Dallas-based GAINSCO Inc. and subsidiary MGA Insurance Company Inc. completed a previously announced sale of an affiliated insurance subsidiary, General Agents Insurance Company of America Inc., the company reported.
General Agents was sold to Montpelier Re U.S. Holdings Ltd., a subsidiary of Montpelier Re Holdings Ltd., for $4.75 million, plus $5 million of policyholders’ surplus that remained in General Agents at closing.
GAINSCO expects to record a gain from this transaction during the fourth quarter of 2007 of approximately $4.5 million, with the net proceeds expected to be contributed to policyholders’ surplus of MGA.
As part of the closing transaction, all direct obligations of General Agents were assumed 100 percent by MGA, and MGA also indemnified General Agents against other liabilities existing prior to closing. Additionally, the Company guaranteed the obligations of MGA to General Agents.
MGA will manage the continued, orderly disposition of the company’s runoff business and will continue to write the company’s ongoing nonstandard personal automobile business.
Source: GAINSCO Inc.
Topics Agencies Insurance Wholesale
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