A New York personal lines mutual insurer has secured an infusion of cash and recovered from insolvency by transforming itself into a stock company, regulators said.
The New York State Department of Insurance said Interboro Mutual Indemnity Insurance Company, in Mineola, N.Y., has emerged from three years of insolvency and subsequent rehabilitation.
According to the department, Interboro, the oldest insurance company serving Long Island, is now a solvent private company called Interboro Insurance Company, a writer of automobile and homeowners insurance.
The department said that the company's successful rehabilitation means it will continue as a going concern, preserving close to 70 jobs. The new owners have committed to keeping the jobs and the company's operations on Long Island.
"The Department is very pleased that Interboro has been successfully rehabilitated," said Acting Insurance Superintendent Eric Dinallo in a statement. "This is an exciting moment for Long Island consumers, who now have more choice in the insurance marketplace when they go to buy car or homeowners insurance."
"This case represents a unique cooperation among the superintendent of insurance's office, the company itself and the court to ensure that the rights of creditors and depositors were protected during this difficult period," said Nassau County Supreme Court Judge Edward W. McCarty III, who supervised Interboro prior to discharging the company from rehabilitation.
The Liquidation Bureau managed Interboro during the period of rehabilitation. The department said a particular difficulty with Interboro was the need to secure sufficient capital to make the company solvent. A mutual company is owned by its policyholders and cannot issue stock to access capital.
The Liquidation Bureau successfully demutualized the company while in rehabilitation. Regulators said it was the first time this procedure was used to rehabilitate a New York insurer.
The action was accomplished through an investor group that paid $15 million for the stock, recapitalizing Interboro and making it solvent. The department said this was the first successful insurance company rehabilitation in six years.
The new owners include Northwood Ventures, Fursa Alternative Strategies and an investor group assembled and represented by Wainwright & Co. LLC.
Before entering liquidation, Interboro primarily wrote private passenger auto, homeowners and general liability coverage, as well as a small amount of commercial auto and workers compensation coverage.
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