Atlanta-based Builders Insurance Group and the Home Builders Association of Georgia agreed to resolve and conclude HBAG’s proxy contest and other outstanding issues between the parties.
Earlier this year when Builders Insurance, a mutual captive insurer for Georgia homebuilders, modified its exclusive affiliation with HBAG, the association implemented a takeover of the insurer.
Under Georgia law, mutual captive insurance companies like Builders are required to sell insurance only to members of sponsoring associations, such as HBAG.
At that time, Patrick Mitchell, Builders’ president and chief executive officer, said the law gave HBAG a membership monopoly while HBAG contended that Builders was violating state law. The association then initiated a proxy vote among its members to regain control of Builders Insurance Group.
Builders ended its exclusive agreement with HBAG and formed an additional relationship with Chesterfield, Missouri-based Contractor’s Benefit Association. The action prompted HBAG to implement the aforementioned proxy vote that would disallow Builders to continue its alignment with CBA and to replace Builders’ board of directors with six HBAG past presidents.
As part of the announced resolution, HBAG and HBAG’s local associations will enter into endorsement agreements with Builders Insurance. The settlement agreements are subject to execution of final documentation.
Source: Builders Insurance Group
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