My opening remarks won't take 10 minutes, but I would like to thank the committee for the invitation to speak.
I am the president of the Ontario Mutual Insurance Association. We are composed of 44 property and casualty mutual insurers incorporated in Ontario. Each of our companies is in excess of 100 years old, the oldest being over 150 years old. The genesis of mutual companies in Ontario, and for the most part in other parts of Canada as well, was the lack of availability of insurance in rural areas of Ontario during the 1830s, 1840s, and 1850s, up until well into the 19th century. Groups of farmers came together and pledged to support each other in the event of a loss, and basically the mutual insurance industry was born out of that.
We're very proud to continue that tradition today. In contrast to some of the mutuals that Mr. Lowery referred to, each of our member companies is a 100% participating company. By that I mean that if you purchase a policy from a mutual insurer in our association, you are a voting member of the mutual and you exercise the full democratic rights of any other policyholder. We do not have a split ownership structure.
Overall we believe that mutual ownership as a structure is extremely important to a diverse financial services sector. We recognize that there need to be different forms of ownership, and we do have concerns about potential demutualizations basically pushing the insurance sector into being either fully publicly traded, and in many cases foreign controlled, or held as private equity. We believe that companies that provide an alternative form of ownership are important.
Right now in Canada, there really aren't any issues concerning the availability of insurance to policyholders. That being said, things have a habit of changing, and it may well be that down the road, due to global conditions, you could see a lack of availability of coverage. In that case, locally owned and controlled mutuals certainly would provide a very viable alternative.
I think that some of the greater threats to smaller companies like our own.... Here I guess I should be clear that we are a fairly small part of the overall P and C sector—although in Ontario, overall, we do rank more or less in the top ten in direct written premium. The largest member of our association writes about $80 million in premium and our smallest member writes only half a million dollars in premium. By being part of an association we're able to support a wide range or scope of these 44 different companies.
We work closely with our provincial regulator. We do have issues concerning the prevalence of regulatory initiatives springing from global circumstances, which can have an adverse effect on smaller entities. We believe there needs to be strong regulation, but we also believe that all regulation, including the need for capital requirements for insurers, needs to take into account special circumstances that may go with smaller-scale entities such as our own.
Overall we support the idea of mutual and cooperative types of ownership, and we think it's an important part of the Canadian economy. We think where we are today is in large part due to the people who were willing to take on the burdens of ownership when others weren't willing to come forward.
That concludes my opening remarks.