{"id":303055,"date":"2011-10-18T07:15:00","date_gmt":"2011-10-18T12:15:00","guid":{"rendered":"https:\/\/www.investmentexecutive.com\/uncategorized\/kingsway-financial-settles-divestiture-dispute-with-pennsylvania-regulators\/"},"modified":"2011-10-18T07:15:00","modified_gmt":"2011-10-18T12:15:00","slug":"kingsway-financial-settles-divestiture-dispute-with-pennsylvania-regulators","status":"publish","type":"post","link":"https:\/\/www.investmentexecutive.com\/news\/industry-news\/kingsway-financial-settles-divestiture-dispute-with-pennsylvania-regulators\/","title":{"rendered":"Kingsway Financial settles divestiture dispute with Pennsylvania regulators"},"content":{"rendered":"

\n\tHigh-risk auto insurer Kingsway Financial Service Inc. (TSX:KFS) announced a settlement Monday in its dispute with Pennsylvania regulators over its divestiture of two financially troubled insurers.<\/p>\n

\tThe settlement, which follows extended litigation and almost a year of negotiations, involves Kingsway’s divestiture of its 100 interest in Walshire General Assurance Co. \u2014 sole shareholder of high-risk U.S. insurer Lincoln General Insurance Co. \u2014 to a number of charities.<\/p>\n

\tThe move was challenged as a “sham transaction” by the Pennsylvania Department of Insurance, which filed a court complaint aimed at forcing the company to unwind the donations.<\/p>\n

\tThe department argued that, if allowed to stand, the divestiture would “undermine the web of laws that protect insurance companies against abandonment by their parent holding companies.”<\/p>\n

\tA lower court ruled in Kingsway’s favour in April 2010, but the department appealed to the Pennsylvania Supreme Court.<\/p>\n

\tUnder the settlement, the two parties dismiss all claims against each other, but Kingsway takes a renewed minority ownership in the companies under LGIC Holdings LLC.<\/p>\n

\tLGIC Holdings is a joint endeavour between Kingsway, with a 49% interest, and U.K.-based Tawa plc, with 51%.<\/p>\n

\tDay-to-day management of Walshire and Lincoln General will be performed by the Tawa group subject to the oversight of the companies’ boards of directors, Kingsway said.<\/p>\n

\tAs a minority and non-controlling investor, Kingsway will not consolidate Walshire or Lincoln General but will account for its investment using the equity accounting method, the company said.<\/p>\n

\tKingsway also obtained releases from Walshire, Lincoln General and the 20 charities.<\/p>\n

\tKingsway Financial’s primary businesses is providing auto insurance to drivers who do not meet the criteria for coverage by standard automobile insurers.<\/p>\n

\tThe company’s stock was down six cents, or 7.69%, at 72 cents Monday on the Toronto Stock Exchange.<\/p>\n","protected":false},"excerpt":{"rendered":"

Kingsway takes a renewed minority ownership in the companies under LGIC Holdings LLC<\/p>\n","protected":false},"author":38954,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2312,2318],"tags":[],"yst_prominent_words":[],"acf":[],"_links":{"self":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/303055"}],"collection":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/users\/38954"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/comments?post=303055"}],"version-history":[{"count":0,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/303055\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/media?parent=303055"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/categories?post=303055"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/tags?post=303055"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/yst_prominent_words?post=303055"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}