Reno, Nev.-based EIG Mutual Holding Co., the parent holding company of Employers Insurance Co. of Nevada has filed a plan of conversion with the Nevada Commissioner of Insurance. The plan describes the terms upon which EIG Mutual Holding proposes to convert from a mutual insurance holding company to a publicly traded stock company.
The plan must be approved first by the Nevada Commissioner of Insurance after a public hearing, and then by a vote of the members of EIG Mutual Holding. Assuming those approvals are obtained, EIG Mutual Holding would conduct an initial public offering of the common stock of the converted holding company. The conversion will not affect in any way the policy benefits, dividend eligibility or policy premiums of existing EICN policies. The company currently anticipates that the completion of the conversion will occur in the first quarter of 2007, at the earliest.
Nevada Governor Kenny Guinn spearheaded legislation in 1999 that established Employers Insurance Company of Nevada as a mutual insurance company owned by its Nevada policyholders, from the former State Industrial Insurance System. EIG Mutual Holding Company offers workers’ compensation insurance to small businesses in eight states through EICN and Employers Compensation Insurance Co., and care management services through Employers Occupational Health, Inc.
“Our conversion to a stock company will enhance our financial and strategic flexibility and enable us to take advantage of growth opportunities and continue our expansion into new markets. Our Board of Directors examined the Plan of Conversion carefully and concluded that it is fair and equitable to the eligible members of EIG Mutual Holding Co.,” said Douglas D. Dirks, CEO.
If the conditions to the conversion are satisfied, the plan provides for the distribution to more than 6,500 eligible members of EIG Mutual Holding Co. of aggregate consideration of not less than EICN’s surplus as reported in its statutory financial statements most recently filed prior to completion of the conversion. As of June 30, 2006, EICN’s surplus was $554 million.
The aggregate value of any consideration to be distributed to eligible members will not be determined until the time of the completion of the conversion and the initial public offering. Any distribution of consideration to eligible members would be made in exchange for the extinguishment of their membership interests in EIG Mutual Holding at the time of completion of the conversion and the initial public offering. Any consideration will be in the form of the converted company’s common stock, cash or a combination of both. Only members of EIG Mutual Holding who have policies issued by EICN that were in force on Aug. 17, 2006 will be eligible to receive consideration if the plan becomes effective.
The plan and certain related documents will be available on the company’s website at www.eig.com and through the Nevada Division of Insurance. More detailed information about the proposed conversion will be provided to members of EIG Mutual Holding Company in the coming months. In the meantime, members may call a toll-free telephone number (1-888-900-1476) between the hours of 8:00 a.m. and 5:00 p.m., Pacific Time, Monday through Friday, to speak to a company representative.
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