2023 OMIA Annual Report : simplebooklet.com

2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT5Compliance - OMIA has dedicated compliance professionals who provide leadership, environmental monitoring, education, and expert guidance on solvency reporting, governance, market conduct and corporate risk management that meet regulatory requirements.Data Strategy and Statistics - OMIA provides member companies with an efcient method of reporting regulatory data, while anticipating data requirements for collective analysis and business intelligence initiatives.Education - OMIA has a dedicated education team that creates online and in-person training sessions. These courses are continuously changing and evolving to ensure that member companies have important and up-to-date information. We also have an OMIA Certication Program to facilitate continuing education and professional development.Employee Pension and Benets - OMIA staff and the Benets Committee are committed to providing guidance on issues related to employee and company benet programs that are available to the membership through OMIA. We are pleased to report that we continue to have a plan that meets or exceeds expectations in today’s labour market. General Meetings - OMIA hosts a variety of meetings and roundtables that allow member companies to come together, gain important information, discuss current and future challenges, innovate, and learn from one another.Government Relations - OMIA and the Legislative Affairs Committee play an important role in maintaining the Ontario Mutuals’ prole with MPPs and MPs. We act as ambassadors to the legislature and communicate the impact of proposed legislation while providing an informal sounding board for MPPs. This includes roundtable discussions and a visit to Queen’s Park each year.Industry Liaison - OMIA maintains strong relationships with industry partners and keeps lines of communication open on behalf of the mutual community. OMIA will share unied messages with organizations like the Financial Services Regulatory Authority of Ontario (FSRA) and others. Insurance for Insurance Companies - Like any business, mutuals need insurance for their own unique risk management needs. OMIA has worked with trusted broker partners and underwriters to develop Directors and Ofcers, Errors and Omissions, Fidelity Bond, and Cyber Risk insurance programs that protect mutuals against these constantly evolving business risks.Market Research - OMIA periodically facilitates the collection of market research to gather data and reveal market trends that help member companies make informed decisions around marketing. We also have a Market Issues Committee which gathers and analyzes industry information that affects the mutuals’ ability to serve their policyholders.Product Development - As the world changes, so do insurance needs, and OMIA is continuously monitoring the heartbeat of all things insurance. With the help of the Product Strategy Committee and colleagues at Farm Mutual Re, OMIA updates and creates insurance products for member companies to implement. Promotion - OMIA promotes the Ontario Mutuals brand through sponsorships, advertising, and events. OMIA also has a dedicated marketing team that is available to support member companies with their individual marketing projects. Special Projects and Studies - When a mutual asks, “Is it a good idea or not?” or “ Are we up to date with emerging trends?” or “Can we tackle a bigger challenge together?” It might be time for a project or study to help members evaluate next steps. Bi-annual salary and compensation surveys, feasibility studies on shared resources, cyber risk inventories, IFRS-17 conversion research and tools, and pilot groups for new roundtables are all examples of successful mutual initiatives that started with an OMIA special project or study.OMIA’S SERVICE AREAS

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT82022 PRESIDENTS & MANAGERSOctober 22nd to 24th, London, OntarioChair, Neil Shay welcomed delegates back to London for the rst time since 2016.In his welcome, Neil returned to his theme of promoting mutuality by Always Building, especially the mutual approach of building relationships, particularly with other mutuals.Opening keynote speaker, Canadian author and entrepreneur, Amber Mac spoke on the emergence of articial intelligence and where it may be leading us. She also spoke to the underlying theme of constant learning at the core of succeeding and surviving in a rapidly changing world. She identied her version of a “PATH”, prioritizing purpose, relentless adaptation, trust building, and health and wellness.The business session included reports from Chair, Neil Shay and OMIA President, John Taylor. Neil spoke about developments in solvency and prudential supervision, the Risk Management Supervisory Framework, mutual data strategy, and the opportunity for resiliency allowances in the mutual homeowners policy. Neil also thanked attendees, sponsors, and donors who helped Caradoc Townsend Mutual and OMIA raise $18,375 for the Farm Mutual Foundation and Ataxia Canada at the June golf tournament.In his President’s Report, John Taylor did a detailed review of solvency overview of the mutuals and the genesis of the system in place before the establishment of FSRA’s Risk Based Supervisory Framework. He summarized for attendees the key issues currently being discussed with FSRA, OMIA, and the Fire Mutuals Guarantee Fund. He also provided an update on OMIA’s strategic plan and the ve overarching strategic goals:• Solvency and Compliance• Promoting Mutuality• Resource Centre• Group and Afnity Services • Data Strategy Of particular note was the recent Data Strategy Committee planning day where the committee identied goals in 2024 to collect more data more quickly to better serve mutual member needs.John also noted that there would be changes required to the OMIA Bylaws due to Ontario’s new Not for Prot Corporations Act. Detailed information was provided to all voting members in August on each of the changes and these will be put forward formally to the membership in early 2024 for ratication at the 2024 Annual General Meeting.Fire Mutuals Guarantee Fund Chair, Sharon Hollister convened the Fire Mutuals Guarantee Fund meeting. She thanked her fellow trustees and spoke on the continuing work with FSRA to arrive at a Risk Based Supervisory Framework that makes sense for policyholders, mutuals, and the regulator.Guarantee Fund expenses rose substantially over the previous 12 months due to the increased resources required to undertake assessments and signicant costs in research, analysis, and development needed to meet IFRS-17 reporting standards in 2023. Annual expenditures were approximately $380,000 up from $260,000 in the previous year. Sharon conrmed to the membership that no individual companies posed a solvency threat to the fund.Catherine MacLellan gave the Financial Review Committee update and reported on the mutual nancials to the end of June 2023. The rst 6 months of the year saw a small net prot. IFRS-17 reporting changes make comparability year over year extremely difcult for end users. Catherine also provided an update on the work involved in understanding the impact of the changes and updating tools like Early Warning Tests. Chair, Neil Shay2023/2024

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT9The nal session of the morning was an update from Tyler Kroetsch on the work undertaken by the Ontario Mutuals Automobile Plan (OMAP) to modernize and update rates and rules and to become more competitive and protable on the auto product. Tyler also outlined projects in scope for the coming year, including telematics.Afternoon sessions included a reside chat with Imran Ahmad of Norton Rose Fulbright and Bryan Hicks, the former chair of OMIA’s Regulatory and Compliance Roundtable. They covered developments in cyber risk with a focus on how the leaders and directors of organizations can prepare and respond to the inevitable cyber breach. The afternoon’s nal speaker was Eric Lascelles who spoke on reading the current economic signals for portfolio management. His broad experience and exposure to capital markets as the Chief Economist for RBC Global Asset Management provided a deep insight into the potential for a recessionary economy in the months ahead.On Monday evening, attendees enjoyed an informal reception and hospitality event. Tuesday’s program began with Farm Mutual Re’s Information Session. This included insight from Chair Ed Forbes, CEO JP Gagnon, CFO Amy Butler, and General Counsel and Corporate Secretary Patrice Rouse covering topics including FSRA’s approach to assessments, Farm Mutual Re’s strategic plan process, challenges in reinsurance and managing catastrophic loss exposures, and strategic approaches to addressing a challenging reinsurance marketplace.Farm Mutual Re’s meeting included special guest speaker, Swiss Re’s Jolee Crosby, CEO Reinsurance Canada & Canada Country President, who shared Swiss Re’s view of risk and mitigation and changing trends. The Farm Mutual Foundation report was provided by Jill Taylor. The 2023 scholarship topic was on voter turnout and engagement in the younger demographic. Jill shared that 227 scholarships had been granted and that all applications had been successful. Following the conclusion of Farm Mutual Re’s meetings, Teresa Budd of Watson Governance wrapped up the morning program. She spoke to changing trends in governance and provided some deep insight into how boards can assess the level of engagement they need to manage risk, provide appropriate oversight, and understand operational issues without becoming operational boards. Following a lunch sponsored by Farm Mutual Re, members received an update on the broker merger and acquisition market from Tony Ngo of Collectivde. The closing keynote session was provided by Sébastien Sasseville. Sébastien is a pre-eminent Canadian endurance athlete. He shared fascinating anecdotes and video of his quests to climb Mount Everest, complete the legendary Sahara Race, the Run Across Canada, and complete the Race Across America, the world’s toughest ultra-cycling race. Sébastien’s lessons learned, and leadership advice included thoughts on optimism as a habit and not an attribute if you wish to meet challenges and succeed. An additional feature to the 2023 Presidents and Managers meeting was an introduction to the Institute for Catastrophic Loss Reduction’s (ICLR) Hazard Lab. This was relocated from its home at the National Research Council’s facilities at the University of Western Ontario and set-up in the convention centre. P&M attendees had an opportunity to watch live, hands-on demonstrations on how building construction can be improved to increase resilience against wind, water, and wildre loss. Glenn McGillvray, Dan Sandek and Keith Porter of ICLR spent two days with us providing demonstrations and deepening our appreciation of the impact of storms and climate change on Canadian homes.Neil Shay closed the 2023 Presidents and Managers meeting and invited delegates to the 2024 Annual Meeting in March and to the 2024 Presidents and Managers Meeting to be held in Ottawa.

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT11Christine Van Daele received her Honours Bachelor of Commerce Degree from McMaster University in 1990, followed by her Certied Management Accountants Designation.Christine joined Westminster Mutual in the role of Accountant in 1993 and was appointed President in 2001. Christine’s contributions to the mutual system began almost from Day One. Her involvement and leadership have included chairing the OMIA Board as well as committees, including Regulatory Review, Data Strategy, and Benets. She was a founding member of the IFRS Committee which evolved into the Accounting Advisory Committee.That committee has done more than a decade’s worth of research and planning, culminating with a challenging, but successful conversion to IFRS-17. Christine was also a member of the Farm Mutual Advisory Committee which worked with FSCO as they considered their transition to a new regulatory regime.For several years Christine was a member of the Canadian Mutuality Leadership Taskforce, a group of OMIA, Farm Mutual Re, and CAMIC Directors that helped unify and align efforts to build mutuality across the country.Christine also played a leading role in organizing the mutual brokerage ownership group, which became Collectivde, and most recently, she joined the Farm Mutual Re Board as Group A Director in March 2020.Christine’s theme for her year as OMIA Chair was, “Our Passion is Mutual.” That passion was there from Day One and continues with her leadership by example and advocacy for mutuality.PRESIDENTIAL MERIT AWARDOMIA Annual Convention, March 2023Each year the Presidential Merit Award is presented to an individual who exemplies the best elements of the mutual system. Winners of this award have demonstrated a long-term commitment to mutuality and service to the Association. OMIA was pleased to have presented the award to Christine Van Daele, CEO of Westminster Mutual, at our 2023 Annual Convention.Past Recipients2022 Brian Downie & Allan Hedley2021 Deferred2020 Rob Pearson2019 Catherine MacLellan2018 Steve Smith2017 Shelley Sutton2016 Sue Baker2015 Tim Shauf2014 Neil Shay2013 Frank Rider2012 Don Davidson2011 Alec Harmer2010 Joe Dietrich 2009 Bill Jellous 2008 Kathryn Adie2007 Brian Fisher2006 Bob Brenner2005 Rick Walters2004 Rob Forsythe2003 Glen Johnson2002 Ernie Koehler2001 Randy Hutchinson2000 Aleck Stickle1999 Dave Bailey1998 John Harper1997 Carrol Lambert1996 Stuart Howlett 1995 Ron Perry1994 Bert Abbott1993 Lorne Wolgemuth1992 Don Mylrea 1991 Vern Inglis1990 Dave MacKay 1989 Mel McIntyre1988 Fred Legg1987 David Wilson1986 Ed Pellow1985 Bruce McBlain1984 Gerald Snyder1983 Emory Knill1982 Bill Weir1981 Bruce Caughey Sr.1980 Max Forsythe

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT13The CIAA is a prestigious organization that exists to promote the study, research, and development of nancial management and insurance accounting. We are honoured to have been recognized by our industry peers with this award which acknowledges our Mutuals’ collaborative approach to transitioning to the IFRS-17 accounting standard. A key to our mutuals’ success in this work is our longstanding philosophy of working together for the benet of all. This was a mammoth project with many complex and novel decision points, that if tackled individually would have been even more challenging to implement. At the centre of this project is our Accounting Advisory Committee, which monitors the accounting and nancial reporting environment and develops solutions and approaches for our member companies to address new and changing requirements. Our IFRS-17 journey has extended over the past ve years, and has incorporated research, policy development, process re-design, data management innovation, education, and a cost-effective funding approach. This committee is made up of dedicated accounting professionals from within our membership who have worked tirelessly to assist mutual accountants, management, and boards in meeting these rigorous new standards. Thank you to our Accounting Advisory Committee members:Chair, Andrea Schaefer, Axiom MutualChristine Van Daele, Westminster MutualDave Paterson, Ayr Farmers MutualTraci Radford, West Wawanosh, MutualKevin Konecny, Kent & Essex MutualJim DeJeu, Lambton MutualCatherine MacLellan, Financial Review CommitteeAmy Butler and Bob Brown, Farm Mutual ReSusan Baker and Sharon Dittmer, OMIAThank you as well to our nominator Daniel Willmann of EY and the CIAA, and our partners along the way. We are delighted to know that the standard we set for ourselves in 1882 - to serve and strengthen our mutual insurance community – is as relevant and meaningful today as ever. TRANSFORMATION AWARDRecognition from the Canadian Insurance Accountants AssociationWe’re pleased to share that the Canadian Insurance Accountants Association (CIAA) awarded OMIA’s Accounting Advisory Committee with their Transformation Award at their Annual Conference in Windsor, Ontario, on September 10th.

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT14John began his career in insurance after graduating with a business degree from Wilfrid Laurier University in Waterloo, Ontario. Over the course of more than 30 years, John has worked as a licensed independent claims adjuster, claims branch manager, manager of professional development, and Vice President of Human Resources. His special project assignments include teaching at Crawford University in Atlanta to prepare claims adjusters selected to respond to losses from Hurricane Katrina and acting as Project Manager for the Walkerton Water Crisis Class Action Claims Settlement. John has been the President of OMIA since 2009. OMIA, located in Cambridge, Ontario, was established in 1882 and represents our network of farm mutual insurers from across the province who write collective premium of about $1.1B. John also serves as Secretary of the Fire Mutuals Guarantee Fund, a unique business model that places the surplus of all member mutuals behind any one for secure policyholder protection.John is a Fellow of the Insurance Institute of Canada, and holds the Canadian Risk Management designation, and Chartered Loss Adjuster designation.John is currently a board member and Treasurer of Farm and Food Care Ontario, a non-prot association that promotes public trust in food and farming in Ontario. He is also a board member of the Institute for Catastrophic Loss Reduction. He was awarded the National Association of Mutual Insurance Companies Service Award in 2022.John was nominated by the OMIA Board of Directors and supported by letters of reference from many of his industry peers. He is a staunch supporter of the mutual insurance community and consummate professional in his leadership role at OMIA. Those who know John know this award is well deserved! The CIP Society has been advancing the education, experience, ethics and excellence of graduates of the Chartered Insurance Professional (CIP) and Fellow Chartered Insurance Professional (FCIP) programs for more than a decade. They are proud to have established the only national program of its kind that celebrates leadership among property and casualty insurance professionals. ESTABLISHED LEADER AWARDRecognition from the CIP SocietyWe’re very pleased to share that John Taylor, President of the Ontario Mutual Insurance Association is the 2023 recipient of the CIP Society’s Established Leader Award. This is a National Leadership Award highlighting achievement across the country. John has been recognized by his peers for his contributions to, and impact on, the property and casualty insurance community.

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT16Committee Focus The Accounting Advisory Committee monitors the accounting and nancial reporting environment and develops solutions and approaches for member companies to address new and changing requirements. The areas covered include International Financial Reporting Standards (IFRS), statutory nancial reporting forms required by the regulators, requirements of the General Insurance Statistical Agency (GISA), taxation (both federal and provincial) – essentially any topic where the information required must be delivered to, or extracted from, the member company accounting and nancial systems. The committee is a liaison with the Financial Review Committee, the Accountants’ Roundtable, and key partners and nancial reporting experts. The roundtable is composed of those at member company staff and management who are responsible for nancial reporting and compliance.The committee also works closely with the Financial Review Committee in reviewing changes to solvency rules such as revised MCT calculations. This collaborative approach helps ensure that the implications of changes are understood and implemented consistently.In 2023, much of the committee focus continued to be on implementation of IFRS-17. IFRS-17 – “Going Live” The development of IFRS-17 has been a long, challenging, and often frustrating experience for Canadian insurance accounting professionals, as regulatory and standards’ bodies wrestled with creating the coherent and timely guidance required for implementation. While effective dates were pushed back several times, January 1, 2023 became the critical milestone date for the insurance industry to be able to report under IFRS-17. As a result, 2023 has been a year of maximum effort for the Accounting Advisory Committee and mutual accountants, in ensuring the mutuals’ IFRS-17 reporting is accurate, compliant, and valid for users including boards, management, policyholders, and regulators. The road to January 1, 2023 included a collaborative approach for mutuals, recognizing that the resources required for conversion were beyond the scope of Mandate - To assist member companies in meeting requirements for audit and nancial reporting.ACCOUNTING ADVISORY COMMITTEE REPORTChair, Andrea Schaefer, Axiom Mutual2023 Committee Members Christine Van Daele (Westminster), Dave Paterson (Ayr), Jim DeJeu (Lambton Mutual), Lindsay Zehr (South Easthope), Catherine MacLellan (Financial Review Committee), Bob Brown (Farm Mutual Re), Amy Butler (Farm Mutual Re), Sharon Dittmer (OMIA), Susan Baker (OMIA)

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT17individual companies. This collaborative approach included doing extensive research on how key decisions would be made and captured in position papers. This included grappling with new concepts and terminology such as policy aggregation, onerous contracts, liability for incurred claims and liability for remaining coverage. By working together, the Accounting Advisory Committee and roundtable utilized their own experience as well as expert resources such as EY to create the foundation for successful implementation. Another important joint effort included creating a model for accessing group actuarial services. With innovative work from the OMIA Statistics team in formatting and pulling premium and claims data, it was possible to streamline and optimize the actuarial reporting required for each company under IFRS-17. Other important work included in 2023 has included ongoing liaison with policy management system vendors, accountant’s workshops on P&C-1 preparation, creating IFRS-17 education and training, and ensuring two-way communication with the Financial Review Committee, the Financial Examination Committee, and FSRA on solvency reporting. In summary, 2023 has been an “all hands on deck” year for mutual accountants. There is more work to come, but the committee will continue to champion an “open source’” approach to the transition process. The committee’s example of leadership, collaboration, and accounting system process innovation was recognized at the Canadian Insurance Accountants Association (CIAA) 2023 Annual Conference when the OMIA Accounting Advisory Committee was awarded the Transformation Award for their work on IFRS-17 Implementation with the member companies of OMIA.As we look ahead to 2024, the committee will be turning its attention to how best to tackle the issue of “climate risk disclosure” in mutual nancial reporting. This will be one of the earliest specic areas to take on as it relates to a larger Environmental, Social, and Governance (ESG) strategy. The Ofce of the Superintendent of Financial Institutions (OSFI) has published guidance, but whether that guidance will change or will extend to provincially regulated insurers is an open question. We anticipate research and education will be our rst steps on this path. We offer thanks to Kevin Konecny for his time, commitment and accounting experience provided to the committee over the past seven years. We welcome Lindsay Zehr to the committee to ensure each policy management system vendor has representation for testing templates and data requirements for nancial, regulatory, and actuarial reporting.

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT18Background The Auto Rate Filing Committee represents the group of OMIA companies that underwrite automobile insurance in Ontario and have elected to do a common ling 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.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 Directions1. Grow ProtablyIncrease 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 protable target customer base2. Trusted PartnerMaintain 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 cultureCreate and grow a best-in-class Auto team that supports our member mutual insurers. Perpetuate a strong feedback loop with our member mutual insurers and their distribution networks to facilitate business management and ensure our rates and rules reect our culture, values, and strategy.4. Adapt for the FutureInvest in the technology required to be a leading insurer and develop a foundation to continue to evolve. Build exibility 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.Mandate - To lead member companies in working together to create a sustainable and protable auto product offered at competitive rates to meet the unique needs of mutual policyholders.AUTO RATE FILING COMMITTEE REPORTChair, Warren Ting, HTM Insurance2023 Committee Members Paul Burns (Tradition), Shelley Deyo (North Blenheim), Marg Torrance (HD Mutual),Pam Marson (Grenville), Jodi Meiering (Ayr), Brenda Brooks (Kent & Essex),Thomas Newby (Edge), Tyler Kroetsch (OMAP), Jeff Ferguson (OMIA),Christine Senior (OMIA)

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT20Background The Automobile Insurance Committee provides formal input to government consultations on potential changes to Ontario’s automobile insurance product. In reforms dating back over 30 years, Ontario’s automobile insurance product 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 benets and creating more stringent claims handling regulations, while at the same time creating a “no-fault” regime that placed limits on the right to sue for damages in tort. At the time, this was seen as an attempt to shift more claims dollars to injury victims for direct treatment and out of pocket losses. Some described this as evolving the Ontario auto insurance system towards becoming a “social safety net.” Over time this has created a very generous insurance product with benets that exceed those of any other province 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. The pandemic period from 2020 to late 2022 created a temporary downward “adjustment” to normal driving patterns, accident rates, and claims volume. This allowed the price of automobile insurance to remain stable and in some cases decrease. Nonetheless, the cost of auto insurance remained a signicant expense for Ontario households and drivers, and the affordability of auto insurance remained a public and political ashpoint.As the pandemic faded in late 2022 and into 2023 new threats to making auto insurance affordable emerged led by rampant ination on the cost of vehicle repairs and replacement, the advent of increased costs associated with new automotive “smart” technology, and a booming trend in high end vehicle theft and claims costs. By late 2023, auto theft had become such a top-of-mind consumer issue that both the federal and provincial government began prioritizing a policy response. These developments, and a return to pre-pandemic driving patterns and claims volumes, has kept the pressure on the government to continue to look for ways to “x” Ontario Auto. These efforts have crossed various ministries and have been less of a system-wide approach to reform than a narrow “issue by issue” approach. The report that follows summarizes the committee’s analysis and input to these issues in 2023.Mandate - To develop OMIA’s position on auto insurance issues and communicate that position to the appropriate legislative and regulatory authorities.AUTOMOBILE COMMITTEE REPORTChair, Terry Knight, North Blenheim Mutual2023 Committee Members Kelly Jackson (Westminster), Linda Pereira (Lambton), Rocco Neglia (HD Mutual), Lisa Fazzari (Farm Mutual Re), Jon Hodson (Farm Mutual Re), John Taylor (OMIA),Susan Baker (OMIA), Janet Schmidt (OMIA)

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT21The License Appeal TribunalSeveral years ago, dispute resolution moved from the Financial Services Commission of Ontario (FSCO) to the License Appeal Tribunal (LAT). The LAT was an existing provincial body that adjudicated a wide range of disputes outside the court system. This move followed a recommendation from Justice Cunningham’s review of automobile insurance dispute backlogs and was seen as a positive move that could improve the effectiveness and speed of dispute resolution.Unfortunately, signicant issues arose following the move to the LAT, primarily related to delays in having cases dealt with, and the development of a huge backlog. The backlog was estimated at 17,000 cases at one point.From our standpoint, these delays were driven by parties bringing claims before the LAT being unprepared to exchange information, late production of witness lists, and half-hearted efforts to make pre-hearing case conferences effective. Adjudicators seemed to have limited ability or tools at their disposal to hold parties accountable to production schedules. A perception also developed that adjudicators were not as effective dealing with the complex technical elements of statutory accident benet disputes, as opposed to other matters. OMIA has actively participated in the Insurance Bureau of Canada’s (IBC) LAT Working Group, which has put forward detailed recommendations to expedite dispute resolution. Given that much of this is outside the control of insurers, it remains essential that adjusters and counsel proactively investigate and settle cases, particularly those involving serious injuries. Being proactive and open to settlement in early stages typically can result in better long-term results and more effective reserve management.Territorial Rating In Ontario, insurers are allowed to charge differential rates based on “territories.” They can only use a limited number of territories and must dene these in rate lings made with FSRA. The use of territories has always been considered as an appropriate and fair way to identify and charge for the higher risks associated with driving in areas where accident frequency and severity is higher. Over the last several years there has been a loud debate led by MPPs representing the higher cost Toronto and GTA areas for auto insurance. The government has repeatedly indicated they wish to address territories but have not been specic as to whether this will involve banning the use of territories or whether it will allow an expanded and exible use of territories that might better represent risk allocation. OMIA has strongly advocated for the continued use of territories, as banning them will undoubtedly result in drivers in rural, lower trafc, areas subsidizing drivers in higher risk urban areas. By the end of 2023, FSRA announced they would accept applications from insurers who wished to propose and use a “modernized” approach to territory rating in the GTA. If an application is accepted as reasonable, an insurer could operate in a “Test and Learn Environment” for a period of two years. This may be a very good rst step in addressing the question of territory, but the stringent requirements for an insurer to operate within such an environment should not be underestimated. Towing and Storage – Fraud and AbuseExorbitant towing and storage fees following an accident have long been a concern to both vehicle owners and insures. This has only escalated in recent years with highly publicized incidents of coercion and illegal activity in the towing sector.

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT22In 2022, the Ministry of Transportation introduced a series of pilot measures in Toronto and the GTA to address concerns over fraud when towing and storage services are forced upon drivers at accident scenes. Further draft regulations to the Towing and Storage Safety and Enforcement Act were developed in 2023. OMIA’s feedback to the Ministry strongly supported these measures and encouraged a vigilant approach to enforcement. The Ministry of Transportation kept up the momentum with the passage of the Towing and Storage Safety and Enforcement Act, replacing the existing municipal oversight framework with a provincial framework, that includes the requirement for towing and storage operators to have a provincial certicate. This will be a phased implementation, but early anecdotal reports suggest this will be a much better and safer environment for drivers. It should also be noted that the insurance industry played a critical role in highlighting the issue and moving the government to action. In a separate consultation on FSRA’s proposal to have more fraud data collected and submitted by insurers, OMIA called upon Tom Seaman of Halwell Mutual and Daryl Stevenson of South Easthope Mutual to provide input on the signicant burden in cost this would impose on small insurers. More on this is expected in 2024. Optional Coverage for Direct Compensation Property DamageDirect Compensation Property Damage (DCPD) is a straightforward and mandatory coverage in Ontario auto insurance policies. The government felt that making this an optional coverage would allow consumers more choice and give them the potential to reduce the overall cost of their insurance.When this was proposed, OMIA strongly expressed concerns that allowing optionality would not save signicant costs for drivers and would result in consumers who may most need the coverage, deleting it without understanding the implications. Nonetheless, the Government has moved ahead, and OMIA has provided members with the required support in adapting forms and processes. In late 2023, OMIA trainers delivered 17 education sessions for a total of 359 mutual agents, underwriters, and other staff in preparation for helping consumers understand the implications of this change. Driver and Auto Search History (DASH)For many years, the insurance industry relied upon a third-party information technology vendor to provide driver records and other information required to underwrite and price auto policies. This records access was commonly referred to as Auto Plus. Due to concerns with that system, the Insurance Bureau of Canada led a cooperative insurance industry effort to create a non-prot equivalent to obtain the same underwriting information. OMIA subscribed to this on behalf of members. DASH was launched in early 2023 and is a positive step in record security and cost efciency. “Take All Comers” In 2020, FSRA initiated a major supervisory initiative with a directive to the industry that they would strictly monitor and enforce the interpretation of the “take all comers” rule. This rule requires all insurers in Ontario to offer insurance to any qualifying applicant based on the insurer’s led rates and underwriting rules. In early 2022, all insurers were required to self-evaluate their compliance with Take All Comers. Twelve insurers who represented the bulk of the auto insurance premium written in Ontario were further tasked with a more detailed internal review and reporting protocol on ndings. While not part of the “top” 12 insurers cohort, Ontario Mutuals were expected to conduct a self-review and the Ontario Mutual Automobile Plan (OMAP) and the Auto Rate Filing Committee put together a toolkit and approach that allowed each mutual to understand their own compliance with Take All Comers and make an appropriate self-assessment. In August 2023, FSRA published the nal Take All Comers Thematic Review Report. This report reached the conclusion that there were marketplace practices that were longstanding and non-compliant and that over time this non-compliance became systemic. FSRA indicated that the sector had been largely successful in remediating identied non-

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT23compliance, but through enforcement actions, FSRA levied signicant monetary penalties against two insurers. In the section of the report signaling FSRA’s future expectations, the regulator referenced its Operations Risk Management Guidance, the need for accountability at the leadership level, and the role of Principles-Based Regulation in ensuring fair treatment of consumers. Fair Treatment of Consumers – Market Conduct Examination for Automobile Insurance In conjunction with their efforts on Take All Comers, FSRA launched insurer examinations in 2022. This involved requesting comprehensive documentation from selected insurers with an assessment of the adequacy of each insurers policies, procedures and controls as related to ensuring that all aspects of automobile insurance from application through to termination were fairly handled.The scope of this was broader than the more limited focus of the Take All Comers Thematic Review. An Ontario Mutual was selected as one of the companies to be assessed. With that assessment now complete, there has been an opportunity to share the lessons learned through the process and this has been extremely helpful for fellow mutuals in identifying opportunities for improved practices, processes, and documentation. It is expected FSRA will undertake further examinations in 2024.Emerging Vehicles – Pilot Program In late 2022, the Ministry of Transportation launched a pilot program in some municipalities to allow automated vehicles such as 3-wheelers, electric low-speed vehicles, e-scooters, cargo-e-bikes, golf carts and large quadrant cycles to operate more freely on public roadways. In some specic pilot areas, the requirement for mandatory automobile insurance was exempted. There were several anecdotal reports of misperceptions that certain property coverages could be extended to these vehicles while on public roadways. In response to member concerns, OMIA provided written input to the Ministry pointing out the issues with the exemption and urging its reconsideration in the review process. Looking Ahead Ontario’s automobile insurance market remains uncertain, with protability challenges on many fronts. Changes to automobile insurance to reduce costs and improve consumer affordability have a long implementation period due to complexity and the need to ensure an orderly transition. We have discussed a range of potential reforms and will continue to provide a mutual perspective on any proposals for reform brought forward.

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT25liabilities. The second phase of the study looked at the design of the Plan based on how contributions funded the plan and how pensions were “earned” by beneciaries. As a result of the second phase of the study, changes to the OMIA Dened Benet (DB) Pension Plan were made effective January 1st, 2022. In the nal stages of the study, asset allocation is being changed and asset cases such as long-term bonds, infrastructure, and private debt are being introduced to best match the assets in the Plan against anticipated liabilities of the Plan.Pension Plan TextThe Plan Text was restated January 1st, 2021, incorporating all prior amendments to the previous plan text. In addition, claried terms and references were added to the text to ensure compliance with Canada Revenue Agency interpretations on payment of pension benets.Annual Plan Review – Dened Benet Pension PlanThis review is completed by OMIA, as Plan Administrator, and TELUS (previously LifeWorks), as Plan Actuary. The annual plan review ensures that the OMIA Plan is compliant with Ontario pension statutes and regulations. It also provides a formal review of governance practices to measure the Plan’s policies and processes against best practices in the pension eld. Member companies were provided with written conrmation of the OMIA Plan’s compliance in September 2023. Stewardship Review – Dened Contribution Pension PlanOMIA, as Plan Administrator, and Canada Life, as Plan Manager, review the Dened Contribution (DC) Plan annually for stewardship and compliance. This report provides feedback to OMIA on the design of the Plan and the services available to employees in the Dened Contribution Plan, as compared to pension industry trends and best practices. The review, completed in October 2023, conrmed OMIA’s DC Plan design and that processes meet best practices. The next review is scheduled to take place in fall 2024. Islamic Global Equity Index Fund (BlackRock)In December 2023, the Islamic Global Equity Fund was added as an investment option under the Dened Contribution Pension Plan. This fund aligns with Islamic religious beliefs that consider Shariah investment principles, supports their long-term savings goals with the growth potential of global equity investments and allows members to participate in the group pension plan.Pension ValuationIn 2022, the OMIA Board of Directors elected to le an “early” valuation due to the signicant improvement to the funded position of the Plan based on guidance from the actuaries, the interest rate environment, the Plan membership information as of December 31, 2021, and various other actuarial assumptions 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 December 31, 2021, valuation also indicated a required decrease to the employer normal cost, effective January 1, 2022, to 4.82%, bringing the total employer contribution rate to 13.82% (9.0% + 4.82%) down from 14.08% (9.0% + 5.08%). The next mandated valuation must be led in 2025 based on the period ending December 31, 2024. Transfer Status of Dened Benet Pension PlanFinancial markets suffered a decline in equity values during the 2020 onset of the COVID-19 pandemic. As Dened Benet pension plans have signicant exposure to equity markets, the decrease in underlying asset values reduced the funded status of pension plans.

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT26The Financial Services Regulatory Authority of Ontario (FSRA) reacted by introducing regulations that restricted the ability of any plan to transfer lumpsum pension entitlements to terminating members. The purpose of the regulation was to ensure plans have sufcient capacity to protect all members following signicant declines in funded status. One of the regulations stipulated that if the transfer ratio of a pension plan at the end of a quarter deteriorated by more than 10% since the last valuation led with the regulator, a plan could not process the payment of lumpsum pension entitlements for terminating members without rst obtaining approval from FSRA.The OMIA plan was subject to that restriction initially but is not currently affected. Our plan actuaries continue to monitor our transfer ratio quarterly.Rate of Return – Dened Benet Pension PlanThe 2023 annual return on assets as at December 31, 2023 was 8.10% (10 year average return of 5.97%). Assets Under Management currently total $220,539,176.Employee Benets Health and Dental CoverageThe OMIA Health and Dental Plan operates on an ASO (Administrative Services Only) model. In an ASO model, participating companies essentially self-insure 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 benet plan, while also ensuring claims are adjudicated at arm’s-length on a condential basis. The OMIA Benets Committee monitors the ASO claims experience history, changes in participation levels, and claims utilization data. The committee also provides input on benets issues that are brought forward by member companies and monitors the ASO target reserve. In 2021, the committee reviewed the target reserve set in 2019 and recommended increasing the current target level over the next ve years. Items and trends of interest this year have been:• Long Term Disability (LTD) rates decreased by 15% at the 2023 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 signicant 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.• The OMIA Benets Plan experienced a decrease in health and dental claims in the rst half of 2020 due to the COVID-19 pandemic, however by December 2020 claims were trending to pre-pandemic levels. By December 2021, Health and Dental claims increased back to 2019 levels. Claims continue to increase in 2023 and are expected to continue increasing in future years. • Health and Dental claims costs have increased substantially in 2023 and are expected to continue to rise, especially with the continued increases in CPI. The Benets Committee closely monitors this trend and potential methods to reduce claims costs, while still providing a competitive benets package. OMIA continues to use the ASO reserve to offset increased claims costs.• The Employee Family Assistance Program (EFAP) continues to be well utilized by members. The program provides employees and their families with support in times of need. The program is completely condential. • Health and Wellness education continues to be a major focus through wellness newsletters and by providing information on lifestyle choices that promote long-term health.Lumino Health Virtual Care Effective January 1, 2023, Lumino Health Virtual

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT27Care was added to the Health and Dental coverage. Lumino Health Virtual Care gives members and eligible dependents (including spouses) access to healthcare professionals via a mobile or web app. Members can talk with a nurse for any health questions or consult a doctor via a secure video if a diagnosis or prescription is required, completely free of charge. Members can also consult other health professionals (e.g., nutritionists) for an additional fee that may be covered by insurance. This service is available 24/7. 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 Benets Department; many companies have 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. Companies have the option to enroll their staff in the HSA every January 1st; please contact the OMIA Benets Department for additional information.Member Education SessionsOMIA provided in person and virtual benets and pension education sessions to employees, agents, and directors throughout 2023. 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. OMIA staff are available to provide virtual or in person presentations on the OMIA Benets and Pension plans at no cost to your company. Companies continue taking advantage of this option; to date in 2023 the OMIA Benets Department scheduled presentations for 6 member companies. Companies wishing to schedule a presentation should contact the OMIA Benets Department. Company Benets Agents Errors and OmissionsThe Agents Errors and Omissions program renewed with no increase in premium rates in 2023. 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 August 2023 for complete details. Directors and Ofcers InsuranceThe Directors and Ofcers Insurance program continues to be well utilized with 40 companies participating in 2023. Cyber Liability InsuranceCyber Liability Insurance was introduced late in 2015. Currently, 33 companies have added this coverage. In 2019, a new Cyber ERM (Enterprise Risk Management) policy was introduced. The Cyber ERM policy is designed to address 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.

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT31Mandate - To determine the courses that OMIA will provide and to deal with other issues related to training.EDUCATION COMMITTEE REPORTChair, Steve Quinn, Cayuga Mutual2023 Committee Members Jerrod Boyse (Ayr), Dan Hill (Germania), Bil Graham (Howick), Dave Rutherford (HTM),Elizabeth Baker (Farm Mutual Re), Christine Senior (OMIA), Sue Baker (OMIA)Training – Information Transfer OMIA’s Strategic Plan recognizes the work of the Education Committee as a key priority. We are 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, OMAP, and Farm Mutual Re teams, as well as staff from member companies and third-party subject matter experts. Topics cover the full gambit of insurance-related subjects, human resources issues, regulatory requirements and information technology support. We appreciate the generosity of member companies in supporting their staff as roundtable chairs and knowledge providers.Demand for OMIA-led training courses was strong in 2023 with just over 5,000 attendees and 190 sessions. On-Demand Courses We continue to grow our portfolio of On-Demand Courses with over 20 available and several more underway. There are now seven courses available in the Directors Certication Program to allow directors to accelerate their learning. Several companies are also using the On-Demand courses when onboarding new staff. A full listing of courses is available on omiaelearning.com.Certicate Programs OMIA administers several certicate programs and has been working hard to keep them up to date. The Directors Certicate continues to be popular along with several discipline-based approaches. The Beyond Certication is being developed in tandem with the Mutual Governance Framework project. In 2022 the updated Agents, Underwriters, and Accident Benet Adjusters certications were released and have had additional updates with respect to cyber coverage and exposures. OMIA will continue to develop certications in Claims, Loss Prevention and Leadership. Next Generation of Mutual Professionals Conference A new conference was hosted by OMIA last year with the purpose of providing a forum for the next generation of mutual professionals to network and develop their skills while promoting the mutual philosophy to the membership. Content for this conference is established by a committee of mutual members. The event was a success, with lots of participation and communication among the group. Planning is already underway for another session in summer 2024.2024 Education Program Over 150 sessions covering a large breadth of subjects will be available next year. Please consult the online provisional education calendar on OMIA’s website. We will also be delivering more in person training as people become comfortable gathering in groups. Virtual and hybrid training will, however, remain a key component of knowledge transfer. On–Site & Multi-Location Training OMIA is pleased to bring training to your company ofce, either virtually or in-person. With few exceptions anything we have done in person or online can be replicated or modied to meet your need.

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT32Legislative Affairs at OMIA 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. The Legislative Affairs delegate at your mutual has an important role in maintaining our prole 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 difcult 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. 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.Queen’s Park Day Summary On March 7th, OMIA returned to Queen’s Park for the rst time since 2020. Space availability was limited in the Legislature and our usual program format was amended to a lunch hour/early afternoon reception for MPPs and staff. Forty-eight mutual delegates made the trip to take part. Ahead of the reception, the delegates received an update on provincial issues with a focus on Ontario automobile insurance, Ontario’s building code review, climate resiliency, tort reform, small insurers, and burden reduction. The Minister of Finance, the Honourable Peter Bethlenfalvy thanked the mutuals for attending and spending time at Queen’s Park educating MPPs and staff on mutual insurance. He also provided a high-level overview of current initiatives including a review of the Corporations Act. The Minister’s Parliamentary Assistant, Stephen Crawford, MPP, Oakville also attended the reception. Mandate - To communicate the association’s position on legislative issues to our elected representatives.LEGISLATIVE AFFAIRS COMMITTEE REPORTChair, Kevin Inglis, Howick Mutual2023 Committee Members Allan Hedley (Cayuga), Brad Vanstone (West Wawanosh), Doug Crockett (Westminster),Ross Lamont (Trillium), Scott Roung (HD Mutual), Dave Leyser (Tradition),Ed Forbes (Dufferin/Farm Mutual Re), John Taylor (OMIA)

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT33Our Legislative host for the day was Guelph MPP Mike Schreiner, Leader of the Green Party. He recognized the contributions mutuals make to policyholders across Ontario, and particularly the cooperative nature of the mutual business model and the impact mutuals have on their communities. The luncheon reception had an excellent turn-out of MPPs and staff. At least 28 MPPs from across the province attended, but the number was probably higher as many did not pre-register. Delegates had excellent conversations with MPPs particularly on the role of regulation in the current environment, issues around automobile theft and fraud, considerations in green construction, revamping the Building Code for climate resilient construction, public education on preventing water damage arising from overland ood, and mutual involvement in community issues.We will return to Queen’s Park on March 5th, 2024.Corporations Act Several years ago, member companies identied a restriction within the Corporations Act that was hindering their attempts to modernize their governance structure. Specically, the Act required all mutuals to have a board size of 6, 9, 12, or 15 members, with no ability to reduce or add to board size in complements less than 3 in number. This made governance planning and director transition problematic when trying to “right size” a board for cost and governance effectiveness and efciency. In conjunction with the Regulatory Review Committee, OMIA submitted a request to have the Act amended for greater exibility, while still maintaining board stability.Having amendments adopted into an Act is a long and arduous process, dependent upon the timing of ofcial reviews of Acts, a government ministry’s appetite for legislative amendments, the input from other ministries and stakeholders, and the strength of the case for making a change. We began our work on this in 2019 with limited impact.Much changed in 2020 with the onset of the pandemic. With in-person meetings prohibited, outdated sections of the Corporations Act (and other similar Acts) put organizations such as mutuals in a non-tenable position as electronic meetings were not allowed under the Act. The government had to scramble and include Emergency Measures to allow electronic meetings. It also spurred a more detailed review of the Corporations Act. We provided detailed feedback on meeting format in the consultation but also re-introduced our proposal to lift restrictions on board size. Over the next three years, we continued to make submissions, created an impact analysis, and suggested wording for amendments to the Act.In the spring of 2023, the government passed Bill 91: Less Red Tape; Stronger Economy Act 2023. The passage of this Bill and subsequent proclamation has resulted in a modernized Corporations Act that allows electronic meetings and allows mutual insurers to determine the optimal number of board members for effective and cost-efcient governance. Private Members’ Bill 56: Fewer Floods, Safer Ontario Act 2022 At the request of Beaches-East York MPP, Mary Margaret McMahon we provided a letter of support for her Private Members’ Bill that includes a recommendation for a Flood Awareness Day and consistent information on water loss prevention for homeowners on municipal websites.Provincial Issues OMIA’s core provincial issues remain:• Ontario Automobile Insurance• Ontario Building Code Review• Tort Reform• Small InsurersThese are longstanding issues and issues relating to automobile insurance and tort reform should be familiar to many MPPs as these have been public policy topics for many years. As related to automobile insurance, our key message continues to be that true cost containment or improved affordability for Ontario drivers can only take place with signicant product reform. This has been a consistent industry message. With cost pressure due to rising ination and accident

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT34frequency this will continue to be a challenging topic for both insurers, regulators, and MPPs. Tort Reform is an extension of this same dynamic.As related to the Ontario Building Code, our message continues to be that the province must take a leadership role in putting climate resilience features within the Building Code. This remains a difcult “sell” as there are other stakeholders who resist even nominal changes to the Building Code that may be seen to increase building complexity or impact the cost of housing. Climate related severe weather events however are beginning to create more urgency within the government. OMIA’s creation of a provincial issue relating to small insurers reects the pressure felt both nationally and provincially as regulators continue to make more demands on data, governance, and operational reporting. In addition, regulators are increasingly proactive in requiring insurers to “prove” governance and market conduct controls without consideration to an insurer’s previous exemplary behaviour in these areas. The increased pressure on small insurers can be seen in many ways, such as regulatory cost assessment almost doubling between 2020 and 2021. In addition, to meet increasing demands for reporting insurers must add signicant additional resources. Mutuals also report concerns with having to choose between focusing on policyholders and meeting regulatory expectations. While there is room for improvement and progress in any sector, our key message is that additional costs brought by regulation will be borne by the policyholder and must be justied with a resultant benet to policyholders. Fall Roundtable The fall roundtable was held on December 21st, 2023, with 35 delegates participating in the virtual meeting. There was a detailed review of OMIA’s provincial issues followed by reports from delegates on what the key political issues were in each of their ridings. These riding reports are always informative as they cross a broad range of issues. While these issues are broader than our own “insurance issues,” it is always important as mutual insurers to understand what is happening in our communities and what may be on the minds of policyholders. Broader social issues such as housing availability, land use planning, conservation, labour market shortages, and access to health services and mental health support can all eventually have longer term implications for property casualty insurers. The fall roundtable also sparked a discussion on the cost-benet equation for a mutual to attend events like Queen’s Park Day and maintain local contact programs with MPPs. In response to that thought provoking discussion, we published “Why We Go To Queen’s Park” a look at why mutuals started their MPP contact program, and why it is more important than ever for member-based organizations to help MPPs understand how community insurers contribute to local prosperity and enable the economic development and activity that keeps rural Ontario viable. Looking Ahead As noted, we head back to Queen’s Park in March 2024, and throughout the year we will continue to push for action on key provincial issues. We urge each mutual to do their part by staying involved locally, getting to know your MPPs, and continuing to inform and educate on the important role of mutuals in local economies. We also encourage mutuals onboarding new board members to discuss at your board table how your company can play a part in this important work.This also provided an opportunity to make sure that the unique perspective of mutuals was presented when important decisions were being made at Queen's Park and at various government Ministries.Among the legislative changes over the years, that input to Queen's Park helped create, were prudent person investment powers and changes to the Corporations Act. In addition, meetings and discussions with MPPs helped provide an effective line-of-sight between centralized public policy and local impact or repercussions. A legislative contact program uses up some of the mutual’s resources because it involves the time and effort of individuals to meet with MPPs. It may also include travel from time to time to attend meetings and events.A mutual always needs to be aware of its expenses, but the legislative affairs contact program should be viewed as a long-term investment. MPPs value hearing directly from constituents and particularly from organizations and businesses in their own riding. The chance to speak with MPPs individually is more effective than other campaigns, particularly as written and electronic communication can be lost in the high volume of messages and other materials that an MPP and their office must deal with every day.Our annual visits to Queen's Park offer our best opportunity to demonstrate the unique role of mutual insurance, both in our industry and in our communities. Small businesses need to have a voice and input on public policy. This can most effectively be done when a trade association and its members team up to put their best foot forward to MPPs. The relatively small but steady investment that mutuals have made in getting to now their MPPs and providing education on what mutuals do, has created a strong basic legislative contact program, which could not be easily or inexpensively re-created from scratch. Although there may be expense in the short run, remaining viable and understood within the larger context of how insurance works in Ontario is vital to mutual sustainability. WHY WE GO TO QUEEN'S PARK As small local insurers, mutuals needed to make sure that the provincial rule-makers understood the unique elements of the mutual insurance model. Among the things that MPPs needed to understand were:• the grassroots nature of mutual governance,• the contributions mutuals make to their communities, and• the unique feature of being essentially set up on a “non-profit” basis, without private ownership, but with residual ownership resting with policyholders. It was also key for MPPs to understand the Fire Mutuals Guarantee Fund and its protection of policyholders from the impact of any insolvency.OMIA's Legislative Contact Program Began in the 1990s As the business of insurance became more complex, it followed that the government would become more involved in supervising how insurers provided insurance. As in many other areas of business and the Canadian economy, regulations became complicated and had an impact on the cost of doing business - and, potentially, these increased costs could make it difficult or impossible for smaller insurers to continue.Like regulations in many sectors, “one size” does not t all.As a result of this proactive work with MPPs, OMIA and its member companies became increasingly called upon by the government to provide input on public consultations on changes to insurance statutes and regulations as well as other economic policies introduced from time to time by the government. This opportunity to make a meaningful impact to public policy directly flowed from the mutuals' ability to build their presence with our elected officials. These features allowed mutuals to operate with a “policyholder first” philosophy and a long-term outlook. While considering how to educate MPPs on the benefits of small mutuals as part of the Ontario insurance marketplace, mutuals also began to think about how to boost the local and provincial economy through:Putting money to work in the community by investing in goods and services.Keeping professional, well-paying jobs in smaller towns and rural areas.Contributing to the local municipal tax base. Supporting community programs including charitable giving.

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT35The Market Issues Committee identies and researches issues that affect how, where, and when insurance products are sold to policyholders.The committee’s discussions on issues are shared with the membership through the MarketWatch bulletin. The committee also helps OMIA plan subject matter and topics of interest for meetings, roundtables, and conferences. Perhaps the most important part of the committee’s process is to provide insight on what each emerging issue might mean to your mutual. In 2023, the marketplace and society fully emerged from the pandemic environment but lingering issues related to the pandemic, including supply chain pressure, ination, tight labour markets, and changes in the workplace have continued to cast a shadow. In addition, the historically severe Canadian catastrophe season in 2022 created record breaking claims payouts for insurers and reinsurers. With signicant uncertainty in the global reinsurance market and a higher cost for capital this has unsettled the Canadian insurance market. Ination, Pricing, and Insurance to Value Ination and its impact on insurance is a two-fold threat that dominates discussion in both underwriting and claims. The issue in claims became acute in 2022 with inationary impacts on repairs. This could be attributed to a range of factors but was largely a case of a mismatch in a shortage of both materials and labour. This restriction in supply was accompanied by increased demand created by claims frequency arising from heavy CAT losses and increased post pandemic economic activity. In simple terms, it was costing a lot more to repair damaged property, and it was becoming very difcult to adequately reserve for longer tail repairs. This began to show up very quickly in nancial results.The impact of ination was more insidious on the underwriting side of the equation. With decades of declining interest rates and extremely low annual movement in ination and CPI, underwriters and senior leaders were faced with a potential “insurance to value” (ITV) crisis on property risks. ITV is not a new concept and is a decades long topic of discussion. Historically, there has always been an impression that many properties were underinsured, but this was challenging to quantify . Every insurer in Canada 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. MARKET ISSUES COMMITTEE REPORTChair, Marg Torrance, HD Mutual2023 Committee Members Ed Forbes (Dufferin), Rob Moorehead (MutualONE), Pam Marson (Grenville),Lee-Ann Vansteenkiste (Salus), JP Gagnon (Farm Mutual Re), Sharon Turnbull (Farm Mutual Re), Tia Milnes (Farm Mutual Re), Susan Baker (OMIA),John Taylor (OMIA)

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT36has periodically revisited their own portfolio, often taking remedial steps to increase the accuracy of valuations and apply appropriate ination factors, with an objective of capturing the right amount of premium on each risk. One of the few downsides of a low ination environment (and soft property market) was the difculty in making increases in limits and rates, and therefore resultant premiums palatable to policyholders, agents, and brokers. This has all changed with the historically severe high catastrophe season in 2022. Insufcient ITV and premium are now among the biggest concerns of the reinsurance market and the ability of primary insurers to provide assurance to reinsurers on adequate ITV is a critical factor in being able to acquire reinsurance at reasonable terms and pricing. Market Conduct - Fair Treatment of Consumers “Market Conduct” is a topic most often associated with regulatory and transactional compliance, as opposed to the insurance marketplace itself. Regulators, however, are becoming more aggressive in supervising how insurers interact with consumers. This takes several different tacks. Regulators are creating wide ranging guidance setting out expectations on how consumers should be treated throughout the insurance life-cycle. These are created in a “principles based” framework, as opposed to the rules-based framework used in the past. Regulators are also dedicating resources and budget to assessing individual insurers on their policies, processes, controls, and practices. All of this has led to an environment where insurers must document how they are ensuring the fair treatment of consumers. This is a signicant departure from insurers previous interactions with regulators that were largely driven by consumer complaints to the regulator on a specic concern or transaction.This all creates a new set of expectations for mutual boards, management, and professionals. As small insurers, located in the centre of their policyholder community, mutuals have always enjoyed a uniquely direct and transparent relationship with policyholders. The focus has always been on customer service, fairness, and a simple approach to doing the right thing. This new regulatory environment, however, comes with a greater requirement to document and proactively prove fairness through formal policies, processes, reviews, and controls. It remains to be seen whether this new approach will positively affect “fairness”, but it would seem that additional administrative burden and cost will be created throughout the insurance policy life-cycle, especially in the early years. This will particularly impact policyholder communication, sales material, product design, and rating, all of which are direct inputs to the insurance marketplace. Brokerage Consolidation The Canadian brokerage market has rapidly consolidated as small independent, often family owned, brokerages are purchased by larger corporate networks. These networks are often insurer-owned or funded by venture capital. This consolidation reduces the number of brokerage rms, although not necessarily branch locations. The long-term impact of fewer brokerage rms providing advice and markets to policyholders can create strong headwinds, particularly for smaller insurers. A consolidated broker channel reduces differentiation and can eliminate distribution opportunities for individual mutuals if they become just one of numerous mutuals in a broker network. To counter this, mutuals, both through Collectivde and independently, have been strategic in acquiring interests in the distribution chain to help maintain

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT37market share while also allowing broker operators to continue to operate on a scale and with a level of independence that best serves policyholders. Catastrophe Claims There are weather related catastrophes that impact mutuals and the insurance industry at large every year. Catastrophe claims have always been with us. The last several years have shown an increasing severity and breadth of damage arising from catastrophe claims - 2022 was a case in point for mutuals. The May 21st , 2022 derecho in Ontario created a record setting number of claims from a frequency and severity standpoint. The extent of damage was unprecedented. On an even larger scale, we saw the staggering impact of post tropical storm Fiona. 2022 constituted the third worse weather catastrophe event year in Canadian history, driven not by a single large loss such as the Fort McMurray wildre, but rather by a series of weather events across the country. The impact of catastrophes when combined with ination on 2023 underwriting activity and ITV was noted previously in this report. Just as importantly, in 2023 claims leaders have been tasked with assessing and formalizing their catastrophe response planning. CAT Plans are not new but in 2023 they are not only recognized as critical to responding to policyholders needs after a CAT, but in setting adequate reserves quickly and accurately. The Changing Workplace Almost every business in Canada has emerged from the pandemic operating differently than before. Flexible work arrangements, remote workers, and greater digital capability have radically changed how we interact with customers. This has been even more pronounced in insurance as many insurance professionals and leaders have retired, taking with them years of experience and expertise. Combined with all of the other market forces: ination, severe weather, consolidation, and increased regulatory scrutiny, this has kept the focus on recruiting and retaining the current and next generation of insurance professionals and has been yet one more challenge to meet in staying competitive in a dynamic and demanding market. Looking Ahead The committee will relaunch the Market Watch publication to members in 2024 with a different perspective on what constitutes the market forces that mutuals face. As always, the committee will identify those emerging issues that deserve a wider forum for discussion and education at mutual events.

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT38The 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.The number of printed brochures in 2023 surpassed the amount ordered in 2022 and is more on trend with what we saw pre-pandemic.Some project examples include local advertisements, special event ads for social media, and brochure material for topics like, Home Systems and Service Line, Accident Checklist, Fire Mutuals Guarantee Fund, and “What is Mutual Insurance?”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 After two years of pandemic cancellations, OMIA was pleased to facilitate a booth at the London Farm Show in March at the Western Fairgrounds. Ontario Mutuals is the exclusive bag sponsor of the show and branded bags were handed out at each entrance. The booth was well-staffed by member company participants over the three days of this large industry event. The Ottawa Valley Farm Show took place the week following at the EY Centre. This year, we passed on a formal booth and signed on as Red Ribbon Sponsors of “Ontario Mutuals Hall A”. Hall A serves as the show’s only dining hall, as well as the backdrop for the opening ceremonies and other events. We will continue to ne-tune our approach to this show to benet our interested mutual members. We were pleased to have a booth at September’s Canada’s Outdoor Farm Show (COFS), the largest outdoor show in eastern Canada. The Ontario Mutuals booth was fully staffed by mutual participants, who greeted visitors over three busy days. We also welcomed representatives from 4H Ontario into our booth, a mutually benecial tradition we hope to continue. The COFS continues to be a Mandate - To raise the prole of mutual insurance.MARKETING COMMITTEE REPORTChair, Kevin Inglis, Howick Mutual2023 Committee Members Deb Van Eyk (Lambton), Tim Wade (Westminster), Kristine Duench (Dumfries),Julie McIntosh (South Easthope), John Taylor (OMIA), Lisa Hunter (OMIA)bcminsurance.combcminsurance.comPremiums stay where they do the most good — in your community.With mutuals, premiums stay in the community, employing neighbours, supporting the local economy and giving back. We invest in local projects and support what matters most to our policyholders. We’ve been buying local for generations, and community spirit has been part of our style for more than 160 years. You’re more than a policyholder, you have a voice. Let it be heard.When you buy a policy, you automatically become a member of the company. That means you have a voice in important issues like electing a board of directors. We’re people-centred, not call-centred.You will always be treated like a person, not a number. Whenever you have a question or a claim, someone you know and trust will be right there to help. It’s not the way every insurance company does business, but it is the mutual way.1003 Niagara Street, Welland, ON L3C 1M5 Phone: 905-735-1234 Toll Free: 1-800-263-0494 The feeling is mutual.Experience the mutual difference for your commercial insurance needs.Commercial InsuranceHome Systems ProtectionA Special Kind of Coverage Enhancementfrom Axiom Mutual Insurance CompanyCanadian homes are now smarter and better equipped, and as they continue to progress, so do the complexity and value of the systems required to keep you safe and co mfortable. Home Systems Protection covers direct physical d amage to “covered equipment” caused by a sudden and accidental mechanical or electr ical breakdown, or electronic circuitry impairment to covered equip ment. What is electronic circuitry impairment? Sensitive microelectronics are now the brains that drive heating, cooling, entertainment and connected home systems. An electronic circuitr y impairment (ECI) can happen suddenly, due to, for example, vibration, or a short caused by a microscopic dust par ticle. When an ECI occurs, it can cause an object to simply stop working, without any evidence of physical damage. Proper ty coverage requires proof of physical damage, which could leave you without coverage for repair or replacement caused by such tech nology failures. Most importantly, you can add this import ant coverage to your home insurance policy for just pennies a day.This is a summar y of coverages. For all coverages, terms, condit ions and exclusions, refer to the actual in surance policy.Home Systems Protection Insurance for a Growing Exposure www.lambtonmutual.com www.lambtonmutual.comPhone: 519-876-2304Toll Free: 1-800-561-41367873 Confederation Line, PO Box 520Watford, ON N0M 2S0Premiums stay where they do the most good — in your community. With us, premiums stay in the community, employing neighbours, supporting the local economy and giving back. We invest in local projects and support what matters most to our policyholders. We’ve been buying local for generations, and community spirit has been part of our style for more than 140 years. You’re more than a policyholder, you have a voice. Let it be heard. When you buy a policy, you automatically become a member of our company. That means you have a voice on important issues like electing a board of directors.We’re people-centred, not call-centred. You will always be treated like a person, not a number. Whenever you have a question or a claim, someone you know and trust will be right there to help. It’s not the way every insurance company does business, but it is the mutual way. There’s insurance, then there’s mutual insurance. Service Line CoverageProtect Yourself from Costly ExposuresUsborne & HibbertMutual Fire Insurance CompanyUsborne & HibbertMutual Fire Insurance Company507 Main Street, SouthExeter, Ontario N0M 1S1Telephone: (519) 235-0350 Fax: (519) 235-3623 Toll Free: 1-800-422-3996After Hours Claims: 1-877-235-0350IN CASE OF AN ACCIDENTusborneandhibbert.caDear Valued Policyholder,The Board of Directors of Lambton Mutual Insurance Company hereby formally announces the retirement of Rick Bebingh as Principal Agent of Bebingh Insurance Limited in Watford effective December 31, 2023. Rick entered the family business in 1989, and we extend our sincere thanks for his years of service to the policyholders of Watford and surrounding areas. He will be greatly missed by his many customers, colleagues, and friends. We offer our very best wishes for a happy, healthy retirement.Lambton Mutual is pleased to announce the appointment of V&T Insurance Inc. as the new Agency in Watford effective January 1, 2024. V&T Insurance Inc. is co-owned by Mikayla Verberne and Jennifer Timmermans. Bringing 23 years of combined experience and complementary skills in all areas of insurance, they are looking forward to welcoming both new and existing clients as they embark on this exciting opportunity.Mikayla and Jenn are passionate about building long-lasting relationships and believe clients should be given choice to tailor their insurance coverage. You can expect to receive the same excellent customer service you appreciated previously with Rick.Their ofce will be at the same location as Bebingh Insurance Limited at 5310 Nauvoo Road, Watford. Mikayla has already joined the team alongside Jenn, Bonnie, Mary Jane, and Sarah so please stop by their ofce to say hello or give them a call at 519-876-2538. To learn more about their story and background in the community, please read further on the back of this letter.Attention: Bebingh Insurance Limited Policyholder Sincerely, President, CEO | Lambton Mutual Insurance Co.www.LambtonMutual.com • 7873 Confederation Line, PO Box 520 Watford, ON N0M 2S0 1-800-263-3935www.htminsurance.ca185 Elgin St W, CobourgYour trusted local partner for 125 YearsWhat is Mutual Insurance?Discover the Mutual Difference. Visit ontariomutuals.caYou’re a member of your mutual insurance company.We’ve been around a very long time for a reason.Mutuals give back in a big way.Our surplus works for you.It’s easy to tune out when you hear the word insurance, but have you ever considered mutual insurance? There’s a real difference, and that difference matters.This means the company isn’t beholden to shareholders, because there aren’t any. You, the policyholder, are the primary focus. Every policyholder has a voice, and every policyholder benefits from the success of the company in a variety of ways.Our oldest mutual is over 160 years old. We’ve lasted because our model works. This is insurance for every day people. It was started by farmers who needed to protect each other from fire loss, and it stands today because the simple principle of neighbour helping neighbour holds true.Our mutuals are committed to supporting local youth groups, community events, charitable organizations, medical centres and more. Giving back is part of who we are.Because there are no shareholders expecting dividends, surplus dollars are used to benefit everyone, through smart investments, community giving and, occasionally through refunds to policyholders.Your local Home, Auto, Commercial, & Farm InsuranceHome Systems ProtectionFilling Property Policy Coverage GapsHome Systems Protection Insurance for a Growing Exposure Canadian homes are now smarter and better equipped. As they continue to progress, so do the complexity and value of the systems required to keep homeowners safe and comfortable. However, homeowner property policies do not cover most mechanical, electrical and heating breakdowns. Nor do they cover electronic circuitry impairment. What is electronic circuitry impairment? Sensitive microelectronics are now the brains that drive heating, cooling, entertainment and connected home systems. An electronic circuitry impairment (ECI) can happen suddenly, due to, for example, vibration, or a short caused by a microscopic dust particle. When an ECI occurs, it can cause an object to simply stop working, without any evidence of physical damage. Until now, property coverage has required proof of physical damage, which would have left insureds without coverage for repair or replacement caused by such technology failures. By packaging home systems protection in your homeowners policy, you can offer this important coverage for just pennies a day. This is a summar y of coverages. For all coverages, terms, condit ions and exclusions, refer to the actual in surance policy.It’s no secret that despite the best efforts of businesses across the country, cyber-crime is on the rise, and the impacts can be devastating.Our Cyber Suite insurance package offers a new way to combat the effects of cyber-crime on commercial operations. This package is comprehensive and can include coverages like:• Data Compromise Response Expenses;• Data Compromise Liability;• Computer Attack;• Cyber Extortion;• Network Security Liability;• Electronic Media Liability; and• Identity Recovery. Consider the loss examples on the next page to see how this comprehensive coverage responds*.*is is for illustrative purposes only. For a full explanation of the coverage, please refer to your policy or speak to your agent or broker.Introducing Our Cyber Suite ProgramCyber Loss Examples for Businesses

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT39must-attend event for farm producers and suppliers, and we look forward to exploring how we can amplify our efforts there.The International Plowing Match (IPM), of which we are a Presenting Partner, took place in Bowling Green, Dufferin County from September 19th to 23rd. Our ever-popular yardsticks were a big hit with visitors, who also enjoyed a photobooth and a variety of musical acts on the “Mutual Avenue Stage” and the “Ontario Mutuals Main Stage”. New this year were fresh Ontario apples from OMIA Director Dave Rutherford‘s own orchard. The Ontario Mutuals tent was host to 4-H Ontario and ve mutuals who presented their own company displays throughout the week.The 2024 IPM will take place in the rst week of October at the Lindsay Fairgrounds, Kawartha Lakes. As always, we will carefully consider our sponsorship approach to this longstanding show. Broker Conventions For the third year in a row, we provided sponsorship to the Young Brokers Conference, held in Niagara Falls in June. We also had the opportunity to facilitate an Ontario Mutuals trade show booth at this popular event with the help of member company participants.The IBAO’s annual Convention took place in Toronto on October 18th and 19th. We had an Ontario Mutuals trade show booth, hosted by a full roster of mutual participants, as well as an Ontario Mutuals hospitality suite hosted by eleven companies. This continues to be a popular exhibition and networking opportunity for the mutual community.Consumer Research Consumer research projects have been paused as we digest the information from the past few years. You can nd the 2020, 2021, and 2022 impact reports on omia.com. Hover over Member Resources and nd them under Marketing. Digital Marketing OMIA Marketing launched our rst 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, and we kept momentum going with an additional ve earlier this year. All videos can be found on the Ontario Mutuals YouTube channel as well as omia.com. Hover over Member Resources to see the heading Video Library under Marketing.We are encouraged by the view rate results during our campaign efforts as well as the positive reception from our mutual community. Our newest video, completed in the fall, highlights 4-H Ontario, an organization that has deep roots in our membership, and one that we’re proud to support. We will continue down the digital marketing path to increase general awareness of the Ontario Mutuals brand and messaging. Our rst project in 2024 will be to highlight the efforts of the Rural Ontario Institute.Key Sponsorships We continue to maintain relationships with key partners in the agricultural sector as part of our initiative to remain top of mind in this community. Ontario Mutuals, supports:• the Ontario Plowmen’s Association, and the Ontario Queen of the Furrow Competition• 4-H Ontario• the Rural Ontario Institute (ROI) and their Advanced Agricultural Leadership Program (AALP)• Farm and Food Care Ontario• the Ontario Soil and Crop Improvement Association• the Advancing Women in Agriculture Conference• the FarmSmart and Southwest Ag ConferencesOntario Mutuals continues to fund the Umbrella Project Awards which were created to recognize and

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT41Mandate - 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.PRODUCT STRATEGY COMMITTEE REPORTChair, Terry Knight, North Blenheim Mutual2023 Committee Members John Miller (Mennonite Mutual – Alberta), Pat Ryan (The Commonwell), Neil Shay (CTM), Jamie Ellis (PEI Mutual), Suanne Wettlaufer (South Easthope),Annette Dumbleton (Farm Mutual Re), Christine Meacher (Farm Mutual Re),Cynthia White (Farm Mutual Re), Jennifer Higuchi (OMIA), Susan Baker (OMIA)Providing member companies with the knowledge they need to inspect, sell, underwrite and adjust the inevitable claim are all part of the 360 degree 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, Jennifer Higuchi, Kip Moi, Christine Senior, Janet Schmidt, Nicole Hackney, Mandy Hetherington and staff from the Farm Mutual Re Underwriting, Loss Control, Reinsurance, and Claims departments. Member company staff provide input to the development process in a variety of ways, including making the initial inquiry and reviewing coverage forms and supporting documents as a check for clarity and practical use at the company level.Composition of the Committee The composition of the Product Strategy Committee is structured to provide an appreciation of member company perspectives from eastern and western Canada as well as Ontario, from companies whose distribution system is broker driven and those that are agent driven, vendor systems, and the points of view of those insurance professionals who look at insurance issues through a mix of underwriting, sales, and claims lenses. In April 2023, we were pleased to welcome Suanne Wettlaufer to this committee. Suanne’s keen eye and clear understanding of product, policyholder, and insurer risk contributes to our discussions. We thank her and South Easthope Mutual for sharing her time in our work for continuous improvement of our insurance products. A Pivotal Piece of the Development and Updating Process This 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 documents for member companies to use. We meet online monthly and have resumed our goal to meet twice a year in person. Each meeting includes a discussion of market issues involving both current and future looking topics, a review of the Action Items, a review of projects that OMIA staff believe are ready to roll out and a discussion of requests and suggestions about coverage documents that have come from member companies.We continue to evolve our oversight function so that we’re tracking progress on the projects that members have identied as having signicant importance to their business. We also contribute to updating existing coverage and reference documents, all while providing a member company’s eye view of insurance market issues and observation of the activities of our policyholders which may require a response.

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT44The Regulatory Review Committee is the key mutual 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 focuses on the regulation activity in solvency, market conduct, and governance. These requirements continue to evolve in complexity and increasingly reect international trends in nancial regulation.In 2023, FSRA continued to further ll out its regulatory structure and its relationship with stakeholders. This relationship is much more complex than had been the case with its predecessor the Financial Services Commission of Ontario. Simply put, FSRA is a bigger organization with greater capacity to regulate. In 2023, the committee continued to meet whenever possible with key FSRA working groups. We also provided a sounding board for OMIA staff who were involved with FSRA’s Technical or Strategic Advisory Committees. This committee is also a key resource for developing OMIA’s formal written responses on proposed changes to regulation.Ministry of Government and Consumer Services – Corporations Act In 2020, the pandemic created an environment where the Corporations Act, long overdue for updating, had to be amended on a temporary basis to allow for virtual meetings. This provided an opportunity for OMIA to discuss with the Ministry of Government and Consumer Services and the Ministry of Finance important changes that could be made to allow for exibility in the number of directors required for mutual boards. Mutual boards have always had to total between 6 and 15 directors with the board complement divisible by 3, leaving options of only 6,9, 12, or 15 directors. This restriction made governance planning and director transition problematic when trying to “right size” a board for cost and governance effectiveness and efciency. Having amendments adopted into an Act is a long and arduous process; however, the pandemic forced the Ministry of Government and Consumer Services to open the Act for modernization to allow electronic meetings of the members. OMIA used the opportunity to comment, both on meeting format and to reintroduce our earlier proposal to lift restrictions on board size. From 2020 onwards we continued to make submissions, created an impact analysis on burden reduction, and suggested wording for amendments to the Act.In the spring of 2023, the government passed Bill 91: Less Red Tape; Stronger Economy Act 2023. The passage of this Bill and subsequent proclamation has resulted in a modernized Corporations Act that allows electronic meetings and allows mutual insurers to determine the optimal number of board members for effective and cost-efcient governance. Mutual insurers can now create board complements between 6 and 15 directors to most effectively and cost efciently oversee the mutual. Mandate - To review regulatory issues that affect member companies.REGULATORY REVIEW COMMITTEE REPORTChair, Marg Torrance, HD Mutual2023 Committee Members John Stirk (Dufferin), Shawn Durnin (Axiom), Jeff Whiting (Ayr), Bryan Hicks (Trillium), John Taylor (OMIA), Jackie Roy (OMIA)

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT45Federal Privacy Regulation The Federal government continues to struggle with pulling together their proposed changes to Federal Privacy Law. A Bill read into parliament in June indicated it would break PIPEDA into three separate areas or acts:• Consumer Privacy• Articial Intelligence and Data• Personal Information and Data Protection TribunalThis will remain a difcult le for the Federal government to tie together coherently, however we are closely monitoring changes and following developments and we are hopeful any changes will be based on a graduated approach. There has been little progress by the government this year.Risk Based Supervisory Framework - Insurance (RBSF-I) The mutuals have had a unique solvency supervision relationship with the provincial regulator. This stems from the creation of the Fire Mutuals Guarantee Fund in the 1970s and the work done by the mutuals in developing tools to monitor the solvency of individual mutuals and at the mutual system itself. These tools have included the development of Early Warning Tests, the standardization of and education on P&C1 returns and Management Discussion Analysis Reports, and stress testing. Most importantly, it stems from the creation of the Financial Review Committee and subsequently the Financial Examination Committee. From the early 2000s the Financial Examination Committee (FEC) has closely monitored mutual solvency and reported to the regulator on an ongoing basis to optimize policyholder safety. The FEC grew out of the mutuals’ own Financial Review Committee (FRC) system and members of the FEC were also members of the FRC, providing a cost efcient and effective window on the solvency of each mutual for both the regulator and the Fire Mutual Guarantee Fund members. FSRA was established in 2019, and in early 2022, published their model for a new supervisory framework, the Risk Based Supervisory Framework- Insurance (RBSF-I). OMIA and members of the Fire Mutuals Guarantee Fund Trustee group, the Financial Review Committee, and the membership at large took part in a series of committee meetings with FSRA as they reviewed the general principles of the RBSF-I. In addition to meetings, OMIA and the FMGF made detailed submissions to FSRA expressing concerns with the potential to lose proportionality and cost efciency. Many member companies also made submissions to FSRA expressing concerns that the framework does not consider the transparency and customer focus embodied by small mutual insurers.The rst assessment of a member company under RBSF-I began in late 2022 and was completed in Q4 2023. OMIA and the FRC also worked in 2023 in assisting members in transitioning the submission of quarterly nancial data directly to FSRA. Member companies will also submit nancials to OMIA and OMIA will continue to support troubleshooting on reporting and adapting to some changes within P&C 1 requirements. This was especially important with IFRS-17 in 2023 and member companies have been very clear in conrming the value received in working collectively with OMIA in what can be an arduous process. As we head into 2024, we can expect further Guidance from FSRA on the full range of supervision. OMIA will continue to work with members on developing responses to regulatory requirements and ensuring that proportionality is maintained. Policyholder protection is the number one priority of all stakeholders, but cost and administrative burden must be carefully monitored and managed.Fair Treatment of Consumers – A FSRA Priority Area FSRA has explicitly identied the Fair Treatment of Consumers as a priority supervision area. In June 2023, FSRA stated that it was building “supervision capacity and market intelligence in the P&C sector.” This supervisory activity will have a signicant impact for insurers and covers a range of actions.This year FSRA completed a Home Insurance Fair Treatment of Consumer Review. (This had previously been called a Proactive Review of Residential Complaints.) This comprehensive survey included detailed data requests on items including the shelf

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT46life of claims, denials, proof of loss timelines, and complaints. This was a mandatory survey for those insurers selected but not all this data is collected by insurers and this aggregated data is not mandatory. This also came on the heels of the Annual Statement of Market Conduct, another signicant and mandatory survey. It will be important for FSRA to provide accountability and transparency as to the key results arising from this survey. Another FSRA initiative has been to examine automobile insurers to determine the extent to which they are structured to be compliant with the Fair Treatment of Consumers Guideline, as promoted by the Canadian Council of Insurance Regulators for the past several years. A member mutual was assessed beginning in 2022 and received the regulators report in 2023. This assessment required a signicant work effort and cost for the mutual to complete. The lessons learned from the assessment process and the reporting process ndings are being collaboratively shared to assist in meeting expectations across the mutual system, through OMIA forums and compliance roundtables. The generosity of the mutual in sharing their experience is much appreciated. In mid-2023, FSRA published its ndings of its multi-year “Take All Comers Thematic Review” on automobile insurance. A high-level summary of that exercise can be found in the Automobile Insurance Committee Report. Of benet to the mutuals is the willingness of FSRA’s Market Conduct Leadership Team to meet on a regular basis with the Regulatory Review Committee to share their priorities and planning. In late 2023, FSRA created the “Non-Auto P&C Insurance Technical Advisory Committee” for Market Conduct, which signals this as a priority item. FSRA Statement of Priorities Each year FSRA publishes its statement of priorities and invites feedback from all stakeholders. We provided a detailed response to FSRA’s Statement of Priorities in Q4 2023. FSRA also provides a business plan that sets out its expected budget. The OMIA response included details on the very signicant increase in regulatory fees absorbed by member companies over the past three years. The OMIA Compliance Roundtable and the ERM ForumThree years ago, the Compliance Roundtable was established to give mutuals an opportunity to discuss compliance issues and compare solutions to common problems. Our founding Roundtable Chair, Bryan Hicks retired from the Chair this year. His contributions are much appreciated. In addition to the Roundtable, an informal group, known as the ERM Forum, has met virtually to discuss issues specically relating to Enterprise Risk Management.The Broad Scope of Regulation in Ontario As we neared mid-year 2023, we took note of the high volume of consultations, information circulars, and guidance documents published by FSRA since 2020. The fast timeline on this publication schedule and the detail level of the documents was creating a challenge for mutual leaders and boards to track and monitor. Many of these publications from FSRA had also generated ofcial responses from OMIA, adding to the inventory. With that in mind, OMIA created a registry of FSRA publications material to mutuals and included the response, if any, provided by OMIA. This registry is maintained on a real-time basis and available to any member on the OMIA web site. Environmental, Social, and Governance (ESG) FactorsAll our mutuals are familiar with this topic, as it has been discussed at a high level at industry events and is covered frequently in the business media. There is a global movement to have businesses of all types formally report on their progress, or intentions, to meet international standards of corporate behaviour for each element of ESG. The Regulatory Review Committee has added this as a standing agenda item and, working with others in the mutual community, will assess how best to understand and respond to potentially complex regulatory disclosure requirements. Looking Ahead Regulatory oversight continues to increase in both scope and depth. OMIA will continue to communicate with the regulator on issues that matter most to mutuals.

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT48GROUP AAxiom | Howard | Kent & Essex | Lambton | Maple | West Elgin | Westminster | YarmouthMaple Mutual Insurance Company hosted the OMIA Group A Annual General Meeting at the Ken Houston Memorial Agricultural Centre in Dresden, Ontario on Thursday, November 23rd. Maple Mutual Director, Judy Cibulka welcomed all directors and staff.JP Gagnon and Ed Forbes were in attendance representing Farm Mutual Re; John Taylor and Neil Shay represented OMIA; and Whitney Burk of the Chatham-Kent Fire Department joined us as our guest speaker.Judy Cibulka chaired the meeting and the CEOs from each Group A mutual introduced new directors and staff. Each CEO also provided an update on their year to date to September 30th, with several companies reporting a challenging year due to severe weather claims. Group A Directors, Tracy Wintermute (OMIA) and Christine Van Daele (Farm Mutual Re) provided some historic context on Group Meetings, which date back to 1925. They also spoke to busy years at the OMIA and Farm Mutual Re board tables. OMIA Board Chair, Neil Shay, complimented CEOs on their reports and noted that Group A was not alone with their results. Neil shared that John Taylor was the 2023 winner of the Insurance Institute of Canada’s Established Leader Award. He went on to report on FSRA, ERM, emerging AI, the need for more data, auto, and rural homes. Neil thanked everyone for their support over the past year.OMIA President, John Taylor, spoke on what he believed to be areas of uncertainty that mutual directors were grappling with in the current environment. These included: • Supervisory Risk - FSRA • IFRS 17 and new ratios and reporting metrics • Weather events/climate change risk • Reputational risk • Insurance and reinsurance risk • ESG risk • Market conduct risk • Uncertainty in the economy John went on to discuss the concept of a model governance framework for mutuals, OMIA’s new by-law, and telematics in 2024. Farm Mutual Re Board Chair, Ed Forbes spoke about the open search for a Farm Mutual Re Director, FSRA’s engagement with Farm Mutual Re, and a new three- year strategic plan. He noted that the Farm Mutual Re Board is a lot of committee work and shared his appreciation for the directors from Group A mutuals on the board, Kevin Konecny, Erroll Butler, and Christine Van Daele. Farm Mutual Re President & CEO, JP Gagnon, provided insight on the key elements of the new strategic plan, the FSRA review process, and the reinsurance market and renewal process.Deb Van Eyk, CAMIC Director, presented slides from CAMIC highlighting their strategic plan, governance, committees, member value, and their initiatives.Whitney Burk of Chatham Kent-Fire Department provided a presentation to the group of their CHiRP home alarm check up program and re safety.Judy Cibulka thanked everyone for attending the Group A meeting. A wine and cheese social hour was held after the meeting was adjourned. All attendees were also welcomed to tour Maple Mutual’s striking new ofce.Bill Gibson of Axiom Mutual invited all members to the 2024 meeting with date and location to be determined.

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT49GROUP BAyr Farmers | BCM | Brant | CTM | Cayuga | Dumfries | Erie | NovaThe Group B Annual Meeting was held on November 21st, at the Dunnville Community Lifespan Centre. There were seventy-ve in attendance. Participants were randomly assigned to tables to promote interaction between companies and enhance learning opportunities. Erie Mutual Director, Mark Moesker welcomed everyone to the meeting and acknowledged the Group B Executive Planning Committee for the day’s program. Mark acknowledged the representatives from OMIA, Farm Mutual Re, and CAMIC, including Group B representatives Jill Chuli, Farm Mutual Re Director, and Steve Quinn, OMIA Director. Each company CEO introduced their company representatives and respective highlights for 2023. Glenn Pick, President & CEO of Nova Mutual, acting as Group B Treasurer, provided an update on the Group B treasury funds and noted that a cash call of $1,500 would be requested from each Group B mutual in 2024. Neil Shay, OMIA Chair, recognized OMIA President John Taylor’s contributions and shared that John had recently won the Established Leader Award from the Insurance Institute of Canada. The Established Leader award recognizes CIP Society members who have achieved sustained success through their demonstrated leadership qualities and the signicant impact they have made on their organizations, their communities, and the industry. John Taylor spoke about the many challenges facing mutuals and directors of small nancial institutions. He listed the Risk Based Solvency Framework, IFRS 17, climate change, reinsurance costs, economic uncertainty and several other challenges. John pointed out that the mutuals have been able to successfully manage challenges in their history and will continue to do so going forward. Ed Forbes, Farm Mutual Re Chair, updated the group on four items: recruitment of new directors, FSRA’s review, strategic focus, and catastrophe response planning.JP Gagnon, Farm Mutual Re President & CEO, spoke to the key strategies of Farm Mutual Re and shared information about the tight reinsurance market. Lambton Mutual’s Deb Van Eyk, CAMIC Ontario Director, brought greetings from CAMIC and reviewed CAMIC’s role and key initiatives. Brad Neal, VP Business Development & Strategic Partnerships, Insurance Institute, presented information on the changing workforce from the Insurance Institute’s 2022 Demographics Research Study. This was very informative and relevant to many of the mutuals who had experienced retention and recruiting challenges during the past year. Cheryl Byrne, Consultant, facilitated breakout group discussions on four challenges: increasing reinsurance costs, changing workplace dynamics, mutual amalgamations, and protability challenges. Each group was randomly assigned an issue to discuss and were also asked to identify what issue they felt was their biggest concern, whether one of the four, or not. The groups reported back their ndings to the room. While many of the issues were seen as signicant, the principal theme was that mutuals are not alone and should continue to work with each other to meet these challenges. In concluding the meeting, Mark Moesker thanked all attendees and presenters. Nova Mutual Director, Eric Harrop thanked Mark and Erie Mutual and, on behalf of Nova Mutual, welcomed the opportunity to be the 2024 Group B Meeting host.

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT50GROUP CMcKillop | Middlesex | North Blenheim | South Easthope | Tradition | Usborne & Hibbert | West WawanoshOMIA Group C companies met at the Arden Park Hotel in Stratford, Ontario on Friday, November 24th.Usborne & Hibbert Mutual hosted the event and attendees were welcomed by Chair, Tom Feeney and President & CEO, Shelagh Cleary.There were over 70 people in attendance.Each company presented their third quarter nancial results, projects, challenges, and an end of year outlook. Recognition was given to North Blenheim Mutual’s Terry Knight who is retiring from the OMIA board in March 2024. The Chair of the Group’s Nominating Committee, Tom Feeney announced that Lloyd McGillvray, from West Wawanosh Mutual met the qualications and was selected to represent Group C.Presentations were provided by the following people, Jeff Consitt, CAMIC, Terry Knight, Group C Representative on the OMIA Board, Neil Shay, OMIA Chair, John Taylor, OMIA President, Teresa Martin, Group C representative on the Farm Mutual Re Board, Ed Forbes, Farm Mutual Re Chair, and JP Gagnon, Farm Mutual Re President & CEO. Each representative gave updates on successes and challenges experienced over the past year, as well as plans for the coming year.Amy Butler, CFO, Farm Mutual Re presented on Changes to IFRS 17 Financials. This was a high-level presentation of the changes we can expect to see this year with nancial statements. She spoke of the various account groupings and the discounting of claims.Paul Kovacs from the Institute of Catastrophic Loss Reduction (ICLR) spoke about the organization and how it works with the insurance industry and Western University. He provided information on hurricane clips and how municipalities can endorse the use of them in new residential buildings. He also spoke about the importance of backow valves to prevent water backing up and the cost of water losses to the insurance industry.After a lunch break, Tony Ngo and Eric Walker from Collectivde spoke about mergers and acquisitions (M&A) within the Canadian insurance industry. Tony spoke about Collectivde and how it is supporting the mutual insurance industry through broker partners. Eric went out to describe the market factors and the unprecedented M&A activity in the Canadian insurance industry.There was an opportunity for open questions and discussions before the meeting concluded.The 2024 meeting will be hosted by West Wawanosh Mutual on Friday, November 22nd, 2024, at the Arden Park Hotel, Stratford.

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT51GROUP DAlgoma | Edge | Germania | Halwell | Howick | Heartland (Associate) | Peel | TrilliumThe Group D Annual Meeting took place at the OMIA and Farm Mutual Re ofce on Pinebush Road in Cambridge on November 20th.Edge Mutual hosted the meeting of approximately 60 attendees, most of whom attended in person. Video streaming was also provided for remote participants.Edge Mutual Chair, Richard Wright, welcomed the attendees. It was noted that no OMIA or Farm Mutual Re Director elections were required this year.Mike Fortuna (Group D treasurer, and CFO of Edge Mutual) provided an update on group nances. Individual Group D CEOs provided nancial and operational updates as at October 2023 YTD.OMIA Updates Neil Shay, CEO & General Manager of Caradoc Townsend Mutual Insurance Company, and Chair of the OMIA Board provided an OMIA update. Neil spoke on the following:He discussed the ve strategic pillars for OMIA, Solvency and Compliance, Promoting Mutuality, Education and Resource Centre, Group and Afnity Services, and Data Strategy.John Taylor, OMIA President spoke briey on the following topics:• RBSF-I• Regulators wanting to get to know your board better.• Board and CEO relationships• IFRS-17• Key Regulatory Guidance • Climate Change• Economic or Financial risks• ESG• Market conduct risk • Economic conditions • Model governance framework• OMIA bylawFarm Mutual Re Updates Ed Forbes, CEO Dufferin Mutual and Chair of Farm Mutual Re, gave an update on progress for the following four topics that were addressed at the P&M:1. Open search for directors2. Engagement with FSRA3. Three-year Strategic Plan 4. Catastrophic Losses Response JP Gagnon, President & CEO, Farm Mutual Re focused on their strategic plan for 2024 to 2026. JP covered their three strategic imperatives: 1. Gaining member insights2. Growing broker distribution segment3. Building ResiliencyCAMIC Updates Tracy MacDonald, CEO, Trillium, and CAMIC Director provided an update. The focus of the presentation was on CAMIC’s Strategic Plan, Governance, Committees, Member Value, and Current Initiatives, including both new and under development.Tracy also provided an opportunity for questions.There were ve breakout sessions. Each attendee asked to attend at least three sessions. These sessions and the facilitator of each are shown below:• FSRA - Patrice Rouse, General Counsel & Corporate Secretary, Farm Mutual Re• Governance - John Taylor, President, OMIA• M&A - Tony Ngo, President & CEO, Collectivde Insurance Group Inc.• ESG - Tracy McDonald, CEO, Trillium, and CAMIC Director• Reinsurance - JP Gagnon, President & CEO, Farm Mutual Re Dufferin Mutual will host the 2024 Group D meeting. The date is yet to be determined.

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT54Ontario Mutual Insurance AssociationFinancial StatementsYear Ended December 31, 20237 Union Street EastWaterloo, Ontario N2J 1B5Telephone (519) 579-5520Fax (519) 570-3611www.csd.cpaINDEPENDENT AUDITOR'S REPORTTo the Directors ofOntario Mutual Insurance AssociationOpinionWe have audited the financial statements ofOntario Mutual Insurance Association (the Association),which comprise the statement of financial position as atDecember 31, 2023, and the changes ofmembers' surplus, operations and cash flows for the year then ended, and notes to the financialstatements, including a summary of significant accounting policies.In our opinion, the accompanying financial statements present fairly, in all material respects, the financialposition of the Association as atDecember 31, 2023, and the results of its operations and its cash flowsfor the year then ended in accordance with Canadian accounting standards for not-for-profitorganizations.Basis for OpinionWe conducted our audit in accordance with Canadian generally accepted auditing standards. Ourresponsibilities under those standards are further described in the Auditor's Responsibilities for the Auditof the Financial Statements section of our report. We are independent of the Association in accordancewith the ethical requirements that are relevant to our audit of the financial statements in Canada, and wehave fulfilled our other ethical responsibilities in accordance with those requirements. We believe thatthe 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 StatementsManagement is responsible for the preparation and fair presentation of the financial statements inaccordance with Canadian accounting standards for not-for-profit organizations, and for such internalcontrol as management determines is necessary to enable the preparation of financial statements thatare free from material misstatement, whether due to fraud or error.In preparing the financial statements, management is responsible for assessing the Association's abilityto continue as a going concern, disclosing, as applicable, matters relating to going concern and using thegoing concern basis of accounting unless management either intends to liquidate the Association or tocease operations, or has no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Association's financial reportingprocess.ContinuesProudly serving the business community since 19721Independent Auditor's Report to the Directors ofOntario Mutual Insurance Association (Continued)Auditor's Responsibilities for the Audit of the Financial StatementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole arefree from material misstatement, whether due to fraud or error, and to issue an auditor’s report thatincludes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that anaudit conducted in accordance with Canadian generally accepted auditing standards will always detect amaterial misstatement when it exists. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected to influence the economicdecisions of users taken on the basis of these financial statements. As part of an audit in accordancewith Canadian generally accepted auditing standards, we exercise professional judgment and maintainprofessional skepticism throughout the audit. We also:· Identify and assess the risks of material misstatement of the financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain auditevidence that is sufficient and appropriate to provide a basis for our opinion. The risk of notdetecting a material misstatement resulting from fraud is higher than for one resulting from error,as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal control.· Obtain an understanding of internal control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances, but not for the purpose of expressing anopinion on the effectiveness of the Association’s internal control.· Evaluate the appropriateness of accounting policies used and the reasonableness of accountingestimates and related disclosures made by management.· Conclude on the appropriateness of management’s use of the going concern basis of accountingand, based on the audit evidence obtained, whether a material uncertainty exists related toevents or conditions that may cast significant doubt on the Association’s ability to continue as agoing concern. If we conclude that a material uncertainty exists, we are required to drawattention in our auditor’s report to the related disclosures in the financial statements or, if suchdisclosures are inadequate, to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor’s report. However, future events or conditionsmay cause the Association to cease to continue as a going concern.· Evaluate the overall presentation, structure and content of the financial statements, including thedisclosures, and whether the financial statements represent the underlying transactions andevents in a manner that achieves fair presentation.We communicate with those charged with governance regarding, among other matters, the plannedscope and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.Waterloo, OntarioCHARTERED PROFESSIONAL ACCOUNTANTSFebruary 14, 2024LICENSED PUBLIC ACCOUNTANTS2

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT55Independent Auditor's Report to the Directors ofOntario Mutual Insurance Association (Continued)Auditor's Responsibilities for the Audit of the Financial StatementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole arefree from material misstatement, whether due to fraud or error, and to issue an auditor’s report thatincludes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that anaudit conducted in accordance with Canadian generally accepted auditing standards will always detect amaterial misstatement when it exists. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected to influence the economicdecisions of users taken on the basis of these financial statements. As part of an audit in accordancewith Canadian generally accepted auditing standards, we exercise professional judgment and maintainprofessional skepticism throughout the audit. We also:· Identify and assess the risks of material misstatement of the financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain auditevidence that is sufficient and appropriate to provide a basis for our opinion. The risk of notdetecting a material misstatement resulting from fraud is higher than for one resulting from error,as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal control.· Obtain an understanding of internal control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances, but not for the purpose of expressing anopinion on the effectiveness of the Association’s internal control.· Evaluate the appropriateness of accounting policies used and the reasonableness of accountingestimates and related disclosures made by management.· Conclude on the appropriateness of management’s use of the going concern basis of accountingand, based on the audit evidence obtained, whether a material uncertainty exists related toevents or conditions that may cast significant doubt on the Association’s ability to continue as agoing concern. If we conclude that a material uncertainty exists, we are required to drawattention in our auditor’s report to the related disclosures in the financial statements or, if suchdisclosures are inadequate, to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor’s report. However, future events or conditionsmay cause the Association to cease to continue as a going concern.· Evaluate the overall presentation, structure and content of the financial statements, including thedisclosures, and whether the financial statements represent the underlying transactions andevents in a manner that achieves fair presentation.We communicate with those charged with governance regarding, among other matters, the plannedscope and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.Waterloo, OntarioCHARTERED PROFESSIONAL ACCOUNTANTSFebruary 14, 2024LICENSED PUBLIC ACCOUNTANTS2

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT57e accompanying notes form an integral part of these nancial statements.ONTARIO MUTUAL INSURANCE ASSOCIATIONStatement of Financial Position and Changes in Members' SurplusDecember 31, 202320232022ASSETSCURRENTCash and cash equivalents$3,148,768$3,448,472Accounts receivable - Members2,364,1492,334,920- Other63,66550,979Inventory22,28313,757Prepaid expenses448,415309,1256,047,2806,157,253CAPITAL (Note 4)64,631136,466$ 6,111,911 $ 6,293,719LIABILITIES AND MEMBERS' SURPLUSCURRENTAccounts payable$469,147$445,853Government remittances163,080148,598ASO claim reserve (Note 5)566,7801,009,939Pension contributions payable1,327,7211,382,5312,526,7282,986,921MEMBERS' SURPLUSOpening Surplus3,306,7983,480,199Current Year Surplus278,385(173,401)Year End Surplus3,585,1833,306,798$ 6,111,911 $ 6,293,719The accompanying notes form an integral part of these financial statements3ONTARIO MUTUAL INSURANCE ASSOCIATIONStatement of OperationsDecember 31, 20232023 2022REVENUESAssociation Fees $ 2,119,369 $ 1,747,574Interest 143,550 53,547Sundry 2,091 1,862Group BenefitsEmployee Benefit Receipts $ 9,377,289 $ 8,768,278Employee Benefit Fees & Direct Expenses (22,178) (12,475)Employee Benefit Premiums (8,609,886)(8,052,200)745,225 703,603Company Benefit Receipts 3,256,501 3,005,021Company Benefit Premiums (3,166,970)(2,918,371)89,531 86,650Trusteed Pension Receipts 18,990,421 18,268,284Trusteed Pension Remittances (18,990,421)(18,268,284)- 834,756 - 790,253ConventionsRevenue 484,451 400,829Direct Expenses (355,532)128,919 (306,700) 94,129EducationRevenue 849,104 621,057Direct Expenses (219,182)629,922 (154,933) 466,124Forms & MarketingSales 162,128 157,141Cost of Sales (145,241)16,887 (145,283) 11,858StatisticsRevenue 2,026,176 1,976,627Direct Expenses (821,614)1,204,562 (745,305) 1,231,3225,080,056 4,396,669EXPENDITURESSalaries, Benefits and Pension Costs (Note 6) 3,279,387 3,012,035Promotional Activities 414,167 419,479Occupancy Costs 223,112 199,115Industry Subscriber Fees 127,483 122,498Programming & Software 123,863 116,881Office Insurance 93,256 87,747Amortization 75,283 84,626Committees 62,147 69,692Board Per Diems 57,690 54,608Non-Recoverable G.S.T./H.S.T. 56,414 59,583Board Travel 56,357 64,742Conference Attendance 54,820 63,519Travel & Mileage 51,471 47,947General Office 49,701 48,651Workshops and Training 32,212 34,171Professional Fees 27,538 61,376Communication Costs 16,77023,4004,801,671 4,570,070EXCESS OF REVENUES OVER EXPENDITURES $ 278,385 $ (173,401)The accompanying notes form an integral part of these financial statements4

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2023 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT60Ontario Mutual Insurance AssociationNotes to Financial StatementsDecember 31, 20233. SIGNIFICANT ACCOUNTING POLICIES (Continued)Capital assetsCapital assets are stated at cost less accumulated amortization. Capital assets are amortized over theirestimated useful lives at the following rates and methods:Furniture and equipment 20% declining balance methodComputer equipment 33% straightline methodCash and cash equivalentsThe Association considers cash and cash equivalents to be cash deposited in financial institutions andguaranteed investment certificates which have a maturity date of less than 12 months.Financial InstrumentsFinancial 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 andlosses reported in income. All other financial instruments are reported at amortized cost, and tested forimpairment at each reporting date. Transaction costs on the acquisition, sale, or issue of financialinstruments are expensed when incurred.Measurement uncertaintyCertain amounts in the financial statements are subject to measurement uncertainty and are based onthe 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 benefitpension costs, accrued pension obligations and pension plan assets.4. CAPITAL20232022Cost Accumulated Net book Net bookamortization value valueFurniture and equipment471,895421,94449,95158,991Computer759,502744,82214,68077,4751,231,397 1,166,766 64,631 136,4667Ontario Mutual Insurance AssociationNotes to Financial StatementsDecember 31, 20235. ASO CLAIM RESERVEOn January 1, 2004, the company entered into an "Administrative Service Only" self-insured agreementwith 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 arebeing held in trust for this plan:20232022Ontario Mutual Insurance Association566,7801,009,939Sunlife Assurance Company24,770(31,018)Bank of Montreal Nesbitt Burns345,381329,318Bank of Montreal199,686196,6081,136,617 1,504,847As atDecember 31, 2023,$566,780 is payable to the plan.6. PENSION PLAN COSTSThe Association is a member of a benefit group pension plan which it sponsors on behalf of itsmembers. Employees hired before December 31, 2016 are members of a defined benefit pension wherepension benefits are based on length of service and final average earnings. Employees hired afterJanuary 1, 2017 are enrolled in the defined contribution pension plan.An Actuarial Valuation of the plan as of December 31, 2021 revealed the plan was in a Going Concernsurplus position. The Solvency Position was above the required 85% at that time, therefore no specialpayments were required as a result of the valuation. The Association contributed an additional $273,765to the Plan during 2023 for normal pension benefit contributions.The next valuation is scheduled to take place December 31, 2024 however the Association's Board ofDirectors will continue to monitor the position of the plan and may elect to call a valuation prior to thatdate.8

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