November 23, 2009 by Canadian Underwriter
Kingsway Financial Services Inc. (KFS) is disposing of its majority interest in Jevco Insurance Company.
“Kingsway believes that the transaction will benefit Kingsway’s and Jevco’s stakeholders by strengthening Jevco’s market presence and allowing it to continue its 20-year history of profitability,” said a Kingsway release.
“One of the objectives of the transaction is for Jevco’s financial strength rating to be judged independently of the Kingsway group of companies, which has adversely impacted Jevco’s current standing.”
In September 2009, Jevco announced that it was assuming the assets and liabilities of Kingsway General Insurance Company.
Both Kingsway General and JEVCO are subsidiaries of KFS.
On Sept. 29, 2009 Standard & Poor’s lowered its unsolicited counterparty credit and senior unsecured debt ratings on KFS to ‘CCC+’ from ‘B-.’
On Nov. 17, 2009 Pennsylvania’s Department of Insurance announced it was taking legal action against KFS, alleging the insurer illegally disposed of its shares of Lincoln General Insurance Company.
The news sent KFS’s stock plummeting more than 40% on the day of the announcement, to just under $2.
Subject to approval by the Office of the Superintendent of Financial Institutions (OSFI), Kingsway is intending to relinquish control of Jevco and remain a non-influential investor.