Motor Club Completes Mountain Valley Acquisition

Motor Club of America recently announced that it had completed its acquisition of Mountain Valley Indemnity Company formerly known as White Mountains Insurance Company, from Unitrin Property and Casualty Insurance Group, for $7.5 million in cash.

Mountain Valley, formed in 1995, presently writes approximately $16 million of small and medium-sized commercial lines business in New York and all of New England except Connecticut. Statutory surplus as regards policyholders at December 31, 1999 was $7.3 million.

Under the terms of the purchase, Mountain Valley will run-off its present 100% intercompany quota share reinsurance agreement; thus at closing there are no net loss and loss expense reserves for claims occurring prior to closing, including those which develop subsequently. Mountain Valley will be assuming the unearned premium at closing (subject to certain adjustments).

Motor Club announced that it intends to pool the operations of Preserver Insurance Company, Mountain Valley and American Colonial Insurance Company in order to maximize its commercial lines operations. These pooled operations will have a premium base of over $30 million, almost all of which will be small and mid-sized commercial lines premium, supported by nearly $30 million in surplus. This surplus includes a new $3 million surplus contribution to Preserver by Motor Club.