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STATE OF MAINE
FORM A STATEMENT OF WHITE MOUNTAINS INSURANCE GROUP LTD., WHITE MOUNTAINS HOLDINGS (BARBADOS) SRL, TACK HOLDING CORP. AND TACK ACQUISITION CORP. PERTAINING TO THE ACQUISITION OF CONTROL OF COMMERCIAL UNION YORK INSURANCE COMPANY
Docket No. INS 00-3031
ORDER ON REQUEST FOR DETERMINATION OF NON-CONTROL OR, ALTERNATIVELY, EXEMPTION FROM FORM A FILING REQUIREMENTS WITH RESPECT TO CERTAIN PRE-CLOSING CORPORATE TRANSACTIONS
This Order is issued in the above-captioned proceeding by Eric A. Cioppa, Deputy Superintendent of the Maine Bureau of Insurance. All legal authority for the procedural processing and decision making with respect to this proceeding has been delegated by Superintendent Alessandro A. Iuppa to Deputy Superintendent Eric A. Cioppa pursuant to Order dated November 8, 2000.
White Mountains Insurance Group, Ltd. ("WTM"), a publicly traded insurance holding company whose shares are listed on the New York Stock Exchange, and certain of its subsidiaries submitted with the Maine Bureau of Insurance in the above-captioned proceeding a Form A Statement seeking approval of their proposed acquisition of control of Commercial Union York Insurance Company ("CU York") (the "Proposed Acquisition"). As set forth in the Form A, WTM and certain of its subsidiaries will acquire CU York and the other U.S. property and casualty insurance company subsidiaries of CGNU plc through the acquisition of common stock of CGU corporation ("CGUC"), the indirect parent company of CU York.
CGUC and certain of its subsidiaries propose to enter into several corporate transactions prior to the closing of the Proposed Acquisition, including certain transactions that will result in the reorganization of the subsidiaries within the CGNU plc group. As a result of such corporate restructuring, CU York will become an indirect wholly-owned subsidiary of CGU Insurance Company, a Pennsylvania domiciled insurance company ("CGU-Pennsylvania") that is, in turn, a direct wholly-owned subsidiary of CGUC (the "Proposed Transfer"). CU York is currently, and will remain upon completion of the Proposed Transfer, a wholly-owned direct subsidiary of Commercial Union Insurance Company, a Massachusetts domiciled property and casualty insurer ("CU-Massachusetts). The ultimate controlling person of CU York, CGNU plc, will not change as a result of the Proposed Transfer. The only change that will take place is the insertion of CGU-Pennsylvania as an intermediate parent company above CU-Massachusetts in the chain of ownership.
By letter dated November 21, 2000 (the "November 21st Request"), it has been requested that the Superintendent:
II. PREHEARING CONFERENCE
A Notice of Pending Proceeding and Prehearing Conference was issued by the Deputy Superintendent on November 8, 2000. The prehearing conference was held as scheduled on November 27, 2000. At that time the parties were provided an opportunity, among other matters, to provide further argument in support of their November 21st Request. The Deputy Superintendent heard further argument and posed questions to the parties.
III. RELEVANT STATUTORY AUTHORITY
An analysis of the November 21st Request is governed by the following provisions of the Maine insurance holding company laws:
. . . on the grounds that the interests of the State in regulating the transaction are minimal relative to the interests of other jurisdictions or are minimal relative to the impact of the transaction as a whole, provided that it does not appear likely that exempting the transaction from the application of this section will be detrimental to the interests of Maine policyholders.
A determination under § 222 (4-A) only exempts persons from the approval requirements of subsections (4-A)(B) and (C), but does not exempt persons form the filing requirements of subsection (4-A)(A).
IV. ANALYSIS & FINDINGS
According to the Form A and the November 21st Request, as well as other information provided by the Applicants in this proceeding, the Proposed Transfer is part of a series of transactions whereby three insurers that are subsidiaries of CGUC will transfer their respective ownership interests in Pilot Insurance Company, an Ontario domiciled insurance company ("Pilot"), to CGUC in exchange for the shares of certain direct wholly-owned subsidiaries of CGUC, including CU-Massachusetts. The Proposed Transfer specifically involves a transfer by CGU-Pennsylvania of its ownership interest in Pilot, plus $140 million in cash, to CGUC for all of the outstanding common stock of CU-Massachusetts. As a result of the Proposed Transfer, CU York will become an indirect wholly-owned subsidiary of CGU-Pennsylvania.
Based on the foregoing, the Deputy Superintendent hereby finds, pursuant to 24-A M.R.S.A. § 222 (2)(B)(2), that the Proposed Transfer will result in an "acquisition of control" by CGU-Pennsylvania of CU York within the meaning of 24-A M.R.S.A. § 222 (2)(B). The Deputy Superintendent hereby exercises discretionary authority, pursuant to 24-A M.R.S.A. § 222 (4-A), to grant the November 21st Request thereby providing CGU-Pennsylvania an exemption to the § 222 (4-A)(B) and (C) approval requirements. The Deputy Superintendent grants this exemption on the grounds that the interests of the State in regulating the Proposed Transfer are minimal relative to the impact of the Proposed Acquisition as a whole, and that it does not appear likely that exempting the Proposed Transfer from the application of § 222 (4-A)(B) and (C) will be detrimental to the interests of Maine policyholders.
With respect to § 222 (4-A)(A), which is a cross-reference to § 222 (4-B), while some of the required information already has been provided by the parties, the Deputy Superintendent requires that additional responsive information be filed in this proceeding on behalf of CGU-Pennsylvania, identified as follows:
V. RESERVATION OF RIGHTS
Should the ultimate transactions at issue in the Form A Statement in the above-captioned proceeding not occur or be disapproved or otherwise, the Superintendent reserves all rights to examine any matters related to the Proposed Transfer which are the subject of the November 21st Request.
VI. RESPONSIVE INFORMATION
The parties are required to provide the responsive information requested no later than the deadline for providing responses to the First Discovery Request of the Deputy Superintendent.
PER ORDER OF THE DEPUTY SUPERINTENDENT OF INSURANCE
|DATED: December 8, 2000||________________________________
ERIC A. CIOPPA
Deputy Superintendent of Insurance
Last Updated: January 16, 2014
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