Hub International Limited has completed the previously announced sale of its underwriting subsidiaries, Old Lyme Insurance Company of Rhode Island, Inc. and Old Lyme Insurance Company, Ltd. (Old Lyme) to Fairfax, Inc. (Fairfax). Fairfax is a subsidiary of Fairfax Financial Holdings Limited, Hub’s largest shareholder.
Hub, through its Kaye Group Inc. (Kaye) subsidiaries, including its underwriting manager, Program Brokerage Corporation, will continue both to manage Old Lyme and to operate Kaye’s Claims Administration Corporation unit (CAC), which is not being sold. Both Old Lyme and CAC have been managed by Kaye subsidiaries since they were formed over 20 years ago. Old Lyme has consistently maintained a combined loss and expense ratio superior to property and casualty industry norms.
The sale for Old Lymes’ book value as of Dec. 31, 2001 of approximately $42.8 million plus interest of $.7 million, will be used to pay down debt and represents a gain of approximately $2.6 million to Hub under Canadian generally accepted accounting principles.
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