ALBERTA MUNICIPAL INSURANCE EXCHANGE

Notes to the Financial Statements

Year ended December 31, 2022, with comparative information for 2021

1. Reporting entity:

Alberta Municipal Insurance Exchange (the "Exchange") was formed on January 1, 2002 under the Reciprocal Insurance Exchange Agreement for Municipalities in the province of Alberta and the Insurance Act (the "Act"). Its registered office is located at 300-8616 51 Avenue Edmonton, Alberta, Canada T6E 6E6.

The Exchange commenced operations on January 1, 2002 and has 728 (2021 - 719) subscribers. Subscriptions to the Exchange are renewed annually on a rollover basis. The next date for renewal of policies is January 1, 2023.

The Act permits a group of subscribers to exchange reciprocal contracts or inter-insurance with each other through a principal attorney. The principal attorney is authorized by the subscribers under a power of attorney, to sign reciprocal contracts on their behalf and to act on the subscribers' behalf in respect of any matter specified in the power of attorney related to those contracts.

The Exchange is established for the purpose of permitting the subscribers to exchange a reciprocal contract or inter-insurance as provided for in the Act. The subscribers to the Exchange are various Association of Alberta Municipalities ("ABmunis") members subscribing to the Reciprocal Insurance Exchange Agreement for Municipalities in the province of Alberta dated January 1, 2002.

The affairs of the Exchange are governed by an advisory board established in accordance with the power of attorney.

The majority of the advisory board members are directors of ABmunis whose municipalities are subscribers of the Exchange. AMSC Insurance Services Ltd. ("AMSCIS"), a wholly owned subsidiary of ABmunis, acts as an agent of the Exchange.

2. Basis of presentation:

(a) Statement of compliance:

The financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and comply with the requirements for filing with the Superintendent of Insurance for the Province of Alberta.

The financial statements were authorized for issue by the advisory board on February 22, 2023.

(b) Basis of measurement:

The financial statements have been prepared on the historical cost basis, except for investments which are measured at fair value.

(c) Functional and presentation currency:

The financial statements are presented in Canadian dollars, which is the Exchange’s functional currency. All financial information presented in Canadian dollars has been rounded to the nearest dollar, unless otherwise indicated.

(d) Use of estimates and judgments:

The preparation of the financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.