PEMCO Insurance merger
PEMCO Insurance Company and its parent company, PEMCO Mutual Insurance Company, filed an application for a proposed merger of PEMCO Insurance with and into PEMCO Mutual Insurance. PEMCO Mutual Insurance would be the surviving entity from this merger.
PEMCO Insurance is a Washington-domiciled stock insurance company operating as a property and casualty insurer incorporated in 1972. PEMCO Mutual Insurance is a Washington-domiciled mutual insurance company operating as a property and casualty insurer incorporated in 1948.
The boards of directors of both companies have approved the “Agreement and Plan of Merger”. The Commissioner must approve the proposed merger before that agreement and plan of merger can be completed.
History of the process
In mid May 2011, we received the application for the merger of PEMCO Insurance Company. We have reviewed that application and requested a hearing regarding the merger transaction.
On July 21, 2011, the judge held an adjudicative hearing to hear testimony about the merger transaction. The proposed merger transaction was approved with an effective date of October 1, 2011.
What we look at
In all proposed mergers, the companies must file an application that details:
- A plan of merger including corporate documents approving the proposed merger;
- Financial information for both companies;
- The effect of the merger on the current Washington policyholders;
- Any changes in their business plan; and
- Any market competition impacts.
Under state law, the commissioner must approve the merger unless:
- The plan of merger is not fair, equitable, or consistent with law; or
- It is in some other way “hazardous or prejudicial to the insurance-buying public."