The Division of Insurance has scheduled a hearing on the request of the General Electric Company (“GE”), and three of GE’s subsidiaries (“Applicants”) for approval under Massachusetts’ Insurance Holding Company System Regulatory Act, G.L. c. 175, §§ 206-206D, of a proposed acquisition of control of Electric Insurance Company (“Electric”), a Massachusetts-domiciled property and casualty insurance company.
The Applicants propose to acquire control of Electric by terminating the trust that currently holds Electric’s shares of common stock and distributing those shares to a GE subsidiary, GE Capital Global Holdings. If the transaction is approved, Electric will be a direct wholly-owned subsidiary of GE Capital Global Holding and an indirect wholly-owned subsidiary of GE and another GE subsidiary, GE Capital Global.
Public hearing December 18, 2017
The Commissioner will conduct a public hearing under M.G.L. c. 175, §206B to determine whether to approve the proposed acquisition of control.
The hearing will commence at 10:00 a.m. on December 18, 2017, at the Offices of the Division of Insurance, Hearing Room 1-E, 1000 Washington Street, Boston, Massachusetts 02118-6200.
Originally, Electric was formed to write personal insurance for GE employees
The Electric Insurance (“Electric”) was incorporated in Massachusetts in 1966, as a wholly-owned subsidiary of Electric Mutual Liability Insurance (“EMLICO”). Electric was formed to provide economical insurance products to the employees of GE, which has been headquartered in Boston since the summer of 2016. A number of years ago, Electric expanded its services and began offering personal lines products to the general public, in addition to the employees of GE. Since a restructuring of Electric in June 1995, Electric has written commercial lines for GE and its subsidiaries. As of July 1, 1995, Wilmington Trust Electric, solely in its capacity as Trustee, acquired all of the issued and outstanding shares of Electric Insurance Electric pursuant to a Trust Agreement between EMLICO and Wilmington Trust Company.
Electric has an “A” rating from A.M. Best
In August 2017, A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings of “a+” of Electric Insurance.
Electric writes personal lines in all 50 states
Electric is currently licensed in all 50 states, the District of Columbia, Puerto Rico and Canada. Electric provides commercial and personal lines coverage on a direct and assumed basis. Electric’s ongoing personal lines principally include automobile, homeowners, and umbrella business, with a large number of policyholders being current or former GE employees. Personal lines business is primarily generated directly (via internet and mail) and Electric actively pursues additional personal lines business through targeted marketing, online sales, and independent agents. GE is the primary policyholder for the Electric’s commercial business, virtually all of which is retrospectively rated. The company’s commercial lines primarily include workers’ compensation, commercial automobile liability and general liability
Electric has four wholly-owned subsidiaries: Elm Insurance Electric, Electric Agency, Inc., Electric Insurance Ireland Limited and Electric of Texas, Inc. The Elm Insurance Company (“Elm”) was formed by Electric in 1983 as a Vermont captive insurance company. Electric provides Elm with management, accounting and other services and is reimbursed based on the cost of these services. Electric Agency Inc. was formed by Electric in 1992, primarily to place business with the National Flood Program. EIC Electric of Texas, Inc. a management company providing services for Electric Lloyd’s of Texas, a Texas insurer on the Lloyd’s plan. Electric has a controlling interest in Electric Lloyd’s of Texas. Electric Insurance Ireland Limited was formed in 2005 and is licensed to write property and casualty business in the European Union.
Documents available at Division of Insurance
Documents filed in connection with this proposed acquisition of control are available for public inspection at the Division of Insurance, 1000 Washington Street, Suite 810, Boston, Massachusetts 02118-6200.
Purpose of hearing
The purpose of this hearing is to afford those persons identified in M.G.L. c. 175, §206B(d)(2) the opportunity to present evidence, to examine and cross-examine witnesses, to offer oral and written arguments and to conduct discovery proceedings. Any discovery proceedings shall be concluded no later than December 12, 2017. Any person identified in M.G.L. c. 175, §206B(d)(2) who wishes to participate in the December 18, 2017 hearing must submit, on or before December 7, 2017, 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.
