State insurance regulators have approved the acquisition of Shenandoah Life Insurance to a Texas-based company, subject to approval by at least two-thirds of Shenandoah’s policy holders. Shenandoah has been under state receivership for almost three years, ever since stock losses tied to falling home prices left the company unable to continue. More from WFIR’s Evan Jones.
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Here is the full State Corporation Commission news release:
SCC APPROVES ACQUISITION OF SHENANDOAH LIFE INSURANCE COMPANY; REHABILITATION PLAN IN BEST INTEREST OF POLICYHOLDERS
RICHMOND — The State Corporation Commission (SCC) has approved a rehabilitation plan, including a plan of conversion, for Shenandoah Life Insurance Company. The plan involves an acquisition of the Roanoke-based insurance company by United Prosperity Life.
In its final order approving the rehabilitation plan, the Commission said the plan of conversion of Shenandoah Life from a mutual company owned by policyholders and the acquisition by United Prosperity Life, a stock company, is “fair and equitable” to policyholders.
Shenandoah has been in receivership since February 2009. A receivership order was issued by the Circuit Court of the City of Richmond after the SCC and Shenandoah Life determined that entering receivership was necessary to protect the interests of Shenandoah’s policyholders and creditors.
Upon the closing of the transaction and following policyholder approval for the demutualization, Shenandoah would become a wholly-owned subsidiary of United Prosperity Life Insurance Company. As part of the acquisition, United Prosperity will invest a minimum of $60 million in Shenandoah. If approved by more than two thirds of the votes cast by Shenandoah’s policyholders, the transaction is expected to close by the first quarter of 2012. United Prosperity has indicated that it plans to continue operating out of the Roanoke office.
The moratorium placed on policy loans, cash or surrender values, surrenders, fund transfers, lapses, cash outs and similar payments will remain in place and may be extended by United Prosperity into the first quarter of 2013. Additionally, Shenandoah will not resume the issuance of new insurance policies until after the acquisition by United Prosperity Life Insurance Company is complete.