State judge approves sale of insurance firm
Ending months of turmoil for approximately 20,000 policy holders, a state judge has approved the sale of Hawaiian Insurance & Guaranty Co. Ltd. to a Minnesota insurance company.
The acquisition by Great Northwest Insurance Co. of St. Paul means HIG's current home, hurricane and auto policies will remain in effect. The court had until midnight last night to approve the deal or the policies would have been canceled, said J.P. Schmidt, Hawaii's state insurance commissioner.
Although Great Northwest had stepped forward earlier this month, the transaction still needed approval by Circuit Judge Victoria Marks.
"It's a great deal for policyholders," Schmidt said. "Otherwise, their policies would have been canceled."
Schmidt declined to put a price on the acquisition, saying it was a complex transaction whose terms could not be quantified easily.
HIG's future had been in question since June, when state regulators took over the company. Although HIG executives said the company's finances were sound, rating agencies had downgraded the bond rating of HIG's parent, Vesta Insurance Group, because of financial problems the company faced from hurricane-related losses in the Gulf South. The downgrade prompted local banks to tell HIG-insured mortgage borrowers to meet with their insurance agents to discuss the downgrade, or to find another insurer.