History of the process
In April 2008, Liberty Mutual Group and Safeco Corporation announced that they had reached agreement on the sale of Safeco to Liberty Mutual for $6.2 billion.
Before that sale could be finalized, the Office of the Insurance Commissioner had to review and approve the terms of the deal.
In May, we received the Form A application and sought proposals from consultants to help with the review process.
In June, we contracted with Cantilo & Bennett LLP to review the legal terms and with Rudmose & Noller Advisors LLC to review the financial terms of the sale.
In early July, the consultants started their review and the application was deemed complete on August 5.
The two-day adjudicative proceeding was held September 10-11. The judge heard testimony from Safeco, Liberty Mutual, the consultants we hired to review the application and OIC staff. The judge's decision will be available here when it is issued.
The judge approved the acquisition on September 18.
What we look at
In all proposed sales, the companies must file an application (Form A) that details:
- Financial information for both companies.
- Who will operate the company at the highest levels.
- Their business plan.
- Market competition impacts.
Under state law, the commissioner must approve the deal unless:
- It would substantially lessen competition or create a monopoly.
- The buyer’s plans are unfair and unreasonable to the policyholders of the insurance company.
- The buyer isn't competent, honest or financially sound enough to run an insurance company.
- It is in some other way “hazardous or prejudicial to the insurance-buying public."