Mutual insurance company, OIL Insurance, loses nine members

Oil Insurance Limited (OIL), a mutual insurance company in the energy industry, has announced that nine of its more than 83 members have elected to withdraw from OIL and not renew their policies effective Jan. 1, 2007.
None of the nine withdrawing members were identified in a company press release.
Collectively, the nine shareholders had gross assets representing approximately 12% of the weighted gross assets of $1.11 trillion insured by OIL immediately prior to withdrawal. OIL Insurance’s gross weighted assets excluding those of the withdrawing members is now US$976.7 billion.
“The company does not believe that the withdrawal of these shareholders from OIL has had or will have a material adverse effect on our company,” OIL Insurance announced in a press release. “Effective upon their withdrawal, these companies became obligated to pay the full amount of their respective avoided premium surcharges which are estimated to total approximately $200 million, and forfeited their dissolution rights in OIL.
“The total amount of avoided premium surcharges to be paid by the withdrawing members will be finalized at year-end.
In an interview with Rupal Parekh of Business Insurance, George F. Hutchings, OIL’s senior vice president and chief operating officer, said the outgoing OIL members are diverse in their risk profiles. “They all had their different reasons why they left,” Business Insurance quotes Hutchins as saying. “There was no commonality across the board.”
Hutchins said the shareholding members that did withdraw represented virtually all of the business sectors in which OIL does business. These include offshore energy, onshore energy, mining, and pipelines.
Canadian members of the company include Canadian Natural Resources Ltd., Husky Energy Inc., Nexen Inc., Nova Chemicals Corporation, Ontario Power Generation, Paramount Resources, Petro-Canada, Shell Canada Limited, Suncor Energy Inc. and Talisman Energy Inc.