Canada Life has no plans at present to change from an insurance company owned by its members into a company owned by shareholders, the managing director of Canada Life Ireland Mr Don Gallagher said yesterday.
He was responding to market speculation that the company was about to put a demutualisation option to members. In recent days the company has noticed a strong increase in the demand for with-profits Canada Life insurance policies. Holders of with-profits policies would qualify for pay-outs if the company demutualised.
Mr Gallagher said that the increase in demand for these policies appeared to have been triggered by speculation that December 31st 1997 would be the cut off date for pay-outs if the company demutualised. "Such speculation has no basis in fact", he insisted.
"It appears that the recent announcement by Mutual Life, Canada's fifth largest life assurance group, that it would seek policyholder approval to become Canada's first insurance firm to demutualised, has triggered speculation that Canada's other mutuals would follow suit", according to Mr Gallagher. Canada Life has been examining the advantages and disadvantages of such a status change, he admitted. But he insisted that no decisions had been made.
Customers buying Canada Life policies should in the first instance ensure that the policy they buy meets their needs for long-term insurance and savings, he advised. They should not take out policies for purely speculative reasons, he warned.
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