Foresters and Unity Life of Canada today announced that they have entered into an agreement under which Foresters will acquire Unity Life.

Under the agreement, which is subject to approval by regulatory authorities and eligible voting policyholders of Unity Life, Foresters will sponsor the demutualization of Unity Life and subsequently subscribe to Unity Life for common shares, payable in cash. Following the demutualization and the share subscription by Foresters, Unity Life will become a wholly owned subsidiary of Foresters.

If the demutualization is approved, eligible Unity Life policyholders will receive cash payments on demutualization in exchange for their voting control and their share of the value of Unity Life. Their insurance coverage, policy values, premiums and policy dividends would be unaffected by demutualization.

In announcing the agreement, Foresters President and CEO George Mohacsi stated: “This transaction will greatly strengthen Foresters market position in Canada, which has traditionally been our smallest market. In Unity Life, we will be acquiring an attractive life insurance operation with strong marketing, product development and distribution capabilities and a demonstrated track record of growth. These qualities will enable us to achieve our strategic goals for Canada of improving our financial results, growing our membership and strengthening our members’ communities.”

“We see our partnership with Foresters as a meshing of the complementary strengths of the two organizations,” said Anthony Poole, president and CEO of Unity Life. “Foresters size, exceptional financial strength and existing Canadian infrastructure will provide us with access to capital and additional product and distribution capability that will enable us to accelerate our Canadian growth strategy.”

The value of the transaction, which is subject to independent valuation, was not disclosed. Based on the experience of other Canadian insurers that have undergone demutualization, it is expected that the demutualization process could take up to 12 months.

On completion of the transaction, Unity Life will continue to operate as a separate entity in the Canadian market under its current leadership as a member of the Foresters group of companies. Future Foresters sales activities in Canada will be conducted through Unity Life, and Foresters current Canadian sales representatives will be offered distribution contracts with Unity Life. The Unity Life sales organization will be able to market both Unity Life and Foresters products.

Eligible Unity Life policyholders will receive a policyholder guide containing full details on the demutualization and will have the opportunity to vote on the demutualization proposal at a special policyholder meeting.

Generally, to be eligible for cash payments under the demutualization, policyholders must have one or more eligible policies in force on the August 9 announcement date.