EIG Mutual Holding Company Members to Vote on Proposed Conversion
Nevada Commissioner of Insurance Alice A. Molasky-Arman issued an order on November 29, 2006, granting initial approval of the Plan of Conversion of EIG Mutual Holding Company, the parent holding company of Employers Insurance Company of Nevada (EICN). As a result of yesterday's order, EIG Mutual Holding Company will be seeking votes from its members for approval of its proposed conversion from a mutual insurance holding company to a publicly-traded stock company pursuant to the Plan of Conversion.
In the next several days, members entitled to vote on the Plan of Conversion will be receiving comprehensive information packages along with proxy cards to cast their votes on the Plan of Conversion. The packages will include estimates of the amount of consideration to be distributed to each eligible member if the conversion is completed. If the conditions to the conversion are satisfied, the Plan of Conversion provides for the distribution to approximately 6,600 eligible members of EIG Mutual Holding Company 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 September 30, 2006, EICN's surplus was approximately $626 million. If the conversion is approved by its members, EIG Mutual Holding Company intends to conduct an initial public offering of the common stock of the converted holding company. EIG Mutual Holding Company must complete the initial public offering simultaneously with completion of the conversion, and neither the initial public offering nor conversion can be completed unless the other is completed. The conversion will not affect the policy benefits, dividend eligibility or policy premiums of existing EICN policies.
EIG Mutual Holding Company's Chief Executive Officer, Douglas D. Dirks, called the Commissioner's decision a major milestone in the conversion process. “We look forward to our members' approval of the Plan of Conversion and achieving the important goal of becoming a publicly traded stock company,” Dirks said.
Nevada Governor Kenny Guinn spearheaded legislation in 1999 that established EICN as a mutual insurance company owned by its Nevada policyholders, converting it from the former State Industrial Insurance System. EIG Mutual Holding Company offers workers' compensation insurance to select small businesses in eight states through its subsidiaries EICN and Employers Compensation Insurance Company, and care management services through Employers Occupational Health, Inc.
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, in the form of the converted company's common stock, cash or a combination of both, would be made in exchange for the extinguishment of their membership interests in EIG Mutual Holding Company at the time of completion of the conversion and the initial public offering. Only members of EIG Mutual Holding who have policies issued by EICN that were in force on August 17, 2006 will be eligible to receive consideration, if the conversion becomes effective. The conversion and the initial public offering cannot be completed unless all conditions to completion set forth in the Plan of Conversion are satisfied.
The Plan of Conversion and certain related documents are available on the company's website at www.eig.com and through the Nevada Division of Insurance. 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.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities.
EMPLOYERS sm is a trade name for a group of companies providing workers' compensation insurance and services to America's small businesses. Insurance and services are offered through Employers Insurance Company of Nevada and Employers Compensation Insurance Company – both rated A- (Excellent) by A.M. Best for financial strength. Learn more about EMPLOYERS at www.eig.com.
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