Following its shell acquisition strategy, Tower Group Inc. announced it has agreed to acquire MIIX Insurance Company of New York (MIIX), an insurance company with licenses in New York and New Jersey.
Closing of the transaction is expected to occur by year end and is contingent upon a variety of conditions including approval of the transaction by the New York State Insurance Department.
In the event of closing, Tower Group will pay $225,000 in cash at closing as well as MIIX’s then outstanding statutory surplus which was approximately $7.8 million as of Dec. 31, 2004. MIIX has no net liabilities for insurance losses. MIIX’s assets consist of U.S. Treasuries and cash.
Michael Lee, president and chief executive officer of Tower Group, Inc., commented, noted this is the firm’s second shell acquisition this year, and brings the total number of insurance company subsidiaries owned by Tower Group, Inc. to three. “Upon closing, we plan to continue to expand MIIX’s licensing to other states,” Lee said. “This transaction will enable us to improve our capability to deliver products at different market segments with varying pricing and coverage terms and conditions and further support our growth through territorial expansion.”
Tower Group Inc., headquartered in New York City, offers property and casualty insurance products and services through its insurance company and insurance service subsidiaries. Its insurance company subsidiary, Tower Insurance Company of New York, is rated A- (Excellent) by A.M. Best Company and offers commercial insurance products to small to medium-size businesses and personal insurance products to individuals. Its insurance services subsidiary, Tower Risk Management, acts as a managing general agency, adjusts claims and negotiates reinsurance terms on behalf of other insurance companies.
In March 2005, Tower Group Inc. acquired its other insurance company subsidiary, Tower National Insurance Company (f/k/a North American Lumber Insurance Company).
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