Superior National To Sell Business Insurance Co. On To Zurich Centre Group

Superior National Insurance Group Inc. has signed a letter of intent under which it will transfer the business and employees of Business Insurance Co. (BICO) to an affiliate of Superior National, and then sell BICO to Zurich Centre Group LLC, a subsidiary of the Zurich Insurance Group. The transfer will take place at the same time as Superior completes its acquisition of BICO's parent company, Business Insurance Group Inc. from Foundation Health Systems Inc. under a definitive agreement previously announced by PropertyandCasualty.com.

The sale of BICO to Zurich will take place after a due diligence investigation of BICO by Zurich; the execution of definitive documents by Sept. 1, 1998; completion of Superior National's acquisition of BIG; approval of the BICO transaction by state regulators; and the consummation of certain additional contractual agreements between Superior National and Zurich.

William L. Gentz, Superior National's chief executive officer, said, "The sale of Business Insurance Co. to the Zurich Group rationalizes Superior National's post-acquisition statutory capital structure and improves BICO's position from a regulatory and rating agency perspective while leaving Superior National in control of BICO's nationwide workers' compensation infrastructure.

"We want to emphasize that Superior National remains committed to expanding BIG's national operations under Superior National ownership, and that BICO employees, producers and policyholders will be totally unaffected by this transaction," he added.