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STATE OF MAINE
I. THE PROPOSED ACQUISITION
Casco is a direct, wholly-owned subsidiary of NE Corporation, a Maine domiciled insurance holding company ("NE Corp.). Hingham Mutual Fire Insurance Company ("Hingham") and Hingham's indirect, wholly-owned subsidiary Danbury Insurance Company ("Danbury"), collectively own approximately 55.2% of the capital stock of NE Corp. The remaining 44.8% of the NE Corp. stock is owned by Phenix Mutual Fire Insurance Company ("Phenix"). Hingham, Danbury, and Phenix are collectively referred to as "the Sellers" herein.
Ohio Mutual proposes to acquire direct control of NE Corp. and indirect control of Casco pursuant to the terms of a Stock Purchase Agreement, dated November 1, 2010. The Applicant has also sought and received the approval of the Ohio Director of Insurance for the transactions.
II. PROCEDURAL HISTORY
Ohio Mutual filed its application for approval and the requisite Form A statement with the Maine Bureau of Insurance on November 10, 2010. The Deputy Superintendent issued a Notice of Pending Proceeding and Hearing in this matter on November 22, 2010. The Notice designated Ohio Mutual and Casco as parties to the proceeding. The Notice also provided interested persons an opportunity to submit an application to intervene in the proceeding, but no applications for intervention were made.
The public hearing was held as scheduled on December 16, 2010. Ohio Mutual and Casco attended and participated in the hearing. The Sellers chose neither to intervene nor testify but Steve Chevalier, President and Chief Executive Officer of New London County Mutual Insurance Company, which owns Hingham and Danbury participated in the hearing via telephone on their behalf. No members of the public attended the hearing.
The Form A filing and its attachments, the Bureau's First Information Request and the Applicant's response thereto, a request for confidential treatment of certain documents submitted by Applicants at the hearing,2 and the written testimony of James J. Kennedy, President and Chief Executive Officer of Ohio Mutual were offered and admitted into the record of the proceeding. Testimonial evidence was provided at the hearing by James J. Kennedy, David Hendrix, Chief Financial Officer of Ohio Mutual, and William Swetland III, President and Chief Executive Officer of Casco.
III. STANDARD OF REVIEW
As identified in the Notice of Pending Proceeding and Hearing, the legal standard of review for the consideration of the pending application is set forth in 24-A M.R.S. §§ 222(7)(A) and 3476(2) and includes the following:
In addition to the legal standards of review under 24-A M.R.S.A. §§ 222 and 3476 as identified above, the Deputy Superintendent in his discretion may consider such other relevant issues identified by parties or otherwise.
IV. FINDINGS OF FACT AND CONCLUSIONS OF LAW
Based upon the testimonial and documentary evidence presented at the hearing and upon a review of the record of this proceeding, the Deputy Superintendent finds that no issues of material concern exist with respect to Ohio Mutual's abilities to satisfy the legal standards for approval set forth in 24-A M.R.S. §§ 222(7)(A) and 3476(2), summarized as follows:
For all of the foregoing reasons, the Deputy Superintendent concludes that Ohio Mutual has met the legal standards for approval set forth in 24-A M.R.S. §§222(7)(A) and 3476(2).
The application of Ohio Mutual to acquire control of Casco through its Stock Purchase Agreement with the Sellers is hereby APPROVED. Ohio Mutual's acquisition of control of Casco is subject to the ten day waiting period requirement of 24-A M.R.S.§ 222(4-A)(C).
The Deputy Superintendent's review of the information for which confidentiality is sought indicates that the request relates to future business plans of the Applicant and the terms of certain reinsurance, management agreements, service agreements, and cost-sharing agreements among and between Ohio Mutual and its subsidiaries which will apply to Casco following the transaction. The request for confidentiality is hereby granted. See 1 M.R.S. § 402(3)(B). The Bureau of Insurance will hold the information identified in the request on a confidential basis. Should a member of the public seek access to the specified documents, only redacted versions will be provided unless and until otherwise ordered by a Court of competent jurisdiction or otherwise agreed to by the Applicant.
VI. NOTICE OF APPEAL RIGHTS
This Decision and Order is a final agency action of the Superintendent of Insurance within the meaning of the Maine Administrative Procedure Act. It may be appealed to the Superior Court in the manner provided by 24-A M.R.S. § 236, 5 M.R.S. § 11001 et seq and Maine Rule of Civil Procedure 80C. Any party to this proceeding may initiate an appeal within thirty days after receiving this notice. Any aggrieved non-party whose interests are substantially and directly affected by this Decision and Order may initiate an appeal within forty days of the issuance of this decision. There is no automatic stay pending appeal; application for stay may be made in the manner provided for by 5 M.R.S. § 11004.
1 Superintendent of Insurance Mila Kofman delegated all procedural and decision making legal authority with respect to this proceeding to Deputy Superintendent Cioppa. See 24-A M.R.S. §206(2).
2 Counsel for the Applicants requested that specifically identified information found on page 5 of the Form A, within Exhibits 4 and 5 to the Form A, and within the Applicant's Response to the Bureau's Information Request be accorded confidential status. The basis for the request is that the information contains trade secrets of the Applicant. The Applicant has further proposed specific redactions to the documents identified.
Last Updated: August 22, 2012
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