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Kingsway Financial Services Inc. Message Board

  • punchtheclock35 punchtheclock35 Oct 21, 2009 4:47 AM Flag

    Bye, Bye Lincoln General

    TORONTO, Oct. 19 /CNW/ - Kingsway Financial Services Inc. ("Kingsway" or the "Company") announced today that its indirect wholly owned subsidiary, Kingsway America Inc. ("KAI"), has disposed of its entire interest in KAI's wholly owned subsidiary Walshire General Assurance Company ("Walshire"). Walshire is the sole shareholder of Lincoln General Insurance Company ("Lincoln General"). All of the stock of Walshire has been donated to charity, and with this disposition Lincoln General ceases being a member of Kingsway's consolidated group of companies.

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    Symbol Price Change
    KFS 4.63 0.00


    {"s" : "kfs,kfs.to","k" : "c10,l10,p20,t10","o" : "","j" : ""} Kingsway is of the view that disposing of Lincoln General at this time will provide all stakeholders, including policyholders, shareholders and creditors with improved long-term value and is consistent with Kingsway's prior determination that it will not continue to voluntarily fund Lincoln General's reserve shortfalls.

    This disposition will also assist Kingsway in continuing to meet its regulatory and contractual obligations in respect of Lincoln General. These obligations include the payment to Lincoln General pursuant to a US$10 million surplus note facility agreement; continued compliance with a run-off management agreement, including certain continued support to the run-off management team at Lincoln General; and continuing guarantee and reinsurance obligations to inter-Company and third party insurance providers in respect of certain Lincoln General obligations. Other than the surplus note facility, quantification of the remaining Lincoln General obligations on Kingsway has not been completed but does not appear to be material to Kingsway at this time. Kingsway will update the market if this assessment changes.

    In addition, Kingsway has also sold substantially all of the assets of Avalon Risk Management Inc.

    Kingsway's recent financial performance has been adversely impacted by historic business strategies and practices that proved to be unprofitable. These dispositions are an important step in Kingsway's previously announced transformation plan to address and bring an end to this legacy.

    Kingsway's decision today is in furtherance of its focus on its profitable core business.

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KFS
5.24-0.01(-0.19%)Apr 17 4:00 PMEDT

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