FSCO seizes control of Canadian Millers’ Mutual

In a not unexpected move, the Financial Services Commission of Ontario (FSCO) is seizing control of troubled Canadian Millers’ Mutual’s assets.
FSCO says the move was made in light of the insurer’s assets being deemed insufficient to provide for the company to continue in business and meet its financial obligations.
The company, which has been in existence for more than a century, announced in late August that it was below the required level of policyholder surplus. It had dealt with largely farm and feed mill insurance, and in 2000 saw direct written premiums of about $6.5 million.
Acting FSCO superintendent Philip Howell made the decision “after receiving information for a chartered accounting firm showing that the assets were insufficient to warrant Canadian Millers’ Mutual Insurance Company continuing in business”, states a FSCO press release.
The statement also notes that policyholders will have some protection under the Property and Casualty Insurance Compensation Corporation (PACICC).
PACICC is also busy with the wind-up order placed on the Canadian operations of U.S.-base Reliance. Following the decision of the Office of the Superintendent of Financial Institutions (OSFI) to wind-up the Canadian branch, PACICC assumed 15 active policies as well as Reliance’s Meridian program, states a PACICC notice.
While PACICC does extend coverage to some of Reliance’s business, it will not with respect to aircraft, fidelity, surety and certain liability insurance. However, PACICC notes that a liquidator has been charged to sell off both Meridian and Reliance’s other business. A deadline of January 31, 2002 has been set to sell the Meridian book, and April 30, 2002 for the remaining business.