Massachusetts insurance regulators have approved plans for three Liberty Mutual affiliates—Montgomery Mutual Insurance Company, Liberty Mutual Mid-Atlantic Insurance Company, and Patrons Mutual Insurance Company of Connecticut—to reorganize from domestic mutual insurers into domestic stock insurance companies and then merge into a newly formed direct, wholly owned subsidiary of Liberty Mutual Holding Company (LMHC).
The Division of Insurance’s Decision and Order in Docket No. F2025-02 found the transactions satisfied the approval criteria in M.G.L. c. 175, §§ 19F–19W, including the standards in § 19H(d), and approved the proposed transaction. The Decision was affirmed by Commissioner Michael T. Caljouw on Jan. 15, 2026.
Deal mechanics: conversion to stock insurers, then merger into LMHC subsidiary
The applicants sought approval for a two-part transaction. First, each company would reorganize as a stock insurer. Second, each reorganized insurer would merge “with and into” a newly created, wholly owned direct subsidiary of LMHC, using three merger subsidiaries formed solely to effectuate the transactions. Each insurer would be the surviving entity, keeping its current name while becoming a stock subsidiary within the LMHC structure.
As a result, the insurers’ policyholders—who constitute the members of mutual insurers—would have their membership interests extinguished and would automatically become members of LMHC on equal terms with all other LMHC members. The Decision also states that all insurance policies issued by each mutual insurer will remain in force and unchanged.
“Mutual” stays in the names
A key feature of the filing was the applicants’ request to keep “Mutual” in their names after conversion. Massachusetts law permits a reorganizing insurer that already uses “mutual” in its name to continue doing so after reorganization as a stock company, unless the Commissioner finds that the continued use would likely mislead or deceive the public. The Decision approved the request.
Liberty Mutual Group Executive Vice President and Deputy General Counsel-Enterprise Ed Kenealy testified that continued use of “Mutual” was consistent with its affiliates’ names and remained accurate because policyholders would retain the benefits of mutuality through membership in LMHC. He also cited operational reasons, including avoiding multi-jurisdictional filings and policy form updates that could be costly and confusing.
The process: working group review and a virtual hearing
The applicants submitted their plans to the Division on Feb. 28, 2025. The Commissioner appointed a Working Group of Division staff and consultants to review the plan components and designated Jean F. Farrington, Esq., and Matthew A. Taylor, Esq., as presiding officers for the required hearing.
On Aug. 29, 2025, the applicants and the Working Group jointly sought approval of policyholder materials, distribution plans, and voting procedures; the applicants filed the final version of their filing on Sept. 2, 2025. A hearing notice issued Sept. 8 scheduled a Nov. 18, 2025 public hearing, and an order issued Sept. 9 approved the requests in the joint motion.
The hearing was held virtually using TEAMS. Peter Rice, Esq. of DLA Piper represented the companies, and Margaret Barao, Esq. was present for the Division. Three witnesses testified: Kenealy for the companies and J. David Leslie, Esq. and Dana Rudmose for the Working Group.
Governance and policyholder voting control
Kenealy testified that the reorganizations would preserve mutuality at the LMHC level and protect policyholder interests, including by requiring LMHC to always own 51% of each company’s shares, which he said would preserve ultimate voting control for policyholders.
The Decision also outlines the company’s policyholder-approval process: each board set a date for determining voting eligibility and scheduled a meeting of eligible members for Dec. 18, 2025. It states that, as required by law, 60 days’ notice was provided to policyholders and published in multiple newspapers, as directed by the Division.
Strategic rationale: efficiency, scale, diversification, and access to capital
According to testimony summarized in the Decision, the companies’ boards and Liberty Mutual senior management periodically review strategic alternatives to protect and enhance the value of the business and the constituencies affected, including policyholders and the communities in which the insurers operate. Kenealy testified that Liberty Mutual’s current structure reflects years of inorganic growth and that the companies evaluated whether their mutual-insurer format remained optimal.
He testified that the benefits of membership in LMHC would include enhanced size and scale, risk diversification including geographic diversity, enhanced access to capital, and improved efficiency in corporate governance and capital management.
Working Group findings and the approval standard
Leslie testified that the Working Group conducted an extensive review of the application materials and voting rules, including evaluating financial statements and projections and reviewing management and board actions.
In its analysis section, the Decision and Order recites the statutory criteria and concludes the proposed reorganization satisfies each element, including best interests, fairness to policyholders, enhancement of operations, no substantial lessening of competition, sufficient paid-in capital and surplus, and compliance with the mutual holding company statutes.
