UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 1.01 Entry into a Material Definitive Agreement
On January 18, 2021, we entered into a Renewal Rights Agreement with United Insurance Holding Corp. and certain of its affiliates, including United Property & Casualty Insurance Company, to transition all of United’s personal lines insurance business in the states of Connecticut, New Jersey, Massachusetts and Rhode Island to HCI. The business to be transitioned represents approximately $124.9 million of annual premiums.
Under the agreement, we agreed to provide 69.5% quota share reinsurance on all of United’s in-force, new and renewal policies in the four states from December 31, 2020 through May 31, 2021. In exchange, we will pay United an allowance of $4.4 million towards already purchased catastrophe reinsurance and a provisional ceding commission of 25% of premium. That percentage could increase up to 31.5% depending on the direct loss ratio results for the reinsured business.
As part of the transaction, we issued to United 100,000 shares of HCI common stock. We also agreed to pay United a cash payment of up to $3.1 million depending on the amount of premium transitioned to us. Consummation of the transactions contemplated by the renewal rights agreement is subject to regulatory approvals in the four states.
Our corresponding press release appears as Exhibit 99.1 to this form 8-K.
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Item 9.01 |
Exhibits. |
Exhibit 99.1 Press Release
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: January 21, 2021.
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HCI GROUP, INC. |
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BY: |
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/s/ James Mark Harmsworth |
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Name: James Mark Harmsworth Title: Chief Financial Officer |
A signed original of this Form 8-K has been provided to HCI Group, Inc. and will be retained by HCI Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.