American Insurance Services (AIS), the parent company of United National Group (UNG), formally advised its would be purchaser American Re that it was canceling the agreement made a year ago for the sale of its shares.
AIS cited the 10 month delay caused by the Pennsylvania insurance commissioner’s refusal to approve the sale as the underlying cause for the cancellation.
The proposed acquisition has been the subject of controversy since it was first announced last August, as American Re is a member of the Munich Re Group, and its parent company has refused to participate in the international panel, which is examining unpaid insurance claims involving European insurers dating from the World War II era.
The commissioner’s office took the position that Holocaust claims must first be addressed before a favorable ruling would be issued. American Re sued the commissioner last February in an attempt to force a decision, but, despite several rulings in its favor, the commissioner’s office has refused to do so.
The reason for the cancellation said AIS was “the uncertainty as to when litigation over the Department’s refusal would be resolved and whether the Department would then approve the transaction, and the resulting impediments this delay and the uncertainty presented to strategic planning for UNG and its current ownership.”
American Re officials expressed disappointment at the cancellation, and stressed that Munich Re had joined the U.S. backed German Foundation Initiative to examine and settle the claims of Holocaust victims and their heirs against German companies arising out of the Nazi era. Munich Re, however, has repeatedly refused to join the international panel on the ground that, as a reinsurance company, it cannot have primary liability for claims against insurers from the Holocaust period.
“We agree, however,” said American Re, “that no company can remain in limbo for an extended and indefinite period, so we understand United National’s decision.”
Both companies pledged to “continue their long-term strategic alliance” and to strengthen their working relationship.
Was this article valuable?
Here are more articles you may enjoy.