Educators Mutual Life Insurance Company and Eastern Holding Company, Ltd., the parent company of Eastern Alliance Insurance Group, both of Lancaster, Pa., have agreed to a plan in which Educators Mutual will convert from mutual to stock form and become a wholly-owned subsidiary of a newly formed holding company. Immediately upon closing, the holding company will exchange cash and holding company common stock for the outstanding shares of stock of Eastern.
The conversion of Educators Mutual and the acquisition of Eastern by the holding company are subject to the prior written approval of the Pennsylvania Insurance Department. The plan also must be approved by at least two-thirds of the votes cast at a special meeting of the eligible policyholder members of Educators Mutual.
Completion of the conversion also is conditioned upon the simultaneous acquisition of Eastern by the holding company. Pursuant to the agreement dated March 17, 2005, Eastern will merge with a subsidiary of the holding company and thereby become a wholly owned subsidiary of the holding company.
The parties expect to close the transaction in late 2005.
Educators Mutual is a mutual life insurance company that provides group life, dental and disability insurance to customers in 16 states, primarily along the eastern seaboard. Educators Mutual is licensed to do business in 41 jurisdictions. Educators Mutual markets and distributes its products through independent general agencies and its subsidiary, IBSi, LLC to approximately 3100 independent producers. At December 31, 2004, Educators Mutual had total assets of $111.5 million, direct written premiums of $ 41.0 million, and total equity of $62.4 million.
Eastern is a holding corporation that operates a domestic insurance group (Eastern Alliance Insurance Group) and an offshore specialty reinsurance company (Eastern Re). Eastern Alliance Insurance Group specializes in workers compensation products and services. Eastern Alliance Insurance Group distributes its products through 55 independent agencies. As of December 31, 2004, Eastern had assets of $ 153.6 million, direct written premiums of $83.2 million and shareholders’ equity of $41.7 million.
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