The Wisconsin Office of the Commissioner of Insurance (OCI) held a public hearing at its offices on July 19, 2019 on Church Mutual Insurance Company's application to restructure into a mutual holding company system. The hearing record will be held open until the end of the day on July 31, 2019 for comments. Comments may be sent to the OCI at ocifinancial@wisconsin.gov. The hearing record will be closed on August 1, 2019 and no further comments will be accepted after the record has been closed. |
The Wisconsin Office of the Commissioner of Insurance (OCI) held a public hearing at its offices on July 19, 2019 on Church Mutual Insurance Company's application to restructure into a mutual holding company system. The hearing record will be held open until the end of the day on July 31, 2019 for comments. Comments may be sent to the OCI at ocifinancial@wisconsin.gov. The hearing record will be closed on August 1, 2019 and no further comments will be accepted after the record has been closed.
Church Mutual Insurance Company is planning to form a mutual holding company. Attached are several documents that provide background on the plan and details on how the new structure will help Church Mutual remain strong and successful for the next century and beyond.
Please take a moment to read the information below, including a letter from Church Mutual Chairperson of the Board, John B. Williams, to learn more about the proposal and its policyholder benefits.
Church Mutual Insurance Company hopes to reorganize its legal structure, based on a unanimous recommendation by its board of directors. The following questions and answers provide general information about this proposed restructuring, including the long-term business benefits.
CMIC's board of directors is proposing that the company change the way it is organized. Currently, CMIC is organized as a mutual insurance company. With the proposed change, CMIC would convert to a stock insurance company that is wholly owned by a newly organized mutual insurance holding company (MHC). CMIC's new name would be Church Mutual Insurance Company, S.I. (CMIC, S.I.)
An MHC is a legal entity organized under state law to serve as the parent company of an insurance company that has been converted from a mutual company to a stock company.
The proposed MHC conversion will not involve any changes to the existing workforce, operations or office locations of CMIC.
Policyholder contract rights will not be affected in any way. There will be no changes to policyholders' insurance coverage, premiums, benefits or service as a result of the proposed change.
When the MHC restructuring becomes effective, policyholders will no longer be members of CMIC. Rather, they will automatically become members of the new mutual insurance holding company. As members of the MHC, policyholders will have rights in the MHC that are comparable to the rights they have now in CMIC.
No. Only CMIC policyholders who are policyholders on the effective date of the restructuring will automatically become members of the MHC. In addition, all future new policyholders of CMIC, S.I., will automatically become members of the MHC. CMIC, S.I., policyholders remain members of the MHC until they are no longer policyholders of CMIC, S.I.
The restructuring will enhance CMIC's ability to grow and respond to future needs, challenges and opportunities in a rapidly changing insurance industry. It will preserve the company's mutuality and the ability to operate with a focus on the long-term interests of policyholders. More specifically, the Board of Directors and CMIC's management believe that the restructuring to a mutual insurance holding company will:
Ultimately, the Board of Directors and management believe that the MHC structure will help ensure that CMIC and its affiliates have the best chance to grow and succeed while the insurance industry continues to mature and evolve. As with any other business, insurance has changed dramatically since CMIC was founded more than 120 years ago. The proposed MHC structure will provide flexibility and position CMIC for continued success in the next 120 years.
After carefully considering the proposed restructuring and other alternatives for more than two years, the board has unanimously approved the restructuring to an MHC.
CMIC will continue to be regulated by the Wisconsin Office of the Commissioner of Insurance (OCI) in the same way as it has been in the past. The newly organized MHC will also be regulated by the OCI.
No, the company does not have any current plans to sell stock after the restructuring is complete.
The creation of an MHC as a holding company to hold the stock of converted CMIC must be approved by the Wisconsin OCI as well as three-fourths of CMIC members (policyholders). Members will have the opportunity to vote via proxy or at a special meeting to be held later in 2019. If the proper approvals and votes are secure, the restructuring should become effective by Jan. 1, 2020.
The information contained in these materials is intended solely to provide general guidance on topics that may be of interest to you. While we have made reasonable efforts to present accurate and reliable information, Church Mutual Insurance Company, S.I. and its affiliates disclaim all liability for any errors or omission or for any actions you take or fail to take based on these materials. The information provided may not apply to your particular facts or circumstances; therefore, you should seek professional advice prior to relying on any information that may be found in these materials.
