ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST MOTION RECORD

Transcription

1 ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST Court File No.: CV CL BY: CERTAS HOME AND AUTO INSURANCE COMPANY, DESJARDINS FINANCIAL SECURITY LIFE ASSURANCE COMPANY, THE PERSONAL INSURANCE COMPANY, QUÉBEC INC., FÉDÉRATION DES CAISSES DESJARDINS DU QUÉBEC (collectively, Desjardins ), STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, STATE FARM FIRE AND CASUALTY COMPANY, STATE FARM INTERNATIONAL HOLDING COMPANY, AND STATE FARM INTERNATIONAL LIFE INSURANCE COMPANY LTD. (collectively, State Farm ) Applicants APPLICATION UNDER rules 14.05(3)(d), (g) and (h) of the Rules of Civil Procedure, relating to the purchase of the Canadian business of State Farm by Desjardins MOTION RECORD (Applicants motion for directions and substituted service) Date of motion: October 15, 2014 McCarthy Tétrault LLP Suite 5300, Toronto Dominion Bank Tower. 66 Wellington Street West, Toronto, Ontario M5K 1E6 Kirsten Thompson LSUC No.: 42762F Telephone: (416) Facsimile: (416) LAWYERS FOR THE DESJARDINS APPLICANTS GOWLING LAFLEUR HENDERSON LLP 1 First Canadian Place 100 King Street West, Suite 1600 TORONTO, Ontario M5X 1G5 Michael S. F. Watson LSUC No.: 17996I Telephone: (416) Facsimile: (416) LAWYERS FOR THE STATE FARM APPLICANTS

2 TABLE OF CONTENTS TAB DOCUMENT DATE 1 Notice of motion October 14, Draft initial order sought -- 3 Draft notice of application -- 4 Affidavit of Denis Dubois (Desjardins) October 9, Exhibit A: Official summary of Desjardins 2013 Annual Report 6 Exhibit B: Joint State Farm Desjardins press release 7 Exhibit C: Excerpts of Master Transaction Agreement ( MTA ) between State Farm and Desjardins 8 Exhibit D: Post-Closing privacy policy -- January 15, 2014 January 15, Affidavit of Peter Hanycz (State Farm) October 13, Exhibit A: State Farm s current online Privacy Notice 11 Exhibit B: State Farm s prior online Privacy Notice 12 Exhibit C: State Farm s current hard copy Privacy Notice 13 Exhibit D: State Farm s prior hard copy Privacy Notice 14 Exhibit E: Excerpts of MTA 15 Exhibit F: Joint State Farm Desjardins press release September 15, 2014 effective before September 15, 2014 April, 2014 effective before April, 2014 January 15, 2014 January 15, 2014

3 Exhibit G: Globe and Mail article re transaction 17 Exhibit H: CBC website article re transaction 18 Exhibit I: National Post article re transaction 19 Exhibit J: State Farm letter to current customers 20 Exhibit K: Second State Farm letter to current customers 21 Exhibit L: Letter from State Farm agents to customers 22 Exhibit M: Affidavits of publication of notice of the transaction in the Canada Gazette 23 Exhibit N: Affidavits of publication of notice of the transaction in the Globe and Mail 24 Exhibit O: Proposed form of additional notice to be published in the Globe and Mail January 6, 2014 January 16, 2014 January 15, 2014 January 2014 June 9, 2014 January, 2014 August 20, 2014 August 11,

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5 Court File No.: 14-CL- - ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST BY: CERTAS HOME AND AUTO INSURANCE COMPANY, DESJARDINS FINANCIAL SECURITY LIFE ASSURANCE COMPANY, THE PERSONAL INSURANCE COMPANY, QUÉBEC INC., FÉDÉRATION DES CAISSES DESJARDINS DU QUÉBEC (collectively, Desjardins ), STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, STATE FARM FIRE AND CASUALTY COMPANY, STATE FARM INTERNATIONAL HOLDING COMPANY, AND STATE FARM INTERNATIONAL LIFE INSURANCE COMPANY LTD. (collectively, State Farm ) Applicants APPLICATION UNDER rules 14.05(3)(d), (g) and (h) of the Rules of Civil Procedure, relating to the purchase of the Canadian business of State Farm by Desjardins NOTICE OF MOTION (Applicants motion for directions and substituted service) THE APPLICANTS will make a motion without notice to a judge presiding over the Commercial List Wednesday, October 15, 2014, at 9.30 a.m. or as soon after that time as the motion can be heard, at 330 University Avenue, Toronto.

6 - 2 - PROPOSED METHOD OF HEARING: Orally THE MOTION IS FOR an order in connection with this application, which arises out of the entering into of a Master Transaction Agreement (the MTA ) in January 2014, pursuant to which Desjardins agreed to acquire State Farm s Canadian Business (the Canadian Business ), consisting of assets and liabilities in relation to State Farm s Canadian-based insurance, mutual fund, loan and living benefits business. The applicants ask for an order for (i) directions of the court with respect to, and (ii) under rule of the Rules of Civil Procedure for substituted service for all documents in connection with, the within application. Specifically, the applicants seek an order: (i) approving the form of notice attached as Exhibit O to the affidavit of Peter Hanycz (the State Farm Affidavit ), for the purpose of notifying Affected Persons (as that term is defined in the notice of application herein) of the proposed disclosure of personal information that is covered by Personal Information Protection and Electronic Documents Act, S.C. 2000, c. 5 ( PIPEDA ), and ordering that the applicants may publish such notice in the National Edition of the Globe & Mail within a week after the making of this order and once again during the following week; (ii) pursuant to rule 16.04, that the publication of notice in accordance with subparagraph (i) above shall constitute good and sufficient service and notice of the within application, the notice of application and the application record on all

7 - 3 - Affected Persons, that such service shall be effective on the date of the second publication of the notice, and that all Affected Persons will be bound by any orders made on the application; (iii) that this application will come on for a hearing on a date in November 2014 to be fixed by the court determine, in the circumstances of this case and of the transaction contemplated by the Master Transaction Agreement (the MTA ) between Desjardins as Purchasers and State Farm as Sellers, dated January 15, 2014, pursuant to which Desjardins will acquire the Canadian business of State Farm: (A) the appropriate interpretation to be given to PIPEDA in relation to the disclosure of such personal information in the circumstances of this transaction; and (B) the adequacy of such notice together with other communications given to Affected Persons so that these Affected Persons have knowledge of the proposed disclosure of their personal information and to determine whether the Affected Persons have consented to the disclosure of such personal information; so that Desjardins may carry on in the ordinary course the business of State Farm to be acquired by Desjardins under the MTA.

8 - 4 - (iv) that any interested party who wishes to appear at the hearing of this application may apply to this Court by filing a notice of appearance giving not less than seven (7) days notice to the applicants or upon such other notice, if any, as this Court may order; (v) that the applicants may from time to time apply to this Court for advice and directions in the discharge of their powers and duties hereunder; (vi) requesting the aid and recognition of any court, tribunal, regulatory or administrative body having jurisdiction in Canada or in the United States, to give effect to the order and to the applicants, and their respective agents, in carrying out the terms of the order, and that all courts, tribunals, regulatory and administrative bodies are hereby respectfully requested to make such orders and to provide such assistance to the applicants as may be necessary or desirable to give effect to the order, or to assist the applicants and their respective agents in carrying out the terms of the order; (vii) that the applicants may apply to any court, tribunal, regulatory or administrative body, wherever located, for the recognition of the order and for assistance in carrying out the terms of the order.

9 - 5 - THE GROUNDS FOR THE MOTION ARE: 1. Rule of the Rules of Civil Procedure and the inherent jurisdiction of the Court. 2. The applicants require directions of the court and an order for substituted service to assist them in this application. The purpose of the within application is to permit: (i) State Farm to disclose to Desjardins the personal information (within the meaning of PIPEDA) of all Affected Persons that State Farm has collected and used in the course of its business; and (ii) Desjardins to use such personal information in the operation of the Canadian Business after closing of the transaction in January 2015, in the same manner as has State Farm. The Parties and the Transaction 3. Desjardins Group is the leading cooperative financial group in Canada. 4. State Farm operates businesses in property, casualty and life insurance, as well as mutual fund, loan and living benefits companies, in Canada. 5. Pursuant to the MTA, in January 2014 Desjardins agreed to acquire State Farm s Canadian Business

10 Once the transaction closes in January 2015, Desjardins will own and operate the Canadian Business as a going concern. Desjardins will continue to provide insurance and financial services to existing Canadian Business customers as part of the transaction. 7. In order to enable Desjardins to provide uninterrupted insurance, financial and other important services to existing Canadian Business customers, State Farm must disclose the personal information of the Affected Persons to Desjardins. All such information is in relation to the Canadian Business. 8. An order recognizing the appropriateness of the applicants efforts to inform the Affected Persons of the proposed disclosure of their personal information, and thereby to establish their consent in compliance with PIPEDA, will serve the interests of the public, the current customers of the Canadian Business, and the Affected Persons, because it will facilitate the uninterrupted continuation of vital insurance and financial services by Desjardins. The Legislation 9. The collection, use and disclosure of personal information in the private sector are governed by PIPEDA. PIPEDA defines personal information as information about an identifiable individual, but does not include the name, title or business address or

11 - 7 - telephone number of an employee of an organization. 10. In section 4(1), PIPEDA states that the relevant part of the legislation applies to every organization in respect of personal information that [an] organization collects, uses or discloses in the course of commercial activities. 11. The information concerning the Affected Persons that the applicants propose that State Farm disclose to Desjardins is personal information that State Farm has collected, used and disclosed in the course of commercial activities. 12. With certain exceptions, PIPEDA requires that the disclosure of personal information occur only with the knowledge and consent of the persons to whom the personal information relates. 13. Unlike substantially similar but more recent provincial legislation (Alberta s Personal Information Protection Act, SA 2003, c P-6.5, British Columbia s Personal Information Protection Act, SBC 2003, c 63 and Manitoba s recently amended Personal Information Protection and Identity Theft Prevention Act, CCSM c P-33.7), and despite repeated attempts at amendment, PIPEDA still does not include as one of the permitted exceptions to the requirement for knowledge and consent for the disclosure of personal information in the context of a business transaction where the parties to the transaction have entered into an agreement under which the parties undertake to use and disclose the information only for those purposes for which the information was initially

12 - 8 - collected from or in respect of the individuals, and the information in issue relates to the carrying on of the business or activity for which the transaction took place. 14. As a result, the applicants seek authorization permitting State Farm to disclose to Desjardins, and permitting Desjardins to use, the personal information of Affected Persons so that Desjardins may continue to provide services to existing Canadian Business customers and policyholders, without undue disruption, pursuant to the transaction contemplated by the MTA and in the ordinary course of business, all to the benefit of and in the best interests of customers and policyholders. Notice to Affected Persons of the Proposed Disclosure 15. As is set out in the affidavits sworn in support of this motion and the application, State farm and Desjardins have undertaken extensive efforts to notify all Affected Persons of both (i) the transaction, and (ii) the proposed disclosure of their personal information by State Farm to Desjardins. 16. In addition, the applicants now seek to publish two notices in the Globe and Mail ( Notices ) explaining in plain language the proposed disclosure of their personal information by State Farm to Desjardins for the purpose of the transaction. 17. The Notices will also notify Affected Persons that they may object to the disclosure of

13 - 9 - their personal information by contacting State Farm s Privacy Officer. 18. Further, the applicants will make available to all Affected Persons for inspection a copy of the Application materials, including the affidavits in support, at the office of State Farm as well as on State Farm s website. 19. The applicants propose this course of action to notify Affected Persons because it would be impractical and commercially unreasonable to notify more than a million customers and policyholders individually, particularly in the case of Affected Persons for whom State Farm does not have current and accurate contact information. 20. State Farm employees and agents who are being transferred to Desjardins under the MTA will have the opportunity to consent to the disclosure of their personal information as part of offers of new contracts with Desjardins. 21. The applicants therefore seek the approval of this Court for publication of the Notices for the purpose of providing knowledge to Affected Persons of the proposed disclosure of personal information covered by PIPEDA. 22. At the hearing of the application itself in November, the applicants will seek a declaration that the Affected Persons have the required knowledge, as such term is used in PIPEDA, and are thus deemed to have consented to the disclosure of their personal

14 information by State Farm to Desjardins. hearing of the motion: THE FOLLOWING DOCUMENTARY EVIDENCE will be used at the the affidavit of Denis Dubois (Desjardins), sworn on October 9, 2014; the affidavit of Peter Hanycz (State Farm), sworn on October 13, 2014; Date: October 14, 2014 McCarthy Tétrault LLP Suite 5300, Toronto Dominion Bank Tower. 66 Wellington Street West, Toronto, Ontario M5K 1E6 Kirsten Thompson LSUC No.: 42762F Telephone: (416) Facsimile: (416) LAWYERS FOR THE DESJARDINS APPLICANTS GOWLING LAFLEUR HENDERSON LLP 1 First Canadian Place 100 King Street West, Suite 1600 TORONTO, Ontario M5X 1G5 Michael S. F. Watson LSUC No.: 17996I Telephone: (416) Facsimile: (416) LAWYERS FOR THE STATE FARM APPLICANTS

15 Court File No.: 14-CL- - CERTAS HOME AND AUTO INSURANCE COMPANY, STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY and others Applicants ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST (PROCEEDING COMMENCED AT TORONTO) NOTICE OF MOTION (Applicants motion for directions and substituted service) McCarthy Tétrault LLP Barristers and solicitors Suite 5300, Toronto Dominion Bank Tower. 66 Wellington Street West, Toronto, Ontario M5K 1E6 Kirsten Thompson LSUC No.: 42762F Telephone: (416) Facsimile: (416) LAWYERS FOR THE DESJARDINS APPLICANTS GOWLING LAFLEUR HENDERSON LLP Barristers and solicitors 1 First Canadian Place100 King Street West, Suite 1600 TORONTO, Ontario M5X 1G5 Michael S. F. Watson LSUC No.: 17996I Telephone: (416) Facsimile: (416) LAWYERS FOR THE STATE FARM APPLICANTS

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17 Court File No.: ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST THE HONOURABLE JUSTICE MORAWETZ ) Wednesday, October 15, 2014 BY: CERTAS HOME AND AUTO INSURANCE COMPANY, DESJARDINS FINANCIAL SECURITY LIFE ASSURANCE COMPANY, THE PERSONAL INSURANCE COMPANY, QUÉBEC INC., FÉDÉRATION DES CAISSES DESJARDINS DU QUÉBEC (collectively, Desjardins ), STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, STATE FARM FIRE AND CASUALTY COMPANY, STATE FARM INTERNATIONAL HOLDING COMPANY, AND STATE FARM INTERNATIONAL LIFE INSURANCE COMPANY LTD. (collectively, State Farm ) Applicants APPLICATION UNDER rules 14.05(3)(d), (g) and (h) of the Rules of Civil Procedure, relating to the purchase of the Canadian business of State Farm by Desjardins INITIAL ORDER THIS MOTION, made by the applicants for directions of the court with respect to, and under rule of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, as amended, for substituted service for all documents in connection with, the within application, was heard this day at Toronto.

18 - 2 - ON READING the motion record including the affidavit of Denis Dubois sworn on October 9, 2014 and exhibits thereto (the Desjardins Affidavit ) and the affidavit of Peter Hanycz sworn on October 13, 2014 and exhibits thereto (the State Farm Affidavit ), and on hearing the submissions of counsel for Desjardins and for State Farm, A. DEFINITIONS 1. In this order, the following terms have the following meanings: (a) Master Transaction Agreement or MTA means the Master Transaction Agreement between Desjardins as Purchasers and State Farm as Sellers, dated January 15, 2014, pursuant to which Desjardins will acquire the Canadian business of State Farm; (b) Affected Persons means persons who are current, former and prospective customers, all persons related to State Farm s policies or accounts, such as State Farm Payment Plan account holders, beneficiaries, drivers, account payers, lienholders, lessors, all persons related to a current or former claim such as claimants and witnesses, service providers, current and former agents, any other persons identified within the Canadian Books and Records (as that term is defined in the MTA), applicants for employment with State Farm and former employees, to the extent that (despite State Farm s notification efforts to date) they do not yet have the required knowledge and have not yet consented to the

19 - 3 - proposed disclosure of their personal information pursuant to the Transaction contemplated under the MTA; (c) PIPEDA means Personal Information Protection and Electronic Documents Act, S.C. 2000, c. 5. B. NOTICE OF HEARING OF APPLICATION RELATING TO DISCLOSURE OF PERSONAL INFORMATION 2. THIS COURT ORDERS that the form of notice attached as Exhibit O to the State Farm Affidavit is hereby approved for the purpose of notifying Affected Persons of the proposed disclosure of personal information that is covered by PIPEDA, and that the applicants may publish such notice in the National Edition of the Globe & Mail within a week after the making of this order and once again during the following week. 3. THIS COURT ORDERS, pursuant to rule 16.04, that the publication of notice in accordance with paragraph 2 of this order shall constitute good and sufficient service and notice of the within application, the notice of application and the application record on all Affected Persons, that such service shall be effective on the date of the second publication of the notice, and that all Affected Persons will be bound by any orders made on the application. 4. THIS COURT ORDERS that this application will come on for a hearing on November, 2014 to determine, in the circumstances of this case and of the transaction contemplated by the Master Transaction Agreement:

20 - 4 - (a) the appropriate interpretation to be given to PIPEDA in relation to the disclosure of such personal information in the circumstances of this transaction; and (b) the adequacy of such notice together with other communications given to Affected Persons so that these Affected Persons have knowledge of the proposed disclosure of their personal information and to determine whether the Affected Persons have consented to the disclosure of such personal information; so that Desjardins may carry on in the ordinary course the business of State Farm to be acquired by Desjardins under the MTA. 5. THIS COURT ORDERS that any interested party who wishes to appear at the hearing of this application may apply to this Court by filing a notice of appearance giving not less than seven (7) days notice to the applicants or upon such other notice, if any, as this Court may order. C. GENERAL 6. THIS COURT ORDERS that the applicants may from time to time apply to this Court for advice and directions in the discharge of their powers and duties hereunder. 7. THIS COURT HEREBY REQUESTS the aid and recognition of any court, tribunal, regulatory or administrative body having jurisdiction in Canada or in the United States, to give effect to this order and to the applicants, and their respective agents, in carrying out the

21 - 5 - terms of this order. All courts, tribunals, regulatory and administrative bodies are hereby respectfully requested to make such orders and to provide such assistance to the applicants as may be necessary or desirable to give effect to this order, or to assist the applicants and their respective agents in carrying out the terms of this order. 8. THIS COURT ORDERS that the applicants may apply to any court, tribunal, regulatory or administrative body, wherever located, for the recognition of this order and for assistance in carrying out the terms of this order. 9. THIS COURT ORDERS that the Honourable Justice Morawetz shall remain seized of this matter for the purpose of the hearing of this application on November, 2014.

22 Court File No.: CERTAS HOME AND AUTO INSURANCE COMPANY, STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY and others Applicants ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST (PROCEEDING COMMENCED AT TORONTO) INITIAL ORDER McCarthy Tétrault LLP Barristers and solicitors Suite 5300, Toronto Dominion Bank Tower. 66 Wellington Street West, Toronto, Ontario M5K 1E6 Kirsten Thompson LSUC No.: 42762F Telephone: (416) Facsimile: (416) LAWYERS FOR THE DESJARDINS APPLICANTS GOWLING LAFLEUR HENDERSON LLP Barristers and solicitors 1 First Canadian Place100 King Street West, Suite 1600 TORONTO, Ontario M5X 1G5 Michael S. F. Watson LSUC No.: 17996I Telephone: (416) Facsimile: (416) LAWYERS FOR THE STATE FARM APPLICANTS

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24 Court File No.: ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST BY: CERTAS HOME AND AUTO INSURANCE COMPANY, DESJARDINS FINANCIAL SECURITY LIFE ASSURANCE COMPANY, THE PERSONAL INSURANCE COMPANY, QUÉBEC INC., FÉDÉRATION DES CAISSES DESJARDINS DU QUÉBEC (collectively, Desjardins ), STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, STATE FARM FIRE AND CASUALTY COMPANY AND STATE FARM INTERNATIONAL HOLDING COMPANY, STATE FARM INTERNATIONAL LIFE INSURANCE COMPANY LTD. (collectively, State Farm ) Applicants APPLICATION UNDER rules 14.05(3)(d), (g) and (h) of the Rules of Civil Procedure, relating to the purchase of the Canadian business of State Farm by Desjardins NOTICE OF APPLICATION TO ALL AFFECTED PERSONS, AS DESCRIBED IN SUBPARAGRAPH 1(c) BELOW A LEGAL PROCEEDING HAS BEEN COMMENCED by the applicants. The claim made by the applicants appears on the following page. THIS APPLICATION will come on for a hearing on November 3, 2014, at a.m., at 330 University Avenue, Toronto, Ontario. IF YOU WISH TO OPPOSE THIS APPLICATION, to receive notice of any step in the application or to be served with any documents in the application, you or an Ontario lawyer acting for you must forthwith prepare a notice of appearance in Form 38A prescribed by the Rules of Civil Procedure, serve it on the applicants lawyers and file it, with proof of service, in this court office, and you or your lawyer must appear at the hearing.

25 2 IF YOU WISH TO PRESENT AFFIDAVIT OR OTHER DOCUMENTARY EVIDENCE TO THE COURT OR TO EXAMINE OR CROSS-EXAMINE WITNESSES ON THE APPLICATION, you or your lawyer must, in addition to serving your notice of appearance, serve a copy of the evidence on the applicants lawyers and file it, with proof of service, in the court office where the application is to be heard as soon as possible, but at least four days before the hearing. IF YOU FAIL TO APPEAR AT THE HEARING, JUDGMENT MAY BE GIVEN IN YOUR ABSENCE AND WITHOUT FURTHER NOTICE TO YOU. IF YOU WISH TO OPPOSE THIS APPLICATION BUT ARE UNABLE TO PAY LEGAL FEES, LEGAL AID MAY BE AVAILABLE TO YOU BY CONTACTING A LOCAL LEGAL AID OFFICE. Date: October 15, 2014 Issued by Local registrar Address of court office 330 University Avenue, 7th floor Toronto, ON M5G 1R7

26 3 APPLICATION DEFINITIONS: 1. In this notice of application, the following terms have the following meanings: (a) Master Transaction Agreement or MTA means the Master Transaction Agreement between Desjardins as Purchasers and State Farm as Sellers, dated January 15, 2014; (b) State Farm Canada means State Farm (as defined in the title of proceeding herein) together with its Transferred Subsidiaries (as that term is defined in the MTA), being State Farm Finance Corporation of Canada, SF Insurance Placement Corporation of Canada and State Farm Investor Services (Canada) Co.; (c) Affected Persons means persons who are current, former and prospective customers, all persons related to State Farm Canada s policies or accounts, such as State Farm Payment Plan account holders, beneficiaries, drivers, account payers, lienholders, lessors, all persons related to a current or former claim such as claimants and witnesses, service providers, current and former agents, any other persons identified within the Canadian Books and Records (as that term is defined in the MTA), applicants for employment with State Farm Canada and former employees, to the extent that (despite State Farm s notification efforts to date) they do not yet have the required knowledge and have not yet consented to

27 4 the proposed disclosure of their personal information pursuant to the Transaction contemplated under the MTA; (d) Initial Order means the order of this Court made on October 15, 2014 with respect to, among other matters, the publication of notice of this application to all Affected Persons; (e) PIPEDA means Personal Information Protection and Electronic Documents Act, S.C. 2000, c. 5. THE APPLICANTS MAKE APPLICATION FOR: 2. an initial order (the Initial Order ) pursuant to rules 14.05(3)(d), (g) and (h), and and Rule 38 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, as amended: (a) approving a notice (the Legal Notice ) substantially in the form attached as Exhibit O to the Affidavit of Peter Hanycz for the purpose of notifying all Affected Persons of the proposed disclosure of their personal information pursuant to the Transaction contemplated under the MTA and of this application; (b) permitting the applicants to publish the Legal Notice in the National Edition of the Globe & Mail twice, once within a week after the making of the Initial Order and once again during the following week;

28 5 (c) for substituted service of this notice of application and the application record on all Affected Persons by means of the Legal Notice; (d) scheduling the hearing of the application; (e) directing any interested party who wishes to appear at the hearing of this application to apply to this Court by filing a notice of appearance giving not less than seven (7) days notice to the applicants or upon such other notice, if any, as this Court may order; (f) permitting the applicants, from time to time, to apply to this Court for advice and directions in the discharge of their powers and duties under the Initial Order; 3. a final judgment: (a) ordering and declaring that by virtue of the publication of the Legal Notice in accordance with the Initial Order and the other communications, described in the affidavit of Denis Dubois and the affidavit of Peter Hanycz, by State Farm and Desjardins to Affected Persons to provide knowledge to such Affected Persons of the proposed disclosure of their personal information, as such term knowledge is used in PIPEDA, State Farm has provided all Affected Persons with required knowledge; (b) ordering and declaring that, given: (i) the nature of the relationship and documentation between State Farm and the Affected Persons,

29 6 (ii) the nature and intent of the Master Transaction Agreement, (iii) the provision in the Legal Notices of the ability of any proposed Affected Person to object to State Farm disclosing his or her personal information to Desjardins, (iv) the intent of Desjardins to carry on in the ordinary course the business that it is acquiring from State Farm and, in so doing, use the personal information in the same way as State Farm did for the purpose of that business, and (v) the further intent of Desjardins to protect and safeguard the confidentiality and privacy of the personal information disclosed, the Affected Persons are deemed to have given consent (as such term is used in PIPEDA) to the disclosure of their personal information by State Farm to Desjardins. (c) ordering that State Farm has the requisite authority and may disclose to Desjardins, and Desjardins may receive and use, the personal information of all Affected Persons, but only in the same manner and to the same extent as did State Farm prior to such transfer; (d) ordering that, subject to compliance with any applicable privacy legislation, Desjardins shall be entitled to use the personal information provided to it by State Farm in a manner equivalent to the prior use of such personal information by

30 7 State Farm, provided that Desjardins shall safeguard such personal information to at least the same extent as did State Farm prior to such transfer; (e) ordering that the applicants or any of them may from time to time apply to this Court for advice and directions in the discharge of their powers and duties hereunder; (f) requesting the aid and recognition of any court, tribunal, regulatory or administrative body having jurisdiction in Canada or in the United States, to give effect to the judgment and to the applicants, and their respective agents, in carrying out the terms of the judgment; and (g) ordering that the applicants may apply to any court, tribunal, regulatory or administrative body, wherever located, for the recognition of the judgment and for assistance in carrying out the terms of the judgment. THE GROUNDS FOR THE APPLICATION ARE: The Parties and the Transaction 4. Desjardins Group is the leading cooperative financial group in Canada. 5. State Farm operates businesses in property, casualty and life insurance, as well as mutual fund, loan and living benefits companies, in Canada. 6. Pursuant to the MTA, in January 2014 Desjardins agreed to acquire State Farm s Canadian Business (as defined in the MTA), consisting of assets and liabilities in relation to

31 8 State Farm s Canadian-based insurance, mutual fund, loan and living benefits business (the Canadian Business ). 7. Once the transaction closes in January 2015, Desjardins will own and operate the Canadian Business as a going concern. Desjardins will continue to provide insurance and financial services to existing Canadian Business customers as part of the transaction. 8. In order to enable Desjardins to provide uninterrupted insurance, financial and other important services to existing Canadian Business customers, State Farm must disclose the personal information of the Affected Persons to Desjardins. All such information is in relation to the Canadian Business. 9. An order recognizing the appropriateness of the applicants efforts to inform the Affected Persons of the proposed disclosure of their personal information, and thereby to establish their consent in compliance with PIPEDA, will serve the interests of the public, the current customers of the Canadian Business, and the Affected Persons, because it will facilitate the uninterrupted continuation of vital insurance and financial services by Desjardins. The Legislation 10. The collection, use and disclosure of personal information in the private sector are governed by PIPEDA. PIPEDA defines personal information as information about an identifiable individual, but does not include the name, title or business address or telephone number of an employee of an organization.

32 9 11. In subsection 4(1), PIPEDA states that the relevant part of the legislation applies to every organization in respect of personal information that [an] organization collects, uses or discloses in the course of commercial activities. 12. The information concerning the Affected Persons that the applicants propose that State Farm disclose to Desjardins is personal information that State Farm has collected and used in the course of commercial activities. 13. With certain exceptions, PIPEDA requires that the disclosure of personal information occur only with the knowledge and consent of the persons to whom the personal information relates. 14. Unlike substantially similar but more recent provincial legislation (Alberta s Personal Information Protection Act, S.A. 2003, c. P-6.5, British Columbia s Personal Information Protection Act, S.B.C. 2003, c. 63 and Manitoba s recently amended Personal Information Protection and Identity Theft Prevention Act, C.C.S.M. c. P-33.7, which is not yet in force), and despite repeated attempts at amendment, PIPEDA still does not include as one of the permitted exceptions to the requirement for knowledge and consent for the disclosure of personal information in the context of a business transaction where the parties to the transaction have entered into an agreement under which the parties undertake to use and disclose the information only for those purposes for which the information was initially collected from or in respect of the individuals, and the information in issue relates to the carrying on of the business or activity for which the transaction took place.

33 As a result, the applicants seek authorization permitting State Farm to disclose to Desjardins, and permitting Desjardins to use, the personal information of Affected Persons so that Desjardins may continue to provide services to existing Canadian Business customers and policyholders, without undue disruption, pursuant to the transaction contemplated by the MTA and in the ordinary course of business, all to the benefit of and in the best interests of customers and policyholders. Notice to Affected Persons of the Proposed Disclosure 16. In January 2014, State Farm sent letters to approximately 1.2 million customers notifying them that Desjardins would be acquiring Canadian Business. In June 2014, State Farm sent a second letter to these customers informing them that it would be necessary for State Farm to disclose their personal information to Desjardins. Approximately 5,800 letters were returned to State Farm as undeliverable. 17. In March 2014, State Farm agents also sent 775,000 letters to State Farm customers, informing them of the transaction. 18. As a sign of good faith and to help ensure that all Affected Persons will have knowledge of the proposed disclosure of personal information, State Farm and Desjardins propose to publish the Legal Notice twice in the National Edition of the Globe and Mail newspaper, explaining in plain language the proposed disclosure of their personal information by State Farm to Desjardins for the purpose of the transaction. 19. The Legal Notice will also notify Affected Persons that they may object to the disclosure of their personal information by contacting State Farm s Privacy Officer.

34 Further, the applicants will make available to all Affected Persons for inspection a copy of the application materials, including the affidavits in support, at the office of State Farm as well as on State Farm s website. 21. The applicants propose this course of action to notify Affected Persons because it would be impractical and commercially unreasonable to notify more than a million customers individually, particularly in the case of Affected Persons for whom State Farm does not have current and accurate contact information. 22. State Farm employees and agents who are being transferred to Desjardins under the MTA will have the opportunity to consent to the disclosure of their personal information as part of offers of new contracts with Desjardins. 23. The applicants therefore seek the approval of this Court (i) that the form of the proposed Legal Notice is sufficient for the purpose of providing knowledge to Affected Persons of the proposed disclosure of personal information covered by PIPEDA, and (ii) to publish such Notice twice in the National Edition of the Globe and Mail newspaper. 24. The relief sought herein is necessary to ensure Affected Persons have the required knowledge, as such term is employed in PIPEDA, of the disclosure of their personal information. Consent of Affected Persons to the Disclosure of Personal Information 25. Based on the notification provided by the published Legal Notice and the direct letters to the Affected Persons, and so that Desjardins can operate the Canadian Business without undue disruption in the ordinary course, the applicants seek a declaration that the Affected Persons have

35 12 the required knowledge, as such term is used in PIPEDA, and are thus deemed to have consented to the disclosure of their personal information by State Farm to Desjardins. 26. The relief sought herein is necessary to enable State Farm to lawfully disclose the personal information of Affected Persons to Desjardins and to enable Desjardins to use the personal information provided to it by State Farm to continue to provide insurance and financial services to those Affected Persons who are current State farm customers and so that Desjardins can operate the Canadian Business without undue disruption in the ordinary course. 27. Desjardins will use the personal information provided to it only in a manner consistent with State Farm s prior use of the information. 28. Desjardins will implement and maintain appropriate safeguards, at least to the same extent provided by State Farm prior to the disclosure of the information to Desjardins, to protect the personal information in compliance with applicable privacy legislation. Statutory Grounds 29. The applicants rely on Rules 14 and 38 of the Ontario Rules of Civil Procedure. 30. The applicants also rely on: (a) the Personal Information Protection and Electronic Documents Act S.C. 2000, c. 5; and (b) rules 14.05(3)(d), (g) and (h) and Rule 38 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

36 The applicants will rely on such further grounds as counsel may advise and this Honourable Court may permit. THE FOLLOWING AFFIDAVIT OR OTHER EVIDENCE will be used at the hearing of the application: affidavit of Denis Dubois, Desjardins, sworn on October 9, 2014; and affidavit of Peter Hanycz, State Farm, sworn on October ; such further and other evidence as counsel may advise and this Honourable Court may permit. If served outside Ontario without court order, list facts & provisions of Rule 17 to support service. Date: October 15, 2014 McCarthy Tétrault LLP Suite 5300, Toronto Dominion Bank Tower. 66 Wellington Street West, Toronto, Ontario M5K 1E6 Kirsten Thompson LSUC No.: 42762F Telephone: (416) Facsimile: (416) LAWYERS FOR THE DESJARDINS APPLICANTS GOWLING LAFLEUR HENDERSON LLP 1 First Canadian Place 100 King Street West, Suite 1600 TORONTO, Ontario M5X 1G5 Michael S. F. Watson LSUC No.: 17996I Telephone: (416) Facsimile: (416) LAWYERS FOR THE STATE FARM APPLICANTS

37 CERTAS HOME AND AUTO INSURANCE COMPANY, STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY and others Applicants Court File No.: ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST (PROCEEDING COMMENCED AT TORONTO) NOTICE OF APPLICATION McCarthy Tétrault LLP Barristers and solicitors Suite 5300, Toronto Dominion Bank Tower. 66 Wellington Street West, Toronto, Ontario M5K 1E6 Kirsten Thompson LSUC No.: 42762F Telephone: (416) Facsimile: (416) LAWYERS FOR THE DESJARDINS APPLICANTS GOWLING LAFLEUR HENDERSON LLP Barristers and solicitors 1 First Canadian Place 100 King Street West, Suite 1600 TORONTO, Ontario M5X 1G5 Michael S. F. Watson LSUC No.: 17996I Telephone: (416) Facsimile: (416) LAWYERS FOR THE STATE FARM APPLICANTS

38

39 Court File No. ONTARIO SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST) BY: CERTAS HOME AND AUTO INSURANCE COMPANY, DESJARDINS FINANCIAL SECURITY LIFE ASSURANCE COMPANY, THE PERSONAL INSURANCE COMPANY, QUEBEC INC., Ff:Dl~RATION DES CAISSES DESJARDINS DU QUEBEC (collectively, "Desjardins"), STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, STATE FARM FIRE AND CASUALTY COMPANY AND STATE FARM INTERNA TIONAL HOLDING COMPANY, STATE FARM INTERN ATIONAL LIFE INSURANCE COMPANY LTD. (collectively, "State Farm") (Collectively, Applicants) APPLICATION UNDER rules 14.05(3)(d), (g) and (h) of the Rules of Civil Procedure, relating to the purchase of the Canadian business of State Farm by Desjardins AFFIDAVIT OF DENIS DUBOIS SWORN OCTOBER 9, 2014 SAY: I, Denis Dubois, of the City of Quebec, in the Province of Quebec MAKE OATH AND 1. I am the ChiefIntegration Officer and General Manager (Ontario, Atlantic and Western Regions) and Vice-President of Desjardins General Insurance Group Inc. ("DGIG") and as such have personal knowledge of the facts to which I depose, except where I have indicated that I have obtained facts from other sources, in which case I verily believe those facts to be true. All capitalised terms used herein have the same meaning as defined in the accompanying unless otherwise indicated. Factum 2. This affidavit is sworn in support of an application for: (a) a motion for an initial order approving the form and content of a notice to be published in the National Edition of Globe and Mail regarding the disclosure by State Farm of the personal information of Affected Persons to Desjardins, as part of

40 the transaction described in the MTA pursuant to which Desjardins will acquire the Canadian Business of State Farm; and (b) an application for a judgement declaring State Farm's efforts to provide knowledge to the Affected Persons 0 f State Farm's proposed disclosure of personal information to Desjardins are sufficient and consent required as under PIP EDA has been obtained by State Farm so that State Farm may disclose to Desjardins the personal information of Affected Persons as it relates to the Canadian Business and Desjardins may use that personal information in the future operation of that business. 3. I have worked at Desjardins since 2cA3~ my role as Chief Integration Officer and General Manager, I am responsible for planning and leading DGIG's Integration of State Farm Canadian activities. I am also continuing in my role as General Manager ofdgig's rapidly expanding operations outside of Quebec. Desjardins 4. Desjardins was founded in 1900 by Alphonse and Dorimene Desjardins, and today it is the largest cooperative financial group in Canada, having approximately $212 billion in total assets.' Attached hereto as "Exhibit 1\" is copy of the official summary of Desjardins' 2013 Annual Report. 5. In 2012, Desjardins was ranked 4th among the North America's safest financial institutions, and named top corporate citizen in Canada by Corporate Knights. More recently, it was ranked second among the world's strongest banks in 2014 by Bloomberg? 6. Desjardins has over 6 million members and clients, and has 45,219 employees.' 7. There are approximately 864 Desjardins service outlets in Quebec and Ontario, 376 caisses in Quebec and Ontario and over 2,270 ATMs in Quebec and Ontario. Nearly 400 Data as at December 31, 2013, unless otherwise indicated, Exhibit A at page 2. Exhibit A at page 2. Ibid.

41 establishments offer a large range of financial and insurance services outside the caisse network and more than 20 entities and business units offer a large range of financial and insurance. 4 services. 8. Desjardins has four business segments: wealth management and life and health insurance, property and casualty insurance, personal services and business serviccs.i Desjardins to Acquire State Farm's Canadian Business 9. On January 15,2014, Desjardins announced that it entered into an agreement to acquire State Farm's Canadian Business. Attached hereto as "Exhibit B" is copy of the joint news release issued by both Desjardins and State Farm and published on Desjardins' website. 10. In the announcement, State Farm advised Affected Persons and the public generally that Desjardins would be operating the newly acquired State Farm Canadian Business in the ordinary course. State Farm also noted that its 1,700 Canadian employees and more than 500 Canadian agents would continue to provide services to State Farm's 1.2 million Canadian customers. II. The parties entered into a Master Transaction Agreement ("MTA"), relevant excerpts of which are attached hereto as "Exhibit c." Under the MTA, State Farm provided Desjardins with copies of all of its privacy policies concerning the collection, use, retention, destruction and disclosure of personal information. State Farm also warranted that "since January 1, 2011, its collection, use, disclosure and retention of personal information and conduct of business has complied in all material respects with applicable privacy laws." 12. The transaction is scheduled to close on January 1,2015. In accordance with the MTA, Desjardins will continue to operate the Canadian Business. 13. The transaction will make Desj ardins Group the second largest property and casualty insurance provider in Canada with annual gross written premi urns of approximately up from approximately $2 billion. $3.9 billion, Ibid. Ibid at page 5.

42 14. Under the terms of the MTA and to permit Desjardins to assume the Canadian Business, State Farm must necessarily disclose to Desjardins information, including personal information, of Affected Persons as it relates to the operation of the Canadian Business in the ordinary course. 15. Desjardins will use the personal information only to the extent necessary to continue the business operations it acquired, including offering the financial and insurance services to existing customers of the Canadian Business. 16. If State Farm is not permitted to disclose the personal information of the Affected Persons to Desjardins, the ordinary operation of the Canadian Business will be disrupted, potentially causing inconvenience for millions of Canadians and potentially creating a coverage gap. 17. Desjardins seeks authorization to use the personal information of the Affected Persons in the same way and for the same purposes as State Farm did in its ordinary operation of the Canadian Business. 18. Desjardins will protect and safeguard the confidentiality and privacy of the personal information of Affected Persons disclosed to it in relation to the operation of the Canadian Business to at least the same standard as State Farm has and in keeping with Desjardins' extensive privacy policy. Desjardins' privacy policy reflects a commitment to confidentiality and privacy surrounding personal information. Privacy Policy 19. To further ensure that Desjardins treatment of the personal information of Affected Persons as it relates to the operation of the Canadian Business is at least as robust as that offered by State Farm prior to closing, Desjardins has drafted a privacy policy based, 0llJ the existing State jo.{\uo...q.'1 ~ Farm policy which will apply to the Canadian Business after ~ 1, Attached hereto as j "Exhibit D" is a copy of the joint State Farm/De)iardins privacy policy ("Post Closing Policy"). 20. The Post Closing Policy specifics the types of personal information collected, how it is used, and how it is shared.

43 21. With respect to safeguards, the policy outlines that Desjardins maintains physical, electronic, and procedural safeguards to protect customer information, regularly reviews its policies and practices, regularly monitors its computer networks, and regularly tests the strength of the company's security. Proposed Notice to be Published in the Globe and Mail 22. To ensure Affected Persons have knowledge of the proposed transfer, State Farm and Desjardins seek to publish a notice in the National Edition of the Globe and Mail as a supplement to the notification efforts made thus far, as discussed. The proposed form of the notice is attached as an Exhibit to the affidavit of State Farm. 23. I am not aware of further commercially reasonable steps that Desjardins may take to provide knowledge to the Affected Persons and obtain consent prior to the completion of the transaction January 1,2015. It is my belief, based on estimates provided by State Farm, that sorting and distinguishing individual paper records to remove or redact those individuals who have not consented would cost more than $140 million and would not be completed before the transaction closes. SWORN BEFORE ME at the City of Quebec, in the Province of Quebec, this 9 th day of October, " J '1 I '.. ~da! Commissioner for f~king Affidavits ) ) ) ) ) ) )

44 CERTAS HOME AND AUTO INSURANCE COMPANY, STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY and others - Applicants - Court File No.: ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST (PROCEEDING COMMENCED AT TORONTO) AFFIDAVIT OF DENIS DUBOIS (Sworn on October _9_,2014) McCarthy Tetrault LLP Barristers and solicitors Suite 5300, Toronto Dominion Bank Tower. 66 Wellington Street West, Toronto, Ontario M5K le6 Kirsten Thompson LSUC No.: 42762F Telephone: (416) Facsimile: (416) LAWYERS FOR THE DESJARDINS APPLICANTS GOWLING LAFLEUR HENDERSON LLP Barristers and solicitors 1 First Canadian Place 100 King Street West, Suite 1600 TORONTO, Ontario M5X IG5 Michael S. F. Watson LSUC No.: Telephone: (416) Facsimile: (416) LAWYERS FOR THE STATE FARM APPLICANTS