Locally-based firms Sagicor General Insurance Inc and Harmony General Insurance Company Limited have announced a merger of their businesses in a deal whose value has not been disclosed.
In an agreement dated December 8, 2017, but which was only made public this week, the two companies agreed to establish a new business, Sagicor General Insurance Inc.
Sagicor General’s President and Chief Executive Officer Keston D Howell announced the deal to policyholders in a circular dated May 14, 2018, but said the merger was awaiting Financial Services Commission approval.
“Sagicor is presently rated by A M Best as ‘A-Excellent,’ which is a financial-strength rating measuring Sagicor’s ability to pay claims. Harmony is not presently rated,” the document cementing the merger states.
The agreement governs the corporate structure of the proposed amalgamated company and as such will not affect the operation of the businesses of the merged firms.
Policyholders have also been assured that their rights would not be affected by the changes made to the articles and by-laws of both companies or to the board of directors on the proposed amalgamation.
“On the proposed amalgamation of Harmony and Sagicor there shall be no transfer of any contract by an insurer to another company,” the agreement reads.
It also explains that the property of each company becomes that of the merged firms and that the absorbed institution would be liable for the obligations of each prior independent business.
Canadian actuaries said the policy liabilities consist of a provision for unpaid claims and adjustment expenses on the expired claim liabilities and a provision for future obligations on the unexpired part of the premium liabilities.
“For Harmony General Insurance Company Limited, the method and assumptions used to estimate the policy liabilities are reasonable and appropriate to the circumstances,” Cynthia M Potts, a fellow of the Canadian Institute of Actuaries said.
“For Sagicor General Insurance Inc, the methods and assumptions used to estimate the policy liabilities are reasonable and appropriate to the circumstances,” Potts added.