FedNat Announces Completion of $15 Million Investment in Monarch National Insurance Company by Funds Managed by Hale Partnership and Monarch’s Assumption of Majority of FedNat Insurance Company’s Florida Policies
06 7월 2022 - 9:32PM
FedNat Holding Company (Nasdaq: FNHC) (FedNat) announced today that
the Florida Office of Insurance Regulation (OIR) has authorized the
assumption of approximately 78,000 policies effective June 1, 2022
by Monarch National Insurance Company (Monarch), from a FedNat
subsidiary, FedNat Insurance Company (FNIC), resulting in Monarch’s
policy count totaling approximately 83,000 policies. This
assumption occurred simultaneously with the closing of the
previously announced $15,000,000 investment in Monarch by funds
managed by Hale Partnership Capital Management LLC (Hale Group).
With the closing of the transaction, the Hale Group is now majority
owner of Monarch, with FedNat holding a minority interest and
maintaining representation on Monarch’s board.
Policy servicing and claims administration with
respect to the policies transferred to Monarch will continue to be
performed by FedNat Underwriters, a wholly owned subsidiary of
FedNat. Monarch obtained catastrophe excess of loss reinsurance for
the 2022-2023 storm season, protecting policyholders and Monarch’s
surplus consistent with its historical reinsurance structure.
Monarch anticipates that its reinsurance structure will provide
appropriate and responsible protection against multiple
catastrophic events.
FNIC’s other remaining Florida policies were
canceled effective June 29, 2022. FNIC’s non-Florida policies have
been cancelled, expired or assumed at this time. The Florida
policies of Maison Insurance Company (Maison), which is currently
in run off, were canceled effective June 29, 2022, and the vast
majority of Maison’s non-Florida policies have been cancelled or
expired, with the exception of approximately 7,650 Texas policies
that will expire over the next nine months.
Michael H. Braun, FedNat's Chief Executive
Officer, said, “FedNat has materially exited non-Florida markets
and expects to complete our transition in coming months as we
continue to refocus solely on our historical market in Florida,
which we believe will result in a financially stronger company,
with less volatility, that will be rightsized to our current
capital and surplus position.”
Steve Hale commented, “My firm and investment
partners are delighted to invest $15 million into Monarch and
facilitate the support of approximately 83,000 Florida
policyholders. I look forward to exploring more opportunities for
investment within the Florida insurance market.”
About FedNat
FedNat Holding Company is an insurance holding
company that manages substantially all aspects of the insurance
underwriting, distribution and claims processes and contractual
relationships with independent agents and general agents. FedNat,
through its minority equity investment in Monarch National
Insurance Company, is transitioning to providing homeowners
insurance exclusively within the State of Florida. More information
is available at https://www.fednat.com/investor-relations/.
Factors that could affect
forward-looking statements
This press release contains statements that may
be deemed forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Forward-looking statements generally may be
identified by the use of forward-looking terminology such as
"anticipate," "believe," "budget," "contemplate," "continue,"
"could," "envision," "estimate," "expect," "forecast," "guidance,"
"indicate," "intend," "may," "might," "outlook," "plan,"
"possibly," "potential," "predict," "probably," "pro-forma,"
"project," "seek," "should," "target," "will," "would," "will be,"
"will continue" or the negative thereof or other variations thereon
or comparable terminology and, in this report includes our
statements regarding the expiration, assumption or cancellation of
policies , the continuation of policy servicing and claims
administration, and cost and coverage of loss reinsurance. FedNat
has based these forward-looking statements on its current
expectations, assumptions, estimates and projections. While FedNat
believes these expectations, assumptions, estimates and projections
are reasonable, such forward-looking statements are only
predictions and involve a number of risks and uncertainties, many
of which are beyond FedNat's control. Management cautions that any
such forward-looking statements are not guarantees of future
performance, and readers cannot assume that such statements will be
realized or that the forward-looking events and circumstances will
occur. Factors that might cause such a difference include, without
limitation, the impact of the Monarch transaction on FedNat, as
well as the risks and uncertainties discussed under “Risk Factors”
in FedNat’s 2021 Form 10-K, and discussed from time to time in
FedNat's other reports subsequently filed with the Securities and
Exchange Commission. These and other important factors may
cause our actual results, performance or achievements to differ
materially from any future results, performance or achievements
expressed or implied by these forward-looking statements. FedNat
expressly disclaims any intent, obligation or undertaking to update
or revise any forward-looking statements made herein to reflect any
change in our expectations with regard thereto or any change in
events, conditions or circumstances on which any such statements
are based.
Contacts
Michael H. Braun, CEO (954) 308-1322
Erick Fernandez, Interim CFO (954) 308-1341
Bernard Kilkelly, Investor Relations (954)
308-1409,
or investorrelations@fednat.com
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