DCAP Announces Commercial Mutual Plan of Conversion Approval by NYS Insurance Department
16 April 2009 - 8:14PM
Business Wire
DCAP Group, Inc. (NASDAQ: DCAP) today announced that the
Commercial Mutual Insurance Company (�CMIC�) Plan of Conversion
(the �Plan�), providing for a conversion of CMIC from an advance
premium cooperative to a stock property and casualty insurance
company, was approved by the State of New York Insurance Department
on April 15, 2009. The Plan provides that, upon the effectiveness
of the conversion, DCAP will receive a 100% equity interest in CMIC
upon conversion of its $3,750,000 principal amount of surplus notes
of CMIC. In addition, DCAP will forgive all accrued and unpaid
interest on the surplus notes as of the date of conversion. The
Plan must be approved by a vote of two-thirds of all votes by
CMIC�s policyholders at a special meeting yet to be set. Upon
approval, eligible policyholders will share in a distribution of
$534,069.
In its opinion and decision, the Insurance Department found that
the benefits to CMIC, its policyholders and the public warrants the
approval of the Plan. The name of the new insurance company will be
�Kingstone Insurance Company.� DCAP�s name will change to
�Kingstone Companies, Inc.�, as previously approved by its
shareholders.
�We are pleased that the Insurance Department has approved the
Plan,� said Barry Goldstein. Mr. Goldstein is Chairman and Chief
Executive Office of DCAP and is Chairman and Chief Investment
Officer of CMIC. DCAP has owned the surplus notes of CMIC since
January 31, 2006. At a meeting of the CMIC Board of Directors on
March 1, 2007, the application to convert to a stock company was
unanimously adopted. For more than two years, the Insurance
Department has considered the application, performed an exhaustive
five year examination of CMIC, had an outside appraisal prepared,
held a public hearing and did extensive due diligence into DCAP and
its principal officers and shareholders. In the end, the Insurance
Department found the Plan to be �fair and equitable, and in the
best interests of the policyholders and the public.�
In connection with the conversion application process, DCAP gave
a commitment to the Insurance Department that, among other things,
Kingstone Insurance will not pay any dividends to DCAP (to be known
as Kingstone Companies, Inc.) for a period of two years following
the conversion without the approval of the Superintendent of
Insurance.
Forward Looking Statements
Statements in this press release may contain �forward-looking
statements� within the meaning of the Private Securities Litigation
Reform Act of 1995. All statements, other than statements of
historical facts, may be forward-looking statements. These
statements are based on management�s current expectations and are
subject to uncertainty and changes in circumstances. These
statements involve risks and uncertainties that could cause actual
results to differ materially from those included in forward-looking
statements due to a variety of factors. More information about
these factors can be found in DCAP�s filings with the Securities
and Exchange Commission, including its latest Annual Report filed
with the Securities and Exchange Commission on Form 10-K. The
company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
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