NU Online News Service, June 1, 6:25 p.m. – The New York State Insurance Department says Phoenix Home Life Mutual Insurance Company, Hartford, can demutualize and go public, if it will be selling enough shares to the public at a high enough price.
“The reorganization of Phoenix from a mutual insurance company to a stock life insurance company, as set forth in the [demutualization] plan, is in the best interests of Phoenix and its policyholders,” Gregory Serio, the New York department?fs new superintendent, writes in an 80-page opinion on the Phoenix demutualization. “The provisions of the plan are fair and equitable to the policyholders.”
But Phoenix must provide a certification letter from its general counsel and seven separate fairness opinions on the day of the conversion before the department can give the company final approval, Serio writes in the opinion.
Phoenix also must get Serio?fs approval of the price and number of shares to be offered through the initial public offering.
The New York department has posted Serio?fs opinion on its Web site, at http://www.ins.state.ny.us/news1.htm
Phoenix, a policyholder-owned mutual insurer, was founded as a stock company, American Temperance Life Insurance Company, in 1851. American Temperance adopted a mutual charter in 1889. The company merged with Home Life Insurance Company and took its present name in 1992.
Phoenix now wants to return to its stock company roots by forming a publicly traded holding company, The Phoenix Companies Inc., that would trade on the New York Stock Exchange under the symbol PNX.
The company would go public later this year by distributing the entire actuarial value of the company to the policyholders, in the form of policy credits, cash and 58 million shares of stock. It would also hold an IPO. The IPO might raise $836 million through the sale of 56 million shares at a price of about $15.75, according to figures Phoenix has filed with the U.S. Securities and Exchange Commission.
Although Phoenix now has its corporate offices in Hartford, the demutualization falls under the jurisdiction of New York regulators because the statutory home office is in East Greenbush, N.Y.
Serio notes in his opinion that Phoenix and its investment bankers are worried about the effects of the recent stock market slump on the planned IPO.