Regulatory approvals have been granted in connection with its proposed sponsored demutualisation of the PICA Group
ProAssurance, a holding company for property and casualty insurance companies focused on professional liability insurance, has announced that all required regulatory approvals have been granted in connection with its proposed sponsored demutualisation of the PICA Group, a provider of professional liability to doctors of podiatric medicine.
The proposed demutualisation is being submitted to PICA shareholders for their approval at a special meeting to be held on March 31, 2009. If approved, the transaction is expected to close early in the second quarter of 2009.
Upon approval, a total of $120 million will be paid to current and certain former policyholders in accordance with the plan of demutualisation. ProAssurance will pay cash to purchase all of the PICA stock authorised in the demutualisation; PICA will then use those funds for the cash distribution. In addition, $15 million in premium credits will be made available to eligible PICA policyholders for a three-year period beginning in 2010 as the result of an additional cash payment from ProAssurance.
ProAssurance has also announced the completion of its acquisition of Mid-Continent General Agency, a Houston-based managing general agent which produces about $25 million a year in premiums from ancillary healthcare providers and other professional liability coverages.
ProAssurance also said that regulatory approval has been granted to allow its acquisition of the Georgia Lawyers Insurance Company (GLIC). Shareholders of GLIC have already approved the transaction which is expected to close during the first week of February 2009. GLIC insures approximately 2,700 lawyers in Georgia and had direct written premium of approximately $5.5 million in 2007.
Stancil Starnes, chairman and CEO of ProAssurance, said: The PICA transaction provides a compelling opportunity to add meaningful, profitable growth as we continue to work to increase our presence in new markets and new areas of medical professional liability business.
We expect Mid-Continent to help us develop a deeper presence in the professional liability market for ancillary healthcare providers, a segment of the healthcare industry that is expected to undergo a rapid expansion in most healthcare reform scenarios.