Co-operators Life Insurance Co. and Central 1 Credit Union Thursday announced an agreement to acquire The CUMIS Group Ltd.

“This transaction would result in a strong, Canadian-owned supplier of insurance products and services to Canadian credit unions and their members,” the organizations said in a release.

CUMIS provides a full range of personal insurance, including credit and mortgage protection; life; disability and critical illness; home; auto; travel and employee benefits. It also provides business, liability and property insurance to credit unions themselves, as well as wealth management services and products, including credit union group retirement plans.

Based on Dec. 31, 2008 consolidated financial statements, the purchase price will be approximately $232 million. The final purchase price will be subject to final closing adjustments.

All existing CUMIS insurance policies remain in effect with no changes, the companies said.

Co-operators Life is a wholly owned subsidiary of The Co-operators Group Ltd. For 23 years, The Co-operators and CUMIS have had a joint insurance business venture, through which CUMIS provides insurance products and services to approximately 450 Canadian credit unions and caisses populaires, and their more than five million members.

Co-operators Life, based in Regina, and Central 1, headquartered in Vancouver, intend to acquire 100% of the issued and outstanding shares of CUMIS, pending required approvals.

CUNA Mutual Group, based in Madison, Wisconsin, currently holds 87.4% of the shares of CUMIS, and “fully supports this transaction,” the companies said.

The transaction is expected to close by Dec. 31, 2009. Upon completion, The Co-operators will own approximately 63.8% to 73% of CUMIS and Central 1 will own approximately 23.6% to 27% of CUMIS.

“Our longstanding relationships with both CUMIS and Central 1, together with our shared commitment to the co-operative and credit union sector, make this a natural fit for The Co-operators,” said Kathy Bardswick, president and CEO of The Co-operators. “As a Canadian-owned co-operative, we welcome the opportunity to forge even closer relationships with, and to provide quality insurance-related services to, credit unions and their members.”

“This acquisition will allow us to ensure credit unions and their members receive efficient service and affordable insurance products. It also diversifies our revenue sources,” said Don Rolfe, president and CEO of Central 1. “

“The Co-operators, Central 1 and CUMIS share strong co-operative values along with a commitment to community and to the credit union system. This deal can only enhance our ability to continue to meet and exceed our customers’ expectations,” said Kenn Lalonde, president and CEO of CUMIS.

In addition to her role as president and CEO of Co-operators Group, Bardswick will become CEO of CUMIS on closing of this deal.

The deal is subject to regulatory, shareholder and court approvals and other standard closing conditions.

IE