 |
ISMIE Continues Conversion to Stock Insurance Company |
A formal plan of merger for ISMIE to convert from a reciprocal insurance exchange to a stock insurance company is under way as ISMIE positions itself to compete more effectively, enhance flexibility and create long-term growth. The plan of merger and the registration statement to execute the conversion have been filed with the Illinois Department of Insurance and the Securities and Exchange Commission (SEC), respectively. Both are currently undertaking a rigorous review of the documents, resulting in an extensive period of questions and response. It is a time-consuming process expected to take several months.
If all necessary approvals are granted, the result will be ISMIE Indemnity Company, which will continue to provide policyholders’ insurance coverage and assume all the obligations of ISMIE. In turn, ISMIE Indemnity will become a wholly-owned subsidiary of a new business corporation called ISMIE Holdings Inc., which will act as the holding company for the enterprise. Policyholders’ current coverage will not be affected by the changeover. The conversion will work as follows:
Eligibility requirements. Policyholders who were members on May 5, 1999, when the ISMIE Board adopted the conversion process, will be entitled to vote on the conversion.
Conversion procedures. If the conversion is approved and completed, eligible members will receive shares of ISMIE Holdings common stock. In the conversion, 10 million shares of ISMIE Holdings common stock will be issued to eligible members and allocated among them as follows:
- 9 million shares will be allocated among eligible members pro rata based on the ratio of their earned premiums (net of any discounts and not including surcharges or premiums paid for reporting endorsements) to total earned premiums for all eligible members during the period beginning July 1, 1995 and ending on and including May 5, 1999, and
- 1 million shares will be allocated evenly among all eligible members, so each receives shares of ISMIE Holdings stock in the conversion.
Completing the conversion. Eligible members will vote on the issue at a special meeting that will be called to consider the conversion plan, registration of the ISMIE Holdings common stock with the SEC, approval by the Illinois Director of Insurance and other conditions. Following SEC registration, eligible members will receive a proxy statement/prospectus in connection with the special meeting that will explain the plans and the conversion process. If the policyholders vote to support the proposal and the Illinois Department of Insurance approves the plan, the merger will be complete.
Questions. Call a specially designated toll-free number: 800-632-7478. However, due to regulatory requirements, ISMIE is limited in the amount of information it can provide at this stage.