Vesta Insurance Group Inc., based in Birmingham, Ala., announced the NRMA arbitration panel has ruled that the whole account quota share contract effective July 1, 1997, between Vesta Fire Insurance Corporation and NRMA Insurance Limited does not apply to loss occurrences prior to July 1, 1997. As a result, Vesta will record an after-tax, non-operating $15.3 million charge in the third quarter, which will be reflected in the company’s Form 10-Q scheduled to be filed on or before November 14, 2002. The charge will reduce Vesta’s statutory capital and surplus by approximately $10.0 million and the company’s GAAP book value per share is $6.87 as of September 30, 2002.
“While we strongly disagree with the panel’s 2-1 decision, we have recorded this amount as a revision of our estimate in this matter,” said Norman W. Gayle, III, President and CEO. “This ruling does not affect our current cash position or set a binding precedent regarding our other arbitrations. We intend to continue to vigorously pursue our claims in this and the other arbitrations.”
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