To provide all stakeholders with enhanced long-term value
Kingsway Financial Services, a Canada-based property and casualty insurer, has stated that its indirect wholly owned subsidiary, Kingsway America (KAI) has disposed of its entire interest in its wholly owned subsidiary, Walshire General Assurance Company, the sole shareholder of Lincoln General Insurance Company.
The company has stated that all of the stock of Walshire has been donated to charity, and with this disposition Lincoln ceases being a member of Kingsway’s consolidated group of companies.
Kingsway is expecting that disposing of Lincoln will provide all stakeholders, including policyholders, shareholders and creditors with enhanced long-term value and is consistent with its prior determination that it will not continue to voluntarily fund Lincoln’s reserve shortfalls.
According to company, this disposition will also assist Kingsway in continuing to meet its regulatory and contractual obligations in respect of Lincoln. These obligations include the payment to Lincoln pursuant to a $10m surplus note facility agreement; continued compliance with a run-off management agreement, including certain continued support to the run-off management team at Lincoln; and continuing guarantee and reinsurance obligations to inter-company and third party insurance providers in respect of certain Lincoln obligations.
In addition, Kingsway has also sold substantially all of the assets of Avalon Risk Management.