Subsidiaries of American Financial Group Inc. and The Hartford Financial Services Group Inc. announced transfers of their New Jersey personal auto businesses to units of Palisades.
American Financial subsidiary Great American Insurance Company has agreed to transfer renewal rights of its personal auto business to Palisades Safety and Insurance Association and Palisades Insurance Company. Under the agreement, Palisades will issue renewal policies to most customers who had private passenger automobile insurance policies written through Great American Spirit Insurance Company and who are “eligible persons” as defined by law (eligible persons are those insureds with fewer than 9 motor vehicle points in the last three years).
AFG expects to report a $7 millionafter-tax loss on the transaction in the 2002 third quarter. As of Sept. 9, Great American Spirit will no longer accept any new private passenger auto insurance business in the state. Great American currently insures about 24,000 vehicles and writes approximately $25 million in personal automobile insurance premium in New Jersey. While the transfer of this existing book of business will occur over the next 12 months, Great American and its affiliates will continue to hold licenses in New Jersey in order to market other insurance coverages.
Twin City Fire Insurance Company, a unit of The Hartford, will transfer its New Jersey personal auto insurance book sold through independent agents to state insurance carrier Palisades Safety and Insurance Association and Palisades Insurance Company. The transaction has been approved by the New Jersey Department of Banking and Insurance and will be effective with policy renewals beginning in late 2002. Under state capitalization guidelines, Twin City will provide approximately $9.2 million after tax in surplus to Palisades to support the book transfer.
As a result of the Twin City transaction, The Hartford will record an expense of that amount in the third quarter of 2002. The action will have little impact on the New Jersey auto insurance market. Twin City’s personal auto business in New Jersey is extremely small, representing approximately 0.4 percent of the market.
The Hartford will continue to have a presence in the state, where it has substantial agency-produced business insurance operations and other lines of insurance products.
Was this article valuable?
Here are more articles you may enjoy.