The Florida Office of Insurance Regulation (OIR) approved the acquisition of AmCOMP by Employers Holdings Inc. after AmCOMP settled unresolved excessive profit issues with regulators.
The issue dates back to May 19 when AmCOMP said it received a "Notice of Intent to Issue Order to Return Excess Profit" from the OIR. Some AmCOMP subsidiaries challenged the notice.
According to Florida regulators, workers' compensation insurers are required to return profits in excess of 5 percent in accordance with Florida statutes.
The settlement, AmCOMP said, resolves all outstanding issues arising from the notice, as well as AmCOMP's 2008 excessive profits filing for accident years 2004, 2005 and 2006. AmCOMP noted that while it did not receive a "Notice of Intent to Issue Order to Return Excess Profit" relating to its 2008 filing, the OIR notified the company that it would not consent to the proposed merger with Employers Holdings without resolution of AmCOMP's 2008 filing.
The OIR said that AmCOMP agreed to repay $8.4 million in excessive profits to its Florida policyholders. AmCOMP's insurance subsidiaries will repay $2.8 million in excessive profits it realized for accident years 2003, 2004 and 2005. The company will also repay $5.6 million for excessive profits for accident years 2004, 2005 and 2006, according to the OIR.
AmCOMP is an insurance holding company that specializes in workers' comp insurance for small- to mid-sized employers. Employers Holdings is a workers' comp holding company for small businesses working in low-to-medium hazard industries.
The OIR said that it expects the merger to be completed in late October.
Under the amended merger agreement, which was approved by the boards of directors of both companies, holders of AmCOMP's approximately 15 million common shares outstanding will receive $12.15 per share in cash.
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