Economical Mutual Insurance Company and TEIG Investment Partnership - s. 147 and s. 6.1 of OSC Rule 13-502

Headnote

Item F(1) of Appendix C of OSC Rule 13-502 Fees - exemption for Funds from paying an activity fee of $5,500 in connection with an application brought under subsection 147 of the Act, provided an activity fee be paid on the basis that the application be treated as an application for other regulatory relief under item F(3) of Appendix C of the Rule.

Rules Cited

Ontario Securities Commission Rule 13-502, Fees, (2003) 26 OSCB 4339 and 27 OSCB 7747.

Securities Act, R.S.O. 1990, c. S.5 as am., ss. 77(2) and 78(1).

National Instrument 13-101 -- System for Electronic Document Analysis and Retrieval (SEDAR), s. 2.1(1)1.

May 3, 2005

Attention: Ms. Barbara R.C. Doherty

Dear Sirs and Mesdames:

By letter dated April 21, 2005 (the "Application"), you applied on behalf of Economical and the Partnership to the Ontario Securities Commission (the "Commission") under subsection 147 of the Securities Act Ontario (the "Act") for relief from subsections 77(2) and 78(1) of the Act, which requires every mutual fund in Ontario to file interim and comparative annual financial statements (the "Financial Statements") with the Commission.

By same date and cover, you additionally applied to the securities regulatory authority in Ontario (the "Decision Maker") on behalf of the Partnership for an exemption, pursuant to subsection 6.1 of Rule 13-502, from the requirement to pay an activity fee of $5,500 in connection with the Application in accordance with item F(1) of Appendix C of the Rule, on the condition that fees be paid on the basis that the Application be treated as an application for other regulatory relief under item F(3) of Appendix C of Rule 13-502.

Item F of Appendix C of Rule 13-502 specifies the activity fee applicable for applications for discretionary relief. Item F(1) specifies that applications under subsection 147 of the Act pay an activity fee of $5,500, whereas item F(3) specifies that applications for other regulatory relief pay an activity fee of $1,500.

From our review of the Application and other information communicated to staff, we understand the relevant facts and representations to be as follows:

1. The Partnership was created on October 1, 2004 among Economical and its wholly-owned subsidiaries, being Federation Insurance Company of Canada.

2. The Missisquoi Insurance Company, the Waterloo Insurance Company and Perth Insurance Company (collectively, the "Subsidiaries").

3. The sole purpose of the Partnership was to create a fund to pool the investment portfolio held by Economical and its Subsidiaries (collectively, the "Partners") through capital contributions made to the Partnership and to utilize those capital contributions to invest in securities and other financial instruments.

4. None of Economical or its Subsidiaries are reporting issuers under the Act.

5. The Partnership is a fund created under the laws of the Province of Ontario.

6. The Partnership fits within the definition of "mutual fund in Ontario" in section 1(1) of the Act and is therefore required to file interim and comparative annual financial statements with the Commission under subsections 77(2) and 78(1) of the Act.

7. Partners of the Partnership receive annual and semi-annual financial statements. The Partnership's annual financial statements are audited by Ernst & Young LLP or such other firm whose partners are members in good standing of the Canadian Institute of Chartered Accountants and which is appointed from time to time as auditor of the Partnership in accordance with its constating documents.

8. Section 2.1(1)1 of National Instrument 13-101 -- System for Electronic Document Analysis and Retrieval (SEDAR) requires that every issuer required to file a document under securities legislation make its filing through SEDAR. The Financial Statements filed with the Commission thus become publicly available.

9. In the Application, the Partnership has requested under subsection 147 of the Act relief from filing the Financial Statements with the Commission. The activity fee associated with the Application is $5,500 in accordance with item F(1) of Appendix C of Rule 13-502.

10. If the Partnership was a reporting issuer seeking the same relief as requested in this application, such relief could be sought under section 80 of the Act, rather than under subsection 147 of the Act, and the activity fee for that application would be $1,500 in accordance with item F(3) of Appendix C of the Rule. The Application should be treated as an application for other regulatory relief under item F(3) of Appendix C to the Rule.

Decision

This letter confirms that, based on the information provided in the Application, and the facts and representations above, and for the purposes described in the Application, the Decision Maker hereby exempts Economical and the Partnership from:

i) paying an activity fee of $5,500 in connection with the Application, provided that Economical and the Partnership pay an activity fee on the basis that the Application be treated as an application for other regulatory relief under item F(3) of Appendix C to Rule 13-502; and

ii) paying an activity fee of $1,500 in connection with the fees exemption request in the Application under item F(3) of Appendix C to Rule 13-502.