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Agreement with Eagle Insurance Will Keep Binghamton Office Open

New York, September 10, 1997

Governor George E. Pataki and Superintendent of Insurance Neil D. Levin today announced that the Superintendent has entered into an agreement with Eagle Insurance Company for Eagle to acquire all the existing policies of Home Mutual Insurance Company of Binghamton, and the private passenger auto policies of its affiliate New York Merchant Bakers Insurance Company.

The agreement, which requires Eagle to provide continuing coverage, pay all outstanding claims and allows policyholders to keep their current coverage at the same or lower premiums, is subject to New York State Supreme Court approval. If approved, the agreement would become effective October 1.

"This agreement saves jobs in Binghamton and insures that policyholders will be able to keep their current coverage without having to pay higher premiums," Governor Pataki said. "This is a wonderful example of the insurance industry working with the State to help save jobs and protect consumers."

As part of the agreement worked out by the Superintendent, Eagle will keep the Binghamton office open, as well as assume the lease for the office. All insurance agents affiliated with Home Mutual and New York Merchant Bakers will also be offered the opportunity to become an agent for Eagle Insurance or one of its affiliated companies.

The Superintendent had placed Home Mutual and New York Merchant Bakers in rehabilitation on August 5th after the companies had run into financial difficulties. The State Insurance Department, after obtaining necessary court approval for the rehabilitation, has been running these insurers since that time.

"I am pleased that we have been able to put together an agreement that is balanced for all interests. This agreement, first and foremost, ensures that policyholders keep their coverage and have their claims paid," said Superintendent Levin.

"The alternative, putting the companies into liquidation, canceling all coverage and disrupting the marketplace was simply unacceptable in terms of the harm it would cause to policyholders. Equally as important, we were able to limit the total exposure to our guaranty funds. All this was accomplished with what we believe will be a positive economic impact on the Binghamton area. I commend Eagle Insurance for entering into this agreement," said the Superintendent.

New York State Senator Thomas W. Libous said, "Once again, Governor Pataki has shown his concern for Broome County by keeping Home Mutual's Binghamton office open through the buyout by Eagle Insurance. Both the Governor and Superintendent Levin did a great job in protecting the policyholders and the employees in this plan."

Binghamton Mayor Richard A. Bucci added, "The restructuring of Home Mutual is a very positive development for downtown Binghamton. It maintains the presence of good paying jobs in the heart of the City and protects the integrity of a company with a long history in our community. This is a plan I very strongly supported."

Specifically, the agreement:

  • Requires Eagle to assume all 16,000 Home Mutual policies currently in force. 15,000 of these policies are private passenger auto policies.
  • Requires Eagle to assume New York Merchant Bakers approximately 7,000 private passenger auto policies.
  • Requires Eagle to offer renewal coverage at the same or lower rates for all private passenger auto policies. The provisions of these policies will be similar to the coverage currently provided in Home Mutual and New York Merchant Bakers policies.
  • Requires that Eagle's non-auto policy renewal rates (homeowners and commercial liability policies), will be the same as currently offered under current Home Mutual and New York Merchant Bakers policies.
  • Allows policyholders to cancel coverage if they do not wish to switch to an Eagle policy.

New York Merchant Bakers' commercial auto policies are not included in this agreement. The Insurance Department is currently seeking a market for these policies.

Department of Financial Services


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