The Massachusetts Division of Insurance will hold a virtual hearing on October 21, 2025, to consider the plan by Merrimack Mutual Fire Insurance Company and Cambridge Mutual Fire Insurance Company to reorganize into a mutual holding company structure.
The proposed transaction would see the two policyholder-owned mutuals convert into stock insurance companies. These new entities would then be acquired by a newly formed parent, The Andover Companies, Inc., a Massachusetts mutual holding company.
Insurers Propose Changes from Position of Strength
The Andover Companies, which also include the stock-based Bay State Insurance Company, enter the regulatory review process with a clean operational record. Bay State Insurance Company is a stock company with nearly all its shares owned by Merrimack Mutual Fire Insurance Company as of year-end 2022. The group holds a financial strength rating of A (Excellent) from A.M. Best.
A comprehensive market conduct examination for the 2022 period, released by the Division of Insurance, concluded with no recommendations or required corrective actions. The final report noted that “the Company complies with all tested Company policies, procedures, and statutory requirements addressed in these areas”.
Strategic Drivers for The Andover Companies To Form a Mutual Holding Company
While Andover Companies’ specific filing was not provided for this review, such reorganizations are a well-established strategy in the insurance industry, typically driven by several key factors.
A principal reason is to gain enhanced financial flexibility and access to capital. A traditional mutual company is generally limited to raising capital through retained profits. The mutual holding company (MHC) structure, however, allows for greater access to capital markets, such as issuing debt or selling a minority, non-controlling stake in its stock subsidiaries. This capital can be used to strengthen the company’s financial surplus or fund investments in technology and growth.
The structure is also seen as more agile for facilitating strategic acquisitions and maintaining competitiveness. The capital and stock currency available in an MHC model can be used to acquire other insurers or agencies, allowing the organization to grow and diversify more efficiently. This is critical in a capital-intensive industry facing rapid technological change and competition from large national stock insurers.
Crucially, the MHC model allows mutual insurers to pursue these objectives while preserving their core mutual character. Policyholders of the original mutual companies become members of the new parent holding company, retaining their fundamental ownership interests and voting rights. This contrasts with a full demutualization, where the mutual structure is dissolved and ownership is sold to the public.
Regulatory Scrutiny and Public Input
The virtual hearing, scheduled for 1:00 p.m., is a mandatory step in the approval process. According to the public notice, the hearing will examine “the fairness of the terms and conditions of the proposed transactions and whether the reorganization is in the best interest of the mutual insurers, fair and equitable to their policyholders, and not detrimental to the insuring public”. The insurers’ directors, officers, employees, and policyholders have the right to appear and be heard at the proceeding.
Timetable for Public Participation
Interested parties must adhere to a strict timetable to participate in the hearing for Docket No. F2025-01. All submissions must be sent to doidocket.mailbox@mass.gov.
To Speak: A “Notice of Intent to Participate” must be submitted on or before October 15, 2025.
To Attend: Individuals who wish to attend the virtual hearing must notify the Division by October 17, 2025.
To Submit Written Statements: Written statements may be submitted at any time prior to the conclusion of the hearing.
To Formally Intervene: Any person seeking to intervene must submit a “Petition for Leave to Intervene”. The public notice did not specify a final submission date for this petition, providing only a placeholder for the year 2025.
The Department published notice can be found “HERE.”
