Article by Roger E Holland and Alana M Dale-Johnson

In October 2011, Canada’s Not-For-Profit Corporations Act (NPCA) came into force, replacing Part II of the Canada Corporations Act. This new legislation brought welcome changes to the way that a federally incorporated non-profit corporation (FNP) is regulated, structured, and incorporated. However, the NPCA also includes strict rules about how and when existing FNPs must transition to the new Act.

By October 17, 2014, all existing FNPs must be incorporated under the NPCA. Any FNP that fails to do this will be deemed inactive and dissolved. Aside from the obvious inconvenience of such a dissolution, there may also be significant tax consequences. It is important that FNPs complete these transition requirements in advance because the transition can require significant preparation as well as approval by their members.

To make the transition under the Act, FNPs have to replace their existing incorporation documents, including their letters patent and bylaws. They have three requirements to comply with. The letters patent must be replaced with articles of incorporation or of continuance and new bylaws must be approved. Both of these must be then submitted to Corporations Canada.

If Corporations Canada approves the new articles (and supporting documents), it will issue a Certificate of Continuance to the FNP to signify a successful transition to the NPCA.

The changes brought about by the new Act will necessitate a careful review of an FNP’s bylaws. In particular, the NPCA requires that the bylaws, at a minimum, include provisions respecting the conditions of membership and how notice of meetings will be given to voting members. Aside from these two requirements, FNPs should consider whether they wish to include additional bylaws specific to their organization’s needs. Without such provisions, the NPCA’s default rules will effectively become the bylaws. For obvious reasons, all FNPs should review the NPCA in advance of their transition.

In summary, existing FNPs should take the time now to properly understand the Not-For-Profit Corporations Act and its transition provisions. A proactive approach will prevent unnecessary complications in the future, especially with respect to the transition process. In doing so, all FNPs should be alert to the unique needs of their organizations and ensure directors and officers are familiar with the NPCA and its Regulations.

Although the above information only addresses federal not-for-profit corporations, we also remind British Columbia societies to ensure their organizations follow British Columbia’s Society Act and embrace good governance practices.

ABOUT SINGLETON URQUHART

Singleton Urquhart is recognized as one of the leaders in construction, insurance and environmental law in Canada, with counsel providing services to architects, engineers, contractors, owners, governments and the insurance industry. In this field, Singleton Urquhart also offers a full range of legal services to the construction and development industries, including negotiating and drafting contracts, advising on real-estate transactions and designing risk-management and loss-control procedures.

Learn more here.

ABOUT TRISURA

Trisura Guarantee Insurance Company is a Canadian-based Property and Casualty insurance company, incorporated under the Insurance Companies Act (Canada). As a Canadian owned and operated company, Trisura is uniquely positioned to satisfy mid-market risks in Contract Surety, Commercial Surety, Directors’ and Officers’ Liability, Fidelity, and Professional Liability including Media Liability.

Trisura is rated A- (Excellent) by A.M. Best Company.

Raylene Smith, Articled Student, assisted with researching and writing this article.

After a remarkable 39 year career in the insurance industry, Bob Taylor has retired from the day to day activities of Trisura Guarantee to be able to spend more time with family and friends. Fortunately for Trisura, Bob will remain involved with the company in his current capacity as Board Chairman.

After several years with Procter and Gamble, Bob joined the Guarantee Company of North America in 1975 and then went on to found Wellington Guarantee in 1989 which later became London Guarantee in 1995. London Guarantee grew into a prominent specialty lines insurer with Bob at the helm as CEO, until its sale to St Paul in 2002.

In 2005, Bob joined with John Garner and Mike George to form Trisura Guarantee, which opened its doors in 2006.

On June 17th, industry friends, colleagues and family gathered for a reception at the National Club in Toronto to honour Bob’s career and his contribution to the insurance industry. During the evening Bob’s brother and several friends and colleagues took to the podium to share a few personal stories and amusing anecdotes.

Bob has been a role model and mentor to many in the insurance business, and is living proof that decency, fairness and integrity are values that can help an organization succeed, thrive and grow.

Bob and his wife Fran plan to spend more time at their Ontario cottage in the summers and at their Florida condo in the winters.

Commercial surety bonds are used to protect consumers against fraud and misrepresentation and to compensate them for potential financial loss.

In many cases, commercial surety bonds are required to satisfy or guarantee fiduciary obligations, governmental legislation, or the private contractual obligations of the applicant or the principal under the bond.

Bonds are also required by some courts or government agencies, often as part of licensing processes or requirements for companies or individuals. In some cases, they are also required by financial institutions or private corporations.

While this is the traditional perspective on the surety marketplace, there are some emerging trends changing the way commercial surety bonds are used.

Common types of bonds
Before discussing the key changes in the commercial surety area, here is a quick overview of the major types of bonds:

License and permit bonds – These products are highly transactional and compliance-focused. The penal sums for these products are usually small.

Customs and excise bonds – These tax bonds are generally used by companies to defer payment of taxes to government agencies.

Fiduciary bonds – These court bonds are used to guarantee the fiduciary obligations of a guardian, executor or conservator.

Performance bonds – These types of bonds are commonly used to guarantee the performance or service contained within the terms and conditions of a contract, excluding construction contracts.

Changes in the commercial surety business

The commercial surety landscape is changing and as we look to the future, we can identify some key trends that will alter the way commercial surety products will be used going forward.

More private sector uses – The types of bonds mentioned above will largely remain as they have traditionally existed, but the places where those commercial surety bonds are being posted are changing rapidly.

For instance, while commercial surety bonds have traditionally been posted to government agencies, an emerging trend is seeing those bonds required for the private sector, including private sector seeking to transfer their risk.

Commercial surety bonds provide a unique value to private sector companies: they offer an elevated or preferred status among their industry peers. They can also be used to mitigate risks to a third party without incurring internal costs.

In many cases, these requirements come though associations or agencies that aim to provide added benefits and risk management to their members.

Customization in commercial surety – As the types of organizations required to purchase commercial surety bonds changes, the way those products are developed and delivered changes as well. It’s a natural part of business growth: the marketplace becomes more complex, and as a result, commercial surety bonds are no longer a “one-size-fits-all” type of product. Different industries have different needs, and products must be customized to accommodate those industry-specific requirements.

Replacing conventional forms of security – Commercial surety bonds are increasingly being used to replace conventional forms of security such as letters of credit or cash deposits. Increasingly, all parties are accepting bonds and viewing them as a way of transferring their risk to a third party: the surety company.

Greater efficiencies – The manner in which commercial surety products are produced and delivered also offer real benefits for both the principal and obligees, allowing them to increase efficiencies by saving the internal resources associated with assessing and monitoring the risk.

The future of commercial surety

As the industry continues to change, Trisura will continue to provide innovative, competitive and responsive solutions to our customers’ needs.

The Trisura difference

Two things set Trisura apart from other surety companies, and make us exceptionally well-positioned for the future of commercial surety: automation and customization.

Automation – The Trisura Bond Portal helps companies, brokers and Obligees automate their existing workflows, providing for greater efficiency and resulting in greater profits.

Using the portal greatly speeds up the underwriting process by allowing businesses to complete applications and submit documents online. In addition, the portal allows organizations to take advantage of easy online payments and quick document generation, creating superior user experience that is immediate and cost-effective for everyone involved.

Customization – Trisura is also leading the way when it comes to creating new custom surety products. We innovate to offer our customers the products they need to mitigate risks and operate more efficiently in the modern business environment.

We understand that all businesses are different, and therefore have unique requirements when it comes to commercial surety. As a result, we strive to offer custom-tailored products and programs which meet the specific needs in various industries.

To learn more about the automation and customization offered by Trisura and how it can help you prepare for the future of commercial surety, contact us today.

Pina Mazzoli is responsible for broker relationships, underwriting and product development for Commercial Surety on a national level.

I first heard this joke as it pertained to the global financial meltdown of 2008 and the insanity of the sub-prime mortgage fiasco in the United States. A little closer to home, it rang true for me when about four months after starting Trisura, I sent an email to our 14 or so staff sending them home a few hours early on a Friday afternoon, or so I thought. In fact, I sent the email to about 3,000 Brookfield employees across North America. Have you ever felt sheer panic before??

One of the most challenging aspects of my job is trying to make strategic business decisions and bets around technology. Maybe it’s because I’m a “techno moron”, but trying to keep up with the rapidly and ever evolving world of technology is at best difficult, and at worst terrifying.

First, let me be clear. We have an excellent systems team headed and staffed by world class experts in their fields. But technology has become increasingly important to us and our operation absolutely depends on our systems. When our “systems go down” we have 90 people sitting around looking at one another.

Couple this with the incredible rate of change in technology and the costs associated with investing in or betting wrong, and the result is that systems discussions have emerged to become one of the most pressing and critical issues that our executive team faces on a daily basis. The reality is, most of us are insurance people, not systems people, and so we often find ourselves out of our depth.

In fact, I joke with Dragan Popovic, Vice President of Information Systems, that when we started Trisura the insurance company we didn’t realize we were in fact starting a tech company!!

Like everyone, we are looking for our systems to be reliable and to help our staff do their work quickly and efficiently. But for us it’s far more than that. We have innovated with our online portal in order to help our brokers and their clients save time and reduce costs. We have continued to push our developers and vendors to deliver world class underwriting platforms that enable our underwriting staff to become even better at doing what they do.

Technology has become one of our key competitive weapons and the advantage our technology gives us is ultimately going to be a major factor in our future success. I have to believe this is not only true of our competitors, but our broker partners as well.

We had the luxury of starting from scratch and so our decision making in the early days was often more clear than perhaps some of the companies struggling with archaic legacy systems and work flows. However, as we grow and start to develop legacy systems of our own, the choices and decisions around technology and what to do, and equally important, what not to do, becomes even less clear.

For insurance companies, making the right decisions in terms of technological strategy, including underwriting platforms, portals, clouds, CRM’s, cyber liability, architecture, vendors, and social media (the list is endless), has emerged as one of the most important challenges from both an opportunity and a risk standpoint.

I sure hope the refrain never becomes “to err is human, to really screw up an insurance company you need a technologically challenged CEO”….</strong class=green>

Mike George
President & CEO

Top Row from left: Samuel Leakemariam, Stephen Logush, Sandra Henkel, James Bennett, Dave Scotland & Alina Didyk
Bottom Row from left: Andrew Dang, Cindy Grant, Steve Trinh & Michael Kalakauskas

This year, Trisura entered with a team of 10 runners who were able to achieve amazing times and results.

Out of almost 1500 runners, James Bennett (Senior Underwriter) finished in 11th place with an amazing race time of 18:09 minutes. Michael Kalakauskas (Underwriter) followed not long after in 19:49 minutes and Dave Scotland (VP, Finance & Controller) came in just behind him at 19:51, both finishing in the top 50.

Big kudos to the entire Trisura team – together they raised $1,675 for the United Way. While at first it seemed doubtful, even the weather cooperated and everyone had a great time. We look forward to participating in the event again next year.

Since 2001, the Scotiabank Rat Race has brought together executives and business professionals in the GTA to run or walk a 5 km race in order to raise funds for the United Way and their network of 200 health and social service agencies.

Established in 1956, United Way supports agencies that provide services to strengthen individuals, families and communities.

James Bennett (front & center) at the starting line

This year’s race so far has raised over $520,000 of their $600,000 goal. But it’s not too late to make a donation! Fundraising continues until 5:00 pm on July 11th.

Learn more about the annual Scotiabank Rat Race or support United Way here.

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