Disclosure & Conflict of Interest


1. Policyholders are Members

South Easthope Mutual Insurance Company is a purely mutual company owned entirely by policyholders who are members. Policyholders are members only as long as they have an insurance policy with the company. There are no shareholders or share value in the company. The members elect a board of directors consisting of nine policyholder members who are responsible for the oversight and governance of the company. The board delegates the operational management of the company to the Chief Executive Officer. 

2. Conflicts of Interest and the Insurance Purchase 

South Easthope Mutual considers the rights of our policyholder members as insurance purchasers to be our priority. Our company, agents and brokers, firmly adhere to the following principles when transacting insurance sales to our Members;

1)    Our policyholder members’ interests come first. Our agents and brokers will put yours ahead of their own; 

2)    We will make you aware of any conflict that could be associated with a transaction or recommendation; 

3)    We will ensure that from the products we offer, we will only recommend those that are the right fit to meet your needs.                                                                                          

South Easthope Mutual, like all insurers in Ontario, is regulated by the Financial Services Commission of Ontario ( 

3. Insurance at Cost 

Since our organization in 1871, South Easthope Mutual has operated on the philosophy of providing members insurance on an at cost basis. There are no shareholders with expectations of profit dividends for their investment in the company. Determining the cost of insurance is complex. In addition to considering current and future claims and expenses; regulatory capital is required to guarantee solvency of the company. When reserves are adequate for claims, expenses and regulatory capital, the board may declare a refund on property insurance policies. 

(Refunds do not apply to automobile premiums. Auto rate and discount schedules must first be filed and approved by the Financial Services Commission of Ontario in advance. It is impossible to anticipate premium refunds.) 

Here is a breakdown of where premiums have gone: 

  • 61% to pay claims
  • 15% to purchase reinsurance
  • 11% commissions paid to agents and brokers
  • 12% to pay other operating expenses
  • 6% returned to property policyholder members in the form of a refund 

Costs in excess of premiums collected are offset through investment income from reserves and surplus required to be retained by the company for the protection of policyholders in the event of a catastrophic event. 

4. Agent and Broker Compensation 

Insurance offered by South Easthope Mutual is available only through captive company agents and authorized independent brokers. 

As compensation for the services they provide, both the agents and brokers receive commission which is based on a percentage of the premium from each individual policy paid to the company. 

Captive agents are employees of the company and receive employee benefits consistent with those of other staff. Certain employment expenses however, they pay on their own. Their primary responsibility is to provide sales service to members of the mutual. When you purchase insurance through an agent, you buy directly from the company. 

Commissions for agents are as follows:
· 6% - Renewal Business – All lines of Business
· 12% - New Business – Automobile
· 20% - New Business – Property and Liability 

Insurance brokers are separate business operations, independent of an insurance company. They run their own offices and employ their own staff. A broker may represent several insurance companies. A broker provides advice to their clients and purchases insurance on their behalf. 

Commissions for brokers are as follows:
· 12% - Automobile
· 20% - Residential Property and Liability
· 15% - Farm Property and Liability
Brokers receive the same level of commission on both new and renewal policies. 

5. Performance Bonus 

South Easthope Mutual also recognizes the extra efforts of agents and brokers in managing their overall portfolios through a potential performance bonus. 

Care in bringing on new members and recommending loss prevention initiatives are in the best interests of all policyholder members. These efforts aid in the fair treatment of policyholder members and the stabilization of competitive rates.
The performance bonus is not automatic and is considered by the Board of Directors on an annual basis. Before it is considered, the company must first realize a bottom line profit. The bonus is based on the net bottom line of their individual portfolio. 

The performance bonus paid to all agents and brokers represents less than 1% of all premiums collected by the company. This bonus has no effect on factors considered in approving a premium refund to property policyholder members. 

If you have any additional inquiries, we invite you to write us at seins(at) 

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