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2020 Presidents Managers Meeting Virtual Event Chair Terry Knight North Blenheim Mutual Insurance Company Bright Ontario

Board of Directors and Officers 2020 OMIA Board Terry Knight Chair Group C Director North Blenheim Mutual John Stirk 1st Vice Chair Director at Large Dufferin Mutual Steve Quinn 2nd Vice Chair Group B Director Cayuga Mutual Neil Shay Director at Large CTM Insurance Marg Torrance Director at Large Halwell Mutual Kevin Inglis Group D Director Howick Mutual John Taylor President OMIA Sharon Dittmer Treasurer OMIA 2 Bob Burley Past Chair Group E Director HTM Insurance Tracy Wintermute Group A Director Westminster Mutual Brad Vanstone Director at Large West Wawanosh Mutual

Message from OMIA President John Taylor Welcome Greetings and welcome to the 2020 Presidents and Managers meeting This is by no means the customary welcome we ve seen in years gone by as mutuals gather each fall 2020 has placed us all in the world of virtual meetings and on a temporary basis at least our President Managers meeting has joined the list of on line only events for this year The P M book is prepared each year in anticipation of giving meeting attendees news on what s taking place in the meetings a mid year report on OMIA activities and general information that we think is important for our mutual members 2020 will see a simplified meeting taking place on October 27th You will receive updates from the leadership at OMIA Farm Mutual Re and the Fire Mutuals Guarantee Fund In addition we ve convened a panel of provincial national and international insurance leaders with Chuck Chamness from NAMIC Colin Simpson from the Insurance Brokers Association of Ontario and Don Forgeron of the Insurance Bureau of Canada We thought this would be an excellent opportunity to get these thoughtful and wellspoken insurance leaders together as they ve been on the forefront of thinking through many of the unique insurance issues arising in our COVID 19 world Your P M book includes some very detailed reports on the work of your committees These are important working groups that provide significant input and feedback to the OMIA Board across a broad range of topic areas The board relies on these committees to provide the true membership perspective and to help put together programs that are specifically tailored to meet mutual needs and foster cooperation among our members Please take time to read these reports We look forward to connecting on the 27th Yours Truly John Taylor President Ontario Mutual Insurance Association 3

The Fire Mutuals Guarantee Fund FMGF was formed in 1976 The creation of this fund enabled farm mutuals to discontinue use of the premium note The FMGF is directed by a board of trustees elected by its members The voting membership for the FMGF is the same as OMIA s voting membership The FMGF trustees are as follows Chair Neil Petreny Dumfries Brian Downie West Elgin Sharon Hollister Germania Jodi Rich Howard Glenn Taylor Halwell The fund is a 1 Million open ended fund with a current balance of nearing 2 Million In the event of an insolvency members would be assessed for the funds necessary to meet the insolvent member s obligations to policyholders There has never been a call on the Fund The fund agreement essentially places the surplus of all 38 participating farm mutuals and Farm Mutual Re behind any one participant Participants in the FMGF are exempt from the insurance industry guarantee fund PACICC Property and Casualty Insurance Compensation Corporation The FMGF provides a broader guarantee in that There is no deductible It covers all lines There are no caps on unearned premiums or claims Guarantee Fund members are subject to a solvency protection process agreed to by all members The process includes a series of solvency tests and quarterly reviews administered by the Financial Review Committee The Financial Review Committee FRC is appointed by FMGF Trustees and consists of Catherine MacLellan Chair Bill Embree Joanne Vansevenant and Rick Walters The committee reports directly to the CEO of Ontario s Financial Services Regulatory Authority or their designate October 2020 4

Neil Petreny Chair FMGF Dumfries Mutual Insurance Company Neil Petreny was elected to the board of Dumfries Mutual Insurance Company in 2013 Originally from Saskatchewan he has a degree in agriculture a Masters in Business Administration and has spent nearly two decades as the General Manager of a Guelph based agricultural services company His business experience includes governance policy planning finance IT systems service delivery and strategic business partnerships In addition to operational experience he also spent seven years as a North American director on an international organization involved with services and standards serving four years as President Neil was elected to a three year term as a Trustee on the Fire Mutuals Guarantee Fund in 2015 and has been a Dumfries Mutual farm policyholder since 2002 5 October 2020

FINANCIAL REVIEW COMMITTEE FINANCIAL EXAMINATION COMMITTEE September 3 2020 To Fire Mutual Guarantee Members From Financial Review Committee Subject 2020 Second Quarter Results June 30 2020 Summary Net Income for FMGF Members for the first six months of 2020 was 46 4 million a significant improvement over the loss of 38 3 million reported at the end of the first quarter Both Underwriting and Investment results were significantly better in the second quarter of 2020 bringing the year to date results to a positive ROE on an annualized basis of 7 27 Although a positive result the first six months of 2020 provided returns lower than the ROE for the same period of 2019 of 10 Income for the first half of the year was comprised of the following key elements Underwriting Gain of 36 1 million Investment Income excluding Unrealized Gains and Losses 25 3 million Unrealized Losses 4 5 million Net Income Net Income was a profit of 46 4 million for the first six months of the year compared to a Net Profit for the same period in 2019 of 60 million While Underwriting Results were considerably better in 2020 Net Investment Income amounted to 20 8 million down from 86 million a year earlier As the 2019 Investment Income was significantly higher due to Unrealized Gains the 2020 Investment Results were affected by Unrealized Losses of 4 5 million The Return on Equity for the first six months of the year was 7 27 compared to 10 for 2019 and a Negative Return of 12 55 for the first quarter of 2020 Underwriting Results The Underwriting Gain increased to 36 1 million at the end of the second quarter from 3 65 million at the end of March 2020 The Combined Ratio was 91 for the first six months of the year This compares to an Underwriting Loss for the same period in 2019 of 13 9 million To the end of June there were no major weather related catastrophic events Catherine MacLellan Bill Embree 6 Joanne Vansevenant Rick Walters

FINANCIAL REVIEW COMMITTEE FINANCIAL EXAMINATION COMMITTEE The Claims Ratio was 51 38 less than the 66 12 Claims Ratio in the first half of 2019 The Claims Ratio for Property was 52 8 while Automobile was slightly less at 51 53 The Expense Ratio increased to 40 93 from 38 62 in 2019 General Expenses increased from 66 million in the first six months of 2019 to 86 million for the corresponding period in 2020 Investment Income Net Investment Income was a Gain of 20 8 million a dramatic improvement over the Loss of 48 million reported for the first three months of the year The significant change results from Unrealized Losses of 62 1 million at March 31 declining to 4 5 million at June 30 In comparison at June 30 2019 the companies had Unrealized Gains of 57 5 million Interest and Dividend Income amounted to 22 1 million Realized Gains were 5 76 million The Investment Yield annualized based on reported Net Investment Income was 2 4 Minimum Capital Test The MCT ratio for Ontario mutuals at June 30 2020 declined slightly from 510 at the end of March to 505 at June 30 This compares to 518 at the end of the second quarter in 2019 While Capital Available increased by almost 60 million to 993 million in the second quarter of the year Capital Required at Target rose by almost 20 million to 245 million during the same three month period Other OMIA has been holding webinar meetings initially every week day but now twice a week This provides a forum for the companies to discuss issues arising from the pandemic and how they are responding in their communities and with their clients and staff It has proven a very beneficial venue for exchanging ideas and assisting one another The regular calls have provided a first hand opportunity to address all of the unique operational legal and governance issues arising from the pandemic and ensure effective timely and compliant responses from the mutuals to any challenges presented The FEC believes that there are no major issues which are not being handled effectively at this time Catherine MacLellan Bill Embree 7 Joanne Vansevenant Rick Walters

FINANCIAL REVIEW COMMITTEE FINANCIAL EXAMINATION COMMITTEE October 2020 To Fire Mutual Guarantee Fund Members From Financial Review Committee Subject Refunds to policyholders Summary We have now received the completed Questionnaires on Refunds to Policyholders from the FMGF members Fifteen companies have paid refunds in the last ten years Key Findings of the Survey In all cases the Refunds are at the complete discretion of the Board of Directors In all cases the Refunds are not included in the calculation of Underwriting Results Background In reviewing Onerous contracts and Fulfillment Cash Flows the question of how Refunds to Policyholders are handled by FMGF members was discussed Would Refunds have to be considered in determining Onerous Contracts In addition at our May meeting FSRA raised the question of how Refunds are being reported in the P C 1 Annual Return It had been agreed several years ago that Refunds would be reported on Page 10 60 but this practice has not been consistently followed Details of the Survey Results Only fifteen of the FMGF members have paid refunds to policyholders in the last ten years The Details of the Refunds are as follows T he Companies by laws provide for the payment of Refunds and both the decision to pay a Refund and the amount are at the complete discretion of the Board of Directors Seven companies classify the payments as Refund of Premiums while the remaining eight companies report them as Refunds of Surplus The amount of the Refund is generally based on Underwriting Results Net Income or both Some companies also consider the Gross and Net Risk Ratios growth in Surplus over last few years and tax savings Four companies use a specific formula to determine the amount of the Refund Only two companies include all policyholders the majority only pay Refunds on property insurance Catherine MacLellan Bill Embree 8 Joanne Vansevenant Rick Walters

FINANCIAL REVIEW COMMITTEE FINANCIAL EXAMINATION COMMITTEE T en companies pay Refunds to policyholders that have been with the company for one year or more while three require that the policyholder have insured with the company for at least three years One had no stipulation No companies include the Refunds in the Underwriting Results Refunds are reported as Other Expenses on page 20 30 line 46 of the P C 1 return All companies include Refunds as a deductible expense for Income Tax purposes Companies do not reduce commissions to Brokers for the Refunds but five companies reduce premium taxes when Refunds are paid This latter item will be discussed at the upcoming Accountants Roundtable The journal entries are generally consistent with a Debit to a Refund account and a Credit to a Payable when the Refund is declared and a subsequent Debit to the Payable and a Credit to Cash when paid Slightly different terminology is used but these are the main accounts Onerous Contracts In the discussions with E Y regarding Onerous Contracts comments were made regarding whether or not Refunds to Policyholders should be taken into account in determining if specific contracts were onerous The AAC will be discussing with E Y the results of the survey and will determine if Refunds are included in the determination of Onerous Contracts given the manner in which they are determined and reported Conclusion As a follow up to the Survey the FRC will ensure that the P C 1 instructions reflect the practices We will also provide additional clarification or responses to the member companies who completed the survey Catherine MacLellan Bill Embree 9 Joanne Vansevenant Rick Walters

Financial Review Committee Members Catherine MacLellan Catherine began her work with Ontario Mutuals in 1994 as one of the inaugural members of a solvency monitoring committee created by the Guarantee Fund companies This role evolved in 2001 to leadership of the Financial Review Committee FRC Working with FSCO and mutual system stakeholders Catherine has been integral in developing and improving solvency monitoring and reporting for the Guarantee Fund companies Catherine MacLellan is principal of her own consulting firm Catherine MacLellan Associates Inc which was established in 1987 Clients have included both public and private organizations including Statistics Canada the Office of the Superintendent of Financial Institutions OSFI Financial Services Commission of Ontario FSCO IBM the Ontario Mutual Insurance Association OMIA a number of private insurance and trust companies and PricewaterhouseCoopers PwC Catherine has been a member of OMIA s Accounting Advisory Committee and has been an important contributor to the mutuals adoption of Prudent Person Portfolio IFRS Enterprise Risk Management and Own Risk Solvency Assessment In 2018 Catherine was recognized with OMIA s Presidential Merit Award In a joint project with PwC since 1989 Catherine has worked on the development maintenance and servicing of the various P C Pro Life Pro and Pension Pro products Catherine began her career at OSFI where she spent thirteen years in the banking and property and casualty insurance sectors She followed this with several years in a public financial services company Catherine MacLellan has an Honours Bachelor of Commerce degree from the University of British Columbia and is a Chartered Professional Accountant Bill Embree As President and CEO of HTM Bill was active in mutual causes and events He was a member of OMIA s Market Issues Committee for several years Bill s insurance career began with the Halifax Insurance Company in 1966 He held various management roles with Independent Insurance Managers the Halifax Insurance Company and the Ontario Mutual General Insurance Company before taking a position at Allianz Canada in 1987 He retired in 2011 after an impressive 40 year career in the insurance industry His job titles there include Vice President Personal Lines and Western Region Manager He had great success in turning around the poor performance of regional offices in Alberta and Ontario and was promoted to the position of Senior Vice President in Business Development Marketing Regional Operations in 1998 He worked with Allianz Canada until 2003 when he joined Hamilton Township Mutual Insurance Company HTM Insurance in Cobourg Ontario In 2011 Bill became a member of the Financial Review Committee of the Ontario Mutual Insurance Association Bill is a Chartered Insurance Professional CIP 10

Rick Walters Deeply committed to the mutual system he served on the board for CAMIC from 2011 2017 and for SEH Computer Systems from 2004 2012 sitting as Chair in 2008 09 Rick attained his degree in Economics from Western University and began his career in 1979 as a Commercial Loan Officer for Federal Business Development Bank in Kingston He spent a short time as a Senior Financial Analyst for Metro Canada Ltd before taking a position as Assistant Manager of L A Mutual in Napanee Rick was appointed to the position of President in 1987 collaborating with the Board and staff of L A Mutual until his retirement in 2017 Rick is an active member of his community and participated on the board of the Lennox Addington County General Hospital from 2009 to 2013 serving as Treasurer in his last year He also served as Secretary and then President of the Rotary Club of Napanee and is a former member of the Solid Waste Advisory Committee During his tenure with L A Mutual Rick was a member of the OMIA Board serving as Chair in 1998 99 He also participated on many committees including the Regulatory Review Committee and the Forms Committee now the Product Strategy Committee Rick is the 2005 recipient of OMIA s Presidential Merit Award and an exemplary member of the mutual community Joanne Vansevenant Joanne served as a trustee of the Fire Mutuals Guarantee Fund from 2001 to 2015 including several years as Chair As part of the trustee role Joanne was also a member of the Solvency Protection Committee Joanne began her career in 1983 as a bookkeeper for Gordan McFadden Trucking Ltd She worked as an accountant for BDO from 1990 until 1995 when she was appointed Chief Financial Officer at Kent Essex Mutual in Chatham In 2016 Joanne was recognized by OMIA with the Distinguished Service Award After 12 years as CFO Joanne was appointed to the position of Chief Executive Officer in 2007 She and her team were instrumental in the growth of the company from a 5 million dollar business to a 30 million dollar business Kent Essex Mutual benefited from her leadership until her retirement in 2016 Joanne takes great pride in her relationship with her community and has sat on the board and the committee of the Four Counties Health Service Foundation in Middlesex County and has chaired the Finance Committee of St Ignatius Church in Bothwell for many years Joanne possesses her Chartered Professional Accountant designation as well as her Chartered Insurance Professional designation A firm believer in the strength of the mutual system Joanne has devoted her time to numerous OMIA Committees including the Auto Rate Filing Committee the IT Development Steering Committee and the Tax review Committee 11

A Special Message from Your FMGF Trustees Safer together Safer together Like most of life s adventures it s safer Like most of life s adventures it s safer when you work together The Fire Mutuals when you work together The FiretoMutuals Guarantee Fund your lifeline a strong Guarantee Fund your lifeline to a strong and vital mutual system and vital mutual system 12

The FMGF forms the bedrock of the Mutuals system in Ontario Together with Farm Mutual Re and OMIA the Fund delivers a unique and extremely secure business model In fact your Mutual belongs to one of the most financially secure networks in the world From Premium Notes to a Sophisticated Funding Model THE PREMIUM NOTE 1800s to 1970s FARM MUTUAL RE 1959 FMGF 1976 SOLVENCY EXAMINATION 2000 Policyholders may be assessed an additional amount on their premium if a Mutual s annual losses are high Concern cumbersome for the Mutual uncertain for the policyholder Farm Mutual Re is established to spread risk and create financial stability and underwriting capacity Mutuals can now insure larger risks and grow with their policyholders The Mutuals establish a 1 000 000 fund Its purpose to protect any Mutual policyholder in the event of any Mutual s insolvency The premium note can now be eliminated The Mutuals and the regulator create an armslength solvency self examination process This proactive process provides a clear picture of solvency across the mutual system and strengthens policyholder protection Through the values of strength in unity and neighbour helping neighbour the Fire Mutuals Guarantee Fund guarantees all policyholders outstanding claims and unearned premiums in the event that any Mutual cannot honour them This fund is backed by each of the Mutuals and Farm Mutual Re thereby placing the surplus of all Member Mutuals behind any one Policyholder protection is the Mutuals foremost goal The underlying principles of the Mutuals have not been of profit but of cooperation and self reliance This theme has endured for well over 100 years and continues to this day For more information about the Fire Mutuals Guarantee Fund write to information omia com 13 For more about the Fire Mutuals Guarantee Fund

Accounting Advisory Committee Report Mandate To assist member companies in meeting requirements for audit and financial reporting Chair Andrea Schaefer Hay Committee Members Christine Van Daele Westminster Dave Paterson Ayr Traci Radford West Wawanosh Kevin Konecny K E Bob Nielson The Commonwell retired Catherine MacLellan FRC Amy Butler Farm Mutual Re Bob Brown Farm Mutual Re Sharon Dittmer OMIA Susan Baker OMIA Committee Focus The Accounting Advisory Committee monitors and contributes to dialogue on many issues including International Financial Reporting Standards IFRS changes to the statutory financial reporting forms required by the regulators requirements of the General Insurance Statistical Agency GISA tax both federal and provincial essentially any topic where the information required must be delivered to or extracted from the member company accounting and financial systems The committee forms a link between the Regulatory Review Committee where many of these requirements first come to light the Financial Review Committee and the Accountants Roundtable The roundtable is composed of member company staff and management who are responsible for financial reporting and compliance The committee also works closely with the Financial Review Committee in reviewing changes to solvency rules such as revised MCT calculations This collaborative approach helps ensure that the implications of changes are understood and implemented consistently In 2020 much of the committee focus has been in developing an implementation process for IFRS 17 IFRS 17 Getting Ready In April 2018 the Accounting Advisory Committee launched a Gap Analysis Project with Ernst Young E Y The committee elected to undertake this gap analysis as a precursor to developing more detailed implementation plans Partnering with E Y on the gap analysis process also Accounting Advisory 2020 14 provided some insight into the mandatory actuarial work that will be required under IFRS 17 in addition to the changes in accounting policies processes and reporting The gap analysis focused on looking at current mutual accounting policies and actuarial practices and compared these against what is anticipated under IFRS 17 The general categories reviewed were as follows Systems Models Policy Process Reporting Once gaps were identified they were then categorized as being either minor or critical in nature IFRS 17 has introduced new terminology and definitions around items such as level of policy aggregation onerous contracts liability for incurred claims and liability for remaining coverage Many of our old familiar ledger and balance sheet accounts such as unearned premium will disappear from our financial reports IFRS 17 will completely change financial reporting and the Accounting Advisory Committee have identified an opportunity to recommend standardization of accounting treatments and approaches to financial reporting among the mutuals In the next phase of IFRS 17 readiness the Accounting

In work to date we have included representatives from policy management system programmers in order to provide some indication on what system changes may be required for financial reporting We will also be working closely with mutual auditors to ensure decisions are acceptable to our audit partners We are working with three companies as test companies to ensure that the actuary will be able to access the data they require to provide the required actuarial services under IFRS 17 Advisory Committee working with mutual auditors and other service providers such as E Y will continue to develop recommended wording and approaches such as Accounting treatments and policies Chart of accounts Accounting for reinsurance premium and proceeds Guideline on level of aggregation by a coverage line Guidelines on identifying onerous contracts Opportunities for aggregated approaches to financial data for actuarial discounting Recommendations on accounting for policy acquisition costs Shared resources for management and board training on IFRS 17 Shared resources for actuarial services Looking ahead into 2021 the committee will be working to finalize position papers and working with mutuals to provide the data required to be submitted for IFRS 17 The Financial Review Committee also plays a critical role in IFRS 17 readiness and their contributions to the committee and the Accountants Roundtable provide valuable insight to the potential impact on regulatory reporting and solvency examination In 2020 it was announced that IFRS 17 would be delayed by one year and currently has a target effective date of January 1 2023 Implementation will be required earlier in order to create comparative statements for the 2023 fiscal year During 2020 the committee continued to work on IFRS 17 readiness In 2019 one key project was formalizing a model for accessing group actuarial services This was a priority project given the increased scrutiny and requirements under IFRS 17 for actuarial input and sign off for financial statements The committee is currently working on developing position papers to be shared with mutuals participating in the group actuarial services project 15 Accounting Advisory 2020

Auto Rate Filing Committee Report Mandate To lead Member Companies in working together to create a sustainable and profitable auto product offered at competitive rates to meet the unique needs of mutual policyholders Chair Henry Miller North Kent Committee Members Steve Quinn Cayuga Tracy MacDonald Trillium Jodi Meiering Ayr Warren Ting HTM Shelley Deyo North Blenheim Laura Ni Farm Mutual Re Sharon Turnbull Farm Mutual Re Jeff Ferguson OMIA Christine Senior OMIA Background The Auto Rate Filing Committee represents the group of OMIA companies that underwrite automobile insurance in Ontario and have elected to do a common filing with the Financial Services Regulatory Authority FSRA This approach is a successful example of mutuals working together to pool expertise and leadership create economies of scale and make decisions in the best interest of member companies and policyholders The Committee identified six Critical Success Factors to achieve the mission 1 Underwriting Appetite and Marketing Responsive and flexible underwriting criteria and supporting marketing to attract quality customers 2 Product Offering Differentiated product within the regulated environment 3 Agile Pricing Actuarially sound sophisticated pricing methodology 4 Portfolio Management Customer level underwriting practices combined with member company monitoring of performance 5 Claims Discipline Consistent claims reserving and settlement practices 6 Operational Efficiencies Forward thinking and efficient processes Strategic Directions 1 Committee responsibility and awareness education and communication Enhance connection between committee members and stakeholders i e constituency model Skills and experience based matrix to balance committee Researching and recommending product enhancement and differentiation 2 Advanced targeted GLM create profitable and competitive auto pricing for our mutuals Re examine segmentation strategy Manage dislocation Orientation and training on GLM Communication strategy Data collection enhancement strategy Auto Rate Filing 2020 3 Grass Roots Inputs Increased two way communication Effectively capture member input Ensure committee s strategies are aligned with member mutuals Use Manager s Conference Tell the membership the types of decisions the committee has to make 4 Customer centric Develop deeper understanding of policyholder needs Ensure that pricing rating data strategy does not preclude implementing self serve model for policyholders at a future point 16

Projects and Rate Filings The committee has been engaged in providing direction on projects in development at Farm Mutual Re and OMIA At the direction of the committee a number of rate filings have been completed and several others are planned Each filing is focused on the strategic priorities of Underwriting Appetite Marketing and Agile Pricing to implement required rate reductions while enhancing the product offered by member companies The automobile portfolio is diligently monitored Date Actions February 2020 Commercial 0 updates to rate groups February 2020 Private Passenger 4 8 June 2020 Private Passenger 0 0 model refresh Upcoming Dates Actions Q1 2021 Commercial Q2 2021 Miscellaneous May 2021 Private Passenger manual refresh COVID 19 Response In the spring as the pandemic evolved the committee met several times to discuss the mutual response to this situation Ultimately we decided to follow IBC s proposed relief measures which involved Allowing flexibility in payment options for those experiencing hardships Waiving NSF or Administrative fees Updating driving characteristics for those working at home and or not driving as far Not adjusting premiums for policyholders volunteering including deliveries The topic of premium relief was also seriously considered There were strong and varying opinions amongst the mutuals and ultimately it was decided not to provide premium relief This will allow mutuals to provide a refund from surplus at the end of the year if warranted following their normal practice 17 Auto Rate Filing 2020

Automobile Committee Report Mandate To develop OMIA s position on auto insurance issues and communicate with the industry regulators and legislative ministries Chair Terry Knight North Blenheim Committee Members Frank Montgomery North Kent Kelly Jackson Westminster Linda Pereira Lambton Jon Hodson Farm Mutual Re Lisa Fazzari Farm Mutual Re Susan Baker OMIA John Taylor OMIA Background The Automobile Insurance Committee provides formal input to government consultations on potential changes to Ontario s automobile insurance product In reforms dating back over 25 years virtually every part of the Ontario automobile insurance environment has been affected often radically by changes to either statute or regulation Each of these changes has required detailed study and comment from the insurance industry including OMIA Many of the initial reforms in the 1990s focused on enrichment of statutory accident schedule benefits and creating more stringent claims handling regulations The Ontario auto insurance system has often been described as being similar to a social safety net Over time this has created a very generous insurance product with benefits that exceed those of any other jurisdiction in Canada In addition the complexity of the rules governing the product have created an extremely complex environment for both insurers and policyholders The creation of a generous and complex auto insurance system has led to the increasing involvement of legal counsel on behalf of policyholders and an adversarial environment for auto claims While 2019 was a year focused on potential changes to the Statutory Accident Benefit schedule and benefits delivery consultations in 2020 have been focused on other issues typically pertaining to civil litigation processes and towing Consultations on the Civil Trial Process Following the onset of COVID 19 in March access to the courts was suspended while the court system determined Automobile 2020 how best to provide litigation services in a virtual environment As can be appreciated given that the court system touches almost every single facet of life in Ontario getting the system going again was of paramount importance The Attorney General s office brought forward three items for consultation in the post COVID break Each of these had come forward previously but COVID 19 and the need to potentially streamline the litigation process brought them to the forefront The Automobile Committee was canvassed to provide input on OMIA s response to the Attorney General and were able to access other partners with significant insight into litigation issues For a number of years the plaintiff bar has lobbied to eliminate access to juries for cases arising from automobile tort Some categories of litigation in Ontario don t allow access to juries but access to juries has always been a fundamental right for auto tort defendants Ostensibly the plaintiff case to eliminate juries is made on the basis that automobile accident claims and the damages arising from them are very complex and beyond a jury s ability to decide properly From a defense standpoint OMIA took the position that juries provide a leavening effect bringing common sense to bear We firmly believe that juries properly instructed are more than capable of dealing with all of the issues arising from automobile tort cases In fact our position was that the juries bring a superior ability to arrive at reasonable and balanced decisions 18

OMIA has also been involved in two early consultations with the Ministry of Transportation In early summer the Attorney General s office introduced consultation on introducing mandatory mediation in all civil proceedings as well as implementing a single judge case management model These systems were in place on a trial basis in Toronto Ottawa and Essex Windsor for a number of years The first of these relates to the Ministry providing more direct access to motor vehicle records and other material that may be critical to underwriting and claims processes This discussion is in early stages The purpose of mandatory mediation was to bring plaintiffs and defendants together in an environment for early resolution of claims The rationale for a single judge model was to eliminate the inefficiencies of various judges providing decisions throughout the management of a case before pretrial The Ministry of Transportation is also in the very early stages of looking at how towing should be regulated in Ontario The cost of towing has been problematic as has been the behaviour of certain towing companies creating the potential for inflated claims costs and inefficiencies in the automobile repair and salvage process OMIA recommended that mediation be highly recommended but not mandatory We also suggested some potential ways to improve the mediation roster to ensure that skilled mediators with the required technical expertise were available at the appropriate stage of each case when the facts were known and where parties would be most likely to reach settlement A core theme for OMIA was the importance of the early disclosure of evidence and reports Delay in disclosure is considered the greatest barrier to early resolution of cases The final issue on the auto front that has come forward in 2020 is the case Tomec versus Economical which removed one of the limitations from the statutory accident benefits schedule There is a concern that this could have a retroactively adverse effect on claims and OMIA did some canvassing of the committee as well as the members of the Accident Benefits Claims Managers Roundtable to determine the extent of the case if any on mutual auto results At this very early stage it appears that exposure may be minimal We also wrote in support of a single judge model on the understanding that a single judge would take the case from the outset through the pretrial process but would not preside at trial Looking Ahead Ontario Auto results are volatile and the product itself has become expensive and controversial This means that efforts to change and reform auto insurance will be with us for the foreseeable future The committee will continue to provide feedback on all of these issues to ensure the perspective of the mutual policyholder is presented We await feedback from the Attorney General s office on these consultations 19 Automobile 2020

Benefits Committee Report Mandate To provide guidance on issues related to employee benefit programs and company benefit programs that are available to the membership through OMIA Chair Steve Quinn Cayuga Committee Members Jeff Howell Bay of Quinte Teresa Martin North Blenheim Terrye Calnan HTM retired Tracy Wintermute Westminster Jennifer Allan Farm Mutual Re Sharon Dittmer OMIA John Taylor OMIA The following chart summarizes the participation level in OMIA programs as at September 1st 2020 Individuals Companies 1 137 42 Short Term Disability 109 4 Critical Illness 868 27 Directors Life 169 25 Dependant Life Employees 959 42 Dependant Life Directors 160 25 Directors AD D 274 37 Plan A Basic 116 6 Plan B Basic Major 186 8 Plan C Basic Major and Child Ortho 917 27 TOTAL Health Dental 1 219 41 Defined Benefit 454 32 Defined Contribution 703 34 Directors Officers with ICPP 0 41 Directors Officers without ICPP 0 1 Bond 1 744 40 E O P C Agents 281 41 Cyber Liability 0 31 Employees Life package Life LTD AD D Health Dental Pension Pension Plan Asset Liability Modelling and Plan Design Changes The Plan has undergone an asset liability modeling ALM study to assess the sustainability and expected trends in Plan funding requirements over the longer term This study projects varied economic scenarios forward on a ten year basis The initial scope of this study was to determine how efficiently the assets in the Plan were matched against the Benefits 2020 20 anticipated liabilities of the Plan The second phase of the study looked at the design of the Plan from the standpoint of how pensions are earned by beneficiaries and funded A report on the work to date along with suggested changes to Plan design was provided to member companies in the fall of 2018 Information sessions were held in December 2018 OMIA requested input from members on the potential changes early in 2019 Overall the purpose of the study

has been to investigate ways to reduce the volatility of the contribution requirement from employers and find ways to best manage or ideally reduce contribution risk in the future In 2019 the OMIA board elected to make the following changes to the OMIA Defined Benefit Pension Plan effective January 1st 2022 1 The DB pension formula will change to 1 5 x credited service x final average earnings for future service only 2 The monthly employee and employer contributions will increase to 9 3 The indexing cap will decrease to 3 Pension Valuation January 1 2020 marked the end of the most recent annual valuation period for the OMIA Pension Plan The OMIA Board of Directors elected to file an early valuation due to the significant improvement to the funded position of the Plan based on the guidance and interest rate environment the Plan membership information as of January 1 2020 and various other actuarial assumptions and rates in the Plan s position and legislative changes with respect to funding of pension plans Results of that valuation revealed a small surplus on a solvency basis therefore no special payments were required The next mandated valuation is required for the period ending January 1 2023 The January 1 2020 valuation also indicated a required decrease to the employer contribution rate effective January 1 2020 In June 2019 all companies participating in the Defined Benefit Pension Plan received a report on the OMIA Board s decision with respect to the changes listed above In September of 2019 an employee announcement detailing the plan changes was sent to all participating members of the Defined Benefit Pension Plan In November of 2019 a legal notice of upcoming pension plan changes was distributed to all participating active members of the Defined Benefit Pension Plan OMIA will return to the ALM in early 2021 Transfer Status of Defined Benefit Pension Plan At the onset of the COVID 19 pandemic financial markets reacted with a significant decline in equity markets Defined benefit pension plans have significant exposure to equity markets and the decrease in underlying asset values affects the funded status of pension plans In March and April the Financial Services Regulatory Authority of Ontario FSRA introduced regulations that restricted the ability of any plan to transfer lump sum pension entitlements to terminating members The purpose of the regulation is to ensure plans have sufficient capacity to protect all members following significant declines in funded status One of the regulations states that if the transfer ratio of a pension plan at the end of a quarter has deteriorated by more than 10 since the last valuation filed with the regulator the plan cannot process the payment of lump sum pension entitlements for terminating members without first obtaining an approval from FSRA Pension Plan Text In 2020 one amendment was filed with FSRA concerning upcoming changes to the plan effective January 1st 2022 Annual Plan Review Defined Benefit Plan This review is completed by OMIA as Plan Administrator and Morneau Shepell as Plan Actuary The annual plan review ensures that the OMIA Plan is compliant with both statute and regulations relating to pension plans in Ontario It also provides a formal review of governance practices to measure the Plan s policies and processes against best practices in the pension field Member companies were provided with written confirmation of the OMIA Plan s compliance in September 2020 Following the market volatility that started in March 2020 a majority of the Defined Benefit pension plans experienced significant deterioration in asset values and funded status at the end of Q1 2020 Our own plan s transfer ratio as at March 31st 2020 was 77 3 Stewardship Review Defined Contribution Plan OMIA as Plan Administrator and Canada Life as Plan Manager reviewed the Defined Contribution Plan for stewardship and compliance The OMIA Board approved the Stewardship Report late in 2019 This report provided feedback to OMIA on the design of the Plan and the services available to employees in the Defined Contribution Plan as compared to pension industry trends and best practices This represented a decrease of more than 10 from the last reported transfer ratio of the plan 92 3 as reported in the January 1 2018 funding valuation report This decrease triggered the new regulation and as a result OMIA as Plan Administrator was required to request FSRA s approval to allow lump sum commuted value transfer payments to continue from the plan for terminating members 21 Benefits 2020

FSRA has only approved commuted value transfer payments capped at the most recent transfer ratio of 77 3 The remaining 22 7 of commuted value owing to terminating members can only be made subject to a sponsor top up payment or may also be paid within five years if the transfer ratio improves to the most recently filed transfer ratio of 92 3 In an ASO model participating companies essentially selfinsure and fund claims through direct premium assessment to member companies Services to administer claims under the plan are purchased from a life and health insurer This model provides the most cost effective basis for the benefit plan while also ensuring claims are adjudicated at arm slength on a confidential basis At this time for those terminating members who have elected a lump sum payment we will proceed with transfers at 77 3 of the lump sum owing Each terminating member who is affected will receive notice of the regulatory change and future considerations on the remaining lump sum owing The committee monitors the ASO claims experience history changes in participation levels and claims utilization data The committee also provides input on benefits issues that are brought forward by member companies and monitors the ASO target reserve The committee reviewed the target reserve set in 2019 and recommended increasing the current target level over the next five years The Plan Actuary will continue to monitor the transfer value quarterly Should the transfer ratio increase above the 92 3 threshold from the January 1 2018 valuation OMIA will apply to FSRA to have the remaining 22 7 of the payment plus accumulated interest based on the prescribed interest rate set out by Canadian Institute of Actuaries paid and then future payments from that point forward would be paid at 100 Should the transfer ratio not increase above the 92 3 threshold OMIA will investigate the option for top up payments early in 2021 to enable the remaining 22 7 to be paid out Some of the items and trends of interest this year have been The Employee Family Assistance Program EFAP continues to be well utilized by members The program provides employees and their families with support in times of need The program is completely confidential Overall Health and Dental claims costs continue to rise This is consistent with industry trends and the Benefits Committee closely monitors this trend and potential methods to reduce claims costs while still providing a competitive benefits package OMIA continues to use the ASO reserve to offset increased claims costs Health and Wellness education continues to be a major focus through wellness newsletters and by providing information on lifestyle choices that promote long term health Note that this approval is only applicable to members who elect the lump sum transfer upon termination or retirement It has no impact on processing retirement calculations or terminating members who elect deferred annuity options it will also have no effect on any DC members Our plan is not alone in experiencing this new development on lump sum transfers and we understand that FSRA has applied the same methodology to other plans as well This is a new regulation and there was no previous guidance as to how FSRA would respond to the request to continue full lump sum transfers Accidental Death and Dismemberment Insurance On January 1 2019 the following enhancements were made to the AD D coverage for employees and directors in the event of an AD D claim Bereavement Benefit Conversion Option Day Care Benefit and Hospital Indemnity Benefit In addition the maximum amounts for the following benefits were increased in the event of an AD D claim Family Transportation Benefit Home Alteration and Vehicle Modification Benefit Identification Benefit Rehabilitation Benefit Repatriation Benefit and Spousal Retraining Benefit For OMIA as the Plan Administrator and for plan sponsors the security of pension benefits for plan members is a priority FSRA has also set security of benefits as a priority and we recognize that these regulatory actions are taken with that in mind Employee Benefits Health and Dental Coverage The OMIA Health and Dental Plan operates under an ASO Administrative Services Only model Benefits 2020 22

Member Company Visits OMIA is available to provide virtual presentations on employee benefits and or pension at no cost to your company Companies wishing to have a presentation should contact the Benefits Department at OMIA We will assess resuming in person presentations in 2021 Company Benefits Agents Errors and Omissions The Agents Errors and Omissions program renewed with no increase in premium rates in 2020 In 2020 the insurer included Breach of Personal Data Third Party Coverage with limits of 1 million at no additional cost Please refer to the E O renewal mailout in July 2020 for complete details Directors and Officers Insurance The Directors and Officers Insurance continues to be well utilized with 42 companies participating in 2020 Cyber Liability Insurance Cyber Liability Insurance was introduced late in 2015 Currently 31 companies have added this coverage and we anticipate more companies will consider this coverage in the future In 2019 a new Cyber ERM policy was introduced The Cyber ERM policy is designed to address the evolving regulatory legal and cyber security standards In addition a new short form application was introduced for those companies renewing their coverage OMIA will continue to share policies and templates on cyber protection and security measures as they are developed Implementing and documenting these measures is a key factor in being eligible for the more comprehensive levels of coverage available through Chubb Compensation and Benefits Survey The bi annual Compensation and Benefits Survey was completed in 2019 and results were shared among participating companies prior to September 30 2019 In 2019 a total of 45 companies participated This report contains information on all aspects of compensation benefits and related employment terms for employees agents and directors It provides excellent benchmarking at minimal cost to those taking part The next survey will take place in 2021 last couple of years topics covered at the HR Roundtable included mandatory health and safety training mental health in the workplace corporate wellness programs the Employee Family Assistance Program EFAP employment terminations employee orientation onboarding and completing pay equity assessments Given the COVID 19 pandemic both HR Roundtables were scheduled virtually using the WebEx platform The May 2020 Roundtable on the Employment Standards Act ESA was well attended and informative OMIA Website Some key features of the OMIA Members website include the ability to send a secure message directly to the OMIA Benefits Department without going over the worldwide web a library of application forms HR document samples HR manual samples company administration manuals for benefits and pension HR Leadership Forum newsletters prior mailouts and links to various government and benefit carrier websites In 2018 the OMIA Benefits Department created new Company Administration Manuals for Benefits and Pension Both manuals are updated annually and can be found on the OMIA Members website under Member Resources Information for HR Administrators Looking Ahead The Benefits Committee monitors and provides guidance on issues relating to programs that are currently offered In late 2014 the Committee held a strategic planning session that established priorities to address member needs over the coming years Three primary strategies were identified Evaluating and enhancing plan user knowledge of the benefits program Providing cost effective labour market competitive benefit plans for member mutuals Upgrading OMIA s current benefit software to improve efficiency adopt best practices and meet data reporting requirements These strategies have been incorporated into the OMIA Strategic plan HR Roundtable The Association provides members the opportunity to participate in an HR Roundtable that is held twice a year in Cambridge The HR Roundtable provides education and discussions on HR trends and challenges Over the 23 Benefits 2020

Data Strategy Committee Report Mandate To provide guidance for the development of OMIA s statistical collection system Chair Neil Shay CTM Insurance Committee Members Christine Van Daele Westminster Alec Harmer HTM Garth Driedger My Mutual Shelagh Cleary Usborne Hibbert Tracy Campbell Germania Robert Stickle BizXcel Sharon Turnbull Farm Mutual Re Jeff Ferguson OMIA Shawn Zhang OMIA Vision Better Data Better Decisions Knowledge Beyond Intuition Mission To facilitate data driven decision making The Data Strategy Committee is comprised of representatives from member companies using each of the different computer systems in place in the mutual system This ensures the committee is aware of the potential scope and effect of its decisions on statistical reporting requirements Strategic Priorities The committee engages in strategic planning and oversight on data related issues Currently our strategic priorities are listed below and form part of OMIA s overall strategic plan 1 Increase member company knowledge and appreciation of the value of data Communicate through company visits conventions OM News training and roundtables 2 Develop framework for sourcing and governing data sources related to aggregated OMIA database Enhanced data collection Use of 3rd party data Working to provide predictive analytic capabilities across all lines of business 3 Improve data utilization and analysis Improvements to OMIA suite of statistical software and hardware Improvements to business intelligence solutions 4 Enable member company efficiencies on data collection and reporting Work to eliminate any manual reporting Look for alternate methods of capturing data to bring efficiencies to member company reporting Data Strategy 2020 24 In 2021 and beyond Farm Mutual Re will continue to pursue analytic capabilities Peril Scores The objective is to provide an integrated solution that works in conjunction with the members current rating philosophy to bring about more sophisticated rating methodologies In future years this could evolve to include multi variate rating capability incorporating credit scoring Benchmark Property Rating The objective is to provide a benchmark rating algorithm using the full breadth of data available in OMIA s centralized data warehouse This will also include reviewing the potential for the creation of a property rating working group to aid in moving member property rating forward Improving Rating for Agricultural Risks The objective is to gain an appreciation of the agriculture data that is available glean insights and improve rating methodology In future years this could evolve in other lines of business In 2021 and beyond OMIA will continue to pursue improvements to data quality and regulatory data requirements Improving Data Quality Ongoing enhancements to OMIA s editcheck software Working closely with system vendors to identify front end data quality issues and improvements Regulatory Data Requirements Supporting FMGF group based approach to actuarial discounting under IFRS 17

Education Committee Report Mandate To determine the courses that OMIA will provide and to deal with other issues related to training Chair Steve Quinn Cayuga Committee Members Jerrod Boyse South Easthope Rob Pearson Town Country Dan Hill Germania Michelle Spoelstra Wabisa Elizabeth Baker Farm Mutual Re Susan Baker OMIA Training Information Transfer An Important Service Area OMIA s Strategic Plan recognizes the work of the Education Committee as a key strategic priority of our resource centre strategic goal Our committee is attentive of our responsibility to move information out to member companies in an effective and timely manner Knowledge is shared through the collaborative efforts of OMIA and Farm Mutual Re teams as well as staff from member companies Topics cover the full gambit of insurance related subjects human resources issues regulatory requirements and information technology support We appreciate the generosity of member companies in supporting their staff as roundtable chairs and knowledge providers Thank you for your flexibility and understanding On Demand Courses At the end of March 2020 Pascale Swanson joined the OMIA staff as the E Learning Developer We are on track to make five courses available online by year end They will be accessed through a Learning Management System LMS that has been set up to make these ondemand courses available to you 24 hours a day Detailed information will be sent to member companies in advance of launch date We will continue to develop courses to add to this new platform Certificate Programs OMIA administers certification programs for member company directors and virtually every professional insurance discipline The Education Committee continues to provide guidance to staff towards the development of a practical and achievable Insurance Practitioner Certification Program Impact of the Pandemic Due to the impacts of COVID 19 the OMIA Education Program like all other areas of all our business was required to reset in the middle of March this year Fortunately we and member company staff and directors had established a level of knowledge about transferring knowledge in a live online format We have wherever possible moved our technical insurance sessions to that delivery style In most cases that has meant that sessions that would have been one full day in person have morphed to two half day sessions How long it will be before we and you are comfortable attending in person sessions remains an unknown but until that time we will continue to join you virtually 2021 Education Program An as known list of 2021 training events will soon be posted on the members website The calendar is updated as changes are made On Site Multi location Training OMIA staff is pleased to bring training programs to your company office virtually and hopefully someday in person With few exceptions anything we have done in person or online can be replicated or modified to meet your particular need We appreciate member companies with large training meeting rooms providing us with access to these spaces when we hear from you that there is a need to share the information locally We ve taken this opportunity to do some experimenting with the structure of some sessions and the delivery of others 25 Education 2020

Legislative Affairs Committee Report Mandate To communicate the association s position on legislative issues to our elected representatives Chair Brad Vanstone West Wawanosh Committee Members Ross Lamont Trillium Barbara Bethune Nova Allan Hedley Cayuga Doug Crockett Westminster Ed Forbes Dufferin Farm Mutual Re John Taylor OMIA Legislative Affairs at OMIA The Ontario Mutuals have a unique place in the property casualty landscape in Ontario This is evidenced by our mutuals commitment to the economic health of rural Ontario local community causes and direct policyholder participation in their mutual The mutual commitment and value system are well recognized by the Ontario Legislature MPPs see mutuals as an important part of a healthy and sustainable insurance system The Legislative Affairs delegate at each mutual plays an important role in maintaining our profile with MPPs and MPs These delegates act as ambassadors to the legislature and communicate effectively on the potential impact of proposed legislation In many cases our delegates provide an informal sounding board for MPPs and are able to provide feedback on how government policies relating to insurance will affect policyholders This is particularly important during difficult markets or when the availability and affordability of insurance coverage becomes an issue Legislative Affairs delegates also provide information back to OMIA and fellow mutuals on important issues in their ridings that will have an impact either locally or provincially In many cases these early discussions on local issues result in broader discussions as issues migrate to other areas of the province Issues concerning trespass and activism on family farms was a good example of this type of issue Delegates are asked to participate in two roundtables during the year The spring event takes place in early March with a visit to Queen s Park Roundtable topics focus on areas of developing interest In addition to roundtables individual delegates are also expected to be active in attending local political events within their communities An effective Legislative Affairs delegate has a keen interest in the democratic process a down to earth approach in Legislative Affairs 2020 communicating with MPPs and a sincere interest in promoting mutual insurance Roundtable Summaries Spring 2020 On Tuesday March 3rd 2020 67 mutual delegates attended the 6th annual Queen s Park Day Our host sponsor for the day was the Hon Ernie Hardeman Minister of Agriculture Food and Rural Affairs and MPP for Oxford Brad Vanstone welcomed delegates and in reflecting on the continued growth of our event recognized Allan Hedley for his work as Chair of the committee when OMIA s Queens Park Day was introduced The day s first roundtable speaker was MPP Norm Miller Parry Sound Muskoka MPP Miller was first elected in 2011 and has had a number of roles in both the opposition and on government benches His current role is as Parliamentary Assistant to the Ministry of Intergovernmental Affairs In 2019 MPP Miller introduced Bill 118 an Act to amend the Occupiers Liability Act He introduced this Bill after speaking to several business enterprises in his riding who were engaged as full time or part time snow removal contractors Increasingly they had seen the cost of their liability insurance escalating along with the cost of the administration and record keeping The upward pressure on insurance costs and administration was due to the propensity of individuals to slip or fall in parking lot and sidewalk areas and subsequently sue property owners This increasing trend particularly towards commercial property owners has resulted in onerous contracts and an attempt to transfer liability from landowners to contractors MPP Miller s Bill proposed a straightforward amendment to the Occupier s Liability Act that would require any individual wishing to make a claim against the occupier or an independent 26

questions are not strictly pandemic focused the potential for reform occurred due to the need to rethink court proceedings and access to justice contractor to provide written notice of their intention to do so within 10 days after the occurrence of the incident This requirement would allow defendants to investigate circumstances of a loss in a timely fashion and ensure prompt evaluation and accurate inspection of loss exposures OMIA was also asked to participate in a consultation with the Ministry of Transportation on effective regulation of towing services in Ontario Towing rates charges and practices has long been a significant concern for automobile insurers particularly as related to accidents in major urban areas OMIA provided preliminary input to the Ministry of Transportation and we expect this will be a long term consultation Our second speaker was MPP Stan Cho Willowdale MPP Cho is the Parliamentary Assistant to the Minister of Finance and sits on several important Queen s Park committees Over the months preceding our Queen s Park day he d had 102 face to face meetings on automobile insurance with various stakeholders MPP Cho shared his perspective on the complexity of automobile insurance and his particular concern over the cost of legal conflict within the current regime 2020 A New Reality The OMIA legislative affairs program traditionally incorporates a fall roundtable in Cambridge Little did we know at that Queens Park day in March that we were barely slipping under the wire in our ability to have any actual in person events in 2020 The declaration of the pandemic and the ensuing lockdown in mid March put many of our normal legislative affairs activities on hold including MPP visits The legislature itself was on hold as the government battled heroically to provide pandemic management and economic support necessary to see the province through the COVID 19 crisis In June 20 Bill 156 the Security from Trespass and Protecting Food Safety Act was proclaimed into law This much needed law stewarded by the Hon Ernie Hardeman was the result of a broad based initiative by farmers and food producers to protect farm families and others from trespass by animal activists OMIA was a very strong supporter of this Bill having been quoted as a supporter in Hansard three times during the Bill s debate cycle In terms of outstanding issues MPP Norm Miller s Bill 118 an act to amend the Occupiers Liability Act has not moved significantly forward however there is significant public pressure to do something about the cost of insuring snow removal and winter maintenance contractors The cost of lawsuits against these individuals and the resulting cost of insurance premiums is creating an environment where many are unable to obtain insurance and are ceasing operations as we head into the winter months OMIA s legislative affairs delegates wrote to a number of local MPPs supporting action on this Bill and will continue to follow it closely and support it if there is an opportunity to move forward Many of the government s activities in the months following COVID 19 concerned revising statutes and regulations on an emergency basis to allow businesses to continue under altered rules Several governance requirements for mutual insurers are set out in statute including the need for in person annual general meetings and the need to hold these meetings by March 31st each year The Ministry of Government and Consumer Services needed to amend legislation in order to provide extensions on this timeline and to allow mutuals to meet virtually OMIA working with legal counsel took preliminary steps to handle this transition with the Ministry and as a result all mutuals were able to comply with the annual general meeting requirements In addition Ontario auto insurance will continue to be a problematic issue for both consumers and insurers as the cost of auto accidents escalates Education for MPPs on the root causes of high auto premiums will remain a core activity Looking Ahead It appears extremely unlikely that Queens Park will be made accessible for public gatherings in March 2021 however we will look for continuing opportunities to provide input to MPPs and work proactively with them In addition at mid year a number of ministries began consultations on civil court proceedings in Ontario courts These proceedings had been severely restricted due to COVID 19 A proposal put forward by the Attorney General s Office suggested access to jury trials be removed from certain types of civil actions including automobile cases OMIA spoke strongly against this and to date access to jury trials remains in place OMIA also provided detailed comments to the Attorney General s Office relating to implementing mandatory mediation and single judge case management models Although these In general OMIA has been extremely supportive of the work MPPs have done throughout the pandemic and in ensuring the response from the government has been balanced across communities and has addressed the broader needs of both the private and public sector As always through the almost 140 year history of the Association we will look for ways to adapt to our current legislative environment and continue to provide a strong voice for mutuals in that process 27 Legislative Affairs 2020

Market Issues Committee Report Mandate To gather and analyze industry market information that affects Mutuals ability to sell their product and serve policyholders to disseminate this information to the mutuals and to connect with industry groups Chair Marg Torrance Halwell Committee Members Ed Forbes Dufferin Rob Moorehead McKillop Christine Owens HTM Chris Hibbs Nova JP Gagnon Farm Mutual Re Jeff Consitt Farm Mutual Re Sharon Turnbull Farm Mutual Re Susan Baker OMIA John Taylor OMIA The Market Issues Committee focuses on proactively identifying and researching issues that affect how where and when insurance products are sold to policyholders The committee s discussions and work are published to membership through the Market Watch bulletin The committee also provides important input as OMIA plans subject matter and topics of interest for meetings roundtables and conferences Perhaps the most important part of the committee s process is to consider an emerging issue and answer the question what will this mean to my mutual In 2020 the year of COVID 19 answering that question has been easier said than done This year several strong themes have come to the forefront in the marketplace Profitability and Availability At this time last year one of the dominant themes was the hard market in property casualty insurance A traditional hard market exists when insurers become risk averse restrict risk selection and charge higher premiums for lines of business that show a loss or declining profitability In late 2019 and early 2020 this hard market was well underway with particular concerns around automobile results and certain types of commercial risk exposures With automobile rating in Ontario regulated and subject to rate approval any changes in automobile pricing take time to work their way through the system In addition Ontario has a take all comers rule that prevents auto insurers from declining new business This creates a more Market Issues 2020 regimented approach to pricing and access to auto markets and limits an insurer s ability to adapt to market conditions Conversely with commercial and residential rates being unregulated insurers have a greater opportunity to apply significant rate increases withdraw from some lines of business and decline or non renew risks at their discretion Today s hard market is the result of years of declining profitability volatile loss patterns and low investment returns In this perfect storm there was simply insufficient income from investments to support marginal underwriting These results were evident across the industry including at the mutuals In 2019 Farm Mutual Re introduced the Path to Profitability initiative as a step towards ensuring adequate pricing and sustainable profitability at the reinsurance level which in turn enables sustainability at the mutual primary level The onset of the pandemic in mid March exacerbated concerns over profitability and availability although the final outcome remains to be seen The equity market crash in March did much to heighten profitability challenges Surprisingly however the ensuing economic shutdown appears to have significantly reduced risk and loss exposures across almost all lines supporting improved underwriting results In addition the equity markets responded strongly to government stimulus and at the end of Q3 2020 provided a tail wind in a reasonably profitable although volatile year As we reach the fourth quarter of 2020 the hard market remains in commercial business and some residential exposures Mutuals don t write the full range of commercial 28

risk that many large multinational insurers do so our sample size is small Many small businesses are experiencing significant price increases especially if they operate nonessential businesses in the context of the pandemic Those businesses deemed essential including some farms and agri businesses seem to have done well through the pandemic due to surge demand What this means is that some businesses are facing crippling business losses and may also be faced with insurance challenges Recent comments from the Minister of Finance in Ontario indicated a direct concern on commercial insurance pricing and signal the possibility of the government threatening more direct involvement High Value Homes This category of risk has its own unique profitability and availability story for the mutuals While not complete newcomers to this market our mutual footprint here has typically been small for several reasons One key reason was that well established competitors had strong balance sheets technical expertise brand recognition and a hearty risk appetite Another reason was that our geographic market didn t align with a lot of these risks The past 20 years however have seen a flight to the country and a boom in high end large square footage homes At the same time the traditional market seems to have shrunk away from some of these risks leaving mutuals as a good option for brokers and policyholders Our current challenge is the growing pains associated with fully seasoning a category of business and getting pricing and risk selection in line with our capacity Farm Mutual Re has sponsored a members working group to tackle the unique challenges of this category of business as it s expected to be a significant long term opportunity if properly managed Consumer Expectations The consumer experience for purchasing goods and services changed radically as a result of COVID 19 Traditional retail in store shopping virtually disappeared for a while Online shopping boomed as did in store retailers ability to accommodate social distancing As almost all consumers become adept with online transactions the expectations of consumers to be able to purchase insurance in a paperless virtual environment will also presumably increase Creating a seamless virtual experience for insurance policyholders is a complex process Insurance is a highly regulated product and is distributed by a unique network of intermediaries such as agents or brokers This creates a barrier to direct digital transactions In 2020 the Insurance Brokers Association of Ontario having observed many insurers desire to increase their virtual direct contact to policyholders created a working group to determine how best to move to a paperless environment Key outcomes include ease of business but also ensuring access to appropriate expert advice from brokers This working group remains in its early stages however we believe consumers will increasingly expect to be able to purchase policies request changes on policies and pay for policies in a fully virtual environment Another significant consumer expectation arising following the onset of COVID 19 was for immediate rate relief on auto insurance With the economy locked down overnight the cost of automobile insurance went squarely into the spotlight as cars were parked and driven less frequently The insurance industry responded by exploring ways to allow re rating of policies temporary coverage suspensions and flexibility on payment terms and nonpayment penalties due to financial hardship One of the challenges for the entire industry in April and May was dealing with the government s musings on the need for insurers to provide immediate auto rebates without having thought through the actual impact on an often unprofitable line of business Automobile as a long tail product does not lend itself well to immediate consumer relief in the eyes of the mutuals from a rebate standpoint however should 2020 prove to be more than adequately profitable there will be an opportunity to look at consumer relief measures on the traditional mutual year end refund model Regulatory Trends Ontario s automobile market is highly regulated which includes market conduct on how and where auto policies may be sold Market conduct oversight and regulation is considerably less present in the residential and commercial property market As noted in the section above rising consumer expectations and a volatile economy have placed some pressure on the regulator to consider how market conduct should be judged in a crisis environment FSRA has been moving to the national guidelines for Fair Treatment of Consumers and we can probably expect more regulatory oversight on market conduct and insurance sales over the coming months From a practical standpoint this means more focus on promotional materials and content how advice is given and point of sale practices 29 Market Issues 2020

One example of the public impact a proactive regulator can have was seen this year as FSRA at their discretion conducted two surveys asking automobile insurers to specify how they were providing consumer relief on COVID 19 and the dollar value of those measures FSRA then published those benchmarks with the government industry and general public potentially re igniting a controversial issue Business Interruption The Great Unknown The ability of an insurance wording to respond to a business interruption claim arising following a pandemic has been a closely followed topic since the onset of COVID 19 Government mandated shutdowns created national and global pressures on the insurance community to provide business interruption for a peril which was never anticipated Some specific cancellation or business interruption indemnity wordings had been issued in some jurisdictions These wordings however were rare birds and the overwhelming majority of commercial policies do not underwrite nor collect premium for perils arising from a pandemic shutdown Nonetheless elements of the legal community and some interest groups immediately attempted to litigate the issue and force fit the coverage issue MARKET WATCH The potential indemnity impact of business interruption would create significant solvency issues and potential market chill associated with this litigation would hang over the commercial insurance marketplace for several years Looking Ahead These issues arising from COVID 19 will continue to be a focus of the committee Since the outset of the pandemic OMIA has convened daily and now twice a week issues calls for companies to call in and respond to questions including many of the market issues topics noted here Some of these challenges have created a once in a lifetime opportunity to re examine and fortify the mutual way of serving policyholders More to come in 21 MARKET WATCH Newsletter December 2019 December 2019 A periodic update to members on the work of OMIA s Market Issues Committee Mandate To gather and analyze information on industry trends that affect a mutual s ability to market their product and serve policyholders and to disseminate information to members and to connect with industry groups THE PATH TO PROFITABILITY Earlier this year JP Gagnon published a brief paper summarizing challenges in the property per risk category of business and the need to return property portfolios to profitability Fundamental to the profitability of any line of insurance is assigning an appropriate price to risk and selecting risks carefully based on your company s individual risk appetite In focusing on the property insurance environment in the property casualty industry we have seen a rapidly hardening market over the past 12 to 18 months About 18 months ago several of the large carriers elected to take remedial action to address declining profitability in their property portfolio Until that time there was a perception that market leaders would take any risk at any price in order to promote growth so this hardening market signaled a sharp turn toward insurance business fundamentals The August 2019 issue of Canadian Underwriter did a feature on Aviva Canada s financial turnaround The four business fundamentals identified by the CEO were rigorous underwriting technical pricing claims management and risk selection While this may seem like insurance 101 when combined with other market intelligence this is a crystal clear sign that there s room to increase premium to properly reflect property risk There is ongoing litigation around the world including in the UK United States and Canada In the United States legislatures have been particularly proactive in entering into the coverage fray COMMITTEE MEMBERS Newsletter June 2020 June 2020 A periodic update to members on the work of OMIA s Market Issues Committee Marg Torrance Halwell Mandate Ed Forbes Dufferin To gather and analyze information on industry trends that affect a mutual s ability to market their product and serve policyholders and to disseminate information to members and to connect with industry groups Rob Moorehead McKillop WHERE TO START Our December 2019 Market Watch seems like it was published in a different century let alone a different year As 2019 was drawing to a close we were closely following underwriting challenges with particular emphasis on adverse development and deteriorating automobile results and insufficient pricing on property risk Chris Hibbs Nova Mutual Christine Owens HTM Mutual JP Gagnon had published his insightful Path to Profitability and through the fall there were many mutual community discussions about pricing risk adequately and the need for profitability to ensure sustainability and durability for mutual insurers JP Gagnon Farm Mutual Re Jeff Consitt Farm Mutual Re 2019 2020 OMIA Chair Bob Burley s theme was Three P s in a Pod Policyholders People and Profit and the inclusion of profit emphasized the importance of maintaining profitability to allow the necessary investment in people and to provide policyholders with highly solvent and locally responsive insurance markets Sharon Turnbull Farm Mutual Re We re six months into 2020 and the question isn t What s changed but What hasn t changed John Taylor OMIA In mid March 2020 the universe dramatically pushed the reset button as the COVID 19 pandemic entered our countries our communities our homes and our businesses Susan Baker OMIA COMMITTEE MEMBERS Marg Torrance Halwell Ed Forbes Dufferin Rob Moorehead McKillop Chris Hibbs Nova Mutual Christine Owens HTM Mutual JP Gagnon Farm Mutual Re Jeff Consitt Farm Mutual Re Sharon Turnbull Farm Mutual Re John Taylor OMIA Employees were dispatched to work from home and governments went into emergency management mode creating social financial and health safety nets across the country People experienced a level of fear and anxiety about their personal financial well being that had not been experienced for several generations The June edition Market Watch will attempt to pull out some of the threads that have emerged during the pandemic and carefully take a peek at what might lie in wait for the rest of 2020 Page 1 of Page 1 3of 5 of 34 Page Page 11 of Find our Market Watch newsletter on www omia com under Member Resources Tools Market Issues 2020 30

We re in This Together 31

Marketing Committee Report Mandate To raise the profile of mutual insurance Chair Kevin Inglis Howick Committee Members Morna Foan Grenville Tim Wade Westminster Jeff Holmes Ayr Deb Van Eyk Lambton John Taylor OMIA Lisa Hunter OMIA most visited event space at the show We re excited about this new sponsorship relationship and look forward to maintaining a strong brand presence in eastern Ontario The sponsorship was rolled over to 2021 and we look forward to a renewed experience in the spring The committee continues to pursue a variety of marketing projects that communicate the advantages of mutuality to internal and external audiences This year has certainly been unique but we continue to be guided by OMIA s Strategic Priorities and the needs of the membership New Chair We welcomed Howick Mutual s Kevin Inglis to the committee as Chair in early 2020 Kevin is a Director on the OMIA Board and we look forward to having his perspective at our meetings We extend our thanks to John Stirk for his dedication to the committee and wish him well as he looks toward his year as Chair of the OMIA Board in 2021 We were happy to learn that Canada s Outdoor Farm Show which typically takes place in mid September in Woodstock was able to adapt their programming to a virtual platform from September 15th to 18th OMIA offered a small sponsorship which gave us the opportunity to promote the Ontario Mutuals brand via the show s web platform We also provided a giveaway item to their swag boxes All proceeds from the sale of the boxes went to 4 H Ontario of which we are a primary corporate partner Promotional Materials Unsurprisingly the demand for individual member promotional materials including brochures advertisements and signage went down when the COVID 19 pandemic struck however OMIA Marketing still collaborated with members on over 45 individual product and advertisement projects this year and will continue to be readily available for requests The 2020 IPM was postponed until October 2021 Below is an interesting and astounding note from the Ontario Plowmen s Association Since its beginnings in 1913 this is only the third time the event has not been able to open Ironically the first cancellation was in 1918 when the quickly spreading flu pandemic struck the City of Ottawa According to history the Mayor of Ottawa and the Federal Minister of Agriculture denied the use of the Central Experimental Farm in Ottawa just one day before the IPM was to open During the Second World War the IPM did not open as it was important for all Canadians to dedicate their time and talents to the war efforts We encourage you to contact marketing omia com to support your promotional strategy as your member company looks toward the new year This service is part of your membership fee and you only pay the cost of printing and shipping Farm Shows OMIA Marketing facilitated the Ontario Mutuals presence at the London Farm Show in early March but unfortunately the events around COVID 19 led to the cancellation of the Ottawa Valley Farm Show mid March We had looked forward to the increased brand exposure brought forth by our exclusive naming rights of Hall A the largest and Marketing 2020 Broker Convention The 2020 IBAO had initially announced their cancellation but is now gearing up to run a short virtual event on October 21st and 22nd OMIA has signed up as a sponsor similar to 32

Key Sponsorships We continue to maintain relationships with key partners in the agricultural sector as part of our initiative to remain top of mind in this community The public facing brand Ontario Mutuals supports the Ontario Plowmen s Association and the Ontario Queen of the Furrow Competition The IPM 4 H Ontario the Rural Ontario Institute ROI and the Advanced Agricultural Leadership Program AALP Farm and Food Care Ontario the Ontario Soil and Crop Improvement Association the Advancing Women in Agriculture Conference the FarmSmart and Southwest Ag Conferences the Outdoor Farm Show in which we will be able to promote the Ontario Mutuals brand via a web platform Market Research The committee was presented with an opportunity to become involved in a market research project undertaken by PMG Intelligence a company dedicated to offering solutions to organizations in the financial sector The study delivered strategic insights that gave a deeper understanding of the consumer purchasing process how a household connects insurance to other facets of their budget the triggers to switching beyond price and value proposition markers that will inform product technology distribution and marketing strategies PMG also provided a detailed illustration of three P C insurance customer personas The biggest change to our sponsorships this year was due to the postponement of the IPM which was set to run in October at the Lindsay Fairgrounds We look forward to the event taking place in 2021 from October 13th to 16th Rob Grein of PMG Intelligence presented the findings to the Managers Conference in early June and to an additional member company group during an online education session in late July The feedback from the sessions was positive and we will arrange to have PMG back for another education session that includes more data about the impacts of COVID 19 on consumer behaviour as well as some marketing insight based on the findings We were also in a position to offer a one time increase of 10 000 to our sponsorship of 4 H Ontario as they navigated some of the funding challenges brought on by the COVID 19 pandemic This additional support helped 4 H Ontario transition as many clubs as possible to a virtual environment We felt this was especially important this year as 4 H volunteers leaders and club members are an important part of farm family and community resiliency in our vital agriculture sector Digital Marketing Campaign OMIA Marketing launched an online brand awareness campaign on August 11th using Google Ads Facebook Youtube and partner sites The campaign features shortened versions of The Mutual Difference video which was shared with the membership this summer Of special note Ontario Mutuals funded the Umbrella Project s first Mental Health Awards and Scholarships which were presented online in May These awards were created to recognize and celebrate students and educators who have chosen well being and actively strengthened their resilience and positive coping skills by overcoming challenges Details can be found in the August issue of OM News The Ontario Mutuals website was also streamlined and updated to coincide with the launch Visit www ontariomutuals ca to have a look The campaign will run until November 3rd and initial results are very positive The key data point for an awareness campaign is the view rate which indicates how often the video is viewed and if you re familiar with Youtube it means the viewer did not click the skip ad button A typical view rate for this type of ad is 8 10 but the Ontario Mutuals videos have a view rate of over 30 With an average of over 260 000 video impressions so far ie the number of times the video is displayed this is a very encouraging percentage Looking Ahead The marketing committee will continue to explore opportunities to promote the mutual difference through sponsorships events advertisements and digital streams We look forward to gaining new insights from online advertising endeavors and also to returning safely to the in person events that bring our mutual community together so effectively We re certainly pleased by this and hope to continue down the path of digital marketing to increase general awareness of the Ontario Mutuals brand and messaging 33 Marketing 2020

Product Strategy Committee Report Mandate To monitor insurance product trends and provide guidance and where appropriate direction to OMIA on the selection prioritization and delivery schedule of development projects to represent members interests by providing market intelligence and risk appetite continuums and to provide oversight of the product development process Chair Terry Knight North Blenheim Committee Members Pat Ryan The Commonwell John Miller Mennonite Mutual Alberta Neil Shay CTM Megan Rooney Dumfries Sonny D Agostino Farm Mutual Re Annette Dumbleton Farm Mutual Re Christine Meacher Farm Mutual Re Cynthia White Farm Mutual Re Susan Baker OMIA Providing member companies with the knowledge they need to inspect sell underwrite and adjust the inevitable claim are all part of the 360 vision we apply to our work of developing insurance coverage and supporting documents Product development requires a truly collaborative effort Member companies are well served in this sense by the contributions of a wide range of Cambridge and member company staff This includes the OMIA Insurance Services team Sue Baker Christine Senior Janet Schmidt Tammy Micallef Jennifer Higuchi and Carol Turkheim and staff from Farm Mutual Re Product Services Reinsurance Claims and Loss Prevention departments Member company staff provide input to the development process in a variety of ways including making the initial inquiry and reviewing coverage forms and supporting documents as a check for clarity and practical use at the company level Composition of the Committee The composition of the Product Strategy Committee is structured to provide an appreciation of member company perspectives from Eastern and Western Canada as well as Ontario from companies whose distribution system is broker driven and those that are agent driven and points of view of these insurance professionals who look at insurance issues through a mix of underwriting sales and claims lenses A Pivotal Piece of the Development and Updating Process The Product Strategy Committee is an important cog in the wheel of activity that surrounds the updating of existing coverage and supporting reference documents and the development of new coverage and supporting reference Product Strategy 2020 documents for member companies to use This committee meets online monthly and twice a year in person Each meeting includes a discussion of market issues involving both current and future looking topics a review of the action items a review of projects that OMIA staff believe are ready to roll out and a discussion of requests and suggestions about coverage documents that have come from member companies We continue to evolve our oversight function so that we are tracking progress on the projects that member companies have identified as having significant importance to their business We also contribute to the function of updating existing coverage and reference documents while providing a member company s eye view of insurance market issues around coverage forms and observation of the activities of our policyholder owners which may require an insurance response Forms Releases The Forms Release webinars which follow the release of new and updated coverage documents underwriting risk selection guidelines or information pieces continue to be well attended by member company staff During the upcoming year we will be experimenting with recording short audio files that will contain an explanation of some new coverage documents Based on some member feedback that indicated a need for access to just in time reviews of new insurance wordings the plan is to post these sound files with the print version We will be interested to hear our members feedback on the initial clips 34

Projects Since our report to the 2019 P M Meeting we have overseen a variety of projects to completion A few examples of the updates are W ater coverage endorsements and Reference documents Water Protection Endorsement Flood Surface Water Coverage Endorsement Flood Coverage Endorsement Surface Water Endorsement Water Back up Endorsement Rebuilding Cost Inflation Factors Personal Commercial Lines New forms and or coverage reference documents include Communicable Disease Exclusion Endorsement Snow Removal Contractors Reference Document Poultry Housing Reference Document Membership in Competiscan a source of information that Insurers send to policyholders business partners and the public Support was provided for various Farm Mutual Re Product Services and Reinsurance initiatives including Updated CGL Rate Pages 2020 Not for Profit Directors Officers Underwriting Guidelines Update Checklists and Underwriting Guides for underwriting Garage Fleet during the pandemic get consensus on specific points from over 40 independent insurance companies We have had some challenges but remain committed to investing in the resources required to meet the demands What is underway now Our oversight role on a variety of on going projects includes Develop both a Primary Non Contributary Liability and Waiver of Subrogation Liability Endorsements and Reference Documents Update Pollution Liability Coverage Endorsement for Land Pesticide Applicators and Reference Documents Develop a Stated Amount Endorsement Statement of Values and Reference documents Introduction of a partnership program for Personal Cyber Insurance Coverage Update to Commercial Cyber Insurance Coverage Options Exploring the ability to expand the scope of Farmers Accident Replacement Labour coverage Exploring the possibility of a partnership program for Legal Expense Coverage Develop a Non Stacking of Liability Limits endorsement Update Builders Risk Coverage As always in response to member company needs the Product Strategy Committee works with staff to respond to immediate market pressures as they arise The Committee continues to focus on improving the speed to market of products The challenge of course is to move quickly with development and at the same time 35 Product Strategy 2020

Regulatory Review Committee Report Mandate To review regulatory issues that affect member companies Chair John Stirk Dufferin Committee Members Shawn Durnin Hay Jeff Whiting Ayr Bryan Hicks Trillium John Taylor OMIA Jackie Roy OMIA The Regulatory Review Committee is the key liaison with insurance regulators including the Financial Services Regulatory Authority of Ontario FSRA Regulatory oversight is an active area for insurers provincially nationally and globally In fact many insurers identify the threat of regulatory intervention as an enterprise risk The committee s areas of focus include regulatory requirements on solvency market conduct and governance These requirements continue to evolve in complexity and increasingly reflect international trends on financial regulation The hard market in Ontario auto dating from 2019 had raised concerns about the application of the take all comers rule and FSRA announced a consultation on this in early 2020 Much of this related to distribution of auto and we await the outcome of that ongoing review FSRA continues to take steps to refine its regulatory structure and its relationship with the stakeholders including insurers FSRA s organizational structure and mandate is considerably more complex than its predecessor the Financial Services Commission of Ontario The Regulatory Review Committee have been closely watching developments with the Corporations Act particularly as it refers to some of the changes made on an emergency basis following the COVID 19 lockdown This Act falls under the auspices of the Ministry of Consumer and Government Services MCGS More recently FSRA created an auto data usage working group to look at the more sophisticated use of data and potentially liberalizing the use of data in rating automobile insurance We anticipate that OMIA will be involved with that working group In 2020 OMIA had several meetings with the prudential solvency branch of FSRA Much of the focus of this branch was on the credit union sector which had been brought within FSRA when the new regulator was created In the second half of 2020 FSRA added additional managers with responsibility for P C solvency for provincially chartered companies such as the mutuals and we are continuing to work with them in orienting them to the mutuals solvency examination regime In addition FSRA has created a significant auto insurance group to deal with the many issues arising from Ontario auto Regulatory Review 2020 36

The primary practical concern was the requirement under the Corporations Act for mutuals to hold in person AGM s before March 31st each year The province wide lockdown banning these types of gatherings made it necessary for MCGS to create an emergency amendment extending the date for AGM s and allowing them to take place virtually This was done just before the mutuals introduced a court motion to provide for relief There is potential that the Corporations Act could see more permanent changes as a result of this review however at present the emergency exemption has been extended into 2021 to allow a one year exemption for virtual meetings while still requiring mutuals to hold their AGM s before March 31st 2021 The committee has also been discussing the potential to request changes to the Corporations Act relating to the number of directors prescribed for mutuals Currently the mutuals must have 6 9 12 or 15 directors Greater flexibility in arriving at a different number of directors to allow for appropriate governance structures and proper succession planning may be warranted The committee will continue to review this requirement As related to market conduct FSRA has been actively engaged in market conduct review since the onset of COVID 19 Much of the focus has been on market conduct in automobile and particularly the potential for automobile insurers to provide relief to consumers based on reduced risk profiles In March April and May FSRA held a number of town halls and needed to provide clarification on the interpretation of legislation including the Unfair and Deceptive Acts and Practices Act These clarifications were provided to expedite insurers in providing some temporary relief to consumers on a timely basis We believe that FSRA will continue to look at this Act in more detail as it has significant impact on how automobile insurance can be underwritten and sold in the province FSRA also announced an intention in the third quarter of 2020 to adopt the CCIR guideline on the Fair Treatment of Consumers FSRA s predecessor FSCO had opted to go with a similar guideline but included some different language to create a made in Ontario guideline Although the guidelines were very similar in many ways and came to the same conclusions we are reviewing this again for any potential problem areas Market conduct will continue to be a significant focus for FSRA in 2020 and 2021 As property casualty insurers we must bear in mind that FSRA also has market conduct responsibilities for a wide range of financial services some of which have unique consumer challenges Looking Ahead FSRA will continue to have a significant impact on how property casualty insurers respond to COVID 19 as we move into 2021 At the same time they are looking at longer term consultations and continuing to organize their efforts as an integrated regulator of a broad range of financial services In addition to consultations with FSRA we anticipate that the Regulatory Review Committee and the Regulatory Compliance Roundtable will be looking at a number of developing compliance issues in 2021 including potential changes to privacy legislation OMIA will also continue our work in creating online reference materials compliance road maps and education for mutuals across the full range of solvency market conduct and governance 37 Regulatory Review 2020

OMIA Strategy Update MISSION To serve and strengthen our mutual insurance community VISION Grassroots insurance at the core of thriving communities The OMIA Strategic Plan you see here was created in 2017 2018 and has been the focus of the our work in the years since In addition to the high level goals and priorities noted here there were over 80 tactical objectives requiring the combined effort of OMIA staff board and committees to achieve We ve made good progress on the tactical objectives and many will continue on as they are longer term projects The OMIA board are also reviewing strategic priorities and will be updating and clarifying parts of the plan recognizing that like all things members needs evolve on an ongoing basis It s also important to put our strategic plan into the context of what we ve experienced in 2020 Although we ve had to change directions and respond to new and different pandemic related challenges our underlying goals and priorities really haven t shifted We believe that this is due to the underlying strength of the mutual model and that working for and with policyholders is the single greatest priority for everyone in the mutual system in good times and bad Strategic Goal Strategic Priorities 2019 2024 A Formalize solvency regime with Ministry of Finance Solvency Compliance To provide Member Companies with leadership environmental monitoring education and expert guidance on solvency reporting governance market conduct and corporate risk management that meet regulatory requirements allowing the continued existence of the FMGF B Champion and lead implementation of regulatory initiatives for the benefit of the membership C Determine the ideal structure and resources needed for solvency examination monitoring and reporting D Build increased awareness among Member Companies on value of Guarantee Fund membership Strategic Goal Strategic Priorities 2019 2024 Promoting Mutuality A Achieve 1 position in agriculture sector top of mind share To enthusiastically communicate the unique advantages of the Mutual insurance model to a wide variety of audiences across a continuum from internal stakeholders to the public OMIA Strategy Update B Increase the appreciation and buy in of the Mutual insurance model among internal audiences C Differentiate the Mutuals among external stakeholder groups 38

Strategic Goal Resource Centre To transfer knowledge to Member Companies to assist in business and insurance operations This includes researching compiling and disseminating information and skills Strategic Priorities 2019 2024 A Be the priority source of training and education for mutuals by creating superior member focused skills and knowledge programs B Create and maintain forward looking competitive suite of insurance coverage documents and products C Provide proactive timely and wide ranging marketing tools knowledge and support for products and services D Develop an innovative approach to delivery of education and product services E Research maintain and communicate to members on compliance based materials knowledge and resources F R epresent mutual auto underwriters interests with Ministry of Finance and Financial Services Regulatory Authority FSRA Strategic Goal Strategic Priorities 2019 2024 Group Affinity Services A Provide cost effective labour market competitive benefit and pension plans To provide Member Companies with access to cost effective administratively efficient and stable programs including employee benefits pension and professional insurance to aid in recruitment retention and financial stability B Develop and source professional insurance liability programs for Mutuals and staff C Create comprehensive user knowledge employee employer on benefits and pension plans D Stabilize pension plan Strategic Goal Strategic Priorities 2019 2024 Data Strategy A Increase Member Company knowledge and appreciation on the value of data To provide Member Companies with leadership environmental monitoring education and expert guidance on solvency reporting governance market conduct and corporate risk management that meet regulatory requirements allowing the continued existence of the FMGF B Develop framework for sourcing and governing data sources related to aggregated OMIA database C Improve data utilization and analysis for business intelligence needs D Enable Member Company efficiencies on data collection and reporting 39 OMIA Strategy Update

We are passionate about empowering and advancing the mutual community INFORMATION SESSION AGENDA Chair s Address President s Address Financial Update Reinsurance Update COMPASS Innovation Lab Update Q A FARM MUTUAL FOUNDATION REPORT 40

Path to Profitability Pricing Analytic Services is collaborating with members to identify risks where there is a misalignment between premium and exposure The two most common issues are territorial rating and the rate charged in relation to value When members operated in smaller local regions segmenting rates strictly by fire protection was suf Farm Mutual Re began a Path to Profitability journey in July 2019 This initiative is responding to our poor underwriting performance in the property line of business Candid conversation with our members conveyed the urgency and importance of taking a swift response and the need for member cooperation Members ficient As members have expanded their businesses rate plans need to be adjusted to reflect the true exposures and claim costs in a given geographical area appreciate the magnitude of the problem and understand the need to act The rate review service provides members with access to actuaries for the rate indication calculations Rate indications were calculated for each of the property classes Residential Farm and Commercial at both the individual member and the aggregate community level Risk Selection Product Services will collaborate with members to identify opportunities to improve risk selection capabilities to achieve adequately priced risks and to avoid adverse selection With the immediate need to improve underwriting results Product Services has refocused their work efforts to develop and experiment with an underwriting audit protocol The audit will highlight premium ade There is a substantial rate deficiency in the residential class of business Members are now informed on how much rate is needed quacy and the selection of desirable risks and appreciate how the deficiencies impact to the mutual community The property benchmark rating tool will assist members in responding to challenges in the housing market to keep pace Members underwriting controls and risk selection guidelines will be compared to industry best practices The initial focus of the with escalating home values and avoid overpricing for average valued homes audit is risk selection guidelines for mortgages electrical systems The Path to Profitability plan emphasizes the importance of charging claims history and action taken to physical inspection recommen the right price for each risk dations Extra attention will be paid to the underwriting approach to new farm business high value residences and building values calculation methodologies The auditing framework and protocols are undergoing a validation Claims Cost Containment process A member has agreed to pilot the process The pilot process The post concussion epidemic the weaker catastrophic definition will ensure the underwriting audit delivers value to the members and Farm Mutual Re It will also ensure that the voice of the pre dating regulatory reform in June of 2016 and the increase in the number of consumers purchasing optional accident benefits members is incorporated in the underwriting audit process design are putting negative pressure on the profitability of the auto line of business Prior accident years claims are also developing adversely A regular audit process will assist members select the right risks and get the right price for each risk The Claims Department is targeting two areas to mitigate this trend The process used to identify and prioritize companies to complete annual claims visits has changed A member s proficiency and compliance with new claims and status update reporting is one PEACE OF MIND way member claims visits will be prioritized going forward The amount of change in case reserves between the member and Farm Mutual Re in a given year is another criterion used to prioritize members for claims visits 41

Commercial and Agribusiness Training Support The second targeted area is prompt settlement and closure of claims Early strategic settlement is one of the best initiatives to address claims indemnity and expense costs A closed claim does While members view commercial insurance as an opportunity for growth they appreciate accessing Farm Mutual Re resources and expertise to take full advantage of this opportunity Commercial and Agribusiness Training and Support services aims to support underwriters and agents in executing members commercial strat not develop adversely due to evolving case law and social inflation The earlier a claim closes positively impacts the overall expenses paid on a claim file The original focus in 2020 was to collaborate with members to target the 2016 accident year automobile claim files for closure As the year has gone on the 2020 objective was modified to methodically develop a more proactive and robust collaborative settlement initiative The focus of this initiative is repositioned to focus on the settlement of 2014 to 2019 accident year claims The egies This service was piloted in 2020 with two members and will be offered to all members interested in developing their commercial portfolios in 2021 Claims team has developed settlement work plans on more than 200 claim files and we experienced 1 2 million in assumed reserves releases in the first couple of months Risk Selection Pricing Support Automobile Portfolio Rate Management One of the value added services offered by Analytic Services is preparing the statutory filings for automobile risk acceptance and rating on behalf of 34 of the 36 members offering automobile insurance in Ontario While the overall rate level has been adequate getting the right price for each risk necessitated improving rate segmentation Following the implementation of generalized linear modeling methodology in 2019 and taking a 4 8 rate increase late last fall under the regulator s new simplified process our conservative philosophy was re positioned as we entered into 2020 The pandemic led to about 40 reduction in direct compensation for property damage DCPD and collision loss costs for the members Despite market pressure the participating members did not refund premiums due to loss cost savings This decision recognized the members ability to refund premiums if warranted at year end preserving member autonomy in making this business decision Under submission a complex filing known as the Manual Rewrite will adjust underwriting guidelines to mitigate adverse selection take a rate increase in commercial and improve clarity of the underwriting strategy As we prepare for 2021 the Commercial and Miscellaneous classes are reviewed annually whereas the Private Passenger class will be reviewed quarterly Current analysis suggests a neutral rate indication This is being verified through a comparative analysis of member reserving against our Farm Mutual Re case reserving practices www FarmMutualRe com 42

High Value Loss Control High value residential risks with Total Insured Value TIV in excess of 6 million have experienced some growth in our portfolio over the past couple of years In light of the poor results in this class we increased our underwriting rigor in the spring of 2020 guiding the Loss control within the mutual community has traditionally leveraged a boots on ground approach Our journey is to influence consistent loss control throughout the mutual community We are focused on introducing digital solutions to broaden our risk control efforts while allocating our physical risk assessment efforts membership on risk selection underwriting and influencing primary to mitigate severity within complex and high risk portfolios pricing In August a further step was taken to remove binding authority with building values in excess of 2 5 million If coverage is required on a specific risk Special Acceptance Approval must be received from Farm Mutual Re Residential risks without a corresponding agriculture or commercial exposure are being declined or if accommodation is deemed necessary facultative coverage is To maintain our commitment to risk control during COVID 19 physical risk assessments were supplemented by desk assessments Our prompt actions enabled the Loss Control team to remain productive while providing tremendous value to the underwriting process to support disciplined risk selection Through the desk assessment efforts we were able to prioritize our physical risk assessments when we returned to the field in mid July Desk as being purchased to protect the treaty going forward A longer term solution is in development with the membership for business outside of our risk appetite in which members will retain sessments will remain a valuable tool within the loss control process a greater net exposure Exposure beyond this net retention will be placed using facultative reinsurance Our Risk Assessment and Risk Improvement reports have been redesigned Risk Assessment reports focus on industry based risks inherent exposures Opinion of Risk Construction Occupancy Protection Exposures C O P E data Natural Hazard Exposures and Loss Estimates In conjunction with our Application Programming Loss Control Technical Development Loss Control Technical Development provides educational opportunities to help the mutual community strengthen its strategic position improve underwriting margins and prudently manage Interface API integrations of Fire Underwriting Service FUS scores and catastrophe risk scores Loss Control will soon be implementing a risk grading methodology With the addition of a broker agent insurance exposures within difficult or hazardous classes of insurance Consistent loss control comes from inspiring member staff to diversify their technical expertise while empowering them to deliver meaningful risk mitigation portal we will enhance engagement with the broker agent community and empower policyholders to take ownership of improving their loss prevention efforts 43

Prototyping an Innovation Lab Statement Of Comprehensive Income Loss And Equity For the period ended September 30 in thousands of dollars Revenue Gross premiums written Net premiums earned 2020 2019 226 292 144 964 218 290 137 263 144 883 15 217 12 423 172 523 27 559 24 914 837 1 808 1 481 327 412 844 412 517 139 898 12 435 11 058 163 391 26 128 36 093 120 10 085 4 059 14 144 411 900 426 044 Underwriting expenses Claims and adjustment expenses Commissions and fees Operating expenses Underwriting loss Investment income Gain on foreign exchange Loss Income before income taxes Income tax recovery Net loss income Members equity beginning of year Members equity end of period Loss ratio Expense ratio Combined ratio 99 9 19 1 119 0 We held our biennial strategic planning session with members in July The goal of this interaction is to identify member driven initiatives for the benefit of the entire membership A large percent of the membership is willing to fund the prototyping of an Innovation Lab concept A team of internal member and external resources will present a prototype for member feedback and validation early in 2021 Increasing our innovation capabilities and following a repeated process will enable us to take smart risks leverage the available scale within the Mutual community and foster a greater sense of mutuality 101 9 17 1 119 0 Minimum Capital Test Ratio September 30 2020 458 December 31 2019 479 www FarmMutualRe com 44

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COMPASS 2020 From Home You know when you are planning your big event and WHAM a pandemic hits Oh that is right you do Well COMPASS was no exception and although the team had to move fast and furious Possibly the most exciting addition to the COMPASS 2020 From Home experience was the introduction of the Mutual Pitch Day and Mutual Investment Token Groups with the top three ideas coming out of COMPASS had an opportunity to refine their pitch and present at the Mutual Pitch Day one week following the we believe COMPASS 2020 From Home was one of the best member planning events yet COMPASS four day event Members placed their Investment Token We learned We collaborated We laughed towards the initiative they were passionate about moving forward Everyone embraced the shift to virtual half day sessions and by and collaborating on a mutual solution moving to the virtual environment we were able to increase member participation from one per company to three Members voted on the top idea within separate streams InsurTech Data Quality Risk Selection and Omni Channel Customer Experience What We Accomplished Together 7 3 Industry Led Seminars Access to 7 industry led education seminars 18 Pitch Books Ideas 18 ideas proposed by COMPASS working groups Innovation Opportunities Video recordings of 3 real innovation opportunities presented by the mutual community 1 ONE Strategic Initiative Activated 1 member driven innovation opportunity into action Insurtech Innovation Lab How to get engaged You Can Still Get Involved Prototyping Stage Customer Discovery Interviews Attend Problem Basecamp Share Out November 6 Enroll in Upskilling Opportunities December 46

Meet Your Innovation Lab Prototyping Team In the spirit of staying true to our commitment of a member driven process we are very excited to have representatives of the mutual community forming the core of this team Stephen Matusiak Product Manager Halwell Mutual Christine Ziembicki Business Analyst Edge Mutual Julian Ghloum Bus Ops Analyst Town Country Mutual Joshua Boyer Systems Analyst Grenville Mutual Participating companies can access information on the Innovation Lab Website Inquiries regarding this initiative can be directed to compassinnovationlab farmmutualre com www FarmMutualRe com 47

P M Meeting Panelists Tuesday October 27th 2020 Lessons from 2020 Fearless Predictions on 2021 A panel of insurance and mutual industry guests will share their perspective on what s happened and what may lie ahead Chuck Chamness NAMIC Chuck Chamness serves as President and CEO of the National Association of Mutual Insurance Companies a property casualty insurance trade association with 1 400 member companies NAMIC members represent nearly 40 percent of the total property casualty insurance market serve more than 170 million policyholders and write 225 billion in annual premiums Chamness has testified before U S House and Senate committees on topics ranging from the impact of the Dodd Frank Act on insurance the U S EU covered agreement and the industry s response to Hurricane Katrina Prior to joining NAMIC he worked 10 years in Washington D C serving in the first Bush administration as deputy assistant secretary for public affairs under HUD Secretary Jack Kemp as well as a press secretary on Capitol Hill and in other public and private sector positions Chamness currently serves as Board Chair of NAMICO a 55 million asset professional liability insurance company owned by the association and its members In 2016 he concluded his three year term as board chairman of the St Baldrick s Foundation an organization that funds more pediatric cancer research grants than any other organization except the U S government Chamness has also served as a board member of the Insurance Institute for Highway Safety since 2004 and is a member of the U S Chamber of Commerce s Association Committee of 100 and the Indiana University Foundation Board of Associates Website www namic org Colin Simpson IBAO Colin Simpson is the CEO of the Insurance Brokers Association of Ontario where he leads the strategic vision and execution of the 14 000 member organization A longtime proponent of the Broker Channel and Canadian Insurance landscape Colin specializes in corporate transformation and change management He has worked in the Canadian insurance industry for 20 years Recent roles include President CEO of Intrinsynch Insurance Solutions Kingsway Financial Services and York Fire Casualty Insurance Colin holds an Honours Degree in Business Law and Economics a Masters Degree in Accounting Finance and is a qualified Chartered Accountant Scotland Website www ibao org 48

P M Meeting Panelists Tuesday October 27th 2020 Don Forgeron IBC Insurance Bureau of Canada s President and CEO since 2009 Don Forgeron has a successful track record of more than 25 years in the property and casualty P C insurance industry He has a strong foundation in the public and private sectors having worked f or Alberta s Department of Environment and the National Research Council in Nova Scotia early in his career As President and CEO Don works with governments and key stakeholders across the country to build a strong stable P C industry and a stronger and safer Canada He is leading a national conversation on the need to better prepare Canada for an earthquake and he continues to push for a national dialogue with governments and consumers on the need for severe weather adaptation Don is active internationally on behalf of Canada s P C insurance industry to provide input to international regulatory bodies He is a founding member of the Global Federation of Insurance Associations and leads an international working group focused on disruption Website www ibc ca 49 2020 P M Meeting Panelists

2020 Presidents Managers Meeting Virtual Event Chair Terry Knight North Blenheim Mutual Insurance Company Bright Ontario

Board of Directors and Officers 2020 OMIA Board Terry Knight Chair Group C Director North Blenheim Mutual John Stirk 1st Vice Chair Director at Large Dufferin Mutual Steve Quinn 2nd Vice Chair Group B Director Cayuga Mutual Neil Shay Director at Large CTM Insurance Marg Torrance Director at Large Halwell Mutual Kevin Inglis Group D Director Howick Mutual John Taylor President OMIA Sharon Dittmer Treasurer OMIA 2 Bob Burley Past Chair Group E Director HTM Insurance Tracy Wintermute Group A Director Westminster Mutual Brad Vanstone Director at Large West Wawanosh Mutual

Message from OMIA President John Taylor Welcome Greetings and welcome to the 2020 Presidents and Managers meeting This is by no means the customary welcome we ve seen in years gone by as mutuals gather each fall 2020 has placed us all in the world of virtual meetings and on a temporary basis at least our President Managers meeting has joined the list of on line only events for this year The P M book is prepared each year in anticipation of giving meeting attendees news on what s taking place in the meetings a mid year report on OMIA activities and general information that we think is important for our mutual members 2020 will see a simplified meeting taking place on October 27th You will receive updates from the leadership at OMIA Farm Mutual Re and the Fire Mutuals Guarantee Fund In addition we ve convened a panel of provincial national and international insurance leaders with Chuck Chamness from NAMIC Colin Simpson from the Insurance Brokers Association of Ontario and Don Forgeron of the Insurance Bureau of Canada We thought this would be an excellent opportunity to get these thoughtful and wellspoken insurance leaders together as they ve been on the forefront of thinking through many of the unique insurance issues arising in our COVID 19 world Your P M book includes some very detailed reports on the work of your committees These are important working groups that provide significant input and feedback to the OMIA Board across a broad range of topic areas The board relies on these committees to provide the true membership perspective and to help put together programs that are specifically tailored to meet mutual needs and foster cooperation among our members Please take time to read these reports We look forward to connecting on the 27th Yours Truly John Taylor President Ontario Mutual Insurance Association 3

The Fire Mutuals Guarantee Fund FMGF was formed in 1976 The creation of this fund enabled farm mutuals to discontinue use of the premium note The FMGF is directed by a board of trustees elected by its members The voting membership for the FMGF is the same as OMIA s voting membership The FMGF trustees are as follows Chair Neil Petreny Dumfries Brian Downie West Elgin Sharon Hollister Germania Jodi Rich Howard Glenn Taylor Halwell The fund is a 1 Million open ended fund with a current balance of nearing 2 Million In the event of an insolvency members would be assessed for the funds necessary to meet the insolvent member s obligations to policyholders There has never been a call on the Fund The fund agreement essentially places the surplus of all 38 participating farm mutuals and Farm Mutual Re behind any one participant Participants in the FMGF are exempt from the insurance industry guarantee fund PACICC Property and Casualty Insurance Compensation Corporation The FMGF provides a broader guarantee in that There is no deductible It covers all lines There are no caps on unearned premiums or claims Guarantee Fund members are subject to a solvency protection process agreed to by all members The process includes a series of solvency tests and quarterly reviews administered by the Financial Review Committee The Financial Review Committee FRC is appointed by FMGF Trustees and consists of Catherine MacLellan Chair Bill Embree Joanne Vansevenant and Rick Walters The committee reports directly to the CEO of Ontario s Financial Services Regulatory Authority or their designate October 2020 4

Neil Petreny Chair FMGF Dumfries Mutual Insurance Company Neil Petreny was elected to the board of Dumfries Mutual Insurance Company in 2013 Originally from Saskatchewan he has a degree in agriculture a Masters in Business Administration and has spent nearly two decades as the General Manager of a Guelph based agricultural services company His business experience includes governance policy planning finance IT systems service delivery and strategic business partnerships In addition to operational experience he also spent seven years as a North American director on an international organization involved with services and standards serving four years as President Neil was elected to a three year term as a Trustee on the Fire Mutuals Guarantee Fund in 2015 and has been a Dumfries Mutual farm policyholder since 2002 5 October 2020