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2021 OMIA Annual Report

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2021 Annual Report

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Chair John Stirk s theme for 2021 was Still Standing For a Reason This sentiment is as true for the mutual system and our impressive history as it is for the last two years we ve all endured both personally and professionally Our mutuals remain steadfast operating for the good of our policyholders and communities There s a reason for that We stand the many tests of time together OMIA Board of Directors OMIA Staff 2021 Annual Convention Summary 2021 P M Summary An Introduction to OMAP Committee Reports Group Reports Financial Statements 3 4 6 8 10 12 37 41

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2021 OMIA BOARD OF DIRECTORS Steve Quinn 1st Vice Chair Group B Director Cayuga Mutual John Stirk Chair Director at Large Dufferin Mutual Kevin Inglis Group D Director Howick Mutual Marg Torrance Director at Large Halwell Mutual Neil Shay 2nd Vice Chair Director at Large CTM Insurance Tracy Wintermute Group A Director Westminster Mutual John Taylor President OMIA Terry Knight Past Chair Group C Director North Blenheim Mutual Brad Vanstone Director at Large West Wawanosh Mutual Dave Rutherford Group E Director HTM Insurance Sharon Dittmer Treasurer OMIA 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 3

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ONTARIO MUTUAL INSURANCE ASSOCIATION President Management John Taylor President Sharon Dittmer Treasurer Manager Administrative Services Jeff Ferguson Director of Operations Susan Baker Manager Insurance Services Lisa Hunter Manager Marketing Communications Shawn Zhang Manager Statistics Information Services MISSION To Serve and Strengthen Our Mutual Insurance Community VISION Grassroots Insurance at the Core of Thriving Communities SERVICE AREAS Data Statistics Services Member Meetings Events Education Training Member Surveys Employee Benefits Pensions Government Relations Product Development Industry Liaison Promotion Insurance for Insurance Co s Regulatory Compliance Services Marketing Special Projects and Studies 4 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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Administrative Services Daljit Johal Executive Assistant Paula Georgei Accounting Specialist Heidi DuMaresq Benefits HR Specialist Rachel Carew Pension Benefits Coordinator Donna Barlow Accounting Assistant Danita Johal Office Assistant Janet Schmidt Training Research Officer Jennifer Higuchi Insurance Resource Officer Kip Moi Insurance Resource Officer Pascale Swanson E Learning Developer Mandy Hetherington Administrative Assistant Insurance Services Christine Senior Supervisor Insurance Services Statistics Information Services Kyle Murphy Statistical Coordinator Julia Sharma Business Intelligence Analyst Marketing Communications Tavia Tobey Marketing Communications Coordinator Kara Tobey Marketing Communications Assistant Karolina Prominski Data Quality Rep Desktop Assistant Shah Shirzadi Information Services Analyst Compliance Jackie Roy Compliance Resource Officer 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 5

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2021 ANNUAL CONVENTION March 25th Online For the second year in a row we held our Annual General Meeting in a virtual setting This was our 139th AGM and although we seem to have gotten the hang of holding virtual meetings we always look forward to seeing our mutual colleagues in person Chair Terry Knight 2020 2021 We kicked off the morning with an inspirational keynote presentation by Drew Dudley internationally acclaimed leadership speaker and best selling author Drew shared the insights he has learned through close to 20 years in the field of leadership development He spoke of his Day One Leadership Process from his time running the leadership development program at the University of Toronto and through his decade traveling the world increasing the leadership capacity of some of the world s most dynamic organizations The group was led through the Annual General Meeting of the Fire Mutuals Guarantee Fund facilitated by Chair Neil Petreny Dumfries Mutual Director and the OMIA AGM commenced shortly after Chair Terry Knight led us through the day including providing his Chair s Report where he reflected on his unusual year and the resonance of his theme 2020 Vision Setting Our Sights on Future Success 6 Treasurer Sharon Dittmer provided a report on the 2020 Financial Statements and incoming Chair John Stirk closed the session by introducing his theme for the year Still Standing for a Reason The following motions were brought forward 1 APPROVAL OF THE MINUTES OF THE 2020 ANNUAL GENERAL MEETING THAT the Minutes of the Annual General Meeting of the Ontario Mutual Insurance Association as held April 29 2020 be approved Moved by Jack Hamilton North Blenheim Mutual Seconded by Scott Roung Dumfries Mutual Carried 2 APPROVAL OF THE 2020 FINANCIAL STATEMENTS AND AUDITORS REPORT THAT the Financial Report and Auditors Report for the Ontario Mutual Insurance Association for the year ended December 31 2020 be adopted as presented Moved by Allan Hedley Cayuga Mutual Seconded by Tracy Wintermute Westminster Mutual Carried 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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3 APPOINTMENT OF AUDITORS THAT Clarke Starke and Diegel be appointed auditors for the Ontario Mutual Insurance Association for the year 2021 Moved by Steve Graham Halwell Mutual Seconded by Frank Barretto Dufferin Mutual Carried 4 ELECTION OF DIRECTORS AT LARGE Terry Knight reviewed the OMIA By law provision on nomination and election of Directors At Large He noted the work of the Nominating Committee and confirmed that the sole candidates meeting all qualification provisions was Marg Torrance of Halwell Mutual THAT Marg Torrance be elected by acclamation Moved by Brian Milne Germania Mutual Seconded by Dave Rutherford HTM Carried Marg Torrance briefly addressed delegates and noted she looked forward to continuing her work on the OMIA Board Marg thanked the OMIA Board the Nominating Committee and the mutual community for allowing her the opportunity to serve for a second term Marg encouraged anyone to contact her with issues or ideas to bring before the board Dumfries Mutual was the 2020 Outstanding Contributor Award winner but could not be recognized at the 2020 Annual General Meeting As we were unable to make the award presentation in person a video prepared by OMIA summarized Dumfries many contributions over the past 165 years This Convention was certainly a unique experience and the challenges of the year were not lost on the day s speakers John Taylor remarked In coming years as I look back at what we were talking about as mutuals in 2020 I will think of your commitment to policyholders your commitment to your community and your commitment to employees partners and colleagues Every conversation and every question this year was guided by those three considerations It is easy to be overwhelmed by media reports on many things including the future of insurance and disruption But in its simplest sense the strength of mutuality lies in each mutual s willingness to do what s best for the policyholder the community and our people And that is at the heart of the mutual model We do not exist to be insurers we exist to be mutual insurers 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 7

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2021 PRESIDENTS MANAGERS October 24th to 26th Huntsville Ontario The 2021 Presidents and Managers Meeting took place at the scenic Deerhurst Resort our first in person event since March 2020 With protocols in place to ensure all delegates were fully vaccinated and social distancing and other health and safety measures were in place approximately 150 in person Chair John Stirk delegates were happy to spend time 2021 2022 together The meeting was set up on a hybrid basis a first for OMIA Some speakers joined the meeting virtually and we were also able to accommodate over 100 virtual delegates from the convenience of their home or office John Stirk welcomed delegates and acknowledged that our meeting was taking place on the traditional territory of the Anishinaabeg specifically the Chippewa Ojibwa and Potawatomi peoples under the terms of the RobinsonHuron Treaty 61 of 1850 and the Williams Treaties of 1923 Our opening keynote speaker Dr Robyne HanleyDafoe brought an inspiring message on how people and organizations have weathered the COVID 19 pandemic She shared important observations and tips on building resilience so that we can all do hard things Dr Robyne s message was made even more meaningful due to her background in studying resilience and her own personal journey following a harrowing car accident as a teen 8 The business session included reports from Chair John Stirk and OMIA President John Taylor John Stirk provided his reflections on his theme Still Standing for a Reason and the pride member companies should take in having survived and succeeded for over a century John also urged delegates to consider their role as mutual leaders and in giving back through sharing their experience and expertise at mutual activities and events John paraphrased John F Kennedy in stating Ask not what your Association can do for you but what you can do for your Association John Taylor provided some remarks on the theme of measuring progress versus solving problems He highlighted some of the mutuals key projects and examples of working together throughout the pandemic including IFRS 17 Collectivfide the Ontario Mutual Automobile Plan OMAP property peril scoring and the Fire Mutuals Guarantee Fund He also provided some observations on how to effectively deliver the mutual message support our communities and support our people Fire Mutuals Guarantee Fund FMGF Chair Brian Downie convened the FMGF business meeting Brian s report provided updates on work in establishing relationships with the Financial Services Regulatory Authority of Ontario FSRA and with succession planning with the Financial Review Committee FRC He provided a report on FMGF expenses for 2020 2021 including some comments on reviewing FRC member duties and adjusting compensation He also reported on the status of the fund s assets and confirmed that no individual mutuals posed a threat to the Guarantee Fund 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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Bill Embree provided the FRC report on mutual results to June 30 2021 and comparatives to 2020 results as well as comparative to industry results He spoke to elements of the 2021 Key Metrics Report and stress testing completed based on 2019 results Bill Embree confirmed the reporting protocol on updating FSRA on implementation progress and work on the 2023 MCT changes and the new business plan format To conclude the morning Henry Miller Chair of the Auto Rate Filing Committee provided members with an update on the creation of the OMAP OMAP and introduced Vice President Tyler Kroetsch who began his mutual career on October 12 The afternoon program included three guest speakers Mary Robinson appeared as OMIA s first ever virtual speaker and provided the history of the Responsible Investment Association of Canada and the evolution of the Environmental Social Governance ESG factor investing in Canada She also provided some insight into the years ahead with increasing expectations that institutions will consider these factors in building investment portfolios Paul Kovacs Executive Director of the Institute for Catastrophic Loss Reduction provided a history on the impact of climate change on the insurance industry in Canada and commentary on the increasing severity and frequency of catastrophic losses He reviewed a number of industry initiatives to foster resilience and incentivize the use of better building materials and techniques in home construction The afternoon concluded with a spirited presentation from Kadey Schultz who provided examples of the impact of social inflation on casualty claims in the United States and some of the factors that have slowed the impact of social inflation in Canada Day two kicked off with a Quick Hits Mutual Perspectives Panel moderated by Marg Torrance Presenters Tony Ngo Sue Baker John Taylor Tracy Wintermute and Jackie Roy provided condensed fastpaced updates on the merger and acquisition environment for brokers silent cyber insurance sales by credit unions the new workplace and the Fair Treatment of Consumers The Farm Mutual Foundation report was provided by Jill Taylor There were 208 scholarship applications granted this year The assignment this year was to provide an essay on how individuals had given back to their community during the COVID 19 pandemic A striking example of this was the Meadow Park Chatham Conversation Station a portable shelter constructed by Jonathon Vanek to allow socially distanced visits with isolated seniors during the most difficult days of the pandemic The Farm Mutual Re Business Meeting included reports from CEO JP Gagnon and CFO Amy Butler Chief People Officer Jennifer Allan provided a presentation on Farm Mutual Re s journey towards Equity Diversity and Inclusion EDI The Assistant Vice President Innovation Andrea Kerswill introduced herself to the mutual group having joined Farm Mutual Re earlier this year She provided an update on Farm Mutual Re s innovation strategy The closing speaker for the P M was David Brown of Governance Solutions An experienced voice in governance for over 40 years David spoke on 5 Mistakes Boards Make and specific strategies to avoid falling into these traps At the conclusion of the meeting John Stirk thanked all members for attending both in person and virtually and invited members to what we hoped would be an in person convention in March 2022 at the Sheraton Centre in Toronto 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 9

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Moving Forward Company 789 becomes the Ontario Mutual Automobile Plan 2021 was a landmark year for the group of Ontario Mutual companies that have for decades been filing automobile rates and rules as a unified entity through Farm Mutual Re Ontario automobile insurance has always been a complex and sometimes volatile product but the onset of increasingly sophisticated analytical underwriting tools and consumer expectations around usage based insurance and digital platforms spurred the Auto Rate Filing Committee to rethink how best to approach the work that the 789 group of the companies did together The name Company 789 came from the IBC statistical automobile data filing code number for our mutual group The committee under the leadership of Chair Henry Miller with assistance from OMIA and Farm Mutual Re worked energetically at creating a dedicated operational structure to ensure the group had access to resources expertise and opportunities to innovate in producing the auto insurance product The committee presented a proposal to membership in early 2021 did a series of town halls and the other information sharing events revised the proposal based on feedback and by mid year moved ahead with the unanimous approval of members to establish the new Ontario Mutual Automobile Plan OMAP There are ambitious objectives for the months and years ahead however the first and most important task was recruiting a leader for OMAP Tyler Kroetsch Bmath FCAS FCIA was appointed as VP OMAP on October 12 2021 By the end of the 2021 further recruitment and strategy work had been completed As we launch into an new year in auto insurance OMAP is at the wheel 10 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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OMIA AWARDS With another year of pandemic restrictions and with AGM moving to a virtual format and our P M to a limited attendance venue the OMIA Board elected to defer naming winners of the Outstanding Contributor Award the Presidential Merit Award and the Distinguished Service Award with the hope that in 2022 there would be a better opportunity to recognize award winners 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 11

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2021 COMMITTEE REPORTS The OMIA Membership has a long tradition of working together to achieve goals develop strategies and make meaningful contributions to mutuality This system provides the membership with a voice in Association activities and also helps provide a cost effective platform for accomplishing more together The following pages provide a summary of the important work done over the past year on your behalf 12 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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Accounting Advisory Committee Report Mandate to assist member companies in meeting requirements for audit and financial reporting Chair Andrea Schaefer HT C Mutual 2021 Committee Members Christine Van Daele Westminster Dave Paterson Ayr Traci Radford West Wawanosh Kevin Konecny K E Catherine MacLellan FRC Bob Nielson FRC Bob Brown Farm Mutual Re Amy Butler 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 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 has identified an opportunity to recommend standardization of accounting treatments and approaches to financial reporting among the Mutuals 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 Accounting 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 In 2021 much of the committee focus continued to be on developing an implementation process for IFRS 17 Chart of accounts Accounting for reinsurance premium and proceeds IFRS 17 Getting Ready Guideline on level of aggregation 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 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 Guidelines on identifying onerous contracts ggregated approaches to data collection for actuarial A services ecommendations on accounting for policy acquisition R costs hared resources for management and board training on S IFRS 17 Shared resources for actuarial services continued on next page 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 13

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In 2020 it was announced that IFRS 17 would be delayed by one year and will be effective on January 1 2023 Implementation will be required earlier in order to create comparative statements for the 2023 fiscal year During 2021 the committee continued to work on IFRS 17 readiness by developing position papers shared with mutuals participating in the group actuarial services project All draft position papers to date have been posted to the OMIA Members Website for members to review In work to date the Accounting Advisory Committee has included representatives from policy management systems in order to provide some indication on what system changes may be required for data collection and financial reporting The committee will also be working closely with mutual auditors to ensure decisions are acceptable to our audit partners With the assistance from OMIA Statistics the committee completed its work with three mutuals as test companies to ensure that the actuary will receive premiums and claims data to provide the required actuarial services under IFRS 17 Looking Ahead Looking ahead into 2022 the committee will be finalizing position papers and continue to work with Mutuals to provide data to the actuary to complete the 2023 P C 1s and to prepare IFRS 17 financial statements 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 The work of the Accounting Advisory Committee has been critical in assuring our regulator FSRA that despite the extreme level of complexity involved in the IFRS 17 transition our mutuals are well prepared well positioned and wellresourced for the new standard 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 Maple Mutual 2021 Committee Members Warren Ting HTM Shelley Deyo North Blenheim Steve Quinn Cayuga Tracy MacDonald Trillium Jodi Meiering Ayr Tyler Kroetsch OMAP 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 In 2021 in addition to the usual work with rate filings the committee with the support of members launched a new approach to managing the mutual auto insurance portfolio with creation of the Ontario Mutual Automobile Plan 14 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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Mission We provide auto insurance solutions and services uniquely tailored and priced to the need of customers in the mutual community Vision To enable our member companies to be the insurer of choice in their respective communities Strategic Directions 1 Grow Profitably Increase Auto GWP and PIF reduce Auto Loss Ratio by supplementing our expertise in our mutual communities with data driven underwriting and rate segmentation insights using the combined scale of our member insurers Improve the accessibility of our products to customers agents and brokers while retaining our profitable target customer base 2 Trusted Partner Maintain our role as a trusted partner to our policyholders with best in industry retention rates Build on our reputation in our mutual communities through offering a thorough suite of automobile insurance products that meet the unique and diverse needs of our neighbours Integrate OMAP within the Ontario Mutuals as a center of excellence for everything Auto related 3 Strengthen People Communication and Culture Create and grow a best in class Auto team that supports our member companies Perpetuate a strong feedback loop with our member companies and their distribution networks to facilitate business management and ensure our rates and rules reflect our culture values and strategy 4 Adapt for the Future Invest in the technology required to be a leading insurer and develop a foundation to continue to evolve Build flexibility that enables a fast follow strategy and supports increasing the scale of mutual auto business Be willing to innovate in our target market leading the industry with products for rural auto business The OMAP Team is Starting to Take Shape Since hiring Tyler Kroetsch as OMAP s Vice President in the fall of 2021 the OMAP team has quickly expanded Stephanie McDonald Underwriting Manager Gerry Wiens Business Analyst and Suomi MacCarthy Actuarial Analyst joined OMAP in early January 2022 Work is well underway for OMAP s first rate filing focused on quick win opportunities expected in June The team is also starting to identify potential larger improvements for subsequent filings and together with the ARFC has laid out the strategic plan for the Ontario Mutuals Automobile product see above OMAP looks to continue expanding by filling out the remaining vacancies develop strong communication and feedback channels with member companies and deliver on rate segmentation and underwriting opportunities in upcoming filings The ARFC is excited for the future of our auto product Projects and Rate Filings Date Actions January 2022 Private Passenger 0 0 Minor rule and algorithm adjustments January 2022 Commercial 0 0 Minor changes January 2022 Miscellaneous 0 0 Minor changes Future Date Actions June 2022 Private Passenger TBD 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 15

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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 Mutual 2021 Committee Members Frank Montgomery Maple Kelly Jackson Westminster Linda Pereira Lambton Lisa Fazzari Farm Mutual Re Jon Hodson Farm Mutual Re John Taylor OMIA Susan Baker OMIA Janet Schmidt OMIA Background Something New Pandemic Relief The Automobile Insurance Committee provides formal input to government consultations on potential changes to Ontario s automobile insurance product As noted the almost complete shutdown of Ontario s economy in March 2020 had a radical impact on driving behaviors with fewer trips and fewer miles travelled for both personal and commercial vehicles The government responded quickly in the early months of the pandemic with public comments demanding that auto insurers provide some form of premium relief In reforms dating back over 25 years 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 evolving toward 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 stringent rules governing pricing selection policy terms and claims processes have created a highly complex environment for both insurers and policyholders This in turn has led to more involvement of legal counsel on behalf of policyholders and an adversarial environment for auto claims 2020 was a year of temporary adjustment as pandemic conditions radically changed driving patterns and driver expectations While we have seen a partial return to normal driving patterns the impact of the pandemic is still incomplete and much about Ontario auto remains on pause as a result Behind the scenes however the government has been consulting vigorously on a wide range of potential changes relating to modernizing auto insurance The report that follows reflects the variety of issues requiring an OMIA response 16 Almost every automobile insurer in Ontario allowed policyholders to reduce coverage or make other immediate cost saving impacts Some insurers also reduced premiums or provided a premium rebate The mutual approach was to allow policyholders to adjust coverages based on personal circumstance and then consider the 2020 results overall If warranted they could then make a refund to policyholders much in the same way that mutuals have over the years provided property refunds to policyholders during years with positive underwriting results Traditionally this had not been done with automobile insurance As automobile insurance is highly regulated there was a significant learning curve as the mutuals that chose to make refunds had to make complex submissions and undertakings to FSRA for approval In early 2021 OMIA assisted with coordinating this process and working with FSRA to simplify a complicated process wherever possible There were a few iterations on submissions but in all about 14 mutuals made auto refunds in early 2021 There is a sense that while driving levels increased from 2020 they had not reached pre pandemic levels and auto results seemed to fare reasonably well in the 2021 financial year There appears to be less public expectation or political advocacy for auto refunds for the 2021 year 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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Ministry of Finance Consultations March 2021 Early in the year there was a flurry of requests for input from the Ministry of Finance on proposals on automobile insurance The first of these related to amending regulations to allow the electronic delivery of automobile insurance notices and other automobile insurance documents This attempt to modernize communication with policyholders is generally welcomed OMIA s input to the Ministry was to ensure that there was careful consideration of mitigating any downside due to inconsistent use of electronic delivery or addresses and other concerns about privacy or cyber security potential of greater benefit for all Ontario drivers OMIA expressed concerns that some innovators would attempt to avoid transparency and practices by citing intellectual property rights OMIA also advised the Ministry to be wary of allowing market leaders to use the sandbox to create innovations that in effect eliminate competition in the longer term and reduce availability in the market which in turn would be detrimental to all automobile insurance purchasers Tomec versus Economical In 2020 a decision on automobile insurance effectively removed defenses relating to limitation arguments on some statutory accident benefits schedule claims Aggressive plaintiff law firms indicated this would open the door to reopening older claims The insurance industry including OMIA have been carefully monitoring the adverse impact of Tomec and continue to survey members twice annually to see if this litigation trend does in fact take place The year end 2021 survey of mutuals shows no discernible meaningful impact from Tomec Fraud and Abuse Consultation Paper The second of the Ministry s proposals was allowing automobile policyholders to opt out of direct compensation property damage coverage This has always been a compulsory coverage in Ontario automobile insurance and is a key part of no fault coverage This is the coverage that allows drivers to recover from their own insurer without any penalty or deductible when damage is done to their vehicle through the negligence of another party OMIA s input to the Ministry was to tread lightly given that many consumers may be likely to opt out of this coverage for very small premium savings without understanding that they were waiving all rights to recover physical damage caused to their vehicle by others The third proposal related to the creation of a regulatory sandbox at FSRA This type of sandbox has been piloted in other jurisdictions and is a place where innovations to a product or process can be implemented even though they do not meet existing regulations The regulator is then in a position to assess the benefit if any to policyholders of the innovation and allow it to be applied more broadly OMIA s input to the Ministry of Finance was to ensure that the creation of a sandbox would be evenhanded and that there would be complete transparency as to the types of innovations being undertaken in the sandbox so that there would be The Ministry of Finance in conjunction with FSRA published a detailed consultation paper on how to establish a fraud and abuse prevention program For many years the prevalence of fraudulent claims in automobile insurance has been a concern and it has been estimated to have cost billions of dollars which ultimately is paid by consumers through increased premiums As the Ministry of Finance and FSRA contemplate a more comprehensive regulatory approach to reducing fraud and abuse OMIA provided detailed answers to 34 questions across a range of topics including the definition of insurance fraud and abuse the use of data in fraud and abuse prevention fraud management tools tools for the regulator and other significant concerns It is anticipated that this consultation may result in a significant strengthening of fraud and abuse prevention practices Bill 282 Moving Ontarians More Safely MOMS Act 2021 and Towing and Storage Safety Enforcement Act 2021 The MOMS Act and Towing and Storage Safety Enforcement Act were introduced in the spring of 2021 The MOMS Act proposed measures to combat unsafe and aggressive driving The Towing and Storage Safety and Enforcement Act put in place some pilot measures to significantly reduce bad behavior by towing firms at accident scenes continued on next page 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 17

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OMIA strongly supported enforcement of laws to improve towing services to accident victims OMIA noted that most tow operators in Ontario provided a valuable service but for many years some towing firms have acted to inflate towing and storage costs to the detriment of policyholders OMIA s response to the MOMS Act also reflected our observation that many rural communities in Ontario were seeing increased incidents of excessive speed on the roads which is a top contributor to increased accident severity In addition in 2021 OMIA created a Towing Sub Committee from the Claims Roundtable and this group was able to provide input for OMIA s participation on stakeholder consultation on the towing bill New Issues Golf Carts Don t Belong on the Road Early in 2021 the province launched a pilot to allow specified municipalities to allow unlicensed vehicles such as golf carts to operate on provincial roadways This has opened a wide range of questions as related to allowing unlicensed vehicles onto roadways The primary issue from OMIA s standpoint is increased accident risk and the severity of injuries that typically arise from collisions between these types of vehicles and motor vehicles This is of concern as the pilot project does not require these vehicles to have auto insurance and claims could conceivably fall back on a home farm or business policy While monitoring this new project and other initiatives relating to non licensed vehicles OMIA has been helping members ensure they are taking a consistent approach to creating underwriting guidelines to eliminate any ambiguity on coverage Looking Ahead Consultation and proposed changes impacting automobile insurance have taken place in a piecemeal fashion and don t seem to incorporate any broad vision of sweeping reform To some degree this might be expected with the pandemic creating significant changes in travel patterns and automobile results that may be an anomaly in the longer term trend line An upcoming election always has the potential to create political pressure points on automobile insurance but relative rate stability over the past couple of years may reduce this as we head towards a June 2022 provincial election 18 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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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 Mutual 2021 Committee Members Jeff Howell Bay of Quinte Teresa Martin North Blenheim 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 January 1st 2022 Individuals Companies Life LTD AD D 1 237 43 Short Term Disability 113 4 Critical Illness 928 29 Directors Life 171 25 Dependant Life Employees 1 034 43 Dependant Life Directors 162 25 Directors AD D 269 36 Health Spending Account HSA 608 16 Plan A Basic 86 3 Plan B Basic Major 116 8 Plan C Basic Major and Child Ortho 1 122 32 TOTAL Health Dental 1 324 43 Defined Benefit 398 31 Defined Contribution 864 38 Directors Officers with ICPP 0 40 Directors Officers without ICPP 0 1 Bond 1 777 39 E O P C Agents 302 40 Cyber Liability 0 30 Employees Life package 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 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 funded and earned by beneficiaries A report on the work to date along with suggested changes to Plan design was provided to member companies in the fall of 2018 continued on next page 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 19

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Information sessions were held in December 2018 and 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 DB Pension Plan effective January 1st 2022 1 T he DB pension formula will change to 1 5 x credited service x final average earnings for future service only 2 T he monthly employee and employer contributions will increase to 9 3 The indexing cap will decrease to 3 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 June 2019 An employee announcement detailing the plan changes was sent to all participating members of the Defined Benefit Pension Plan in September 2019 A legal notice of upcoming pension plan changes was distributed to all participating active members of the Defined Benefit Pension Plan in November 2019 OMIA will return to the ALM in early 2022 Pension Plan Text The Plan Text was restated January 1 2021 incorporating all prior amendments to the previous plan text In addition clarified terms and references with the text to ensure compliance with Canada Revenue Agency interpretations on payment of pension benefits Annual Plan Review Defined Benefit Pension Plan This review is completed by OMIA as Plan Administrator and LifeWorks previously 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 2021 Stewardship Review Defined Contribution Pension Plan OMIA as Plan Administrator and Canada Life as Plan Manager review the Defined Contribution DC Plan for stewardship and compliance annually This report provides 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 The review completed in November 2021 confirmed OMIA s DC Plan as well designed and current with best practices among employers 20 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 the 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 normal cost effective January 1 2020 to 5 08 bringing the total employer contribution rate to 12 58 7 5 5 08 Effective January 1 2022 the total employer rate increased to 14 08 9 0 5 08 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 early 2020 the 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 lumpsum pension entitlements for terminating members without first obtaining approval from FSRA 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 31 2020 was 77 3 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 lumpsum commuted value transfer payments to continue from the plan for terminating members 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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At that time FSRA 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 5 years if the transfer ratio improves to the most recently filed transfer ratio of 92 3 For those terminating members who have elected a lump sum payment OMIA proceeds with transfers at 77 3 of the lump sum owing Each terminating member receives notice of the restriction and future considerations on the remaining lump sum owing Notice of the regulatory change and future considerations on the remaining lump sum owing is included in a member s pension termination document therefore all members terminating now receive this documentation and can make their decision on the form of pension they wish to take accordingly Note that this hold back only applies to members who elect the lump sum transfer option upon termination or retirement This has no impact on processing retirement calculations or terminating members who elect deferred annuity options it will also have no effect on any DC Plan members 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 any of 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 For OMIA as the Plan Administrator and for plan sponsors the security of pension benefits for plan members is a priority Additionally FSRA has set security of benefits as a priority and we recognize that these regulatory actions were taken with that in mind Late in 2020 the OMIA Board elected to make a funding call to allow for the release of funds being held back in 2020 Late in 2021 the OMIA Board elected to make a funding call to allow for the release of funds being held back in 2021 These funding calls were applied against the overall funded position of the plan In 2022 the plan continues to pay lump sum transfers at 77 3 holding back the remaining 22 7 The OMIA board will revisit whether to make a further funding call in 2022 to release the funds being held back in 2021 Rate of Return Defined Benefit Pension Plan The 2021 annual return on assets as at December 31 2021 was 11 72 Total Assets under management was 219 809 025 Employee Benefits Health and Dental Coverage The OMIA Health and Dental Plan operates under an ASO Administrative Services Only model 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 s length on a confidential basis The OMIA Benefits 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 Some of the items and trends of interest this year have been L ong Term Disability LTD rates decreased by 20 at the 2022 renewal Sun Life instituted a new disability incidence factor in 2021 for calculating LTD rates and OMIA experienced a rate decrease even with the inclusion of the new incidence factor The incidence factor accounts for the significant increases in LTD claims across Sun Life s block of business largely related to mental health claims OMIA s overall LTD claims experience continues to be better than the experience in Sun Life s block of business T he OMIA Benefits Plan experienced a decrease in health and dental claims in the first half of 2020 due to the COVID 19 pandemic however by December 2020 claims were trending to what the plan experienced pre pandemic By December 2021 Health and Dental claims increased back to the levels seen in 2019 Claims are expected to continue increasing in 2022 and in future years even as the pandemic continues we do not expect to see pandemicrelated claims decreases at this time H ealth and Dental claims costs are expected to continue to rise especially with the continued increases in CPI The Benefits Committee closely monitors this trend and potential continued on next page 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 21

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methods to reduce claims costs while still providing a competitive benefits package OMIA continues to use the ASO reserve to offset increased claims costs T he 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 H ealth and Wellness education continues to be a major focus through wellness newsletters and by providing information on lifestyle choices that promote long term health Increased Paramedical Coverage Effective January 1 2022 the annual limit for paramedical coverage increased to 750 person year paramedical category it was previously 500 person year paramedical category Paramedical coverage is limited to an overall annual maximum of 2 000 for all paramedical claims with the exception of claims for physiotherapy and mental health professionals Coverage for physiotherapy remains at 4 000 person year Coverage for mental health professionals remains at an aggregate limit of 1 200 person year This limit is shared between the five categories of mental health providers covered by the plan psychologist psychiatrist psychotherapist social worker and clinical counsellor Companies have the option to enroll their staff in the HSA every January 1st Please contact the OMIA Benefits Department for additional information benefits omia com Member Education Sessions OMIA provided virtual benefits and pension education sessions to employees agents and directors throughout 2021 Additional education sessions included webinars about the Sun Life member s website and mobile app and presentations on the Employee and Family Assistance Plan EFAP and the Lumino Health resources available on the Sun Life member s website OMIA will continue monitoring the needs of our members and is open to scheduling education sessions on additional topics throughout 2022 OMIA is available to provide virtual presentations on the OMIA Benefits and Pension plans at no cost to your company Companies continue taking advantage of this option In 2021 the OMIA Benefits Department scheduled presentations for nine member companies Companies wishing to schedule a presentation should contact the OMIA Benefits Department We will assess resuming in person presentations in the second half of 2022 Company Benefits Agents Errors and Omissions The Agents Errors and Omissions program renewed with no increase in premium rates in 2021 It should be noted that OMIA s E O program has received as is premium renewals since the 2015 2016 renewal Please refer to the E O renewal mailout in July 2021 for complete details Directors and Officers Insurance The Directors and Officers Insurance continues to be well utilized with 41 companies participating in 2021 2021 saw an increase in premiums due to a hard market Cyber Liability Insurance Health Spending Account HSA Effective January 1 2021 companies were given the option to enroll in a Health Spending Account HSA through Sun Life and the OMIA Benefits Department Many companies have since taken advantage of this option The overall experience for those that offer the HSA has been positive with companies and members appreciating the ease of administration and claims submission 22 Cyber Liability Insurance was introduced late in 2015 Currently 30 companies have added this coverage A new Cyber ERM policy was introduced in 2019 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 We continue to see an increase in premiums due to the frequency and severity of cyber events in general 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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Compensation and Benefits Survey The bi annual Compensation and Benefits Survey was completed in 2021 and results were shared among participating companies prior to September 30 2021 A total of 47 companies participated in 2021 The survey will be offered again in 2023 HR Roundtable The Association provides members the opportunity to participate in an HR Roundtable that is held twice a year The HR Roundtable provides education and discussions on HR trends and challenges Over the last couple of years topics covered at the HR Roundtable included building a culture of safety as employees return to the workplace psychological health safety in the workplace managing virtual teams and employer accommodation requirements during the COVID 19 pandemic Given the COVID 19 pandemic recent HR Roundtables have been held virtually using the Zoom platform These roundtables will continue to be held virtually until it is safe to return to in person meetings OMIA Website The company administration manuals for Benefits and Pension are also available on the website Both manuals are updated annually and can be found on the OMIA member s 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 Some key features of the OMIA member s 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 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 23

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Data Strategy Committee Report Vision Better Data Better Decisions Knowledge Beyond Intuition Mission To facilitate data driven decision making Chair Neil Shay CTM Insurance 2021 Committee Members Christine Van Daele Westminster Shelagh Cleary Usborne Hibbert Tracy Campbell Germania Garth Driedger My Mutual Karen Byrne Trillium Jeff Ferguson OMIA Shawn Zhang OMIA Sharon Turnbull Farm Mutual Re 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 Determine feasibility of a Property Rate Working Group Model Several companies have identified an interest in using our collective data to advance property rating 2 Increase maintain and govern the OMIA centralized database for the benefit of regulators and Farm Mutual Re 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 for business intelligence needs 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 In 2022 and beyond the committee with Farm Mutual Re will continue to pursue analytic capabilities Integrating Peril Scores Into Rating and Risk Selection The 35 member companies that have become part of this collaboration will have received a detailed peril score report In 2022 the committee will help members with whatever is necessary to adopt and include peril scoring in their individual rating and risk selection guidelines A Peril Score Webservice will be completed In 2022 2023 this will evolve to include multi variate residential rating plan which may also contain credit scoring should the individual mutual choose to do so There will also be updates to Water Reports In 2022 and beyond OMIA will continue to pursue improvements to data quality and regulatory data requirements Additional Data Collection During 2022 more data will be collected through XML 4 5 in the area of commercial automobile and areas to support reinsurance 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 24 Supporting FMGF group based approach to financial reporting under IFRS 17 Ongoing improvements to the P C 1 reporting process 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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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 Mutual 2021 Committee Members Jerrod Boyse Ayr Dan Hill Germania Rob Pearson HT C David Rutherford HTM 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 Our committee is attentive to 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 as well as staff from member companies and third party subject matter experts Regular contributors to our meetings Christine Senior Janet Schmidt and Pascale Swanson assist our efforts to have our calendar include topics that cover the full gambit of insurance related subjects human resources issues regulatory compliance requirements and IT support We very much appreciate the generosity of member companies in supporting their staff as roundtable chairs and knowledge providers Impact of the Pandemic The OMIA Education Program like all other areas of business was required to reset in the middle of March 2020 Please extend our thanks to all your staff and board for your support flexibility and willingness to share experiences with us One pandemic benefit is that OMIA trainers have increased their technical knowledge of the delivery platforms and become more confident in techniques for delivering information in a live on line format Another is that during these past 18 months we have had the opportunity to be in virtual rooms with people who in the past were not able to attend sessions in Cambridge While decreasing the length of some technical and discipline focused sessions we have increased the frequency which has allowed us to cover more topics overall In order to respond to your training needs we continually modify and adjust individual units and the overall program Your response to a multi discipline approach to insuring farm operations prompted us to continue bringing you this kind of focused session And as you have increased your focus on business development and sales service we have been able to match that by creating opportunities for your staff and agents to develop skills in those areas How long it will be before we are comfortable attending inperson sessions and how we will all balance our new found skills in sharing knowledge in a virtual environment with the pleasure of being in a room together remains an unknown but we will figure it out likely with a bit of trial and error On Demand Courses Two years into this new aspect of our knowledge sharing efforts our On Demand Course library boasts 11 full courses and four resource recordings If you have not had an opportunity to access them connect with the person at your mutual who has the Administrator role Many thanks to those who have contributed as subject matter experts provided the character voices tested the sessions and provided us with comments and suggestions on what to do next 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 2022 Education Program The as known list of 2022 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 are pleased to bring training programs to your company office virtually and hopefully soon in person With few exceptions anything we have done in person or online can be replicated or modified to meet your particular needs 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 25

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Legislative Affairs Committee Report Mandate To communicate the association s position on legislative issues to our elected representatives Chair Brad Vanstone West Wawanosh Mutual 2021 Committee Members Allan Hedley Cayuga Doug Crockett Westminster Ross Lamont Trillium Barbara Bethune Nova Ed Forbes Dufferin Farm Mutual Re John Taylor OMIA Legislative Affairs at OMIA Roundtable Summaries The Ontario Mutuals have a unique place in the insurance landscape in Ontario This is demonstrated by our mutuals commitment to the economic health of rural Ontario local community causes and direct policyholder participation in their mutual Our commitment and mutual value system are well recognized as MPPs see mutuals as an important part of a healthy and sustainable insurance system Spring 2021 The Legislative Affairs delegate at your 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 impact of proposed legislation In some cases our delegates provide an informal sounding board for MPPs and provide feedback on how government policies relating to insurance will affect policyholders This is especially 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 These early discussions on local issues can lead to broader discussions as issues migrate to other areas of the province Local road safety concerns and trespass and activism on family farms are good examples of this type of issue Stephen provided his background which included his service in the legislature as an MPP from 2012 until 2018 and his time as the Minister of Transportation Delegates participate in two roundtables each 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 communicating with MPPs and a sincere interest in promoting mutual insurance 26 Our spring meeting could not be held at Queens Park as it remained closed to visitors but 66 delegates attended our virtual roundtable on March 2 2021 We welcomed Stephen Del Duca the leader of the Ontario Liberal party as our opening speaker He also provided insight into the unique challenges of leading a political party during a time of lockdowns and travel and meeting restrictions As party leader he identified four key priorities Publicly funded education Universal healthcare including long term care Economic growth and prosperity with more evenly distributed income equality Environmental sustainability He spoke to some specific issues more prevalent to rural Ontario including access to broadband connectivity and the provincial funding required for road and bridge maintenance much of which was downloaded to municipalities in the 1990s During the spring of 2021 paid sick days and modernizing minimum wage were key public issues which Stephen spoke to as well In response to a question on managing post pandemic debt levels he described himself as a fiscally responsible liberal with an interest in balancing austerity with fiscal responsibility 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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The second part of the Roundtable included a review of OMIA s submission to the Minister of Finance in preparation for his spring budget This included participating in a virtual roundtable with the minister The OMIA budget submission included Requests for increased consideration on exemptions or reductions on reporting requirement for small insurers Support for universal broadband access and infrastructure in rural Ontario Ensuring that watershed and floodplain management is carefully undertaken given the significant flood risk in watershed areas where mutuals are significant insurers An ongoing request for significant automobile insurance and tort reform to remove adversarial elements of the current time system and reduce the portion of premiums not going directly to policyholders or injured parties During the Roundtable delegates also received an update on OMIA s submission relating to the Corporations Act and a request that the Act be amended to allow mutuals to have a board size that is not necessarily divisible by three As of October 2021 there has been no further action on permanent amendments to the Corporations Act Fall 2021 Thirty five delegates attended the fall roundtable on September 29 2021 At the outset of the Roundtable National Truth and Reconciliation Day which falls on September 30 was noted and an indigenous land acknowledgment was made The opening speaker was Bill Walker MPP for Bruce GreyOwen Sound Bill has represented Bruce Grey Owen Sound for 18 years and has extensive experience in the legislature including roles as a government whip Minister of Government Consumer Services Associate Minister of Energy Opposition Critic for Seniors and Long Term Care Community and Social Services Long Term Care and Wellness and Children and Youth Services He also chaired the PC Caucus Nuclear Committee MPP Walker provided perspective on fulfilling the duties of an MPP during COVID 19 including issues at the constituency level He spoke to the government s RED Rural Economic Development program including commitments to broadband and infrastructure In a question and answer session with delegates the topics covered included issues of labour supply in rural areas escalating house prices and lack of housing availability concerns of excessive speed on rural roads and balancing transportation needs with farmland protection Federal Election The Roundtable also heard updates from delegates on the riding results from the federal election on September 20 This was generally a stand pat election with little movement in seat totals Almost all of the delegates shared the hope that the level of political debate and discourse would improve citing several negative examples from the most recent federal campaign John Taylor provided updates on key provincial issues for the fall term including advocating for some specific rules and restrictions relating to the sale of property casualty insurance in credit union branches and websites He also spoke to OMIA s position on meaningful changes to the Ontario Building Code and the potential for incentivizing resilient construction at the local or municipal level Two other key provincial issues remain Ontario Automobile and the ongoing need for tort reform particularly as related to liability The final segment of the Roundtable featured discussion questions including the following Do cannabis production facilities pose a noise odour and environmental risk in your community Have your local municipalities flagged excessive speed as a community safety risk Delegates had some excellent examples of local issues arising on both of these questions and a combination of public intervention and regulation may be necessary to address them Looking Ahead In December 2021 Brad Vanstone stepped down from the OMIA Board and from the Chair of the Legislative Affairs Committee Brad joined the committee in 2013 and his passion for mutuality and grass roots political leadership was evident from day one He has been succeeded as Chair by Kevin Inglis of Howick Mutual With pandemic management continuing to be the government s legislative priority through the end of 2021 and with restrictions on gatherings still in place in early 2022 the annual Queens Park Day scheduled for March 2022 was deferred Nonetheless 2022 provides the promise of a return to more normal activities and an opportunity to speak with our elected representatives on important issues facing mutual insurers their communities and our economy This will be a particularly important process leading up to the June 2022 provincial election 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 27

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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 Mutual 2021 Committee Members Ed Forbes Dufferin Rob Moorehead McKillop Christine Owens HTM Pam Marson Grenville 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 might arise from class action litigation over the potential for transmission of COVID 19 to customers and employees in business premises The committee s discussions and work are published to members through the MarketWatch 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 answer about any emerging issue What will this mean to my mutual In addition there were several high profile class actions launched against insurers in 2020 for business interruption coverage arising from the COVID 19 shutdown These continued to make their way through the Courts in 2021 but it will be sometime before the full impact of that litigation is known Many had high hopes that 2021 would bring an almost full return to normal for both mutuals and their clients but that was not to be The end of year omicron wave actually pushed back a lot of the progress we had seen in the fall From an insurance standpoint while there were some new insurance issues to a large extent 2021 was a continuation of 2020 Profitability and Availability A hard market that was first noted in 2019 escalated in 2020 and continued into 2021 but with potentially fewer COVID related complications Availability of coverage for hospitality risks was acute in 2020 This is not a core market for our mutuals however we did carefully monitor the industry response particularly as there were significant political overtones as restaurants and other hospitality venues struggled with reopening later in 2020 The Insurance Bureau of Canada led an industry coalition and established a Business Insurance Action Team to help hospitality risks do proactive risk management to find coverage in the marketplace By all indications this was largely successful Much of the initial concern around commercial insurance in the early stages of the pandemic was related to exposure that 28 Another category of risk that encountered a difficult hard market was snow removal operations This again arises from liability exposures Ontario took some steps to reduce liability exposures for slip and falls but this was relatively minor in the overall litigation environment With 2021 results now finalized it appears that industry numbers were strong from the profitability standpoint This may serve to mitigate the hard market although it is still too early to predict particularly as it relates to the potential for longtail casualty claims In addition there is a sense that the strong investment returns will not be repeated in 2022 With interest rates expected to rise significantly throughout 2022 fixed income investment returns will be challenging This will place additional emphasis on pricing and underwriting for profitability Troubling trends that intensified in late 2021 were supply chain disruptions and inflation Each of these pressures can be expected to increase claims costs and put more pressure on profitability From a mutual standpoint strong pricing discipline in the industry will be required to maintain the path to profitability and to ensure long term stability in rates 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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Cyber Coverage Cyber is the most volatile of the commercial markets due to huge increases in both severity and frequency of cyber events This is a relatively new coverage but has become a critical financial safety net as cyber risk has exploded The pandemic has exacerbated cyber loss ratios due to security gaps and learning curves with more and more people accessing corporate networks while working from home Mutuals offer cyber coverage through a third party partnership and as a result do not retain cyber coverage but this is an increasingly prominent risk management area for mutual policyholders This will be both an ongoing need and a potential opportunity The cyber insurance market is global in nature and recent indications are that cyber coverage even with very significant increases in pricing in 2021 will continue to increase in price over the next couple of years For mutuals this will primarily be of concern as they attempt to obtain their own corporate coverage and to maintain existing partnerships to add cyber coverage to client portfolios In late 2021 the question as to whether some elements of cyber risk were uninsurable emerged for the first time High Value Homes A subgroup of mutuals formed a High Value Homes Working Group to develop a model to provide coverage to some higher value homes that fall within the mutual risk appetite and target market The working group prepared a detailed proposal on a model to create shared underwriting capacity but ultimately this proposal did not move ahead Given that the real estate market in Canada continues to boom and that there is an increasing willingness of Canadians to invest in higher value homes and renovations this remains a topic of interest for many mutuals We expect that there will continue to be discussions on how this market can be tackled profitably Credit Union Insurance Sales Although other provinces have allowed credit unions to handle some P C insurance sales in branches the Ontario government is looking to create a more liberal regime to allow credit unions to sell property casualty insurance products in their branches and on their websites The development of rules to support this went through two iterations of government consultations in 2021 and OMIA made submissions identifying some very specific rules required for consumer protection The Insurance Brokers Association of Ontario also provided some insightful input and the final rules as published appear to include the practices required to ensure appropriate separation of lending activities from insurance sales Given that credit unions are member based entities like mutuals there remains an interest in looking for strategic partnerships Mergers and Acquisitions The P C marketplace continues to consolidate Two of the biggest changes among larger Canadian based insurers was the approval by policyholders of Economical s demutualization and initial public offering as Definity and the acquisition of RSA by Intact and a Danish partner This will further consolidate the market share concentration among the largest Canadian insurers This market concentration raises the question of whether regulators will intervene at any point to ensure market diversity and competition Indications are that the concentration limit is not yet sufficient for concern Perhaps of even greater interest to mutuals is the ongoing consolidation in the broker distribution network Until 10 years ago most brokerages were independently owned small businesses Many of these small business operators however have sold brokerages to consolidators some of whom are controlled by underwriters The last couple of years has also seen an increasing infusion of capital from venture capitalists and the strategy to begin combining business operations of P C business lines with health and benefits providers The mutual owned Collectivfide has continued to acquire brokerages in 2021 and provides a meaningful alternative for brokers who wish to maintain a greater degree of independence while still being part of a larger communitybased insurance network Charitable Giving and Community Support The theme of charitable giving and community support continued strongly in 2021 There is a sense that the degree of economic recovery from the pandemic has not been evenly shared among all sectors and as a result continued support of good causes resonates with policyholders MarketWatch MarketWatch was published in January and July The July edition looked at the future of underwriting and ongoing requirements for data to enable more sophisticated pricing and eventually some greater digital capability with customers MarketWatch can be found on omia com under Member Resources Marketing Looking Ahead With economic headwinds inflation social unrest supply chain scarcity and the hoped for return to pre pandemic normality 2022 may be yet another unprecedented year 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 29

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Marketing Committee Report Mandate To raise the profile of mutual insurance Chair Kevin Inglis Howick Mutual 2021 Committee Members Deb Van Eyk Lambton Morna Foan Grenville Jeff Holmes Ayr Farmers Tim Wade Westminster John Taylor OMIA Lisa Hunter OMIA The committee continues to pursue a variety of marketing projects that communicate the advantages of mutuality to internal and external audiences We are guided by OMIA s Strategic Priorities and the needs of the membership Promotional Materials The OMIA Marketing department was pleased to collaborate with members on multiple individual product and advertisement projects this year and continues to be available for requests Some examples include local advertisements special event ads for social media customer service surveys and brochure material for topics like Service Line Equipment Breakdown Rental Residential and Cyber Suite We encourage you to contact marketing omia com to support your promotional strategy This service is part of your membership fee and you only pay the cost of applicable printing and shipping Priority Exhibitions Ontario Mutuals was the Presenting Sponsor of London Farm Show Connect in early March a virtual speakers series that replaced the annual in person show The circumstances around COVID 19 led once again to the cancellation of the Ottawa Valley Farm Show that same month Although we look forward to the return to in person events we will seek out alternative ways to support agricultural events and organizations through sponsorships in 2022 Canada s Outdoor Farm Show which typically takes place in mid September in Woodstock adapted their programming to digital events that took place throughout the year Ontario Mutuals was one of the few Content Sponsors at the September 15th and November 10th sessions A collaboration between Farm Mutual Re Loss Prevention and OMIA Marketing led to the presentation of a two video series on common hazards in homes and on larger properties Special thanks to Randy Drysdale AVP Loss Prevention Technical Development for his participation and expertise Unfortunately the International Plowing Match IPM of which 30 we are a Presenting Partner was cancelled once again It is set to take place in Kemptville from September 20th 24th 2022 We will map out our in person presence and hope to engage with our eastern province mutuals as much as possible We look forward to returning to the field in support of this historical agricultural event Broker Convention This year we provided sponsorship to the Young Brokers Conference held virtually on June 17th This was our first entry into this growing and dynamic conference and we hope to maintain a presence going forward The IBAO s annual Convention was held virtually on October 20th and 21st We sponsored a speaker session called The Future of the Workplace presented by Eric Termuende We continue to seek opportunities to bring awareness to the Ontario Mutuals brand and the mutual difference Next year s IBAO Convention is being planned for October 2022 and will hopefully take place in person where we can participate as sponsors of an Ontario Mutuals hospitality suite Consumer Research In 2019 we were presented with an opportunity to become involved in a consumer research project undertaken by PMG Intelligence a company dedicated to offering solutions to organizations in the financial sector The study was completed in early 2020 and 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 As the events of the pandemic unfolded we decided to undertake a tracking study with PMG Intelligence called a COVID Impact Analysis This study helped us gain further insight on the impacts of COVID 19 on purchasing behaviours 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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PMG Intelligence conducted two education sessions on the topic in January and February 2022 and the Summary of Results can be found on omia com under Member Resources Marketing We are happy to continue our relationship with PMG and move forward with additional research in 2022 as the pandemic shapes our world Digital Marketing Campaign OMIA Marketing launched our first online brand awareness campaign from August to November 2020 using Google Ads Facebook Youtube and partner sites It featured shortened versions of The Mutual Difference video The campaign success led us to a 2021 project using the same platforms and new video content Four engaging videos were created Investing in Community Personal Touch Mutuality and Customer Service They can be found on the Ontario Mutuals YouTube channel as well as omia com hover over Members Resources to see Ontario Mutuals Videos 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 maintained a view rate of around 34 across both years We re certainly encouraged by this and hope to continue down the digital marketing path to increase general awareness of the Ontario Mutuals brand and messaging We look forward to a fresh campaign in 2022 Key Sponsorships their local competitions the Go For the Gold competition and their annual golf tournaments in Guelph and Ottawa This year we were also able to provide a small increase in support to the Rural Ontario Institute as they navigate the extended schedule of Class 18 in the Advanced Agriculture Leadership Program AALP The additional funding will go towards the purchase of items that the AALP will benefit from such as computer and presentation equipment Of special note Ontario Mutuals funded the Umbrella Project s first Mental Health Awards and Scholarships in 2020 and the committee agreed to increase our funding of the newly branded Umbrella Project Awards in 2021 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 OMIA Marketing participated in committee groups to review applications and decide on recipients The Awards were presented virtually in June and the details are featured on page 22 of the August issue of OM News Many of our mutuals sponsor the Umbrella Project in their local school boards and we re happy to be part of the grassroots growth of this valuable program We look forward to seeing the impacts on our youth and their educators 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 to returning safely to the in person events that bring our mutual community together 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 Ontario Mutuals supports the Ontario Plowmen s Association and the Ontario Queen of the Furrow Competition The IPM Postponed to 2022 4 H Ontario the Rural Ontario Institute ROI and the Advanced Agricultural Leadership Program AALP Farm and Food Care Ontario AgScape the Ontario Soil and Crop Improvement Association the Advancing Women in Agriculture Conference the FarmSmart and Southwest Ag Conferences We were happy to provide funding support to 4 H Ontario on a variety of projects including a resource on the topic of careers 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 31

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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 Mutual 2021 Committee Members John Miller Mennonite Mutual Alberta Megan Rooney Dumfries Pat Ryan The Commonwell Neil Shay CTM Insurance Jamie Ellis PEI Mutual 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 is 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 Jennifer Higuchi Kip Moi Carol Turkheim retired and Mandy Hetherington 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 from making the initial inquiry and reviewing coverage forms and supporting documents as a check for clarity and practical use at the company level documents for member companies to use This committee meets online monthly and in person twice a year 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 all 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 Composition of the Committee Forms Releases 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 lens 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 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 32 During the upcoming year we will continue to experiment 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 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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Projects Since our report to the 2021 AGM Convention we have overseen a variety of projects to completion A few examples of the updates are C ommercial General Liability Coverage Business and Personal Liability Coverage documents Automobile Policy Termination Letter Templates C yber Suite update of Data Compromise Cyber One Coverages available through a Resource Treaty Farm Mutual Re has with HSB Canada BI I C ommercial Liability Farm Liability Certificates of Insurance Templates Snow Removal Contractors Reference Document Money Securities o R obbery Coverage Form Broad Form Money Securities and Dishonesty Disappearance and Destruction Coverage Form A ddition of more of the standard Ontario Automobile Change Forms R eposted the Additional Rebuilding Cost and Guaranteed Rebuilding Cost Coverage Reference Document R ebuilding Cost Inflation Factors Personal Commercial Lines New forms and or coverage reference documents include C yber Incident Property Exclusion and Reference Document B uilders Risk Coverage assorted support documents and Reference Document H ome Cyber Protection available through a Resource Treaty Farm Mutual Re has with HSB Canada BI I Support was provided for various Farm Mutual Re Product Services Reinsurance initiatives including Updated CGL Rate Pages 2022 N ot for Profit Directors Officers Underwriting Guidelines Update and a Claims Reporting Form for that coverage Garage Auto Program Decentralization Project Phase 1 U pdates to the Personal Farm Liability Rate Pages for the categories of Snow Removal Contractors and Storage of Vehicles and Property of Others on Farm properties The committee continues to focus on improving the speedto market of products The challenge of course is to move quickly with development and at the same time 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 As always in response to member company needs the committee works with staff to respond to immediate market pressures as they arise Our oversight role on a variety of on going projects includes T ransitioning the Residential and Farm Policy wordings away from Booklet style U pdating the Residential and Farm Policy wordings based on market scan Develop a Non Stacking of Liability Limits endorsement S upport for analysis of exposures introduced due to the Sharing Economy R esearch on how Insurers might support the UN Build Back Better initiative Monthly Reporting Premium Adjustment Calculation Form U pdating the Termination of Property Insurance Policy Letter Template L imited Accident Insurance Coverage Form Reference Document designed to accommodate operations beyond farm business M onitor upcoming updates to Equipment Breakdown Endorsements and Household Equipment Breakdown Endorsements Residential Liability Certificate of Insurance Template U pdate Commercial Property Broad Form and Named Perils Form Coverage Documents Primary Non Contributory Endorsement for a CGL Tenants Restriction Endorsement and Reference Document U pdate Commercial Additional Agreements based on market scan S upport for the introduction of pilot regulations to the Highway Traffic Act 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 33

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Regulatory Review Committee Report Mandate To review regulatory issues that affect member companies Chair John Stirk Dufferin Mutual 2021 Committee Members Shawn Durnin HT C Jeff Whiting Ayr Bryan Hicks Trillium Marg Torrance Halwell 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 In 2021 FSRA continued to define and fill out its regulatory structure and its relationship with stakeholders This structure is more complex than its predecessor the Financial Services Commission of Ontario and it is a much bigger organization with more departments and headcount All of this has taken place against the backdrop of the pandemic and the many challenges posed by restrictions on in person meetings and industry outreach and education events In addition public and political pressure relating to premium relief for Ontario drivers created a new dynamic for the regulator in balancing prudent regulation with consumer expectations Early in 2021 FSRA released a Report from the Residents Reference Panel on Auto Insurance This was a special purpose consumer panel convened by FSRA to provide grass roots input on what a cross section of drivers in Ontario expect from their auto insurance This process and panel differed significantly from previous consumer consultations as it was drawn from a broad spectrum of drivers none of whom were involved with exiting advocacy groups trade associations or businesses in any way affiliated with auto insurance Senior FSRA staff shared the findings with OMIA and our members at our Managers Conference in May 2021 This was a good chance to hear consumer perspectives and to show FSRA our own commitment to a commonsense approach to insurance 34 Our Regulatory Review Committee also held a long awaited meeting with FSRA s Market Conduct Team in early August This meeting provided the Committee with a chance to hear FSRA s outlook on how Market Conduct will be supervised in the coming years and just as importantly a chance for the committee to showcase our policyholder focused insurance philosophy and the transparency and stability that mutuals create in the insurance market The work of this OMIA committee is a living example of how mutuals work together to combine all the benefits of operating as small independent insurers while working together to create a mutual network that benefits policyholders and communities across Ontario We look forward to regular meetings with our FSRA peers There has also been a broad range of consultations with FSRA and other Ministries and Agencies on proposed changes to statutes regulations and guidelines Ministry of Government and Consumer Services Corporations Act The onset of the pandemic in March 2020 created a dilemma where businesses incorporated under the Corporations Act such as mutual insurers were not allowed to hold annual meetings in person In 2020 temporary regulatory exemptions were put in place to allow these meetings to take place virtually and the mutuals successfully adapted to the virtual AGM meeting environment The Ministry of Government and Consumer Services opened a consultation about making some of these changes permanent and OMIA responded to this with written feedback The feedback included a recommendation that any changes to the Corporation Act ensured that electronic meetings could not be hijacked by interest groups to promote demutualization OMIA also asked for changes to the Corporations Act to reduce the restrictions on board composition for mutuals Currently mutual boards must total between 6 and 15 directors and the 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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board complement must be divisible by 3 We ve asked for the removal of this divisible by 3 requirement As of October 2021 no permanent changes have been announced but changes to allow virtual meetings will undoubted be introduced in 2022 Amendments on board composition are not expected without input from the Ministry of Finance and OMIA has initiated this work with the Ministry more cumbersome or time consuming for certain applicants The mutuals were not singled out but FSRA expects all auto insurers to spend the first months of 2022 identifying existing or potential violations and then correcting them Canadian Insurance Services Regulatory Organizations CISRO Principles of Conduct for Intermediaries CISRO is an umbrella organization for insurance regulators across Canada They have been tasked with putting more definition and uniformity on the Fair Treatment of Consumer Guidelines which have been published across Canada over the last few years Our committee made a submission to CISRO outlining our belief that in creating these guidelines the group should look for every opportunity to create simple transparent and understandable expectations for all insurers and all other insurance stakeholders Unfair or Deceptive Acts or Practices Rule UDAP As incorporated FSRA can create rules around insurance that previously would have required cabinet approval In early 2021 FSRA released its first working paper on proposed changes to the Unfair or Deceptive Acts or Practices section of the Insurance Act FSRA published a comprehensive proposal and the Regulatory Review Committee provided its detailed input to FSRA in March The key principles supported by OMIA centered around ensuring that changes to UDAP do not put an unfair burden on smaller enterprises recognizing that many small insurers would face unnecessary and expensive burden if reporting requirements were increased In its submissions OMIA often refers to this as the principle of the proportionality In addition OMIA cautioned FSRA to be careful in casting strict liability nets for penalties that may be imposed against boards of directors We support accountability and responsibility for boards of directors but also recognize that in some cases the levels of regulatory liability imposed on directors can be a significant obstacle to recruiting the types of community minded grassroots individuals who compose mutual boards As 2021 came to a close FSRA published the results of its lengthy study on violations by insurers of Take All Comers as related to auto insurance applications FSRA noted issues primarily related to the use of systems to screen out potential applicants by making the application process We will continue to provide detailed responses to this group as the work they are doing at a national level will increasingly impact provincial regulation Ministry of Finance The Ministry of Finance intend to allow credit unions to sell property casualty insurance products in their branches and on their websites OMIA made a detailed submission to the Ministry outlining our strong recommendation that specific rules be put in place to ensure no tied selling of products c omplete transparency on commission and referral fee arrangements r estrictions are placed on data sharing between credit union operations and insurance sales operations and t hat the insurance distributor in the credit union must be a separate corporate entity from the credit union itself After a second consultation in late 2021 by the Ministry on published draft rules a further submission was made in support of input provided by the Insurance Brokers Association of Ontario to further clarify and strengthen the separation of deposit taking and lending from insurance sales We believe the final rules will be much better as a result of this consultation process Canadian Council of Insurance Regulators CCIR Incentive Management This is another umbrella organization of insurance regulators who have been active in developing standards that will probably filter down to each provincial level OMIA has and continued on next page 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 35

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will be making submissions relating to consultations on how incentive programs should be managed by property casualty insurers Prudential Supervision Solvency Review Fire Mutuals Guarantee Fund members are somewhat unique as their solvency is supervised by FSRA The majority of insurers in Canada are supervised by the Office of the Superintendent of Financial Institutions a federal agency The Fire Mutuals Guarantee Fund and OMIA have developed a unique relationship with provincial supervision over the years and the strength of the guarantee fund system is a distinct benefit to policyholders Regulatory Compliance Roundtable This Roundtable was established two years ago evolving out of the Privacy Officer s Roundtable A working group creates agendas and the Roundtable meets twice per year Any area that creates a compliance requirement for mutuals is fair game for consideration by the Roundtable The Roundtable s objective is to provide research and education as well as an informal discussion forum for individuals at mutuals who are tasked with compliance to develop their capabilities Bryan Hicks has served as the Chair of the Roundtable and Jackie Roy has taken lead from the OMIA side of the process We hope to see increased participation by members in 2022 and the recently published Compliance Corner will highlight areas the roundtable is studying Privacy Privacy law continues to develop in Canada and has been of greater importance than ever with the escalation of cybercrime and the threat to the security of personal information Over the past two years we have been working with FSRA as they tailor their approach to solvency supervision The work of the Financial Review Committee in maintaining our relationship and adapting to emerging solvency needs has been a critical piece of this work The committee and OMIA are participating in a FSRA Technical Advisory Committee on an Insurance Prudential Solvency Framework to formalize their plan for solvency supervision moving forward John Taylor Glenn Taylor Steve Grant and Bryan Hicks are participating in this committee 36 OMIA monitors changes in privacy legislation and provides educational opportunities to ensure privacy requirements are being met Looking Ahead Regulatory requirements for insurers and for many businesses across Ontario have become increasingly complex and are difficult to navigate As we look ahead to 2022 we anticipate that many of the consultations which were started by regulatory bodies in 2021 will result in new guidelines or regulatory compliance requirements Our objective is to ensure that regulators are aware of any adverse outcomes of the potential of any proposals and to ensure that mutuals are ready to meet new requirements as they come into force 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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OMIA GROUPS OMIA s voting members are constituted into five distinct groups linked by geography and tradition The group structure supports grass roots involvement by member companies and provides a forum for problem solving and the exchange of ideas Each of these groups also provides one democratically elected director to the OMIA Board Annual reports of these groups are provided on the following pages 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 37

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GROUP A Howard HT C Kent Essex Lambton Maple West Elgin Westminster Yarmouth Group A did not hold an Annual Meeting in 2021 GROUP B Ayr Farmers BCM Brant CTM Cayuga Dumfries Erie Nova The Group B 2021 Annual Meeting was held on November 23rd at the Riverside Exhibition Centre in Caledonia There were 65 people in attendance Tim Montague Chair of the Group B Executive Committee welcomed everyone to the meeting Mr Montague called on each company CEO to introduce their company representatives and share any highlights from 2021 A lively and thoughtful discussion followed and covered topics ranging from director engagement connectivity continuity planning director support the future board meetings hybrid meetings and CEO support Additionally the panelists shared some of their firsthand experiences during the pandemic The panelists included Elizabeth Baldwin Ayr Farmers Mutual Greetings and highlights on the 2021 year were received from Sangita Kambl President CAMIC Steve Quinn OMIA Group B representative Jeff Ferguson Director of Operations OMIA John Stirk Chair OMIA Jill Chuli Group B Farm Mutual Re representative Valerie Fehr Vice Chair Farm Mutual Re and Jeff Consitt Senior VP Farm Mutual Re Warren Burger Erie Mutual Keynote speaker Paul Kovacs of the ICLR shared his thoughts and insights on climate change and its implications on the insurance sector Paul noted that although insurance might receive a B for its efforts on climate society might receive an F Further thoughts included a discussion on global warming green house gas emissions climate risks and opportunities for insurance to participate in a build back better program Scott Roung Dumfries Mutual The afternoon session focused on the The Director Experience During the Pandemic via a director panel discussion and was facilitated by Ayr Farmers Director Dave Thompson 38 Jill Chuli CTM Insurance Mary Ann Mooney Nova Mutual Harold Meadows Cayuga Mutual Phil Lambert BCM Insurance Jayne Carman Brant Mutual A donation to the Farm Mutual Foundation on behalf of Paul and the panelists was made In concluding the meeting Chair Montague thanked all attendees presenters and panelists The 2022 Group B annual meeting will be hosted by Dumfries Mutual at a site to be determined 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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GROUP C McKillop Middlesex North Blenheim South Easthope Tradition Usborne Hibbert West Wawanosh The Group C Annual Meeting was hosted by South Easthope on November 26th at the Arden Park Hotel in Stratford Ontario Attendees were welcomed by Chair John MacKay and Frank Rider CEO South Easthope There were roughly 50 people in attendance OMIA updates were provided by Terry Knight Past Chair John Stirk Chair and Jeff Ferguson Director of Operations Farm Mutual Re s update was provided by Paul Vandenbosch Chair and JP Gagnon President CEO The CAMIC update was provided by Jeff Consitt and President Sangita Kambl The final session of the morning included an Ask the Manager Forum which brought interesting discussions on investing and the residential development of farm land The 2022 meeting will be hosted by Tradition Mutual on November 18th at the Arden Park Hotel GROUP D Algoma Dufferin Edge Germania Halwell Howick Heartland Peel Trillium The Group D Annual Meeting took place at the OMIA and Farm Mutual Re offices in Cambridge on November 29th In addition JP provided an update on the Ontario Mutual Automobile Plan on behalf of VP Tyler Kroetsch There were over 40 attendees most of whom attended in person Video streaming was also provided for remote participants Paul Vandenbosch reported on Farm Mutual Re s new board committee structure Halwell Mutual hosted the meeting and Board Chair Steve Graham and CEO Marg Torrance welcomed everyone to a long awaited in person group meeting The Group D Nominating Committee put forward motions to re elect Kevin Inglis President and CEO of Howick Mutual as OMIA s Group Director and Ed Forbes President and CEO of Dufferin Mutual as Farm Mutual Re s Group Director for three year terms Each motion passed unanimously Jeff Ferguson provided an OMIA update on 2021 highlights Of note there had been over 3600 individual attendances at OMIA educational sessions through the year and additional certification programs for agents and underwriters were under development There was also a brief update on the Property Peril Scoring project OMIA Chair John Stirk shared that a common theme across the mutuals was addressing the future of work with new technology and accessibility JP Gagnon provided a Farm Mutual Re update including initiatives on innovation Equity Diversity and Inclusion and formal strategies for broker distribution on member business There was also a report on crop loss results and the approach to underwriting audits Sangita Kambl provided a detailed CAMIC report on areas including revenue sources member advocacy and communication sector development and member services Planned initiatives include the development of a public outreach campaign and re inventing CAMIC s 2022 Lobby Day Individual Group D CEOs provided financial and operational updates During the afternoon there was a Future of Work Panel moderated by John Taylor with panelists Adam Dyment from the Cooperators Irene Bianchi of Peel Mutual Jennifer Allan of Farm Mutual Re and Jason Cox of Halwell Mutual This interactive discussion included from attendees on the panelists shared experiences and perspectives Key themes included the need for constant communication in a hybrid work environment creating clarity for teams on strategy and purpose and addressing organizational morale as employees being to experience fatigue and burnout associated with this lengthy pandemic 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 39

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GROUP E Amherst Island Bay of Quinte The Commonwell Grenville HTM L A Gord Lodwick Board Chair The Commonwell Mutual Insurance Group welcomed just over 60 participants to Group E s annual meeting The meeting was held in a virtual format having been postponed in June due to pandemic concerns and the hope of being able to host an in person meeting later in the year Updates were provided by Gord Lodwick Director Farm Mutual Re and The Commonwell and Dave Rutherford Director OMIA and HTM Insurance Company Farm Mutual Re s board activity and work around their structure committee work and governance style were reviewed for the benefit of attendees A review of OMIA s work was presented by John Taylor President and John Stirk Chair Topics covered included the activities of the Regulatory Review Committee education opportunities during the pandemic relationship building with FSRA and the restructuring of the Automobile reporting company 789 Two sessions of a CEO Roundtable were held Group One Bruce Caughey President CEO Amherst Island Mutual Alec Harmer President CEO HTM T im Shauf President CEO The Commonwell Mutual Insurance Group Topic E ach presenter provided an update on projects or efforts their companies have been undertaking to advance either service to their members or their individual company s competitive position in the marketplace 40 Discussions included creating a space for employees in this environment new platforms technology enhancements customer service enhancements for payment of claims IFRS 17 implementation increase in claims reliance on OMIA and Farm Mutual Re the focus on member experience the importance of community philanthropy member segmentation use of data analytics broker connectivity and NTO non technology optimization Group 2 Jeff Howell President CEO Bay of Quinte Mutual Pam Marson President CEO Grenville Mutual Mike Salmon President CEO L A Mutual Topic Each presenter provided their thoughts hopes concerns about the needs and viability of the mutuals and our system in a marketplace that continues to consolidate and face increasing regulatory and compliance pressures Common themes included the developing relationship with FSRA benefits that the mutuals bring to the marketplace and communities served challenges with relationships with Farm Mutual Re broker amalgamations the value of the mutual market what it means to live our values strength in being different growing use of data and opportunities for the mutuals going forward A short discussion about global mutuality took place and how mutuality is exhibited in other countries Chair Lodwick thanked everyone for participating and confirmed that the 2022 Group E Meeting will be hosted by L A Mutual with the date and place to be determined 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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OMIA FINANCIAL STATEMENTS The following pages make up the Financial Statements of the Ontario Mutual Insurance Association year ended December 31 2021 The report was provided by Clarke Starke Diegel

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Ontario Mutual Insurance Association Financial Statements Year ended December 31 2020 7 Union Street East Waterloo Ontario N2J 1B5 Telephone 519 579 5520 Fax 519 570 3611 www csdca com INDEPENDENT AUDITOR S REPORT To the Directors of Ontario Mutual Insurance Association Opinion We have audited the financial statements of Ontario Mutual Insurance Association the Association which comprise the statement of financial position as at December 31 2021 and the changes of members surplus operations and cash flows for the year then ended and notes to the financial statements including a summary of significant accounting policies In our opinion the accompanying financial statements present fairly in all material respects the financial position of the Association as at December 31 2021 and the results of its operations and its cash flows for the year then ended in accordance with Canadian accounting standards for not for profit organizations Basis for Opinion We conducted our audit in accordance with Canadian generally accepted auditing standards Our responsibilities under those standards are further described in the Auditor s Responsibilities for the Audit of the Financial Statements section of our report We are independent of the Association in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada and we have fulfilled our other ethical responsibilities in accordance with those requirements We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with Canadian accounting standards for not for profit organizations and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement whether due to fraud or error In preparing the financial statements management is responsible for assessing the Association s ability to continue as a going concern disclosing as applicable matters relating to going concern and using the going concern basis of accounting unless management either intends to liquidate the Association or to cease operations or has no realistic alternative but to do so Those charged with governance are responsible for overseeing the Association s financial reporting process Continues 42 Proudly serving the business community since 1972 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL 1REPORT

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Independent Auditor s Report to the Directors of Ontario Mutual Insurance Association Continued Auditor s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement whether due to fraud or error and to issue an auditor s report that includes our opinion Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists Misstatements can arise from fraud or error and are considered material if individually or in the aggregate they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements As part of an audit in accordance with Canadian generally accepted auditing standards we exercise professional judgment and maintain professional skepticism throughout the audit We also Identify and assess the risks of material misstatement of the financial statements whether due to fraud or error design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion forgery intentional omissions misrepresentations or the override of internal control Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Association s internal control Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management Conclude on the appropriateness of management s use of the going concern basis of accounting and based on the audit evidence obtained whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Association s ability to continue as a going concern If we conclude that a material uncertainty exists we are required to draw attention in our auditor s report to the related disclosures in the financial statements or if such disclosures are inadequate to modify our opinion Our conclusions are based on the audit evidence obtained up to the date of our auditor s report However future events or conditions may cause the Association to cease to continue as a going concern Evaluate the overall presentation structure and content of the financial statements including the disclosures and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation We communicate with those charged with governance regarding among other matters the planned scope and timing of the audit and significant audit findings including any significant deficiencies in internal control that we identify during our audit Waterloo Ontario February 9 2022 CHARTERED PROFESSIONAL ACCOUNTANTS LICENSED PUBLIC ACCOUNTANTS 43 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 2

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Ontario Mutual Insurance Association Statement ofONTARIO FinancialMUTUAL Position and Changes in Members Surplus INSURANCE ASSOCIATION 2021 in Members Surplus Statement of FinancialDecember Position and31 Changes December 31 2021 2021 2020 ASSETS CURRENT Cash and cash equivalents Accounts receivable Members Other Inventory Prepaid expenses CAPITAL 3 656 128 3 377 672 66 689 45 354 263 278 7 409 121 3 026 990 2 853 757 22 035 36 432 235 395 6 174 609 151 581 98 109 7 560 702 6 272 718 Note 4 LIABILITIES AND MEMBERS SURPLUS CURRENT Accounts payable Government remittances ASO claim reserve Note 5 Building reserve fund Note 6 Pension contributions payable MEMBERS SURPLUS Opening Surplus Current Year Surplus Year End Surplus 510 861 148 976 934 454 2 486 212 4 080 503 357 444 130 095 819 999 18 954 2 052 536 3 379 028 2 893 690 586 509 3 480 199 2 433 217 460 473 2 893 690 7 560 702 6 272 718 The accompanying notes form an integral part of these financial statements The accompanying notes form an integral part of these financial statements 44 3 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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Ontario Mutual Insurance Association Statement of Operations Statement of Operations December 31 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION December 31 2021 2021 2020 REVENUES Association Fees Interest Sundry Group Benefits Employee Benefit Receipts Employee Benefit Fees Direct Expenses Employee Benefit Premiums Company Benefit Receipts Company Benefit Premiums 1 868 118 9 963 2 248 8 369 401 18 974 7 685 508 664 919 2 012 955 26 104 2 102 7 535 544 5 566 6 922 717 607 261 2 390 358 2 313 090 77 268 2 001 979 1 928 713 73 266 16 899 718 16 899 718 742 187 14 531 527 14 531 527 680 527 Conventions Revenue Direct Expenses 120 101 68 053 52 048 13 350 5 493 7 857 Education Revenue Direct Expenses 496 896 87 982 408 914 343 115 96 909 246 206 139 123 120 083 19 040 154 253 135 082 19 171 Trusteed Pension Receipts Trusteed Pension Remittances Forms Marketing Sales Cost of Sales Statistics Revenue Direct Expenses 2 039 968 689 242 1 350 726 4 453 244 1 811 199 590 729 1 220 470 4 215 392 EXPENDITURES Salaries Benefits and Pension Costs Occupancy Costs Promotional Activities Industry Subscriber Fees Programming Software Office Insurance Amortization Committees Non Recoverable G S T H S T Professional Fees Board Per Diems General Office Travel Mileage Workshops and Training Communication Costs Board Travel Conference Attendance Loss on Disposal of Capital Assets Note 8 2 783 137 195 575 188 206 108 038 81 832 76 103 74 468 69 684 52 394 49 219 49 015 40 290 27 003 24 443 23 683 22 981 664 3 866 735 Note 7 EXCESS OF REVENUES OVER EXPENDITURES 586 509 2 704 216 192 948 168 203 102 859 86 339 62 541 56 113 90 431 44 472 73 123 43 420 50 738 19 140 22 641 23 754 13 722 259 3 754 919 The accompanying notes form an integral part of these financial statements The accompanying notes form an integral part of these financial statements 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 460 473 4 45

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Ontario Mutual Insurance Association Statement of Cash Flows ONTARIO MUTUAL INSURANCE ASSOCIATION December 31 2021 Statement of Cash Flows December 31 2021 2021 OPERATING ACTIVITIES Excess of revenues over expenditures Items not effecting cash Amortization Loss on disposal of capital assets 93 422 679 931 Changes in non cash working capital balances Decrease increase in accounts receivable Decrease increase in inventory Decrease increase in prepaid expenses Increase decrease in accounts payable and government remittances Increase decrease in pension contributions payable Increase decrease in ASO claim reserve Increase decrease in Building Reserve Fund Increase decrease in Deferred Revenues INVESTING ACTIVITY Purchase of capital assets NET CHANGE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS BEGINNING OF YEAR CASH AND CASH EQUIVALENTS END OF YEAR 586 509 2020 460 473 60 851 259 521 583 568 569 8 922 27 883 172 298 433 676 114 455 18 954 776 032 1 056 440 6 225 12 932 21 968 1 030 223 605 163 4 738 929 1 123 537 146 894 22 126 629 138 1 101 411 3 026 990 1 925 579 3 656 128 3 026 990 The accompanying notes form an integral part of these financial statements The accompanying notes form an integral part of these financial statements 46 5 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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Ontario Mutual Insurance Association Notes to Financial Statements Ontario Mutual Insurance Association December 31 2021 Notes to Financial Statements December 31 2021 1 BASIS OF PRESENTATION The financial statements were prepared in accordance with Canadian accounting standards for not forprofit organizations ASNPO 2 DESCRIPTION OF OPERATIONS Ontario Mutual Insurance Association is a not for profit trade association that provides support services to its membership of farm mutual insurers across Canada The Association is incorporated without share capital under the laws of the Province of Ontario As a not for profit organization the Association is exempt from income taxes under Section 149 of the Income Tax Act The continued operation of the Association is dependent upon the continued support of its membership 3 SIGNIFICANT ACCOUNTING POLICIES Revenue recognition The Association follows the deferral method of accounting for its contributions Accordingly externally restricted contributions are recognized as revenue in the year in which the related expenses are incurred Unrestricted contributions are recognized as revenue when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured Restricted funds are deferred and recognized as revenue in the year in which the related expenses are incurred Revenue is recognized on the accrual basis service is provided Membership revenue is recognized in the period the Inventory Inventory of forms and promotional material is valued at the lower of cost and net realizable value with the cost being determined on an average cost basis Employee future benefits The Association has a defined benefit plan for its employees which is accounted for using the immediate recognition approach Under this method the accrued benefit obligation is based on an actuarial valuation completed in accordance with paragraph 3463 07 at least every three years for purposes of funding the plan The accrued benefit obligation is reported net of fair value of plan assets Actuarial gains and losses and all costs of the plan are expensed in the year incurred 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 6 47

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Ontario Mutual Insurance Association Ontario Mutual Insurance Association Notes to Financial Statements Notes to Financial Statements December 31 2021 December 31 2021 3 SIGNIFICANT ACCOUNTING POLICIES Continued Capital assets Capital assets are stated at cost less accumulated amortization Capital assets are amortized over their estimated useful lives at the following rates and methods Furniture and equipment Computer equipment 20 declining balance method 33 straightline method Cash and cash equivalents The Association considers cash and cash equivalents to be cash deposited in financial institutions and guaranteed investment certificates which have a maturity date of less than 12 months Financial Instruments Financial instruments are recorded at fair value when acquired or issued In subsequent periods financial assets with actively traded markets are reported at fair value with any unrealized gains and losses reported in income All other financial instruments are reported at amortized cost and tested for impairment at each reporting date Transaction costs on the acquisition sale or issue of financial instruments are expensed when incurred Measurement uncertainty Certain amounts in the financial statements are subject to measurement uncertainty and are based on the Association s best information and judgment Actual results could differ from these estimates Examples of significant estimates include providing for amortization of capital assets the estimated useful lives of assets the allowance for doubtful accounts the allowance for inventory obsolescence certain actuarial and economic assumptions used in determining the defined benefit pension costs accrued pension obligations and pension plan assets 4 CAPITAL Cost Furniture and equipment Computer 442 977 934 609 1 377 586 Accumulated amortization 394 709 831 296 1 226 005 2021 Net book value 48 268 103 313 151 581 2020 Net book value 57 785 40 324 98 109 7 48 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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Ontario Mutual Insurance Association Ontario Mutual Insurance Association Notes to Financial Statements Notes to Financial Statements December 31 2021 December 31 2021 5 ASO CLAIM RESERVE On January 1 2004 the company entered into an Administrative Service Only self insured agreement with Sun Life to fund the Health and Dental Benefits of participating member company employees These amounts represent a reserve for future benefit payments At yearend the following amounts are being held in trust for this plan 2021 2020 Ontario Mutual Insurance Association Sunlife Assurance Company Bank of Montreal Nesbitt Burns Bank of Montreal As at December 31 2021 934 454 is payable to the plan 934 454 1 868 324 913 195 444 1 456 679 819 999 42 614 324 144 194 571 1 296 100 6 BUILDING RESERVE FUND In fiscal 2006 a Building Reserve fund was initiated to help fund the move to a future location The Association expensed 100 000 in fiscal 2006 2007 and 2008 In November 2009 the Association moved to its new location The building reserve fund was being recognized into income on the same basis as the amortization expense of the assets acquired during the move The balance of the building fund was recognized in the current fiscal year The following amounts have been charged to the building reserve fund during the year 2021 Opening balance Recognized in operations 18 954 18 954 2020 23 692 4 738 18 954 The amount recognized into operations during the year is the reduction of amortization expense of 18 954 7 AMORTIZATION Amortization for the year Building Reserve Fund recognized in operations Note 6 2021 2020 93 422 60 851 18 954 74 468 4 738 56 113 8 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 49

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Ontario InsuranceAssociation Association OntarioMutual Mutual Insurance Notes Statements Notesto toFinancial Financial Statements December 31 2021 2021 December 31 8 PENSION PLAN COSTS The Association is a member of a multi employer defined benefit group pension plan which it sponsors on behalf of its members The plan covers a majority of Association employees and pension benefits are based on length of service and final average earnings As of January 1 2017 all new hires are enrolled in the defined contribution pension plan provision which the Association also sponsors on behalf of its members An Actuarial Valuation of the plan as of January 1 2020 revealed the plan was in a Going Concern surplus position The Solvency Position was above the required 85 at that time therefore no special payments were required as a result of the valuation During 2020 the OMIA transfer ratio fell more than 10 triggering the Financial Services Regulatory Authority FSRA to limit members lumpsum transfer value from the plan resulting in holdbacks Late in 2021 the OMIA Board of Directors elected to make a funding call on members of the plan to pay the amount held back from the 2021 lumpsum transfers That resulted in a funding call amount of 51 400 In addition the Association contributed an additional 235 060 to the Plan during 2021 for normal pension benefit contributions The next valuation is scheduled to take place January 1 2023 however the Association s Board of Directors will continue to monitor the position of the plan and may elect to call a valuation prior to that date 9 FINANCIAL INSTRUMENTS The Association s financial instruments consist of cash and cash equivalents accounts receivable from members and others accounts payable and accrued liabilities ASO claim reserve and pension contributions payable Unless otherwise noted it is management s opinion that the Association is not exposed to significant currency or credit risks arising from these financial instruments Interest rate risk is the risk that the value of a financial instrument might be adversely affected by a change in the interest rates The Association is not exposed to any significant interest rate risk from its financial instruments The extent of the Association s exposure to the above risks did not change significantly during the year 10 UNCERTAINTY REGARDING COVID 19 In March 2020 the World Health Organization declared a global pandemic due to the novel coronavirus COVID 19 The situation is constantly evolving and the measures put in place are having multiple impacts on local provincial national and global economies During the fiscal year the Association has experienced uncertainty regarding future revenues including conventions education and forms and marketing Additionally there has been decrease of certain expenditures such as committees general office board travel promotional activities and travel mileage since the beginning of the pandemic in early 2020 Management is uncertain of the effects of these changes on its financial statements and believes that any disturbance may be temporary however there is uncertainty about the length and potential impact of the disturbance 9 50 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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MISSION To Serve and Strengthen Our Mutual Insurance Community VISION Grassroots Insurance at the Core of Thriving Communities 2021 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 51

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