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Folksamerica Completes Sierra WC Deal

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NU Online News Service, April 1, 2004, 4:11 p.m. EST – Folksamerica Holding Company Inc., New York, has completed previously announced plans to acquire a workers’ compensation unit from Sierra Health Services Inc., Las Vegas.[@@]

Sierra agreed to sell the unit, California Indemnity Insurance Company Inc., in November 2003 for $15.5 million in cash up front and up to $64 million in performance-based payments.

Sierra hopes to collect the performance-based payments, which will depend on California Indemnity’s claims and other expenses, in January 2010.

Folksamerica is a subsidiary of White Mountains Insurance Group Ltd., Hamilton, Bermuda.

California Indemnity is the parent company of Commercial Casualty Insurance Company, Sierra Insurance Company of Texas and CII Insurance Company.

Sierra said in November that it made the deal so that it can focus on its core managed care operations.

Sierra’s Nevada-based workers’ compensation administration company, Nevada Administrators, is not part of the Folksamerica deal.