AmTrust restructures role in Tower takeover
AmTrust Financial Services and National General have scrapped plans to buy part of Tower Group’s US domiciled insurance companies as part of ACP Re’s proposed takeover.
In a filing, AmTrust stated that following discussions with regulators around the overall plan with for the administration of the run-off of Tower’s business, the best way to structure the transaction would be for Tower to retain ownership of all its US insurance companies.
Instead, it also said that it and National General should acquire the commercial lines assets and personal lines assets. They would then administer the run-off of Tower’s historical commercial and personal lines claims, place both lines with the Tower insurance companies, which they will exclusively manage and fully reinsure, retain the expirations on all businesses written by Towers and receive a non-compete agreement from Towers and ACP Re.
In connection with the revised plan, AmTrust and National General will provide ACP Re with financing of up to $125 million each, subject to terms to be negotiated. A $250 million aggregate stop loss reinsurance agreement will also be issued.
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