Directors of Toronto-based Manufacturers Life Insurance Co. have voted to "demutualize" the company.
Shareholders are to vote on the plan July 29.
Demutualization is the conversion of a policyholder-owned company to a stock-issuing company. The ability to raise capital has become increasingly important as the insurance industry consolidates.
The move last week by Manufacturers Life is part of a trend toward restructuring ownership that started in the United States and is sweeping across Canada.
Canada's four largest mutual insurance companies, including Manulife, are moving toward demutualization. In the United States only three of the top 10 are likely to keep their mutual structures, for regulatory and other reasons, said Kevin Gough, a consultant at Conning & Co. of Hartford, Conn.
Though Manulife announced an intent to demutualize in January 1998, Canadian law at the time did not allow larger mutuals to convert. Canadian insurers, arguing they should be able to compete with the rapidly demutualizing U.S. insurers, won a change in the law this March, Mr. Gough said.