The Iowa Insurance Division has filed charges against two GuideOne insurance companies for failing to comply with a request for information. GuideOne Mutual Insurance Co. and GuideOne Specialty Mutual Insurance Co. face charges related to a decision by GuideOne in February to hire investment banker J.P. Morgan & Co. as an adviser.
In April the insurance division verbally requested a copy of the J.P. Morgan engagement letter and any report issued by J.P. Morgan. GuideOne has not provided the requested information. The state agency says failing to do so violates Iowa law. Possible remedies include suspension or revocation of the company’s license and a monetary fine. An administrative law judge was asked to issue an order directing GuideOne to supply the information and impose appropriate sanctions.
The insurance division also held a hearing Thursday on GuideOne’s sale of two subsidiaries that were acquired in 1999. GuideOne is returning the companies—Arizona-based American Summit and Waco-based National Lloyds Insurance Co.—to a holding company, NLASCO, created by the former owners. GuideOne bought the companies in separate deals for about $79.5 million. The resale price is about $62 million. GuideOne officials have refused to explain the $17.5 million price difference.
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