The parent of Employers Insurance Co. of Nevada has won state authorization to convert from a mutual to a publicly traded stock company — and in the process give its 6,500 members cash and stock that could add up to more than $550 million in value.
In an order released Dec. 1, state insurance Commissioner Alice Molasky-Arman authorized EIG Mutual Holding Co. to move ahead with the conversion early next year, subject to endorsements by the businesses, school districts and other entities that have worker compensation insurance policies with the company.
Ann Nelson, an executive vice president with EIG Mutual Holding Co., has said that stock and cash distributions will be made once all approvals are obtained.
Gov. Kenny Guinn pushed for the 1999 legislation that set up the Reno-based mutual insurance holding company in the place of the former State Industrial Insurance System. EIG now offers worker compensation policies to small businesses in eight states.
As of June, the insurance company’s surplus was $554 million. If that amount is about the same at the point of cash and stock distributions next year, the average for policyholders would be about $85,000. The actual amounts would be determined through a formula that takes into account a policyholder’s premium payments and tenure with the company.
Doug Dirks, chief executive officer of EIG, has stated that the conversion will increase the company’s financial and strategic flexibility and enable it to take advantage of growth opportunities and continue expansion into new markets.
Dirks also said directors of the company concluded that the plan is “fair and equitable” to members of the mutual company. The change wouldn’t change any policy benefits or liabilities that now exist under the mutual company.
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