TERRITORY AND PLAN OF OPERATION
The Company is a New Jersey domestic property and casualty insurance company. The ultimate Parent, Fundacion Mapfre, is a worldwide insurance holding company, which through its insurance subsidiaries writes a broad range of life and property and casualty insurance products.
On November 15, 2004, the Company was granted a license limited to the business of reinsurance by the Office of Superintendent of Financial Institutions (“OSFI”). In addition on December 14, 2004, the Company was granted a license by the Province of Ontario.
On May 23, 2007, the Company was granted an Amended Certificate of Authority to write direct business in the State of New Jersey.
The Company, formerly a reinsurance company, began writing some direct business in 2008 in Arizona. The Company underwrites traditional and specialty lines of business through the brokerage market on risks located in the United States and Canada. The Company is not producer controlled and most business is obtained through intermediaries. The Company is licensed in thirty one states and the District of Columbia.
The minutes from the Board of Directors and the Shareholders were reviewed from 2006 through June, 2009 for any subsequent events. The Board of Directors approves the investment transactions, elects officers and generally is proactive in the Company. The Shareholder minutes documents the elections of the Board of Directors. The Board members attended meetings on a regular basis.
The Board of Directors maintains three committees; an executive committee (ad hoc), an investment committee and an internal audit committee as of December 31, 2008. The Board of Directors of the Company’s ultimate parent, Mapfre S.A. of Spain, complies with N.J.S.A. 17:27:4(d)(3) and consists of one- third of outside directors. In addition, the parent has established a compliance committee composed of only external directors and therefore the Company complies with N.J.S.A. 17:27:4 (d)(4).
Effective June 30, 2006, through an Assumption and Assignment Reinsurance Agreement, which was approved by the NJDOBI, the Company's premium and loss reserves, in the amounts of $8,279,827 and $95,066,708, respectively, for the 2000 through 2005 underwriting years, were transferred to the U.S. Reinsurance Trust. No gain or loss was recognized on the transaction.
In December 2006, under a similar Assumption and Assignment Reinsurance Agreement, the Company transferred the premium and loss reserves of its Canadian Branch, for the 2000 through 2006 underwriting years, to its Parent’s newly formed Canadian Branch. Therefore, as of December 31, 2006, the only reserves remaining on the Company’s books are the reserves of the predecessor company, Chatham Reinsurance Corporation.
As a result of the transfer of business and the sale of the Company, the Company currently has no inforce book of business and, therefore, no in-force reinsurance program. Any reinsurance which is still active is related to the predecessor company’s reinsurance program.
The Company remains liable to the extent that the reinsuring companies are unable to meet their obligations and collateral is insufficient under these agreements.