Premia acquires P/C insurer from Illinois Department of Insurance
Bermuda-based run-off specialist Premia Holdings has acquired an Illinois-based property/casualty insurer that was being managed by the Illinois Department of Insurance after being placed into rehabilitation in 2017.
It has bought Public Service Insurance Company (PSIC) and its subsidiary Western Select Insurance Company (WSIC) from the director of the Illinois Department of Insurance, acting in her capacity as statutory and court affirmed Rehabilitator for Public Service Insurance Company.
Public Service is an Illinois-based property/casualty insurer originally formed as a mutual but later converted to a stock company. After underwriting losses in 2015, it was downgraded by AM Best in 2016 and placed into rehabilitation by the Illinois Department of Insurance in 2017.
In what the company called a ground-breaking transaction, Premia has acquired certain assets of PSIC (including WSIC) and the direct insurance liabilities of PSIC, while other assets and liabilities were retained in and channelled to the Estate of PSIC, in rehabilitation. The transaction closed on January 9, 2019.
In addition to the Illinois Department of Insurance’s approval, the transaction was approved by the presiding judge of the Chancery Division of the Circuit Court of Cook County Illinois overseeing the Rehabilitation of the PSIC Group. After notice, an objection period, and extensive briefing on the issues, the Court approved the Amended Plan and the Stock Purchase Agreement between Premia Holdings Inc. and the Rehabilitator.
Bill O’Farrell, chief executive officer of Premia Holdings, said: “This was a new and elegant solution for the policyholders of Public Service and the fact that not a single claimant, policyholder, ceding company or reinsurer objected to this transaction is further evidence of the compelling solution in this matter and a real credit to the Illinois Department of Insurance.”
O’Farrell added: “I am very pleased that we were able to deliver this solution to the Public Service Estate. It provides better capital support to Public Service’s policyholders and provides Premia a strong operating platform for additional U.S. transactions.”
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