NU Online News Service, Aug. 17, 4:16 p.m. – The North Dakota Department of Insurance will hold a public hearing at 9 a.m. Sept. 6 in Bismarck, N.D., on plans by Amerian United Mutual Insurance Holding Company, Indianapolis, to acquire Pioneer Mutual Life Insurance Company, Fargo, N.D.
Pioneer is a policyholder-owned mutual life insurer that was founded by railroad workers in 1868. It reported $1.4 million in statutory net income for 2000 on $69 million on $69 million in revenue.
American United says it wants to acquire Pioneer by converting it to a stock charter, putting the Pioneer stock in the hands of a subsidiary, OneAmerica Financial Partners Inc., Indianapolis, and giving the Pioneer policyholders policy-based voting rights at American United.
American United could eventually demutualize and give the former Pioneer policyholder-owners cash or other compensation for their voting rights, but it has no current plans to demutualize, Pioneer executives report in a description of the acquisition plan.
Although the Pioneer policyholders will not cash payments, affiliating with a mutual holding company appears to be quicker and cheaper than a full demutualization, and it should give Pioneer the ability to keep some of its traditional mutual company culture, the Pioneer executives write in a discussion of their reasons for agreeing to the American United deal.
The Pioneer board approved the deal May 16.
American United and Indianapolis Life Insurance Company, Indianapolis, began talking to Pioneer about a deal in November 1998, when American United and Indianapolis Life both had close ties.
American United and Indianapolis Life drifted apart, and Indianapolis Life withdrew from the Pioneer deal in February 2000. American United and Pioneer signed a new affiliation agreement in March 2000.
American United has already acted on the agreement by purchasing a $10 million Pioneer surplus note and taking over the management of all of Pioneer’s investment activities, Pioneer says.
Pioneer has posted documents describing the deal on its Web site, at http://www.pmlife.com/