Kingsway America, an indirect wholly owned subsidiary of Kingsway Financial Services, has disposed of its entire interest in its wholly owned subsidiary Walshire General Assurance Company. Walshire is the sole shareholder of Lincoln General Insurance Company.
All of the stock of Walshire has been donated to charity, and with the disposition Lincoln General ceases being a member of Kingsway Financial's consolidated group of companies.
Kingsway Financial is of the view that disposing of Lincoln General at this time will provide all stakeholders, including policyholders, shareholders and creditors with improved long-term value and is consistent with Kingsway Financial's prior determination that it will not continue to voluntarily fund Lincoln General's reserve shortfalls.
Kingsway Financial said that this disposition will also assist the company in continuing to meet its regulatory and contractual obligations in respect of Lincoln General.
These obligations include the payment to Lincoln General pursuant to a $10 million surplus note facility agreement; continued compliance with a run-off management agreement, including certain continued support to the run-off management team at Lincoln General; and continuing guarantee and reinsurance obligations to inter-company and third party insurance providers in respect of certain Lincoln General obligations.
Other than the surplus note facility, quantification of the remaining Lincoln General obligations on Kingsway Financial has not been completed but does not appear to be material to Kingsway Financial at this time. Kingsway Financial said that it will update the market if this assessment changes.
In addition, Kingsway Financial has also sold substantially all of the assets of Avalon Risk Management.