By law, the Division of Insurance must conduct a public hearing on the sale
The Division of Insurance announced this month that the General Indemnity Group, LLC (“GIG”) has made an application to the Division for the approval of its proposed acquisition of control of the United Casualty and Surety Insurance Company (“UC&S”). According to public documents filed by GIG, on May 19, 2016, the General Indemnity Group, a subsidiary of the Boston Omaha Corporation, entered into a Stock Purchase Agreement with the shareholders of the UC&S. According to the agreement, if it is approved, GIG will acquire control of UC&S, via the purchase of all issued and outstanding stock of the property and casualty insurer.
Since UC&S is a Massachusetts-domiciled insurer, the Division is required to conduct a public hearing on the matter pursuant to M.G.L. c. 175, §206B. In addition to determining whether or not to approve the proposed acquisition of control, the public hearing must be conducted in order to allow any persons who might be affected by the proposed acquisition the opportunity to give testimony or evidence on the matter.
The public hearing will take place in November
The Division announced in Bulletin F2016-01; Acquisition of Control of United Casualty Ins. Co. that it has scheduled the public hearing on the matter for 10:00 AM on November 15, 2016. The hearing will take place in Room 1-E at the Division’s offices located at 1000 Washington Street, Boston, MA. The Division has also made available all of the documents filed in connection with the proposed acquisition available for public inspection. They can be viewed in Suite 810 at the Division’s offices.
Those individual interested in participating in the public hearing
The Division has advised those individuals interested in participating in the hearing, the following:
Any person identified in M.G.L. c. 175, §206B(d)(2) who wishes to participate in the November 15, 2016 hearing must submit, on or before November 9, 2016, a written Notice of Intent to Participate, setting forth the statutory basis for their participation. The Notice of Intent to Participate must specify the basis for the asserted interest in the proposed acquisition of control, if applicable, as well as whether the person intends to make an oral statement, present evidence, examine or cross-examine witnesses or engage in discovery.
If the Commissioner determines that a person’s interest may be affected by the proposed acquisition of control, that person may participate at the hearing following presentations by the Applicant, UC&S and before any other person the Commissioner may recognize at the hearing. The length of any oral statements, presentations of evidence or examination of witnesses, may be limited at the discretion of the Commissioner. Written statements may be submitted at any time prior to the conclusion of the hearing.
All submissions, including the Notice of Intent to Participate, must refer to Docket No. F2016-01 and may be sent either by post addressed to: Docket Clerk, Hearings and Appeals, Division of Insurance, 1000 Washington Street, Suite 810, Boston, Massachusetts 02118-6200, or by electronic mail to firstname.lastname@example.org.
A family-owned property and casualty insurer based in Quincy
According to documents reviewed by Agency Checklists, United Casualty and Surety Insurance Company was first organized on March 7, 1988 and incorporated on May 1, 1989 under the laws of the State of Georgia. An amendment approved by the Secretary of State of Georgia on April 17, 1989 approved the company’s request to change the company name (formerly United Casualty and Surety Company, Inc.) as well as to modify the types of insurance the Company was initially authorized to write.
On June 28, 1993, the Company re-domesticated to the Commonwealth of Massachusetts. Shortly thereafter, pursuant to Massachusetts law, a merger of the two former entities, United Casualty and Surety Insurance Company and United Casualty and Surety Company, Inc. was certified with the former becoming the surviving corporation.
Based in Quincy, UC&S is a family-owned insurer run by the Carrigan family with its principal lines of business being surety and fidelity bond coverages, with it primarily specializing in providing surety bonds. The company is rated A- (Excellent) by AM Best and is approved by the United States Department of the Treasury (570 Circular).
It is currently licensed to write business in the following states of Massachusetts, Rhode Island, New Hampshire, Maine, New York, New Jersey, Connecticut, Pennsylvania and Florida. Total Liabilities, Capital and Surplus for the insurer as of 2009, the last year the insurer was examined by the Division of Insurance, totaled $10,425,281.
According to documents filed with the SEC, General Indemnity Group, LLC has agreed to purchase the acquired stock of UC&S for $13,000,000 which will be paid to the selling stockholders at the closing.
More about the buyer, General Indemnity Group, LLC
Also based in Boston, the General Indemnity Group, LLC is the wholly-owned subsidiary of the Boston Ohama Corporation, whose headquarters are on Newbury Street in Boston. The company currently operates several lines of businesses, including outdoor billboards in addition to other related advertising services and a surety insurance brokerage firm. The Boston Omaha Corporation is run Co-CEOs Adam K. Peterson, who is based in Omaha, and Alex B. Rozek, who is based in Boston.
On September 11, 2015, the company formed General Indemnity Group, LLC, a wholly-owned subsidiary, for the purpose of acquiring and underwriting “potential future insurance operations.” In October of 2015, the company commenced its operations with the hiring of Michael Scholl, ACAS, MAAA as President. Ms. Scholl is a former actuary.
GIG says that it intends to employ “a hybrid distribution model, working both on a direct basis as well as through the traditional agency model.” According to Boston Omaha’s 2015 Annual Report, GIG is also on the hunt for acquisitions and is interested in acquiring retail agencies, insurers or managing general agencies which fit within their model.
Since June of 2015, the company also has acquired seven different outdoor billboard businesses located in various states including Alabama, Florida, Georgia and Wisconsin. As a result, it now owns and operates more than 520 billboard signs. In addition to these corporate endeavors, GIG also maintains minority ownership in several real estate ventures.
In April of this year, the company acquired the Warnock Agency, a surety-only agency providing surety bonds in all 50 states for a cash purchase price of $1,345,000.