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(Reuters) - Economical Insurance's mutual policyholders voted on Monday to allow the Canadian property and casualty insurance firm to demutualize.
Demutualization is a regulated process in which a mutual insurance company converts to a share company with share capital and voting shareholders.
Mutual policyholders of the firm voted in favor of commencing negotiations with non-mutual policyholders on the allocation of demutualization benefits, at a special meeting in Kitchener, Ontario, the firm said.
Economical Insurance in February welcomed rules released by the government of Canada that paved a path for it to potentially seek a public listing or a sale.
Many of Canada's largest life insurance firms went through the process in the 1990s, but until now regulations did not exist for property and casualty insurers to follow that path. In 2011, the Canadian government began a process to create a regulatory framework to allow property and casualty insurers to demutualize.
Economical said it would prepare and mail a formal notice to all eligible policyholders which has to be approved by the federal regulator, the Office of the Superintendent of Financial Institutions.
Reporting by Kshitiz Goliya in Bengaluru