The First Circuit Court of Hawaii granted a motion approving the transfer of assets and policy obligations from Hawaii Insurance Commissioner J.P. Schmidt, as liquidator of The Hawaiian Insurance Guaranty Co., to qualified buyer GNW (Great Northwest Insurance) Hawaii Insurance Ltd.
GNW Hawaii Insurance is a newly formed subsidiary of GNW Acquisition Corp.
In June, Schmidt assumed control of HIG because its parent company, Vesta Insurance Group, was unable to meet its financial obligations. Schmidt has since been looking for buyer to assume the policies in Hawaii.
HIG sold homeowners and motor vehicle insurance policies in Hawaii and California. With approximately 26,000 policyholders in Hawaii, it was the state’s fourth largest provider of homeowners insurance.
In September, the officers of HIG, Vesta Insurance Group, the holding company of HIG, and J. Gordon Gaines, a VIG-affiliated management company, filed a motion to intervene as a party in the liquidation action. But the court found that a statutory basis for the transfer of policies exists under the provisions of Hawaii statutes.
Without a qualified buyer, HIG would have been required to deal with thousands of claims for unearned premiums, which preliminary estimates indicated would have exceeded $5 million, according to the commissioner’s office.
To avoid inconvenience and confusion, the court said GNW would assume the obligations under existing policies established by HIG unless the policyholder opts out by advising GNW within 30 days that it requests an unearned premium refund.
Topics Mergers & Acquisitions
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