(April 19 – 09:45 ET) – Specialty insurer Queensway Financial Holdings announced today that it has signed a definitive agreement to sell its U.S subsidiaries to Argonaut Specialty Group Inc.


Queensway will sell its subsidiaries, North Pointe Financial Services Inc., Hermitage Insurance Company, Consolidated Property & Casualty Insurance Co. and Universal Fire and Casualty Insurance Co. These subsidiaries account for approximately 83% of Queensway’s assets and approximately 91% of the company’s gross written premiums. The balance of its business, the Sun States Insurance Group and Paradigm Insurance Company, are both in liquidation.


Closing of the transaction is subject to regulatory approval and other consents, and is expected to occur on or before June 30. The purchase price is US$40 million, subject to certain adjustments. According to the company, proceeds received on closing will be net of holdbacks totalling US$6 million. Of that US$6 million, US$2 million will be paid to Queensway upon completion of an audit of the closing date accounts. The remaining US$4 million will be paid following the second anniversary of the closing date subject to the adequacy of the insurance reserves and compliance with the agreement’s various warranties.


Queensway says these sales, together with the proposed sales of Atlantic Alliance Fidelity & Surety Company, Coachman Insurance Company and Queensway Investment Counsel Limited would, when completed, effectively represent the disposition of all of Queensway’s operating companies.


Queensway will apply the proceeds received on closing of these sales will to outstanding indebtedness.