Sunday, December 6, 2015

(No.296) Joe Belth's "MEMOIR" about life insurance


"A review of Joe Belth's "THE INSURANCE FORUM:A Memoir" 
is Part 3 of the RickardsRead series
about how to buy life insurance"

by Alastair Rickard


I was for years employed in the Canadian life insurance business and at the same time I was an unlikely but persistent critic of it. I was also dismissive of certain journalists, analysts and self-appointed 'expert critics' of the insurance industry, its products and those who distributed them.

Why?

Too many of those in these categories did not (and still do not) understand many of the realities of the life insurance business. Neither in my experience did too many of senior decision-makers in the industry, some of whom were astonishingly ignorant of certain industry fundamentals like agency distribution, an ignorance often compounded by a patronizingly arrogant attitude to those who actually sold a company's core products..

As for industry critics: far too many were and are so far below the bar of expertise set by Professor Joseph Belth during his 40 years as founding editor of The Insurance Forum in the U.S. that reaching it would require jet travel. Yet the industry needs and benefits from informed criticism and commentary.

This brings me back to Joe Belth. He is the person I have long regarded as the ablest and best informed critic and analyst the modern North American life insurance industry has had. Belth is the gold standard against which I have measured myself and others.

(I wrote a column a couple of years ago when Joe marked the 40th anniversary of The Insurance Forum; see RickardsRead No. 250, "The magnificent Joseph Belth: a model for insurance critics", posted Nov. 7, 2013).    

Professor Belth has recently written and published a book of great value to any reader who wishes to understand core issues involving the life insurance business and its products in North America: "The Insurance Forum:  A Memoir". The volume deserves to be a vade-mecum for anyone, including consumers. with a serious interest in the  life insurance business (see below for details of publication and purchase).

In his "Memoir" Joe covers his life and influences but most of the book is comprised of his analysis of and reflections about more than two dozen major aspects of the modern North American life insurance business from (for example) the demutalization wave of life insurance companies through the secondary market for the buying and selling of  inforce life insurance policies to executive compensation in life companies and life insurance polucy replacement. All of the analysis and comment is informed by a truly impressive understanding of the business and its impact on consumers.

This is a book that ought to be read by every insurance regulator (whose understanding of the business they regulate is in my experience too often inadequate), and by agents/brokers as well as those industry analysts and self-styled 'expert critics' who purport to offer consumers and investors informed opinions on a business about which their views are frequently not just inadequate but defective.

Indeed, based on my experience as both a company officer and an editor (The Canadian Journal of Life Insurance) observing, working with and exchanging views with life insurance industry people at various levels, I would if it were possible make Joe Belth's recent "Memoir" required reading in the industry.

The sad reality is that many insurance company executives know less (or little more) about many of the fundamentals of the business in which they work than certain self-promoting 'expert critics' I have encountered through the years.

I have long believed that a major reason for Joe Belth's understanding of and effectiveness as a critic of the life insurance business, its products and their distribution is rooted in the fact that, before becoming involved in various capacities with education about insurance, Joe actually worked for a time as a life insurance agent. He learned first hand important realities of the life insurance business -- pro and con.

Over the years I have written thousands of words for both public and corporate consumption about a fundamental function of the business: selling stuff to people, most of whom (even in the internet age) will not take the initiative to purchase. Hence the historical and continuing centrality of the active, prospecting agency system of distribution in taking a core product -- individual life insurance as well as various other financial products -- to consumers and convincing them to purchase it to meet a need, a product still at the base of a proper financial planning pyramid.

I have never made this fundamental point as elegantly or as succinctly as Joe Belth does in the conclusion to his "Memoir". His prose is never obscure or less than understandable

Among other observations he concludes that one of the fundamental obstacles faced by the life insurance business has been and is "that the purchase of life insurance requires consumers to think about the unpleasant subject of their deaths and take action rather than procrastinate. As it is often said: 'life insurance is sold not bought'.

"The significance of this obstacle," he continues,"is that life insurnace companies must hire and train life insurance agents to seek out customers ... [and] persuade their customers to take action rather than wait until next year. I call the latter the critical but difficult anti-procrastination function of life insurrance agents.

"The further significance of this obstacle is that a life insurance company must provide the agent with  a strong financial incentive to engage in a difficult and often discouraging type of work. ... Most people die without wills because no one is compensated for performing the anti-procrastination function."

I recommend Joe Belth's book highly, including to existing or potential life insurance consumers who
seek to understand whether what they are being told involving this core product is understandable and reliable
                                                              ***

The hard cover book "The Insurance Forum: A Memoir" by Joseph A. Belth is available direct from The Insurance Forum at P.O.Box 245, Ellettsville, Indiana 47429. The price is $50 (U.S. funds).  Shipping and handling is included.

For ordering details go to www.theinsuranceforum.com and use the link to Memoirs.  


*************************

email: Alastair.Rickard@sympatico.ca

blog: www.RickardsRead.com

previous columns and blog archive:
to access previous columns and this blog's archive, the links to which
are listed chronologically in the margin beside each column
as it appears on the RickardsRead website, go to
a recent column and use the links.

to set a "Google Alert" for RickardsRead columns
in order to receive notice automatically of new columns
as they are posted to RickardsRead.com, go to
www.Google.com/alert

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Thursday, September 24, 2015

(No.295) "E.L. Doctorow, J.K.Rowling, Charles Bukowski, Dennis Lehane & Lee Child": some end of summer reading"


"Some enjoyable end of summer reading in five novels: the forgotten, the underestimated, the unusual, the surprising and the addictive ---  by E.L. Doctorow, J.K. Rowling, Charles Bukowski, Dennis Lehane and Lee Child"

by Alastair Rickard

The recent death at 84 of the American literary novelist E.L. Doctorow generated numerous reflections and tributes by peers and critics and readers. Many people have read one or more of Doctorow's best-known novels such as "Ragtime" and "Billy Bathgate".

I was prompted to read Doctorow's first novel from 1960 (still in print) "Welcome To Hard Times". Ostensibly it is a western tale set in a small town ca. the 1880s in an unnamed territory not far from the Dakotas.

In fact this tale is really a literary work of fiction as far removed from the typical novels in the American genre of 'westerns' like those by Louis L'Amour as one can imagine. It is a dark tale of the negative effect on the small settlement and its leading characters of a truly sociopathic individual.

The novel was made into a movie Doctorow understandably disliked but Hollywood then as now was unlikely to produce a version of a complex novel pleasing to its author. "Welcome To Hard Times" is worth reading if only to see the point at which Doctorow's novel writing started.

Charles Bukowski was a German born (1920) poet and novelist who came to the U.S. at the age of three. He was raised in Los Angeles and lived there for fifty years. He died in San Pedro California in 1994.

During his often tough and rough life he wrote 45 books of poetry and prose including 5 novels. He gradually developed -- and still has -- a loyal rather than a "best selling" readership.

I recently read his 1982 autobiographical novel "Ham On Rye"(still in print). The novel follows the hardscrabble youth in LA of his alter ego in the book -- Henry Chinaski -- from childhood through to the post-Pearl Harbor American entry into WWII. It is not only an absorbing story but conveys much feeling and impact in its straightforward prose.

Dennis Lehane, a very successful American novelist, may be best known for "Mystic River" which was turned into a successful movie directed by Clint Eastwood.

"Live By Night"(2012) is a tale that unfolds in Boston, Tampa Florida and Cuba during the 1920s and early 1930s. It follows the criminal activity and prison time of Joe Coughlin, the son of a senior but corrupt Boston cop, who makes his money and his reputation in organized crime. It is very well told, a novel that is hard to put down

Lehane continues Coughlin's story in "World Gone By" (2015), a novel set in Tampa and Cuba in the 1940s  For maximum enjoyment the two novels should be read in the order in which they were published. They are very interesting tales.

When J.K. Rowling, the hugely successful creator of the Harry Potter novels, wrote her first non-Potter novel, one for adults called "The Casual Vacancy" (2012), it was as if some book reviewers had been waiting eagerly for the chance to bring down a literary notch or two the world's most commercially successful novelist. Indeed Rowling came to believe that she would receive unbiased reviews from the literary paparazzi for a non-Potter novel written for adults only if critics did not know they were reviewing a novel she had written.

Hence the use by Rowling of the pseudonym Robert Galbraith for the first novel "The Cuckoo's Calling"(her second 'adult' novel after the "The Casual Vacancy") in what by now has turned out to be a series featuring a London private detective and one-legged ex-soldier named Cormoran Strike.

Her identity as its author was leaked but not before a number of critics had given 'Galbraith's first novel' favourable reviews. As I indicated previously in RickardsRead I regard Rowling's detective novels as very good indeed.

"The Casual Vacancy" title refers to a legal/administrative reference to the death of a sitting member of a parish council. The novel's plot is kicked off by and subsequently intertwined with the unexpected death of a 'progressive' member of the parish council of the small English town of Pagford  in contemporary Britain.

Rowling wrote a very good novel indeed, a penetrating story of the various conflicts which surface after the councillor's death among a cast of characters, conflicts related to age, class, gender, politics, incomes and race.  The novel has elements that remind me of both Charles Dickens and Jane Austen.

Lee Child is an Englishman and a former director who worked in British television. He is today a famous New York City-based novelist and best selling American writer.

His current fame derives from the huge commercial success of a series of novels featuring an adventure-seeking ex-U.S. Army military police officer named Jack Reacher, a physically fit and imposing man who is violence prone and wanders the country carrying not much more than his toothbrush.

Child has just put out his latest Reacher novel, the twentieth, titled "Make Me" (2015). The Reacher novels are very successful and, while hardly great fiction, they are addictive for many people including me. The publication of a new Reacher novel is a guaranteed fix for addicts. For us "Make Me" has a plot as absorbing and action-filled as any Reacher fan could desire.

******************************

email: Alastair.Rickard@sympatico.ca

blog: www.RickardsRead.com

previous columns & blog archive:
to access previous columns and this blog's archive, the links to which
are listed chronologically in the margin beside each column
as it appears on the RickardsRead website, go to
a recent column and use the links

to set a "Google alert" for RickardsRead columns
in order to receive notice automatically of new columns
as they are posted to RickardsRead.com, go to
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Saturday, September 5, 2015

(No.294) Part 3 of "Two Macdonalds & several other crime novelists"


Part 3 of "Two Macdonalds (Ross and John D.) and
several other crime novelists"

by Alastair Rickard

In my two previous columns (Nos. 292 amd 293) I offered some comments about new or republished novels I have enjoyed by a number of current writers as well as the accumulated works of the late Ross Macdonald and John D. Macdonald.

This column concludes the series.

                                                 *********

The American author Joseph Kanon is a talented writer. His novels are set in different cities and mainly but not entirely at or shortly after the end of world War II. The novels do not repeat characters or plot lines.

"The Prodigal Spy" (1999) takes place in Washington and Prague and involves an American insider who spied for the Russians. "The Alibi" (2009) involves an American officer in Europe at war's end and his involvement with a Jewish-Italian survivor of war crimes. Both are well written -- as one expects from Kanon.

There is hardly a more reliable writer when it comes to each of his novels ascending the American bestseller lists than Michael Connelly. A former journalist, Connelly is the real deal: a certified producer of 'top 10' novels. His longest running character is the Los Angeles Police Dept. detective Harry Bosch. Because his Bosch novels are not frozen in time Connelly reached a point chronologically when Bosch retired.

However, like Ian Rankin's Detective Inspector John Rebus in Edinburgh who was also retired by his creator, Bosch came out of retirement. "The Burning Room" (2014) is the latest published in the series with another (the 20th,"The Crossing") scheduled for publication in November this year.

Vermont state detective Joe Gunther is the central character in more than two dozen crime novels by Archer Mayor. Gunther is surrounded by a continuing cast of police and non-police characters (especially female friends), a pattern continued in "Proof Positive" (2014), the 25th in the series. The next Joe Gunther novel "The Company She kept" will be out this month.

Lee Child is, like Michael Connelly, the creator of a character -- Jack Reacher -- whose appearance in another new story guarantees that novel bestseller standing. Child, an Englishman who once worked in British television, created an American character who is not only an ex-military policeman, large and very tough, but also a wanderer around the U.S. thus facilitating his encountering of all manner of eccentric people and circumstances.

"Personal" (2014) features rather more than usual of Reacher's biographical details but is just as violent as well as difficult for a reader to put down. The 18 Reacher novels are very successful for good reason: they are absorbing. The next Reacher novel, "Make Me", will be out in Sept. this year.

The American novelist John Sandford has created two long running characters: Lucas Davenport, a senior detective in a Minnesota state policy agency and Virgil Flowers, one of his subordinates, For the most part their respectives cases do not overlap.

There are 25 "Prey" novels featuring Davenport; all his stories have "Prey" in the title: and 8 so far featuring Virgil Flowers. The latest from Sandford are "Gathering Prey" (2015) and (with Flowers) "Deadline" (2014). They are well plotted and told in a fashion as interesting as their predecessors in the two series.

Like Joseph Kanon novels, the historical espionage genre of fiction by Alan Furst, a particular favourite of mine, form a series of novels without continuing characters. In "Midnight in Europe" (2014) Furst again shows that he is a master at setting up the mood and creating the atmosphere of Europe in the years between the two world wars and leading up to WWII.

Finally Rebecca Cantrell, like Furst an American writer who has lived in Europe, began the story of her lead character Hannah Vogel in pre-war Europe in "A Trace of Smoke" (2009). It is the first in a series of novels and a good start, one that has been followed by three more.

Vogel is revealed to be a newspaper crime beat reporter living a hand-to-mouth existence in 1931 Berlin who unintentionally becomes involved with the affairs of a senior Nazi. The story embraces aspects of both the Nazi rise to power in Germany and the corresponding decline in the pre-1933
Berlin/Weimar lifestyles since depicted in books like Christopher Isherwood's "The Berlin Stories"and various movies and plays such as "Cabaret".

*****************************

email: Alastair.Rickard@sympatico.ca

blog: www.RickardsRead.com

previous columns and blog archive:
to access previous columns and this blog's archive, the links to which
are listed chronologically in the margin beside each column
as it appears on the RickardsRead website, go to
a recent column and use the links

to set a "Google alert" for RickardsRead columns
in order to receive notice automatically of new columns
as they are posted to RickardsRead.com, go to
www.Google.com/alert

******************************* 


/Weimar era

Sunday, August 23, 2015

(No.293) Part 2 of "Two Macdonalds & several other crime novelists"


Part 2 of "Two Macdonalds (Ross and John D) and
several other crime novelists' series"

by Alastair Rickard

In my previous column (No.292) I began some comments about new or republished novels I have enjoyed by a number of current writers as well as the accumulated works of novelists Ross Macdonald and John D. MacDonald.

This column continues those comments.

                                                               *********

Randy Wayne White is, like C.J. Box, an American writer I regard as a professional novelist. Like most novelists who earn their livings from writing so-called genre fiction they are unlikely to receive the critical literary applause their writing deserves.

Years ago White created a character named Doc Ford, a former CIA operative who now appears to spend his time as a marine biologist while involving himself with various often dangerous matters having nothing to do with biology, marine or otherwise.

Ford lives on Sanibel Island off Florida's gulf coast. In "Cuba Straits"(2015) the latest (the 22nd) in the Doc Ford series has an interesting plot premise. Doc becomes involved in an infiltration of Communist Cuba and a search for items and persons involving the Castro brothers and the beginning of the Cuban Revolution.

"The Man From Berlin" (2013) and "The Pale House"(2014) are the first two novels in a series by the English writer Luke McCallin. Both are set in Yugoslavia towards the end of World War II during the last stages of the German military effort there. The central and continuing character is an army intelligence officer Captain Gregor Reinhardt.

As a character Reinhardt reminds me of Philip Kerr's sometime Berlin detective and army officer Bernie Gunther. There are distinct parallels involving Reinhardt and Gunther. Not the least of the similarities is the fact that they are more sympathetic characters to readers because they neither embrace belief in Nazi ideology nor voluntary participation in its military-related crimes.

McCallin's first two Reinhardt novels are absorbing reading and while I look forward to reading future novels in the series they are not yet at the same standard as the ten volumes (thus far) in  Kerr's Gunther series (especially the initial three novels republished in 1993 as the "Berlin Noir" trilogy).

David Downing is another English writer of non-fiction (history, politics, biography) as well as fiction but whose career began decades ago. His fiction was for years of no particular note until he began what turned into a six novel series set in Germany -- mainly Berlin -- before, during and at the end of World War II. Each of the six in the series has as its title the name of a different Berlin station.

The first of the "Station" series in 2007 was "Zoo Station", the last in 2013 "Masaryk Station". The "Station" novels follow the life and espionage activities of Jack Russell, an Anglo-American journalist reporting from Berlin for American newspapers until the U.S. entered the war at the end of 1941 after which he continued his involvement in Germany but no longer as a reporter.

The "Station" series is well done. The novels are informed by a sound understanding of the history, locale and contemporary atmosphere of Hitler's Berlin, the Third Reich and life before, during and at war's end.

Downing's fiction has come a considerable distance from what he describes as "my first real novel" in 1987: the recently republished Second World War spy novel "The Red Eagles". While an interesting plot it was clearly the harbinger of better work to come.

I have recently read the first novel in what seems destined to be a series of what could be labelled as 'desert noir' detective/crime fiction: "Bad Country"(2014). It is actually what its writer, C.B. McKenzie, says is his tenth novel but the first to find a publisher.

It is set in remote southwest Arizona 'indian country' as well as Tucson.. It follows a former rodeo cowboy, a native American named Rodeo Grace Garnet. Retired from the rodeo circuit he is a private investigator of sorts who lives in the desert. He makes a living -- but just -- from piecework as a bounty hunter, warrant server and divorce snoop.

This novel involves Garnet in a couple of tough cases and several nasty situations. It is a dark but promising beginning for this character operating in a different setting, both geographical and cultural. A detective series with a difference.

TO BE CONTINUED
                                                                     ****
Correction to previous column (no.292):
In the final sentence of my comments on John D. MacDonald's Travis McGee series I inadvertently referred to it as the Lew Archer series (i.e., the series of novels written by Ross Macdonald, also reviewed in the same column).  

********************

email: Alastair.Rickard@sympatico.ca

blog: www.RickardsRead.com

previous columns & blog archive:
to access previous columns and this blog's archive. the links to which
are listed chronologically in the margin beside each column
as it appears on the RickardsRead website, go to
a recent column and use the links.

to set a "Google alert" for RickardsRead columns
in order to receive notice automatically of new columns
as they are posted to RickardsRead.com, go to
www.Google/com/alert

*************************  


    

Saturday, August 8, 2015

(No.292) "Two Macdonalds (Ross & John D.) & several other crime novelists"


"Two Macdonalds (Ross and John D.) and several other 

successful writers of crime novel series"


by Alastair Rickard

One of the pleasures for many readers of fiction is to discover and follow a character one finds interesting, a character who appears and reappears like bees in amber in a writer's work, novel after novel.

I follow as they appear the new novels in series written by a number of current writers as well as working my way through the accumulated works of novelists like Ross Macdonald and John D. MacDonald.

I have devoted this and succeeding columns to several novelists whose series I enjoy.

                                                                **********

Ross Macdonald (1915-83) was the principal pseudonym adopted by Kenneth Millar, an American raised in Canada -- mainly in Winnipeg and Kitchener -- who became a leading crime novelist in the U.S. He earned fame from the 1950s on as the creator of a private detective he called Lew Archer whose milieu was California/L.A. 'noir'.

Beginning in 1949 Macdonald/Millar wrote until 1976 a series of 18 Archer novels plus 3 short story collections featuring Archer. They brought to the genre in the United States a new realism combined with intricate mystery narratives.

The Library of America is a non-profit publisher dedicated to preserving (and using higher quality hard cover book editions to do so) the American literary heritage. Its aim is to keep in print "America's best and most significant writing".

It has just published a four novel selection in a single volume of Ross Macdonald's Archer novels: "Ross Macdonald: Four Novels of the 1950s" (2015). It is scheduled to publish in April 2016 a second selection "Ross Macdonald: Three Novels of the Early 1960s".

Ross Macdonald is sometimes confused with his contemporary: American crime novelist John D. MacDonald (1916-86). The latter MacDonald wrote 21 crime/detective novels from 1964 to 1985 featuring a Florida "salvage consultant" named Travis McGee.

While McGee eschewed calling himself a private detective, he was one in the hard-boiled fictional American tradition. The McGee novels are as entertaining reading as the Archer series. Indeed both the Archer and McGee novels easily match if not exceed the overrated 'detective fiction' of the now lionized American novelists identified with California 'noir' Dashiell Hammett and Raymond Chandler.

John D. Macdonald's Travis McGee series novels are still available in one form or another including a selected 5 novel compilation: " John D. Macdonald: Five Complete Travis McGee Novels" (1985).

C.J. Box's "Stone Cold" (2014) is the 14th in a series in which the lead character, Joe Pickett, works as a Wyoming state game warden. However his career has gone well beyond his ostensible duties to involve a great deal of rather violent detective work often relating to special assignments from the state's governor. The most recent in the Pickett novels, "Stone Cold", is one of the best among those I have read thus far in this series.

Martin Walker, an English journalist who has spent much of his career in the United States, now divides his time between Washington and the Dordogne region in southwest France. Several years ago he, like many journalists do, decided to try his hand at fiction. Most such non-ficition writers do not become successful novelists but Walker has.

He created a character named Bruno Courreges, a former French soldier who saw active service in Bosnia and elsewhere, left the military and became the chief of police in St.Denis, a small town in the Dordogne region. He gets involved regularly in cases and activity with national implications going well beyond the duties of his official role.

The most recent in the Bruno series, the 6th and 7th, are "Resistance Man" (2013) and "The Children Return" (2014).

TO BE CONTINUED

*****************************

email: Alastair.Rickard@sympatico.ca

blog: www.RickardsRead.com

previous columns & blog archive:
to access previous columns and this blog's archive, the links to which
are listed chronologically in the margin beside each column
as it appears on the RickardsRead.com website, go to
a recent column and use the links

to set a "Google alert" for RickardsRead columns
in order to receive notice automatically  of new columns
as they are posted to RickardsRead.com, go to
www.Google.com/alert

*******************************



  

Sunday, July 19, 2015

(No.291) "The Aga Khan Museum in Toronto"


"The Aga Khan and his new museum in Toronto: 

a new cultural asset for Ontario"

by Alastair Rickard

Prince Karim has been since 1957, when he was just 20, the 4th Aga Khan and the 49th Imam of Nizari Ismailism -- a denomination within Shia Islam. He is the hereditary spritual leader of the world's 20-30 million Ismaili Muslims who reside in various countries including Canada. His grandfather chose him as his successor thus skipping his son and Karim's father Prince Aly Khan.

The Aga Khan, now age 78, comes from a fascinating family. His father's first wife (and Karim's mother) was an English aristocrat. His stepmother ( but for only 4 years) was the American film star Rita Hayworth.

The 4th Aga Khan is divorced, carries a British passport but lives at Aiglemont (a large estate in northern France), controls billions of dollars in personal and Ismaili assets and seems to be as far from the sort of religiosity the public associates these days with Imams as it is possible to be.

There is a significant Ismaili community in Canada particularly Toronto. Over the years the Aga Khan developed a rather positive attitude to Canada. He was awarded honorary Canadian citizenship in 2004 and even addresssed this country's Parliament in 2014.

This favourable feeling for Canada doubtless helped prompt him to pick Canada as a place to build a museum. It is located on a 17 acre site on Wynford Drive in Toronto (near Eglinton and the Don Valley Parkway)  part of which was owned by Shell and part formerly the headquarters of the Bata Shoe empire.

As an initiative of the Aga Khan Trust for Culture he established an Ismaili religious/community centre and adjacent to it a museum of Islamic arts and culture: the Aga Khan Museum. Both are enhanced by being surrounded and complemented by the Aga Khan Park. The Museum opened in September of 2014 .

The architecture of both the Museum designed by the Japanese architect Fumihiko Maki and the Ismaili Centre (by Indian architect Charles Correa) is what I characterize as starkly modern and hence suitably trendy and fashionable for the second decade of the 21st century.

The surrounding park, open dawn to dusk, is also 'ultra modern' in appearance, meant to be a 21st century interpretation of a garden from Muslim civilizations. Designed by Lebanese landscape architect Vladimir Djurovic the Park's most striking feature is the five large reflecting pools with rows of serviceberry trees.

The interior of the Museum is impressive. The ground floor features theater space, an interior courtyard atrium, an adjacent cafe and the Diwan -- a restaurant featuring food inspired by the Middle East, North Africa and India.

The principal feature is a large L-shaped gallery in which are displayed items from the Museums' 1000 piece collection covering Muslim civilization from the 8th century to the modern day.The artifacts featured include musical and scientific instruments, pottery and metal work, paintings and carpets. It is a strikingly effective gallery.

The temporary special exhibitions the Museum hosts use gallery space on the second floor. Currently and until Oct. 18, 2015 there is an exhibition drawing mainly from works held by the Metropolitan Museum of Art in New York: "A Thirst For Richness in Capets from the East and Paintings from the West".

It pairs mid-17th century Dutch paintings which include eastern carpets in the paintings with actual carpets produced in the Near and Far East during the same period. Different areas of origin for the carpets featured different colours and designs. It is not a large exhibition but it is an interesting one.

These days "unique" is a much over-used and misused adjective. The Aga Khan Museum and Park qualifies, in a Canadian context, for that word's appropriate use.

For details of the Aga Khan Museum and the special exhibtion, go to:

agakhanmuseum.org

****************************

email: Alastair.Rickard@sympatico.ca

blog: www.RickardsRead.com

previous columns & blog archive:
to access pevious columns and this blog's archive, the links to which
are listed chronologically in the margin beside each column
as it appears on the RickardsRead.com website, go to
a recent column and use the links

to set a "Google Alert" for RickardsRead columns
in order to receive notice automatically of new columns
as they are posted to RickardsRead.com, go to
www.Google.com/alert

******************************

Monday, June 29, 2015

(No.290) "Gormless punditry & electoral reform"


"Gormless punditry and the need for electoral
reform in Canada"

by Alastair Rickard


Federal Liberal Party leader Justin Trudeau reently announced some planks in the party's platform for the Oct. 2015 parliamentary election.

In these columns I have deplored the negative impact of Canada's 'first-past-the-post' (FPTP) electoral system (see, for example, RickardsRead columns Nos. 151 & 156). When there are more than two political parties contesting the election the Westminster FPTP system regularly -- but not always -- produces results in which a party wins a majority of seats and forms a government but lacks a majority of voter support.

If the Liberals form the next federal government Trudeau promises to form a parliamentary committee to examine various possible changes to our system and the government will then implement electoral change within 18 months.

One is entitled to be sceptical about the likelihood of electoral reform coming to pass although both the NDP and the Green Party are also pledged to support it.

The Charest Liberal government in Quebec, after losing the 1998 election to the PQ (48 seats vs. 76) even though they received more votes (43.55% vs 42.87), came into office (so I was told by an insider in the premier's office) determined to reform the FPTP parliamentary system in Quebec. For reasons I will not get into here both Liberal government interest in and activity on this file gradually dissipated.

It is naive to expect Canadian media to step off their well marked and politically predictable paths in their reporting and commentary. I would have been surprised for example if, following the 2011 federal election, most of the major corporate media in Canada had treated the Conservatives winning a majority of seats (but less than 40% of the votes) as if the Tories had achieved something other than a "popular mandate".

This sort of codswallop can be insidious. Is it surprising that such common media usage can come to embrace a fundamental falsehood: i.e., a majority of seats based on a minority of votes becomes 'a popular mandate for a government elected by Canadians'?

While I remain more than a little sceptical about how likely it is that reform will end up being enacted post-2015 federal election my belief that it is needed remains undiminshed. This brings me to the matter of negative reaction to the recent Liberal pledge of electoral reform. Konrad Yakabuski, one of the Toronto Globe and Mail's regular columnists, provided a good example.

Yakabuski produced (June 18) a fine illustration of the sort of jejeune thinking that regularly forms part of a predictable negative reaction to calls for electoral reform in Canada, a system the shortcomings of which are directly connected to much voter dissatisfaction and apathy.  However it should be noted that two days later the Globe's consistently best columnist, Jeffrey Simpson, addressed the same issue with his customary sophistication and nuance.

Yakabuski posed the following questions (apparently he viewed them as rhetorical questions):

"can anyone," he wrote,"argue that the 'wrong' party formed the government in Ontario or Ottawa? That our main opposition parties are underrepresented [sic] in the Ontario Legislature or Ottawa?"

The answer, if one is interested in the facts delineating the electoral results of the system Yakabuski thinks should remain intact, is "yes" -- one can so argue very easily based on facts.

In the last federal election (2011) the Conservatives won a decisive majority of seats in the House of Commons  (166) based on 39.6% of the vote. The two leading opposition parties (NDP and Liberal) won a shade less than half the total votes cast (49.5%) but received 137 seats between them. Might that be viewed with some reason as "underrepresentation" of the 60.4% of the voters who refused to support the majority government?

Or what about the 2014 Ontario election, one we are apparently (according to Mr. Yakabuski) to accept did not produce a result in which the opposition was "underrepresented" by the result?

The re-elected majority Liberal government won 48 seats in the Ontario legislature based on only 38.7% of the vote while the two major opposition parties got the electoral support of 55.1% of the voting public in the province.

This result enabled too much of the usual sort of post-election 'media group think' in which too many pundits babbled away about the surprising "mandate" the returning Liberal government received from the Ontario electorate. Conveniently ignored of course was the fact that more than 60% of that electorate voted against the government. Again, some popular mandate that is.

But let's not ignore the results of the May 5, 2015 Alberta provincial election. Various 'analysts' were quick to voice astonishment about how the politically right-of-centre Alberta electorate had suddenly and surprisingly moved almost en masse to support for the left-of-centre NDP. Amazing!

Actually the Alberta result was not nearly as amazing as many pundits made it sound if one looks more carefully at the actual details of the election results.

In an election with 5 parties competing for votes, 2 major opposition parties -- the PCs and the Wildrose, both right of centre parties -- received a majority of the votes (52%) while the NDP won just a shade above 40%. Yet under our Westminster FPTP system the NDP took a majority of seats (54) while the two major opposition parties won only 31 based on their majority of the votes cast. Any "underrepresentation" there?

Finally, those who resist meaningful change to the FPTP system we received from the Mother of Parliaments in Westminster should pay more than passing attention to how well or poorly the system worked in the recent UK parliamentary election.

For example: the Conservatives won a majority in the Commons based on 37% of the vote. UKIP (the UK Independence Party) won 14.1% of the vote (mostly in England), came second in 120 constituencies and got just 1 seat in the Commons.

Or how about Nicola Sturgeon's Scottish National Party (SNP) taking 56 of Scotland's seats in Westminster based on 50% of the votes cast by Scots with the other 5 parties winning only 3 Scottish seats in the Commons [sic] based on their half of the popular vote. "Underrepresentaion" is more than hinted at by half the vote producing 3 of 59 seats.

Those who apparently think that such electoral results produced by the FPTP system suggest a healthy democracy have a rather different idea than I do of what constitutes both good health and democracy. Setting up non sequitur straw men (as Yakabuski does) in order to knock them down in a lame attempt to rebut arguments in favour of FPTP is unconvincing.

Nor does reform of the FPTP system have to mean choosing only a system of proportional representation. There are various electoral system changes that would improve the democratic bone fides of the current system, employed either singly or in combination. For example:  a mixed system of FPTP and proportional representation; preferential ballots; even run-off elections.

Rick Salutin, a Toronto writer and political thinker, has a long public record of thinking about issues and doing so unimpeded by concerns about what may or may not find agreement in the mainstream media or elsewhere.  "We now live," he wrote back in 2011 following the federal election," in a permanent state you could call the tyranny of the minority. You could also call it the tragedy of the majority. ... Everyone played by the rules of the game, but it's a stretch to call that game democracy."

I agree.

**********************

email: Alastair.Rickard@sympatico.ca

blog: www.RickardsRead.com

previous columns & blog archive:
to access previous columns and this blog's archive, the links to which
are listed chronologically in the margin beside each column
as it appears on the RickardsRead.com website, go to
a recent column and use the links

to set a "Google alert" for RickardsRead columns
in order to receive automatic notice of new columns
as they are posted to RickardsRead.com, go to
www.Google.com/alert

*************************

Monday, June 22, 2015

(289) "Economical Mutual Insurance: still playing silly buggers?"


"Economical Mutual Insurance: still playing silly buggers?"

by Alastair Rickard


RickardsRead columns Nos. 284, 285 & 286 (""Economical Insurance Co. & the draft regime for P & C demutualization", parts 1-3) involved comments on and suggestions for amendments to the draft federal regulations that will govern the demutualization/conversion process of Canadian federally regulated mutual property and casualty (P & C) insurance companies like the Economical Mutual Insurance Co. of Waterloo, Ontario which have both 'mutual and non-mutual' policyholders. The draft regulations were published for public comment on Feb.28 this year.

I have received inquiries about whether I thought changes had been or were being made to the draft regulations as the result of comments submitted on the draft regulstions to the Dept. of Finance. I have received nothing directly from Finance in this connection except for acknowledgement of my submissions to Finance on the draft regulations. As for what has happened vis-a-vis the draft regulations I have heard nothing reliable enough to record here.

Questions abound. For example: when will the P & C regulations (with any amendments) be made effective?

If federal Finance Minister Joe Oliver who now faces a serious October election challenge in his downtown Toronto riding is even half as politically astute as his predecessor the late Jim Flaherty he will ensure that these regulations affecting potentially millions of P & C stakeholders (and which are certain to raise complaints and concerns from various quarters) do not become publicly official -- at the earliest -- until after the federal election.

Why? Because there is no net political upside for Oliver or the Conservative government from these regulations, only potential negatives given the approaching election.

On June 24 Economical Mutual will hold its annual meeting in Kitchener, Ontario. Those readers who have followed the Economical/demutualization issues through the more than a dozen RickardsRead columns I have devoted to the subject will recall that having to deal with this can of worms was forced upon the federal government by the Economical Mutual insider group deciding to request to demutualize the company, i.e., to convert it to a stock company.

In fact this process was at root prompted by the fantasy shared by the fewer than 1,000 of Economical's "voting" policyholders:   that they could force the demutualization of the company and share among themselves the $1+ billion in company equity and do so to the exclusion of the company's more than 1 million regular policyholders.

Economical annual meetings have not, since the announcement of the intent to demutualize in December 2010, provided much useful insight as senior management and board -- on behalf of the insider group to which they mostly belong -- played silly buggers with their demutualization fantasy.

As I have noted in more recent commentary this fantasy is now so sharply circumscribed, even by the P & C regulations in the draft form we have seen, that their appearance has doubtless diminished the insider group's enthusiasm for demutualization but also may perhaps shape or at least influence Economical's actual response to the regulations and the process once implemented in final form.

The company's annual meeting this week might even provide a reliable hint or two of senior management and board views about the future. Or maybe not.

                                                                           *****

In my two most recent RickardsRead columns (Nos. 287 & 288): Parts 1 & 2 of "McCarry, Kanon and other enjoyable reading" two among the novels I recommended were written by Joseph Kanon.

Since then I have read two more of Kanon's novels, all of which are historical thrillers set in various world cities at or just after the end of the Second World War: "The Good German" is set in the devastated Berlin of 1945-46 with an American war correspondent as th chief character; "Stardust" is a story that plays out in Los Angeles and its movie industry in the early post-war period and the nascent American anti-communist hysteria which later reached a zenith of sorts with Senator Joe McCarthy.

I recomment both these novels as good reading and I am part way through reading another Kanon novel set in Venice in the immediate post-war period. It is titled "The Alibi" and is truly absorbing.

************************

email: Alastair.Rickard@sympatico.ca

blog: www.RickardsRead.com

previous columns & blog archive:
to access previous columns and this blog's archive, the links to which
are listed chronologically in the margin beside each column
as it appears on the RickardsRead.com website, go to
a recent column and use the links

to set a "Google alert" for RickardsRead columns
in order to receive notice automatically of new columns
as they are posted to RickardsRead.com, go to
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Wednesday, May 27, 2015

(No.288) "Part 2 of some enjoyable reading"


"Part 2 of some recommendations for enjoyable reading"

by Alastair Rickard

In my previous RickardsRead column (No.287) I began providing a list of fiction that have read recently. I did not find them all to be of equal value as enjoyable reading but I did find them all to be worthwhile.

In this second instalment of these brief notes on (mostly) recently published fiction I have provided some further recommendations for your attention.

                                                                     *********

Regular readers of this column will know of my fondness for several novelists. Among then is the Scot Philip Kerr. His series of novels in which the lead character is the German cop/private detective Bernie Gunther and his 'adventures' before, during and after World War II is for me irresistible reading.

"The Lady From Zagreb", the 10th in the Gunther novels, is set mid-war. At the direction of the Reich's propaganda minister Joseph Goebbels Gunther is sent on a mission that takes him from war torn Berlin to Switzerland and Croatia.

For me this novel, well-researched like all of Kerr's work,  does not provide quite the same level of enjoyment as did the gold standard provided by the first three Gunther novels (available as a trilogy entitled "Berlin Noir") but this latest novel in the series is still a rewarding read.

Loren D. Estleman is a professional novelist who lives in Michigan. Among his more than 70 novels are 22 in a detective series featuring former Detroit cop and now private detective Amos Walker.

While the setting is the depressed (and depressing) contemporary Detroit area Walker is a throwback not so often seen in crime fiction these days, a sort of Philip Marlowe character who navigates 'hard-boiled' mysteries but in in an environment that would seem like Mars to Raymond Chandler.

Estleman is a genuine professional writer and his award-winning novels, whether a throwback to an older style or not, are a treat to read. The latest two novels in the Walker series, both published in 2014, are "Don't Look For Me" and "You Know Who Killed Me".

Richard Price is an established New York-based novelist. For some reason his latest novel "The Whites" appears as "Richard Price writing as Harry Brandt". The focus of the book is a former hot shot New York City street cop named Billy Graves who, after a highly publicized accidental shooting, has been content to be on a career back shelf for years.

"Whites" is a sort of cop speak reference to suspects that detectives were unable to charge and convict but whose guilt was certain. Graves has such a "white" as do each of the members of Graves' group of former colleagues from 20 years ago.

Old cases of his and theirs haunt his life as does an event from his wife's teenage years.

The plot is absorbing and the writing superior.

The fourth novel featuring Spanish police detective Max Camara is set in his hometown of Valencia. The author of "Blood Med" is Jason Webster, an Englishman who really knows both contemporary Spain and the country's history. His stories have a verisimilitude that is a great strength of each of the Camara novels.

Webster's plots are inventive and frequently touch on the influence on the novel's characters of events in the Spanish civil war of the 1930s. As a character Camara reminds me of  Ian Rankin's Edinburgh D.I. John Rebus -- and that is high praise.

"World Gone By" is Dennis Lehane's 12th novel. He is a genuine star of American bestseller lists. These are not necessarily places to locate rewarding new fiction but Lehane's latest is a novel that is difficult to put down, so well told is the story.

It has an interesting plot involving certain members of a Florida-based organized crime family and their activity and rivalries in Florida and Cuba during a particularly interesting time: World War II. Lehane is a very accomplished storyteller.

Peter Robinson is an Englishman who divides his time between Toronto and Yorkshire. "Abbatoir Blues" is the 22nd novel in a series featuring the Yorkshire detective Alan Banks, now a D.C.I.

Robinson is an accomplished writer to whom I was introduced (literally and figuratively) some years ago by my wife Pat. He is one of her favourite novelists. His success through the years is based on genuine talent as this latest Banks novel illustrates yet again.

**************************

email: Alastair.Rickard@sympatico.ca

blog: www.RickardsRead.com

previous columns & blog archive:
to access previous columns and this blog's archive, the links to which
are listed chronologically in the margin beside each column
as it appears on the RickardsRead.com website, go to
a recent column and use the links

to set a "Google alert" for RickardsRead columns
in order to receive automatic notice of new columns
as they are posted to RickardsRead.com, go to
www.Google.com/alert

***************************




Tuesday, May 26, 2015

(No.287)"McCarry, Kanon & other enjoyable reading"


"Novels by Charles McCarry, Joseph Kanon and other writers
who provide enjoyable reading"

by Alastair Rickard

Over the years some RickardsRead columns have been devoted to books I have enjoyed reading and consider sufficiently worthwhile to recommend to readers.

It should be noted that in these columns I have not taken the time or effort to write reviews of books I regard as not worth recommending. Indeed I disqualify myself from writing  -- at least in this forum -- so-called literary criticism, what the English writer Cyril Connolly once described as the thankless task of drowning other people's kittens.

It's not that I don't benefit from regular reading of negative as well as positive book reviews, the former an invaluable aid to avoiding the wasting of one's time. Depending on the reviewer I very often can pick up indications of books I am likely to enjoy -- and many of them do turn out to be enjoyable; others not.

These days, when literally thousands of novels annually cascade into the marketplace -- many of them closer to what can be called typing than to writing while many others are merely trendy but pretentious dross, I value the opinions of reviewers. I welcome assistance in compiling a reading list in an era when so many novels contain more promise than achievement, more prospect of reading enjoyment than actual pleasure.

With that in mind I once again use this column and the next one to share some books I have read recently. I did not find them all of equal value as enjoyable reading but I found them worthwhile. For that reason I draw them to your attention. Most are recently published.

Depending on readers' particular tastes in fiction some may share my favourable opinions; doubtless others will not.

                                                                  ****

"The Winter Family" by Clifford Jackman (2015) is a just published first novel by a young Canadian lawyer. It is set in the American civil war and frontier during a period running from the 1860s to the 1890s. It tracks the activities and relationships of the members of a gang of outlaws, the so-called Winter Family, during a changing west.

The novel is as dark in tone as the period's unromantic history. It reminds me of another recent novel set in Oregon and California of the 1850s also by a young Canadian novelist, the award-winning Patrick deWitt,  "The Sisters Brothers" (2011). Both novels are violent but not gratuitously so and are fascinating tales.

"Istanbul Passage" and "Leaving Berlin" are the two most recent novels by the superb American writer  Joseph Kanon. All his novels have been set in different cities in the years soon after the end of the Second World War. His superior plots and writing have been likened to what would be created by a combination of John LeCarre and Graham Greene.

These two espionage novels are marked by complexity and suspense set against well-researched historical backgrounds. They feature superior writing and believable plots.

Charle McCarry is a former American intelligence operative in the field who later turned to fiction. He has not been prolific in the writing of novels over the years but what he has produced is very good indeed. Among novelists who have produced 'espionage' thrillers and spy stories he ranks very highly indeed.

Those of McCarry's intermittent novels involving members of the Hubbard-Christopher clan of American intelligence operatives range through the period from the 1930s to the present day. They are stunningly effective stories and he is expert at plotting that covers multiple characters who appear and reappear over long periods. McCarry's prose is as elegant and pleasing to read as Kanon's.

Read and enjoy for example McCarry's "The Old Boys", "Christopher's Ghosts", "The Last Supper" and "Second Sight".

[TO BE CONTINUED]

**********************

email: Alastair.Rickard@sympatico.ca

blog: www.RickardsRead.com

previous columns & blog archive:
to access previous columns and this blog's archive, the links to which
are listed chronologically in the margin beside each column
as it appears on the RickardsRead.com website, go to
a recent column and use the links

to set a "Google alert' for RickardsRead columns
in order to receive automatic notice of  new clumns
as they are posted to RickardsRead.com, go to
www.Google.com/alert

***********************



Sunday, April 12, 2015

(No.286) "Part 3 -- Economical Insurance Co. & the draft regime for P & C demutualization"


"Part 3 -- The Economical Insurance Co. of 
Waterloo, Ontario and the new draft regulations for the
demutualization of federally regulated property and
casualty insurance companies in Canada"

by Alastair Rickard

This series of columns on RickardsRead.com has as its focus the proposed federal regulations to govern the demutualization of property and casualty (P & C) insurance companies having both voting/'mutual' and non-voting policyholders.

Part 1 (column No. 284 posted March 15, 2015) included some of my comments on this subject but featured as its core particularly cogent and well-informed comments by Claude Gingras, a lawyer with very considerable direct involvement with mutuality and a mutual insurance company as Vice-President and General Counsel of the Mutual Life Assurance Co. of Canada and later as an advisor in the Dept. of Finance in Ottawa.

Part 2 in the series (column No. 285 posted March 19, 2015) was comprised of my further comments and criticisms about both the draft P & C demutualization regulatory regime and the company (or rather the coterie of insiders who control Economical Insurance Co.)  responsible for the federal government having to develop the proposed regime.

In this column, Part 3, I am sharing two informed reactions to Part 2 of this series (No.285) to which I have added some more of my comments at the conclusion of this column.

                                                         *************

I am sharing first the views of an American professor of insurance studies who wrote to observe that
"with the exception of a few rare cases I have always admired Canada’s regulators.  They seem to know their job of making sure that [insurance] companies are financially sound and well-run and that consumers are protected.  However, the extent to which the draft demutualization regulations fall short truly is breathtaking.

"This case makes it clear that mutual insurance companies with both voting and non-voting policyholders have outlasted their usefulness, whatever it may have been at one time.  If a company is a mutual, all policyholders should have voting rights.  Regulators should establish a process for phasing out the current system that allows second class policyholders."

                                                                   ***
Claude Gingras, followed up his previous comments on RickardsRead [ I have added highlighted emphasis for certain points] :

"Thank you for Part 2 of your comments. They are not only well put but go at the root of what is wrong with these proposed regulations for P&C demutualization. They attempt to give a varnish of credibility to what is a major flaw in the federal insurance legislation that allows federally incorporated P&C mutual companies to establish a clubbish style of governance while enjoying the privilege of selling insurance to the unsuspecting Canadian public.

"Yes indeed, it’s a mystery as to why the Harper government decided to cater to the managements of the few companies that made unrestrained use of the voting loophole in respect of P&C mutuals in the Insurance Companies Act, rather than plugging that stupid loophole of which the federal Dept. of Finance and OSFI [the Office of the Superintendent of Financial Institutions] have been aware for many years.

"If it needs to be said: like you I too never had a policy from Economical, or Gore Mutual for that matter. My interest in this is different.

"Having spent my whole career in insurance and most of it in a mutual insurance company, I acquired the solid conviction that mutuality, contractually and also in its corporate form, is the best way to service the insurance needs of the Canadian population. In some countries, corporate mutuality is by far the prevailing structure for insurance but here in Canada it is in steep decline.

"Whose fault is it?  Certainly not competition (ref. The Northwestern Mutual Life Insurance Company in the US or the big mutuals in France). In part it may be because of the greed of management envious of the benefit packages enjoyed by their colleagues in stock companies, including in banks; but mostly because of the callous treatment over many decades of the rights and interests of policyholders by the Canadian government, including Finance, OSFI and the Senate. This sad story should be told one day.

"Meanwhile, back to the proposed federal regulations for P & C demutualization of companies with both voting and non-voting policyholders.

"You are right to point out that there will be no genuine proportionality or practical fairness in the negotiation process between the less than 1000 Economical policyholders with the right to vote and the some one million non-voting policyholders, in order to establish the apportionment of the value of the company between them.

"There is no doubt that the less than 1000 policyholders of Economical Insurance to whom the company granted voting rights in its unfettered discretion will be well assisted by it in these negotiations for the simple reason that “they are us.” For the mass of non-voting policyholders, the story is quite different.

"While shareholders are allowed to obtain the list of shareholders to communicate and seek proxies,  the Insurance Companies Act of Canada does NOT grant the same right to policyholders. So it will not be possible to gather proxies or make proposals at the special meeting required to approve the “entente” arrived at by the two negotiation teams, if any.

"How would the leader of the non-voting policyholders’ negotiation team communicate with his or her constituency, otherwise than through the kind services of the company’s management?  Here is the Harper government solution:  application may be made to court “to ensure the efficiency, transparency and fairness of negotiating the conversion proposal” say the proposed regulations. Here it is difficult to miss the irony!

"We all know that the Harper government resents any interference by the courts with its legislation but when it comes to the handling of a political hot potato that same government has no qualms in authorising the court to override the provisions of the legislation, and this by regulations!

"Again, instead of doing the right thing (i.e., correct by legislation the non-voting loophole) this government, in order to avoid Parliamentary scrutiny, first hides a simple power to make regulations in the huge omnibus Bill 31 of 2014 and then proceeds by regulations with an extremely short period for comments, in addition to proposing a most contorted scheme for P&C demutualization.

"No wonder this reminds me of a saying that my good friend and mentor Benson A. Rogers was fond of uttering when faced with similar situations: 'Oh what a tangled web we weave, When first we practice to deceive'! ”

                                                                              ***

Those readers with a continuing interest in this financial and regulatory soap opera may wish to consider the reality of the recondite regulatory and 'political' processes now to be involved IF a P & C company like Economical Insurance, i.e., one with two classes of policyholders, attempts to demutualize under the proposed federal regulatory regime.

I would be somewhat surprised if Economical's controlling insiders decide to proceed (at least in the near term) with the demutualization process, one which will inevitably throw up formidable obstacles to their obtaining anything within a country mile of the sort of financial benefit for themselves which appear to have motivated their Dec. 2010 initiative.

I would be even more surprised if, having decided to go ahead with the demutualization process laid down by the regulations, the process came to a decision point in less than two years from now -- if then.

Whether a decision -- if that point were actually to be reached -- is to demutualize will depend on whether or not the process produces a result considered to be fair; also on whether or not the "negotiation" over the respective financial benefits to be shared by the company's voting and non-voting policyholders is seen to be acceptable by a participating majority of those among Economical's 1+ million non-insiders.

The potential for litigation even during the process but especially after a 'decision point' seems to me to be rather considerable.

RickardsRead will return to this subject when there are developments worth noting. Keep reading the only source (since Economical started the ball rolling) of reliable analysis and critical commentary on Economical Mutual Insurance and P & C demutualization.

***********************

email: Alastair.Rickard@sympatico.ca

blog: www.RickardsRead.com

to access previous columns and this blog's archive, the links to which
are listed chronologically in the margin beside each column
as it appears on the RickardsRead.com website, go to
a recent column and use the links

to set a "Google alert" for RickardsRead columns
in order to receive automatic notice of new columns
as they are posted to RickardsRead.com, go to
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Sunday, March 29, 2015

(No.285) "Part 2 -- Economical Insurance Co, & the draft regime for P & C demutualization"


"Part 2 -- The Economical Mutual Insurance Co. of 
Waterloo, Ontario and the new draft regulations for the 
demutualization of federally regulated property and 
casualty insurance companies in Canada"

by Alastair Rickard


CLARIFICATION

In the previous RickardsRead column on this subject (No. 284, posted March 15, 2015) I should have made clear (but did not) in my introduction of comments by Claude Gingras about the draft federal regulations governing the demutualization of federally regulated property and casualty (P & C) insurance companies that his comments -- and mine -- specifically related to the set of draft regulations involving companies with both non-voting policyholders and voting/mutual policyholders like Economical Mutual Insurance.

Our comments did not and do not apply to the other set of draft regulations relating to those P & C companies all of whose policyholders have mutual/voting status.

I will also repeat here for readers' information what I have stated previously: I am not now nor have I ever been a policyholder of Economical Mutual Insurance Co. or any of its subsidiary P & C companies. I have no financial interest in the outcome of any demutualization of Economical under the federal Finance Department's yet-to-be finalized regulatory regime.

MORE COMMENTS FOR THE FEDERAL DEPARTMENT OF
FINANCE ON THE DRAFT P & C REGULATIONS

I do not intend to rehearse here either the comments I made in the previous column or those of Claude Gingras (both in No.284). I expressed my agreement with all of his analysis.

However there are other aspects of and changes needed to the draft federal regulations which would govern any attempt to demutualize by the Economical Mutual Insurance Co. -- or indeed any other P & C company in the same category.

I will offer a few comments here for consideration. I will send this column (as I did the previous one - "Part 1") as a formal submission to the Dept. of Finance prior to the end of the 30 day comment period deadline set by Finance when it published the draft regulations on Feb, 28, 2015.

1. It should be noted by both Finance mandarins and those (likely relatively few) among the millions of potentially affected P & C policyholders who are actually aware of the publication of the draft regulations that the 30 day comment period is ridiculously short and needs extension, especially given the fact that the draft regulations about which stakeholder comment must be made within that 30 day period took the Minister of Finance and his department more than 4 years to develop and make available for public comment.

2. In its "Regulatory Impact Analysis Statement" the Dept. of Finance received input during the original consultation period from four federal P & C companies which had both voting ("mutual") and non-voting policyholders.

According to Finance two of the four companies told Finance that "benefits [i.e., company equity on demutualization] be distributed only to mutual policyholders. The other mutual companies and other stakeholders generally held the opposite view and recommended that all policyholders share the benefits."

The two federal P & C companies referred to by Finance who favoured dividing the "benefits" of demutualization only among voting policyholders are not named. However one does not need to be a clairvoyant to know that both have a comparatively small number of voting policyholders but many more non-voting policyholders.

Which companies?

Obviously one is the company which set the demutualization ball rolling with its request to Ottawa back in late 2010 -- Economical Insurance. My guess is that the second is Gore Mutual Insurance Company of Cambridge, Ontario (founded 1839).

3. Although Minister of Finance Joe Oliver at the end of the day was unwilling to allow a ridiculous approach to demutualization, he ought to have ensured (as I think his predecessor Jim Flaherty would have done) that the mandarins in Finance drafting the regulations gave less weight than they seem to have done here and there to the views and desires of those P & C insurance company insiders who want to keep the demutualization playing field tilted as far as at all possible in the direction of a distinct minority of voting policyholders in a company with both policyholder types.

Case in point: the proposed regulations would require that non-voting policyholders must have held their policies for 12 months from the date the company's board decided to recommend demutualization to "be considered as eligible non-mutual [non-voting] policyholders", i.e., in order to be eligible to share in the "benefits".

Reason for this given by Finance:  "The time requirement discourages speculative policy purchases and ensures that policyholders have a reasonable commitment to the company."

Then why not apply using specific regulation the same 12 month period requirement to holders of voting policies? Such a difference in the treatment of voting and non-voting policyholders cannot be justified and requires change before the regulations are finalized.

4. For more than four years two Ministers of Finance and their department's mandarins have avoided by delay bringing forward a demutualization regime for federal P & C insurance companies. I can understand why.

Still, when a draft regime for companies with voting and non-voting policyholders finally sees the light of day, what's on view?

It is a draft regulatory regime with a striking (if politically understandable) absence of genuine leadership. Instead of presenting a regime that prescribed formulae to ensure equitable distribution to all policyholders of company value on any demutualization Finance kicked the can down the road.

What P & C policyholders now have before them instead is a serpentine process requiring, inter alia, the appointment of a legal counsel and a 3 to 9 member policyholder committee for each side (i.e., voting and non-voting policyholders). I will not review here this tortuous demutualization process; readers can consult the draft regulations published in the Canada Gazette and cited in my previous column.

At this point it is sufficient to note that at Economical Insurance, for example, there would not on a demutualization under the proposed regime be any genuine proportionality or practical fairness of process. Fewer than 1,000 voting policyholders can organize themselves easily and effectively in order to have ongoing direct input to and influence on the process of negotiation. Contrast that with the challenge to meaningful participation and representation confronting one million non-voting policyholders.

For this reason alone -- among several others related to the process the draft regime prescribes -- I would expect (if Economical were to proceed with demutualization) that various non-voting policyholders -- individuals and sub-groups of various sizes -- will sooner rather than later seek legal advice and/representationn of their interests before and/or during the demutualization process.

Nor would I be surprised to see legal action(s) if either the process of negotiation or its result is considered unsatisfactory. If this seems unlikely it is worth noting the incentive for Economical's non-voting policyholders to take the demutualization process very seriously indeed:  $1.7+ billion of equity.

5. The possibility of a regime that could produce a result approaching the equitable treatment of non-voting policyholders plus a court-supervised process of negotiation between the legal representatives and policyholder committees of the voting and non-voting policyholders in a P & C company already seems to have reduced the once unalloyed enthusiasm within Economical Insurance's senior management for a demutualization regime, the creation of which Economical forced on the federal government.

After the release of the draft regulations John Bowey, Economical's board vice-chair and head of the company's demutualization committee reacted. Unsurprisingly, for the head of a group of insiders who kicked off this attempted financial grab with an expressed declaration that all the company's equity belonged to them, the reaction seemed to be one of rather diminished enthusiasm, not least for a proposed regulatory regime under which the division of that equity with the many non-voting policyholders would have to be negotiated and voted upon if demutualization is to occur.

Declared Mr. Bowey: "The way the rules [for demutualization] are proposed now the company would have very little input and opportunity to make recommendations, which, to be frank, is one of the concerns that we have." My translation: 'on behalf of the fewer than 1000 insiders of the company we -- representing the insider group -- will have an impossible task under the proposed regulatory regime obtaining even a lion's share of the company's equity'.

6. Today, as previously, the Economical insider group have sought to camouflage with an unconvincing rationale the alleged need to demutualize and divvy up the company's equity among themselves. Why their obviously financially self-interested views enjoyed any credibility with Finance remains a mystery, all the more so since Finance acknowledges that except for one other P & C company (Gore Mutual?) the other submissions in the government's original consultation were opposed to what they sought.

Perhaps the leading reason advanced by Economical for demutualization is to make it possible for the company to raise capital for company growth via acquisition. This from a company with current equity of more than $1.7 billion and assets of $5+ billion; and from a large mutual company that as a mutual has acquired a number of P & C companies as subsidiaries.

Their argument reminds me of the similarly transparent nonsense advanced by the board and senior management of the Mutual Life Assurance Co. of Canada for its demutualization, while blithely ignoring publicly the fact that Mutual Life -- as a mutual -- had recently had no difficulty buying the long established and substantial Canadian operations of both Prudential of England and Metropolitan Life.

Economical's board vice-chair is still advancing the gormless argument that the "company is too big to be a mutual company [sic] in some ways and yet too small to compete with the big non-mutual companies. So we are caught in the middle."

That does not seem well grounded. Indeed if Mr. Bowey's comments indicate his actual grasp of the relevant facts, there is cause for at least mild alarm. They fall more than embarrassingly short of even tenuous contact with industry reality and are as insubstantial as the smile of the Cheshire Cat in "Alice's Adventures In Wonderland".

Then again those who post-2010 have advanced arguments pushing for the allocation of the (now) $1.7 billion among fewer than 1000 Economical voting  policyholders have rarely allowed facts to detain them for long. Doubtless they felt encouraged by the nearly complete absence of critical analysis of their plan in the mainstream media both regionally and nationally.

As the past four years have shown: in this sort of non-critical environment a self-constructed reality, indeed a cognitive illusion, is easier to maintain.

7. I am less than satisfied with the draft demutualization regime. It is awkward and convoluted in terms of going about getting equitable treatment for non-voting policyholders in a company like Economical. This RickardsRead column and the previous one (No.284) have pointed to a number of points to consider before the draft regulations are finalized.

However, if Economical Insurance proceeds to demutualize the negotiated division to be required by the regulations of the company's value between fewer than 1,000 voting policyholders on the one side and the company's hundreds of thousands of non-voting policyholders on the other at the very least guarantees that this gang of Economical insiders will not be walking away from a demutualization with $1 million+ each.

But then, as I have pointed out more than once in RickardsRead columns during the past several years, only those Economical insiders who resided in cloud-cuckoo-land were likely to have thought that their desired financial grab using company demutualization would proceed unimpeded.

                                                                   ****
RickardsRead will return to the subject of Economical Mutual insurance Co.
and Ottawa's demutualization regime.

************************************ 

email: Alastair.Rickard@sympatico.ca

blog: www.RickardsRead.com

to access previous columns and this blog's archive, the links to which
are listed chronologically in the margin beside each column
as it appears on the RickardsRead,com website, go to
a recent column and use the links

to set a "Google alert" for RickardsRead columns
in order to receive automatic notice of new columns
as they are posted to RickardsRead.com, go to
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Sunday, March 15, 2015

(No.284) " Part 1 - Economical Insurance Co. & the draft regime for P & C demutualization"


"Part 1: the Economical Mutual Insurance Company of 
Waterloo, Ontario and the new draft regulations for the 
demutualization of federally regulated property and 
casualty insurance companies in Canada"

by Alastair Rickard

When the Economical Mutual Insurance Company of Waterloo Ontario announced in Dec. of 2010 (more than 130 years after its founding) its intention to demutualize it forced the federal government of Canada in the person of its Minister of Finance and his department to do what had previously not been done: come up with a regulatory regime to provide both a method and a framework federally regulated property and casualty (P & C) insurance companies would have to use if they demutualized.

To say that the feds were less than eager to engage with this task is self-evident. Since the Economical Insurance Co. announcement and request more than 4 years ago one federal finance minister (who wisely kept kicking this can down the road) has died and been replaced by a far less politically astute successor who has now allowed/directed his senior mandarins in Finance to produce a draft regulatory regime for public comment.

This was done on Feb. 28, 2015. The draft regulatory regime that, unless amended, will govern the demutualization of any federal P & C mutual insurance company, is detailed on the Canada Gazette website (www. gazette.gc.ca) Vol. 149, No.9, Feb.28,2015: "Mutual Property and Casualty Insurance Company Having Only Mutual Policyholders Conversion Regulations".

Since July of 2011 when I first began writing about this matter in terms of issues of equity and public policy there have been more than a dozen columns on RickardsRead devoted to it, especially to the matter of the patently ludicrous intention and expectation of fewer than 1000 "voting policyholders" of Economical Mutual to force demtualization of the company as a prerequisite to dividing among themselves more than $1.2 billion in company equity.

As I predicted nearly 4 years ago the federal government has not allowed this corporal's guard of Economical insiders to carry out unimpeded the financial skinning of the hundreds of thousands of non-voting Economical policyholders.

However, the contorted and complicated regime outlined by Finance in the draft regulations is far from satisfactory although I don't deny that inside Finance and indeed the Ottawa beltway it is likely seen as providing more than a fig leaf of political cover.

I will return to this matter in my next column.

The Department of Finance will receive comments on the draft regulations for only 30 days, i.e., until March 30, 3015. Comments can be submitted by email to finlegis@fin.gc.ca

                                                  **************

Followers on RickardsRead.com of the Economical / P & C demutualization subject will recall the contributions to intelligent discussion of relevant issues by Claude Gingras (see column nos. 179, 209 & 258). He is a lawyer and a former Vice-President and General Counsel of The Mutual Life Assurance Co. of Canada who was subsequently associated in Ottawa with the Dept of Finance, notably during the development of a demutualization regime for federally regulated mutual life insurance companies.

Mr. Gingras has prepared for RickardsRead his commentary on the federal regulatory regime for P & C companies published on Feb.28. As usual his comments are both very well informed and insightful.

I will return to the Economical Insurance / P & C demutualization subject in Part 2 of this column.

                                                            ****************


                                 "Comments on the proposed demutualization 
                                   regime for Canadian property and casualty 
                                              insurance companies"

                                         by Claude Gingras LL.L, LL.B, LL.M


Background information

Last February 28, the Department of Finance published draft regulations for a P&C demutualization regime, more than 4 years after Economical Mutual Insurance Company of Waterloo, Ontario, announced its intention to convert into a stock company.  Before commenting on these draft regulations, some background information could be useful.

Economical is one of the large Canadian mutual property and casualty (P & C) insurance companies that have very few policyholders entitled to vote, in fact less than 1000, but with over a million policyholders in total.

This situation was allowed to develop because the Insurance Companies Act of Canada (ICA) grants the right to vote to participating policyholders that can be found only in life insurance companies, not in P&C companies.  Nothing is said in the ICA about voting rights in a mutual P&C company. These companies revert to their Charter for their policyholders’ voting rights.

Originally, subscribers of policies issued with a premium note – a 19th century attempt to refurbish the coffers of a mutual P&C in financial difficulty – were given the right to vote. In fact there has never been a call on those notes, as such a call would do more damage than good, sending a clear message that the company is in real financial trouble.  Economical abolished these notes in 2008, while preserving the right to vote to the privileged few holders of those policies.

In 2003 the Department of Finance proposed to extend by legislation the right to vote to all policyholders of Canadian mutual P&C companies. “A narrow voting base may reduce the effectiveness and fairness of governance because the management of such companies is accountable to only a few policyholders” said the Department in its Consultation Paper. But faced with the fierce opposition of these companies, Finance abandoned this proposal.

Except for the right to vote, there is no difference between voting policies and non-voting policies in these P & C companies.  Their holders pay the same premium for the same coverage, and carry the same risk, that of the possible insolvency of the company, nothing more, nothing less.  Add that these voting rights are granted at the sole discretion of management and it is understandable that Finance raised the issue of fairness in 2003. It should be of no surprise also that those voting policies are held in great majority by directors, officers and employees of these companies.

During the consultation period prior to the draft regulations, Economical requested a demutualization process “essentially the same” as was established for the conversion of life insurance companies some 15 years ago, adding: “mutual policyholders of federal P&C mutuals enjoy at least as strong ownership rights as participating policyholders of federal life mutuals and accordingly have the exclusive rights to demutualization benefits, as did the participating policyholders of the demutualized federal life mutuals.”

If the Government had accepted this argument, each voting policyholder of Economical would receive an amount in the order of $1.5 million at least, in the form of shares or equivalent cash!

But there is a world of difference between participating life insurance policyholders and the voting P&C policyholders of Economical.  The former’s right to vote is given by legislation, not at the discretion of the company. The participating policyholders pay a higher premium than non-participating policyholders and there is a regulated system of policy dividends.  These dividends have long been used by the mutual life companies as a cushion against insolvency.

There were hundreds of thousands of par policyholders in each of the four Canadian life insurance mutuals that demutualized at the end of the last century and none received any amount that would approach, even by far, what the voting policyholders of Economical were expecting to receive. And, in a mutual life insurance company, the non-par business can be considered an investment of the par policyholders. This is at least what the Carter Commission of the sixties argued for the Government to start taxing mutual life insurance companies in 1969. Nothing of that sort can be said about voting policyholders at Economical.

The proposed demutualization regime for P&C mutuals

Ottawa did not “buy” the arguments of the management of Economical. Rather it has proposed a very complex and protracted process of demutualization where voting and non-voting policyholders would be asked to negotiate a fair allocation of the value of the company between the two groups and do so under court supervision.

Each negotiating committee would be represented by a lawyer and 3 to 9 policyholders appointed by the court, with each eligible policyholder having the right to challenge the appointment of even the lawyer that would lead the other policyholders committee - s.8(5). The negotiations would have a year to reach a conclusion, with a possible extension.  Then the “entente” must be submitted to the vote of all eligible policyholders, those with and without right to vote currently.

To allow this the regulations require that the voting policyholders give, at a special meeting, to the non-voting policyholders the right to vote at another special meeting to approve or reject the conversion plan. This in fact is a fundamental change under the Act (extending voting rights to non-voting policyholders) within another fundamental change (the demutualization itself.)

The opinions of independent experts must be obtained on a variety of matters, including the value of the company, the appropriateness of the measure to be taken to ensure the marketability of the shares, the appropriateness of the cash given in lieu of shares, and on the equity and fairness of the allocation of demutualization benefits.

Numerous applications may be made to court, which has the power to make all orders “it considers necessary to ensure the efficiency, the transparency and fairness of the process of negotiating the conversion proposal” – s. 7(3).

In addition, a large volume of information (at times different for each group) must be provided for the various special meetings of policyholders that the conversion process requires, and to the federal Superintendent of Financial Institutions.

Faced with such a complex exercise, it is not surprising that Economical announced that it is pondering whether these draft regulations “can be practically implemented.”  All this to give value to a voting right allocated by the company to some staff and a few privileged policyholders!

 Here are some aspects of these regulations that are questionable:

These regulations would apply to all mutual P&C that have some non-voting policyholders – s.2

Will a P&C insurance company with all its policyholders entitled to vote, except a few with short term policies  like travel insurance, be required to use these regulations if it wants to demutualize, or would a simplified process be available?

It is required by the regulations that those few policyholders with a voting right must receive greater demutualization benefits because of their voting right – s.12(3)

What is the valid reason for such a requirement?  Should it not be left to all the policyholders that would negotiate the conversion plan to decide this matter? Non-voting policyholders have contributed as much to the success of the company, and in much greater number! Further, these few policyholders with right to vote may already have received dividends that, if so, may not have been produced solely by their own premiums. Why this monumental extra gratification?

While the opinions of independent experts are required on various matters, when it comes to opine on the fairness and equity of the demutualization benefits and their allocation, the opinions of both an independent actuary and of the actuary of the company must be given – s. 13(2)(b)

Why the need for the opinion of the actuary of the company who is not "independent” by the very definition in the regulations of this term, and may well be the holder of a voting policy? Can we imagine an independent actuary giving a contrary opinion to that of the actuary of the company?  And what if he or she does?  Given that the person is retained and paid by the company, this is unlikely to happen.

The eligibility to receive benefits is different for holders of voting policies and for those of non-voting policies.  Holders of non-voting policies must have held their policies for the 12-month period ending on the day the company decided to proceed with demutualization.  But policyholders with right to vote need just have their policies on the day of that decision if the company so decides!

In addition, only holders of voting policies may reinstate their policies to participate in the allocation of benefits – Definitions of “eligible mutual policyholders” and “eligible non-mutual policyholders” in s.1.

This is strange.  Instead of plugging the loophole in its legislation, the government is giving the opportunity to the company to make further use of it at a moment where it will really pay for the selected new policyholders! Is this a faintly disguised way of giving legally some of the value of the company to more management, staff and favoured clients?

Each group of policyholders will receive different information. For instance,  holders of voting policies would be given “a detailed description of any significant transaction contemplated in connection of the conversion” but not the holders of non-voting policies – s. 14(j)

This information would be important for both groups of policyholders, to decide for instance,  to take their benefits in form of shares or cash, to keep their shares for the time being, etc. Why give it only to the holders of voting policies?

The regulations require that the by-laws of the company be changed to give to the holders of non-voting policies the right to vote, but only for the approval, or rejection, of the conversion proposal, and to authorize the company to apply for letters-patent of conversion in case of approval – s. 13(1)

The right to extend voting rights is provided in the ICA (s.238(1)(i)) and constitute a fundamental change, but that section authorizes  only a change to vote at all future meetings of policyholders.  While the regulations model the procedure outline in the Act to effect that change, it is questionable whether it is possible to limit, by regulations, its effect under the Act, i.e., to restrict it to voting only at the special meeting of eligible policyholders. In fact it is questionable to provide that right by regulations when the process to do so is already in the Act.

There are other questionable choices that have been made by the drafters of these regulations, albeit of lesser or no legal consequence. For instance, the million plus policyholders of Economical Insurance with no right to vote, who have subscribed their policies with a mutual company, and who have contributed greatly to its success, may be miffed to learn that they are not “mutual” policyholders.

The term is one that Economical likes to use in its communications for those policyholders who have the same rights and obligations as they have, except for this additional voting right. And Ottawa is obliging.

Conclusion

Voting policyholders in a mutual P&C company got their right to vote because they had to sign a premium note obliging them to pay a second premium at the request of the company if in need to replenish its coffers in times of financial difficulty.  As far as it can be ascertained, such a request has never been made, making the obligation highly spurious!

When Ottawa finally revised its insurance legislation in 1992 (the first major revision in 60 years), it should have indicated who shall have the right to vote in a Canadian P&C mutual insurance companies, rather than leaving it to management of each company to decide on a case by case basis. Ottawa could have corrected this oversight again in 2003, but did not.

When Economical abolished its premium notes in 2008 it should have extended the right to vote to all its policyholders with the same contractual rights and obligations.  If the right thing had been done on any one of these occasions, the governance of some mutual P&C companies would have been greatly improved.  And Canadian policyholders would not now have to put up with these contorted regulations.

There is still time for Ottawa to act, before the first P & C demutualization.

March 11, 2015

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Part 2 of the attention currently being paid on RickardsRead.com to Economical Insurance and the proposed federal regulatory regime for P & C insurance company demutualization will appear in the next column (No.285).

*****************************

email: Alastair.Rickard@sympatico.ca

blog: www.RickardsRead.com

to access previous columns and this blog's archive, the links to which
are listed chronologically in the margin beside each column
as it appears on the RickardsRead.com website, go to
a recent column and use the links

to set a "Google Alert" for RickardsRead columns
in order to receive automatic notice off new columns
as they are posted to RickardsRead.com, go to
www.Google.com/alert

********************************