Tawa buys 51% stake in US firm

Run-off specialist Tawa this morning said it is to acquire a 51% stake in a newly formed US holding company, LGIC Holdings, LLC for $1.

Subject to regulatory approval, LGIC will acquire a majority of Walshire General Assurance Company, the sole shareholder of Lincoln General Insurance Company.

The other investor in LGIC will be Kingsway Financial Services Inc, the former indirect owner of Walshire General Assurance Company.

Pennsylvania-based Lincoln General, in run-off since 2009, reported statutory gross assets of $412m and net assets of $3.2m at the end of 2010.

Previously Lincoln General wrote a broad book of predominantly commercial and personal lines insurance.

After making allowances for fair value adjustments Tawa said it anticipates that the transaction will have minimal impact on net assets.

Marvin Mohn, head of US operations for Tawa and its subsidiary Pro, said: “This transaction is an exciting and natural development to the partnership which Tawa and Pro announced with Lincoln General in November 2010.

“Working closely with the Lincoln General team in the management of this challenging run-off will provide Tawa and Pro with the opportunity to develop further their joint US management services line of business.

“We are also very pleased to be partnering with Kingsway as shareholders of the holding company.”