New York Direct Insurer Taking New Purchase National

White Plains, NY-based Direct Response Corporation (DRC), a national, direct-writer of auto insurance, has entered into an agreement to buy Connecticut Life & Casualty Insurance Company (CL&C). Terms of the transaction were not disclosed.

Mory Katz, president and CEO of DRC and Robert Weiss, chairman & CEO of Weiss Financial Corporation, which owns CL&C, said the acquisition would provide value to both entities. DRC owns a growing group of direct auto insurance companies, most notably Response Insurance. Connecticut Life & Casualty is a direct insurer writing auto and homeowners insurance in Connecticut, with more than $13 million of in-force business.

Katz said, ``We are very impressed with the team and business Bob Weiss has built. We plan on working with Bob and Ron Licata (CL&C president & chief operating officer) on taking Connecticut Life & Casualty national. Together we are going to help bring to fruition Bob's vision of making CL&C a significant force in the business.''

Weiss said, ``In many ways this move fulfills my long-held vision of making CL&C a significant player in the insurance industry. Ron Licata and I have worked together to build our company's reputation for quality and service. As we progressed we realized that additional success was limited by the constraints of our resources and capital. DRC brings the resources needed to help expand CL&C's products and services in Connecticut and beyond.''

Both parties signed a letter of intent and the acquisition is subject to approval by the Connecticut Insurance Department and completion of due diligence. Direct Response Corporation intends to maximize the complimentary business models of the two companies by expanding CL&C's insurance products into the states currently marketed to by Response Insurance, including New York, California, Florida, Illinois, Maryland and Georgia. CL&C will continue to operate under its current name and management with Weiss as chairman and chief executive officer and Licata as president and chief operating officer. It is expected that staffing in CL&C's Meriden, CT office will increase significantly as a state-by-state roll out is launched.

Weiss, formerly a successful independent insurance agent, formed Connecticut Life & Casualty in 1990. Licensed in the state of Connecticut, the company writes personal lines of business, of which auto insurance current comprises approximately 72 percent. At its founding it was the first domestic insurer formed in Connecticut in more than 100 years.

Direct Response Corporation was initially financed in 1996 with an equity commitment of $215 million from an investor group led by Morgan Stanley Dean Witter Capital Partners, the private equity unit of Morgan Stanley Dean Witter & Co. That investment was recently augmented by an additional $97 million.