ReSolution PRoCeSS Federal legislation and a number of provincial legislations require that each insurance company appoints an ombudsman within the company and have in place a third party dispute resolution mechanism. To meet this “third party” requirement as efficiently and effectively as possible, CAMIC has set up its own third party dispute resolution organization called “Mutual Insurance Companies OmbudService (MICO)”. In turn, MICO has an agreement with the ADR Institute of Canada to provide MICO participating member companies with a mediator when a complaint is filed. In particular, our procedure goes as follows: The company representative addresses the insured’s complaint the best of his/her ability. If unable to solve the dispute, the case is referred to the company’s ombudsman. If a solution is still not found, the insured is informed of the third party dispute resolution process and is directed to MICO’s Web Site www.mutualombudservice.ca for additional information and for access to a mediation registration form. As soon as a complaint is registered, the Mutual Insurance Companies OmbudService (MICO) asks the ADR Institute of Canada to appoint a mediator. A mediation session is organized between the mediator, insurer and policyholder. Should the mediator not be able to bring the two parties to agree, the policyholder still has access to the court system. To date, all cases referred to a mediator have been solved at that level. Our system is cost effective and is consistent with the objective of relieving the court system of insurance related cases. on-line inSuRanCe CouRSeS As per our agreement with ILS Learning, employees, directors, agents and brokers of CAMIC member companies can purchase access to 127 insurance courses + 9 courses dedicated to adjusters. The CAMIC section of ILS’ web site include all of these courses. Price: $150 for the 7 adjusters’ courses + 127 general insurance courses or $100 for the 127 general insurance courses. To register please call ILS Learning at tel.: 1-800-404-2211 and mention that you are a member of CAMIC. Details can be found on CAMIC’s Web Site. Broker-insurer Connectivity ••••• Centre for Study insurance operation (CSio) as per our agreement with the Centre for Study of insurance operations (CSio), CaMiC members who wish to join CSio to gain access to CSio Standards and to have access to the CSionet are basically treated as one group of companies. in particular, mutual insurers which have a membership in CSio through CaMiC pay, as a group, only one one-time access fee of $21,000 (avoiding the $21,000 welcome fee per company), pay a yearly membership assessment based on the global business of mutuals with brokers (avoiding the $10,000 annual minimum assessment per company) and pay as a group for only 2 CSionet (as opposed to a CSionet per company). iter8 (for download and upload) as per our agreement with iter8, CaMiC members are given a discount off iter8’s list price for each type of license: upload, download and WaRP/xMl. they also benefit from the possibility of reducing the costs of the Professional Services provided by iter8 through grouping many mutuals under contracts carried out under a similar timeline. details are posted on the CaMiC’s Web Site. calls for autoPlus Gold, MVR and hitS; as well as to applied Systems’ WaRP software to upload Private Passenger automobile and Residential business electronically from the agency Manager bMS and from keal bMS. our agreements with Compuquote, CGi and applied Systems are an extension of similar agreements negotiated between these companies and Peel Mutual ins. Co. the outcome of Peel Mutual’s negotiations has been extended to other CaMiC member companies. ••• upload of data from the broker to the insurer those working on the upload of data between the brokers and the insurer may wish to have access to Compuquote’s data exchange Service, to CGi’s Web service
Slide 9: PReMiuM PayMent With CRedit CaRdS and debit CaRdS Global PaymentsTM has been offering a merchant payment card solution package to CAMIC members for six years. As our volume of business has grown over time, Global PaymentsTM has reduced its fees applicable on credit cards and debit cards transactions. The latest reduction was effective December 1, 2008. Through our agreement, you benefit from: • • • • Low credit and debit rates Free set up of your Visa and MasterCard accounts A wide variety of multipurpose point of sale terminals Visa, MasterCard and Interac Direct Payment sales deposits to your bank account of choice A cost effective recurring customer payment solution VehiCle RePlaCeMent CAMIC has a car Insurance Replacement Agreement with Hertz Canada Ltd. Hertz has agreed to provide specific benefits and rates to participating CAMIC member companies. Details can be found on CAMIC’s Web Site. MonitoRinG inVeStMentS Global Manager Research is a p&c insurance industry investment monitoring firm which help management and the Board determine how well your company’s investments are doing. In particular, Global Manager Research : • • produces, quarterly, the Property & Casualty Investment Monitor (PCIM); maintains a Database of Canada’s investment managers of segregated and pooled funds broken down by style, objectives and investment returns; and each year, organizes a series of one-day seminars to give clients the opportunity to meet a number of portfolio managers. ••• afteR houR ClaiMS SeRViCe CAMIC has a “mutual insurance companies” phone line with Crawford & Company (Canada). CAMIC covers the cost related to the toll free line while your company covers the cost of recording a claim and, if necessary, of dispatching an adjuster. The protocol for handling claims established by CAMIC can be modified to suit your needs. • • If you wish to take advantage of our agreement with Global PaymentTM, please contact Georges Dumitru from Global PaymentsTM at 1-866-937-5151 extension 5 or at 514398-0418. CAMIC members are offered these services at a discount rate. Mr. Bruce Friesen, President of Global Manager Research, can be reached at (905) 842-4242. Details can be found on CAMIC’s Web site. ••••• Actuary on the audit team and three-year peer review effective with the 2006 financial year, the Canadian institute of Chartered accountants (CiCa) requires that auditors « in almost all circumstances » must only accept an engagement to audit an insurance enterprise if there is an actuarial expertise on the engagement team performing the audit. an agreement has been concluded with the actuarial firm J.S. Cheng & Partners inc. to conduct three-year peer reviews and be the actuary on the audit team of mutual insurers. being the actuary for many mutuals, J.S. Cheng and Partners inc. have developed an expertise in mutual insurers, which translate into more efficiency in delivering the service and further translate into cost savings for mutual insurers. ••••• CDrg agreement CaMiC has just signed an agreement with CdRG to become, on behalf of its member companies, one of the three companies having access to the services of the Red teams. CdRG has formed three Red teams whose role is to help CdRG member companies when the demand for their services is overwhelming. by virtue of the agreement between CaMiC and CdRG, CaMiC members who use the services of any CdRG member company will have access to the CdRG Red team should a catastrophe occurs in the territory in which the CaMiC member does business. this agreement is valid for one year. during that one-year period, CaMiC would welcome your comment on the quality of the services offered by any of the CdRG member companies and by the Red team if applicable.
Slide 10: ReSeaRCh on inSuRanCe aPPliCantS CAMIC has an agreement with CGI whereby CGI waives the initiation fee applicable to CGI’s claims tracking services; the initiation fees is waived for the use of the HITS system for personal property, the use of CTS for commercial lines, and the use of AUTOPLUS. In addition, CAMIC members benefit from a discount of $0.10 per HITS inquiry. This issue of has a new look, please give us your comments