Tawa, a quoted insurance service provider and run-off investor, has entered into a definitive agreement to acquire for $1 a 51% stake in a newly formed US holding company, LGIC Holdings.
Subject to regulatory approval, LGIC will acquire a majority of Walshire General Assurance Company, the sole shareholder of Lincoln General Insurance Company.
The other investor in LGIC will be Kingsway Financial Services, the former indirect owner of Walshire General Assurance Company.
Pennsylvania-based Lincoln General, in run-off since 2009, reported statutory gross assets of $412m and net assets of $3.2m at the end of 2010.
After making allowances for fair value adjustments Tawa anticipates that the transaction will have minimal impact on net assets.
Marvin Mohn, head of US operations for Tawa and its subsidiary Pro said this transaction is an exciting and natural development to the partnership which Tawa and Pro announced with Lincoln General in November 2010.
"Working closely with the Lincoln General team in the management of this challenging run-off will provide Tawa and Pro with the opportunity to develop further their joint US management services line of business.
"We are also very pleased to be partnering with Kingsway as shareholders of the holding company,"Mohn said.