Reflection Spring 2009
- 1. Spring | 2009 reflection • • • • • A newsletter of the Canadian Association of Mutual Insurance Companies In Memoriam Two icon figures leave the mutual ShaRon P. doxtatoR insurance industry (1951-2009) • • • • • Glen Claude Sharon P. Doxtator, JohnSon Robitaille Manager of Usborne retired from the left Groupe Promu- & Hibbert Mutual Ontario Mutual tuel on April 9, Fire Ins. Co., passed Insurance Asso- 2009 after spend- away on Friday ciation (OMIA) on ing 6 years with April 10, 2009 at the March 26, 2009 the organization age of 58. after spending 31 as Chief Executive years with the asso- Officer. Claude Sharon joined ciation. He coordinated OMIA’s training joined Groupe Promutuel in January 2003. Usborne & Hibbert in July 1987 and was program from 1978 to 1986, was promot- Under his leadership, Groupe Promutuel promoted Manager in 1997. Over time, ed Vice-President in 1986 and President member companies have, as a group, reached Sharon has built a reputation for her prudent in 1989. Through his three decades with a gross premium volume exceeded by only management. She leaves behind a very well OMIA, he served on most of OMIA’s stand- three other insurers in the province. In capitalized insurance company that makes ing committees and on special commit- October 2004, Claude joined the CAMIC the envy of the mutual insurance industry. tees that explored such initiatives as sol- Board and worked hard at strengthening vency monitoring, financial services, central the financial and managerial reporting of computer, auto insurance issues and joint CAMIC’s President to the CAMIC Board. governance. 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. 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. 311 McArthur Avenue, Suite 205 Ottawa, ON K1L 6P1 613.7 8 9 .6851
- 2. 2008-2009 Board of Directors • • • • • exeCutiVe CoMMittee Ray White Rob foRSythe Chairman – Eastern Canada 1st Vice Chairman of the Board – Ontario Manager – SouthEastern Mutual Ins. Co. Senior Vice President – Farm Mutual Reinsurance Plan Inc. daRin neSSel Joe dietRiCh 2nd Vice Chairmain of the Board – Past Chair – Ontario Western Canada Manager – Trillium Mutual Ins. Co. Manager – Mutual Fire Ins. Co. of BC diReCtoRS blaiR CaMPbell Randy ClaRk Director – Eastern Canada Director – Western Canada Corporate Secretary & General Counsel – President & CEO – PEI Mutual Fire Ins. Co. The Portage la Prairie Mutual Ins. Co. fRank RideR yVan RoSe Director – Ontario Director – Quebec Manager – South Easthope Mutual Ins. Co. Manager – Promutuel L’Abitibienne aSSoCiation’S PReSident noRMand lafRenièRe
- 3. CAMIC’s pre-budget submission • • • • • On January 9, 2009 CAMIC presented spending should be “Will this stimulus mea- of Finance and the Canada Revenue Agency. its pre-budget submission to the Federal sure increase the productive capacity of our All we are asking the federal government is Department of Finance. In our document, economy?” In our view, investing in sewer to accept that insurers use, for tax purposes, we have identified four areas of concerns and systems and in municipal roads and bridges the definition of policy acquisition costs and made recommendations to address them. meet that test but may not be as expedient as cost deferral included in generally accepted Our recommendations were: the federal government would wish. accounting principles. In a time when insur- In the subsequent budget, the federal govern- ers need to rebuild their capital, it is essential 1. To increase funding to help municipali- ment injected significant additional money to get this minimum level of cooperation ties address their infrastructure deficit; towards municipal infrastructure projects – from the government. 2. To modify the tax treatment of Deferred however, these projects must be completed Policy Acquisition Costs (DPAC); within 2 years and require the financial Maintain ReStRiCtionS on 3. To maintain the ban on banks selling contribution of provincial and municipal bankS inSuRanCe Retail- insurance in their branches and the ban governments. These conditions will prevent inG PoWeRS on their user of bank customer informa- a significant number of worthwhile projects tion to target their marketing of insur- This issue will be revisited along with the from being implemented. ance products; and revision of the financial services legislation 4. To supervise credit card companies as in 2011. By raising this issue now, we just defeRRed PoliCy they charge higher merchants’ discount want to highlight that our position has not aCquiSition CoStS (dPaC) rates for purchases made by clients with changed and that the arguments that we “special” credit cards. The Quebec Revenue Agency has assessed raised in the past are still as valid today as most of our Quebec based member compa- they were at the time of the last review. MuniCiPal infRaStRuCtuRe nies for inadequate deferral of policy acquisi- tion costs.The additional assessment is worth diSCount RateS ChaRGed Our interest in addressing the municipal about $10 million. by CRedit CaRd CoMPanieS infrastructure deficit is related to the impact that inadequate sewer systems, and insecure For its part, the Canada Revenue Agency Credit card companies, VISA and MasterCard, roads and bridges have on insurance claims has not yet reassessed our Quebec members have changed their requirements to be able and injuries. Our document further empha- for inadequate deferral of policy acquisition to possess a Mosaic or an Infinite credit card. sized that while we encourage the govern- costs, but it has reassessed a number of stock Due to these changes, the proportion of ment to inject financial stimulus in the econ- companies and it is therefore likely that our the population which posses a Mosaic or an omy, it is very important to ensure that any members will be reassessed by the Canada Infinite credit card has increased from 5% to such stimulus increase the productive capacity Revenue Agency. It is to prevent such a reas- 35% in one year. While these newly issued of the economy in the future. The test before sessment from taking place that CAMIC raises cards give their owners some more benefits committing to any tax cuts or government this issue with both the Federal Department 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 fol- low the lead of the Canadian retail Council and others in supporting solutions which limit the price charged for financial transac- tions in Canada. FUTUrE AnnUAL COnVEnTiOnS oCtobeR 4–6, 2009 oCtobeR 3–5, 2010 oCtobeR 2–4, 2011 the Westin harbour Castle toronto, fairmont Chateau lake louise, fairmont tremblant, toronto, on lake louise, ab Mont tremblant, qC
- 4. Gross Premium Written by Member Companies • • • • • ReGion CoMPany naMe GRoSS PReMiuM WRitten ($000) 2008 2007 MaRitiMeS Antigonish 4,300 4,400 Carleton 1,883 1,912 Clare 2,138 2,305 Fundy 3,030 3,133 Kings 6,314 6,029 Pictou 981 891 Prince Edward Island 13,814 13,179 Southeastern 5,443 5,325 Stanley 5,597 5,603 United General 5,336 5,349 Subtotal 48,836 48,126 quebeC Abitibienne 27,337 24,975 Appalaches 26,066 22,948 Beauce 26,269 24,127 Bellechasse 13,263 13,725 Bois-Francs 14,999 14,067 Coaticook-Sherbrooke 15,327 14,254 Deux-Montagnes 20,803 19,433 Drummond 8,444 7,389 Gaspésie - Les Iles 21,845 18,905 Groupe Estrie-Richelieu 43,231 41,876 Groupe Ledor1 69,800 66,899 Haut St-Laurent 15,422 13,008 Lac St-Pierre - Les Forges 20,766 19,293 Lanaudière 31,370 31,000 Montmagny - L’Islet2 13,392 17,451 Monts et Rivers 11,227 9,872 Portneuf - Champlain 36,401 33,774 Les Prairies 16,897 15,802 Réassurance 124,451 143,616 Des Riverains3 20,407 20,566 La Vallée 11,436 10,328 Valmont 18,935 17,064 Vaudreuil-Soulanges4 20,135 17,821 Verchères 14,592 12,979 Subtotal 5 518,364 487,556 1 The number under the 2007 column is the addition of the GPW of Promutuel Dorchester and Promutuel Lévisienne-Orléans. 2 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.
- 5. ReGion CoMPany naMe GRoSS PReMiuM WRitten ($000) 2008 2007 ontaRio Algoma 9,394 8,842 Ayr 16,005 15,034 Bay of Quinte 15,032 14,433 Bertie & Clinton 9,267 8,598 Brant 5,775 5,775 Caradoc Delaware 1,411 1,350 Cayuga 5,599 5,379 Co-operators 1,452,610 1,372,196 Dufferin 7,396 6,983 Dumfries 11,139 11,308 Erie 4,921 4,722 FMRP 169,077 154,809 (Business outside member companies) 30,132 22,914 Farmers (Lindsay) 65,021 61,200 Germania 10,968 9,885 Glengarry 8,594 8,296 Gore 223,511 198,192 Grenville 4,828 13,304 Grey & Bruce 1,934 1,633 Halwell 13,566 12,992 HTM 16,778 15,536 Hay 7,407 7,148 Howard 7,794 7,250 Howick 11,555 10,799 Kent & Essex 14,983 14,286 Lambton 14,946 14,126 Lanark 19,788 19,883 L&A 6,273 5,976 Max Canada 6,310 6,038 McKillop 7,343 7,249 Middlesex 8,885 8,418 Norfolk 4,856 4,608 North Blenheim 7,485 7,170 North Kent 6,113 5,785 North Waterloo 58,260 50,341 Oxford 8,538 8,758 Peel 30,051 27,887 Peel Maryborough 13,543 12,780 South Easthope 11,398 11,118 State Farm 1,265,219 1,139,081 Town and Country 8,913 8,429 Townsend 4,941 4,721 Tradition 10,708 10,044 Trillium 30,172 29,545
- 6. ReGion CoMPany naMe GRoSS PReMiuM WRitten ($000) 2008 2007 ontaRio Usborne & Hibbert 5,314 5,103 Wabisa 5,509 5,446 West Elgin 8,118 8,457 West Wawanosh 12,512 12,314 Westminster 7,273 6,826 Yarmouth 5,762 5,585 Subtotal 6 3,523,850 3,263,743 WeSteRn Germania (SK) 1,926 1,860 Canada Mennonite (Alberta) 4,516 4,288 Mennonite (Saskatchewan) 11,713 10,715 British Columbia 23,319 18,801 Portage La Prairie 151,317 140,085 Red River Valley 51,506 47,675 Saskatchewan Mutual 36,883 34,944 Subtotal 281,180 258,368 Canada total 5,6 4,372,230 4,057,793 5 Promutuel Réassurance is not included in the subtotal and total to avoid double counting. 6 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 in february 2009, the Manitoba office of Risk Management & inspections for Portage the fire Commissioner also decided to la Prairie Mutual ins. Co. has been gather- issue a safety notice but added that a num- ing information and alerting the Canadian ber of fires have occurred from improper Standards association (CSa international) use and element failures in some mod- about the failure of the element of electric els of electric, fan-forced space heaters, Construction Space heaters 240 volts, called construction heaters (available on 3,000 watt and greater range, more specifi- the CaMiC Web Site). cally the 4.8 kW construction heater. the CaMiC Member companies have been following repeated complaints from Gerry surveyed to determine if their company has Currie about fires caused by these heater experienced losses related to fires caused elements, CSa international has imple- by these heaters and, if so, if it was fol- mented a task force to investigate the lowing their improper use and/or improper reasons for the failures and, if necessary, to installation. come up with corrective measures. the CaMiC board will analyze the results CSa international failed to conclude that of the survey and decide if CaMiC should there is a design defect of these con- lobby if favor of a product recall of those struction heaters. Consequently, it decided heaters already in the market. against a product recall and in favor of only issuing a safety notice (available on the CaMiC Web Site).
- 7. February 3, 2009 – Lobby Day in Ottawa • • • • • On Tuesday During its subsequent meeting, the CAMIC be concurrent with the reception held by the February 3, 2009, board decided to repeat the experience on Dairy Farmers of Canada also taking place CAMIC held its Tuesday February 2, 2010. Again the event at the Chateau Laurier. Both organizations third Lobby Day will be held at the Chateau Laurier and will attract rural MPs and Senators. in Ottawa. The event started with a presentation by Sean Moore, one of Canada’s most expe- rienced 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. 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, sity for the board of directors to know how of mutual insurers towards the cooperative deputy Chief these investments perform. bruce gave us movement. these two organizations are economist at bMo a process by which board members could now respectively called the Conseil qué- Capital Markets be in a position to play their role of com- bécois de la coopération et de la mutualité made a very well pany supervisors. and the Conseil canadien de la coopération prepared presenta- et de la mutualité (CCCM). CaMiC is a Dave Sitaram, tion on the State member of both the CCa and the CCCM. President of of the Canadian, the Canadian our last speaker is uS and Global Co-operative a well known indi- economy. now that a few weeks have association (CCa), vidual within the passed, it is clear that his reading of the made a presenta- association com- state of the Canadian economy was right tion on the 100th munity in ottawa. and that the direction was nowhere near anniversary of his paul Ledwell made a recovery. the Governor of the bank of organization. the a presentation on Canada subsequently proved him right. very strong link between the beginnings of the latest trends in Bruce Friesen, mutual insurers and the beginnings of other the governance of President of Global cooperative organizations was made very organizations. Well versed in organizations Manager Research, clear. furthermore, it was mentioned that of all sizes, he made clear that regulators made a presenta- the quebec cooperative organization and do not expect the impossible from small tion related to the the (french) Canadian cooperative organi- organizations and the “Good Sense” is investments made zation had recently changed their respec- the prime quality regulators look for in any by mutual insurers tive name to include the word mutuality in boards. and the neces- recognition of the significant contribution
- 8. Agreements between CAMIC and suppliers • • • • • CoMPlaint ReSolution process and is directed to MICO’s Web Site on-line inSuRanCe PRoCeSS www.mutualombudservice.ca for additional CouRSeS information and for access to a mediation Federal legislation and a number of provin- As per our agreement with ILS Learning, registration form. cial legislations require that each insurance employees, directors, agents and brokers of company appoints an ombudsman within As soon as a complaint is registered, the CAMIC member companies can purchase the company and have in place a third party Mutual Insurance Companies OmbudService access to 127 insurance courses + 9 courses dispute resolution mechanism. (MICO) asks the ADR Institute of Canada dedicated to adjusters. The CAMIC section to appoint a mediator. A mediation session is of ILS’ web site include all of these courses. To meet this “third party” requirement as organized between the mediator, insurer and Price: $150 for the 7 adjusters’ courses + 127 efficiently and effectively as possible, CAMIC policyholder. Should the mediator not be able general insurance courses or $100 for the 127 has set up its own third party dispute resolu- to bring the two parties to agree, the policy- general insurance courses. To register please tion organization called “Mutual Insurance holder still has access to the court system. call ILS Learning at tel.: 1-800-404-2211 and Companies OmbudService (MICO)”. mention that you are a member of CAMIC. To date, all cases referred to a mediator have In turn, MICO has an agreement with the Details can be found on CAMIC’s Web Site. been solved at that level. Our system is cost ADR Institute of Canada to provide MICO effective and is consistent with the objective participating member companies with a of relieving the court system of insurance mediator when a complaint is filed. related cases. In particular, our procedure goes as follows: The company representative addresses the insured’s complaint the best of his/her abil- ity. 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 Broker-insurer Connectivity • • • • • Centre for Study insurance iter8 (for download and upload) calls for autoPlus Gold, MVR and hitS; as operation (CSio) well as to applied Systems’ WaRP software as per our agreement with iter8, CaMiC to upload Private Passenger automobile as per our agreement with the Centre for members are given a discount off iter8’s and Residential business electronically Study of insurance operations (CSio), list price for each type of license: upload, from the agency Manager bMS and from CaMiC members who wish to join CSio download and WaRP/xMl. they also ben- keal bMS. to gain access to CSio Standards and to efit from the possibility of reducing the have access to the CSionet are basically costs of the Professional Services provided our agreements with Compuquote, CGi treated as one group of companies. in by iter8 through grouping many mutu- and applied Systems are an extension of particular, mutual insurers which have a als under contracts carried out under a similar agreements negotiated between membership in CSio through CaMiC pay, similar timeline. details are posted on the these companies and Peel Mutual ins. Co. as a group, only one one-time access fee CaMiC’s Web Site. the outcome of Peel Mutual’s negotiations of $21,000 (avoiding the $21,000 welcome has been extended to other CaMiC mem- fee per company), pay a yearly member- ber companies. ship assessment based on the global busi- ness of mutuals with brokers (avoiding the $10,000 annual minimum assessment per • • • company) and pay as a group for only 2 upload of data from the broker CSionet (as opposed to a CSionet per to the insurer company). 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
- 9. PReMiuM PayMent With VehiCle RePlaCeMent MonitoRinG inVeStMentS CRedit CaRdS and debit CAMIC has a car Insurance Replacement Global Manager Research is a p&c insurance CaRdS Agreement with Hertz Canada Ltd. Hertz industry investment monitoring firm which Global PaymentsTM has been offering a mer- has agreed to provide specific benefits and help management and the Board deter- chant payment card solution package to CAMIC rates to participating CAMIC member com- mine how well your company’s investments members for six years. As our volume of busi- panies. Details can be found on CAMIC’s are doing. In particular, Global Manager ness has grown over time, Global PaymentsTM Web Site. Research : has reduced its fees applicable on credit cards • produces, quarterly, the Property & and debit cards transactions. The latest reduc- Casualty Investment Monitor (PCIM); tion was effective December 1, 2008. Through our agreement, you benefit from: • maintains a Database of Canada’s invest- • • • ment managers of segregated and pooled • Low credit and debit rates funds broken down by style, objectives • Free set up of your Visa and MasterCard and investment returns; and accounts afteR houR ClaiMS • A wide variety of multipurpose point of SeRViCe • each year, organizes a series of one-day sale terminals seminars to give clients the opportunity • Visa, MasterCard and Interac Direct CAMIC has a “mutual insurance compa- to meet a number of portfolio managers. Payment sales deposits to your bank nies” phone line with Crawford & Company (Canada). CAMIC covers the cost related to CAMIC members are offered these ser- account of choice the toll free line while your company covers vices at a discount rate. Mr. Bruce Friesen, • A cost effective recurring customer pay- the cost of recording a claim and, if necessary, President of Global Manager Research, can ment solution of dispatching an adjuster. The protocol for be reached at (905) 842-4242. Details can be If you wish to take advantage of our agree- handling claims established by CAMIC can found on CAMIC’s Web site. ment with Global PaymentTM, please contact be modified to suit your needs. Georges Dumitru from Global PaymentsTM at 1-866-937-5151 extension 5 or at 514- 398-0418. 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.
- 10. ReSeaRCh on inSuRanCe aPPliCantS CAMIC has an agreement with CGI where- by CGI waives the initiation fee applicable to CGI’s claims tracking services; the initia- tion 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