Medmarc Insurance (Medmarc) has signed an agreement to merge into ProAssurance for a $153.7m, all cash, sponsored demutualization that will provide Medmarc's eligible Members with cash payments of $146.2m and future policy credits of $7m.

ProAssurance chairman and chief executive officer Stan Starnes said that the transaction is expected to enhance ProAssurance’s ability to respond to dynamic new risks.

"Further, Medmarc’s book of legal professional liability business expands our existing lawyers’ professional liability line," Starnes added.

"Medmarc continues to focus on those specialized insurance needs and will bring this expertise and insurance product scope to ProAssurance."

Following the approval by Medmarc’s eligible Members, the sponsored demutualization will convert Medmarc into a non-public stock company while ProAssurance will buy the stock authorised in the demutualization and Medmarc’s eligible Members would then receive $153.7m million in cash payments and future policy credits, as outlined in the Plan of Conversion.

Medmarc president and chief executive officer Mary Todd Peterson said: "We believe the transaction will also provide an avenue for growth by providing increased flexibility to address the evolving insurance and risk management demands of the medical technology and life science industry."

Both the companies’ Boards of Directors have unanimously approved the transaction which is expected to close before the end of 2012.