FAQs related to the planned merger of Essex Insurance Company into Evanston Insurance Company
Operationally what does it mean when Markel merges one company into another?
The surviving company by operation of law will assume all the obligations of the merged company so that the business continues unchanged for policyholders and their agents, brokers, wholesalers and program administrators. The fundamental change is that policy documents will begin to reflect the acquiring company name. All other obligations remain unchanged including but not limited to underwriting, billing, claims and other management processes.
What are the ratings and financial sizes of the surviving companies and what are the benefits to me as the agent/broker?
The financial strength ratings of the surviving companies issued by A.M. Best, S&P, Moody’s, and Fitch are not expected to change as a result of the mergers. A.M. Best also assigns a Financial Size Category (FSC), based upon policyholder surplus, to rated companies. The A.M. Best strength of the surviving companies is expected to be “A” Excellent XV.
What are the benefits to broker/agents and policyholders?
This initiative decreases the number of companies that our production partners use to transact business with Markel which streamlines the process to do business with us. The benefit to the policyholders would continue to be the collective Markel financial strength, and a strong recognizable Markel brand name. And, Markel’s effective use of capital will serve to the benefit of policyholders as Markel becomes more efficient, scalable and able to use resources for product creation and product enhancement over time. The consolidated financial strength of all the Markel companies will remain unchanged. Collectively we will remain as strong as we were prior to these changes.
Will brokers and agents work with the same office(s) and underwriter(s) for new and renewal business after the consolidation?
Markel production partners will work with the same offices and underwriters for new and renewal business. The change in carrier will have no impact on current underwriting relationships. It is business as usual. There will be no changes in underwriting philosophy, appetite, policy limits, terms or conditions that were available from the merged company after it is consolidated. Markel will continue to be a strong market for the products that producers write with us.
When a Markel company has policyholders that merge into a surviving company, will in-force policies be endorsed to reflect that the company I placed coverage with no longer exists and that all obligations remain as a part of the surviving company?
All in-force policies will receive a merger endorsement stating that all correspondence, including policies, will be replaced by the surviving carrier. A cover letter explaining the benefits of the change will be sent to the producer in advance of the policyholder receiving a letter with the merger endorsement. The communication plan is to inform producers in advance of these changes and for them to have branded materials and resources to answer their associates questions and those of policyholders. Both letters will include a Markel contact who will be responsible for directing questions from policyholders to the appropriate parties for response.
When a company is being merged into the surviving company and my original issuing company no longer exists, will my clients get non-renewal notices from the merged company at time of renewal?
The policyholder will not get a notice of non-renewal for companies that merge. At the time of merger, by operation of law, the companies merge as if the surviving entity wrote the business from day one. So when policy transactions are managed during the policy period the surviving company has stepped into the place of the issuing company for all obligations. When the policy comes up from renewal, it will be on the surviving carrier’s paper.
A cover letter explaining the benefits of the change will be sent along with the merger endorsement to the insureds and producers.
How will Markel communicate to policyholders that the surviving company will underwrite the renewal no different than it would have had the merged company continued independently?
The cover letter will state explicitly that the surviving company will manage renewals with the same underwriters, management team, underwriting appetite, forms, rates and other terms and conditions as the merged company.
Will Markel provide any communication directly to policyholders sharing that the company they have coverage with is being merged into another Markel company and that all limits, terms, conditions, premiums etc. will remain unchanged for the duration of that policy?
At the time of merger, Markel will send an endorsement reflecting the merger. The merger endorsement will clearly indicate that all terms and conditions of the policy remain the same.
A cover letter explaining the benefits of the change will be sent along with the merger endorsement to the insureds and producers. The letter will include a Markel contact responsible for directing questions from policyholders to the appropriate parties for handling.
If a policy is audited, will the audit resulting in additional or return premium be processed on the merged or the surviving company?
The responsibilities of the insured and Markel will remain the same after the merger. All the business will be processed on the surviving carrier’s paper.
Will Markel provide producers with branded information they can share with their clients and policyholders of Markel about the pending changes and what they can expect?
Communications will be created for our brokers about the pending changes and delivered to them in advance of the transaction dates. Producers may be called and provided discussion before the announcements at the discretion of the division and underwriting and business development leadership to explain the initiative.
Will there be any change in how claims are managed, processed, investigated, defended or paid?
The only change will be to the name of the carrier whether a merged carrier or a transfer of policies from one carrier to another.
All documentation going forward will need to contain the surviving carrier’s name. There will be no changes made to the service levels, handling, and resolution of claims either before or after the respective mergers.
If a policy is with a company that is merged into another company where are claims reported?
The methods and procedures you currently use for reporting claims will remain unchanged.
Only the name of the carrier will change. The merger will be transparent for all in the claim reporting process.
If there is a claim payment, will the payment be from the merged or surviving carrier during the transition period until all my new and renewal business is placed with the surviving company?
Claim payments will be issued by the surviving carrier after the merger date. Payments prior to that date will be issued by the carrier to be merged.
Will claim histories from the merged company continue to be available, and what will I receive when requested along with the surviving company loss information? Or will they be combined into the surviving company?
Claims information is compiled based on policy number and insured, and will continue to be available in the same way as before the merger.
If premium payments are due who does the producer or policyholder pay?
Payment should be made to the surviving carrier. Your billing and collection contact at Markel will remain the same as before the merger. Invoices and other payment documents will reflect the name of the surviving company after the merger.
Will producer agreements or other contractual agreements be modified in any way due to the merger of existing companies into a surviving company?
Most of our current producer agreements are not in the name of the insurance companies but reference the “Markel insurance companies and affiliates.” That said, the agreements contain a declaration page where the companies are listed and it does not hurt Markel or the producer to have legacy companies merged still listed as long as the surviving companies are listed.
These agreements also do not have a clause which requires both parties’ consent if a merger takes place. Consequently, in that situation there would be no need to amend the producer agreements after merger because the surviving company, by operation of law, would step into the shoes of the company that has been merged. To the extent that a usual and customary producer agreement has been entered into in the non-surviving carrier’s name the agreement will be endorsed to reflect the continuing carrier’s name going forward. To the extent that there are customized or individualized
contractual agreements in place with the non-surviving insurance company’s name, they are being examined to determine whether the agreement needs to be amended or replaced. This is the responsibility of the division leaders to work with their specific producer agreements.
Will my customer receive invoices or credits from the surviving company or the new company when premium bearing or return premiums policy changes are made?
After the individual company mergers, policy changes and subsequent premium transactions will reflect the new carrier’s name. For clarity, all correspondence will clearly indicate the surviving company is a Markel company.
If I have any incentive compensation program with any one division or company, how will it be affected by the merger of one or more companies?
There will be no change in incentive compensation based on the merger for the period of time it is in force. Similar to policy terms and conditions, the surviving company steps into this obligation.
You can expect that the incentive agreements will be reviewed prior to the mergers to make sure that the January 1, 2016 incentive agreement meets the intent of the agreement that was in effect prior to and is expected to be in effect post merger.
Are there any changes in Markel agency numbers that will affect my ability to process, book, or invoice policies at Markel or on behalf of any brokers or agents?
No. There will be no change in Markel agency numbers.
For E&S business, if I had licenses on file with the merged company and not the surviving company, will the documentation automatically be made available to the surviving company within Markel?
If I have letter of credit securing an SIR or large deductible where the non-surviving insurance company is the beneficiary, what if anything, will need to be done after the merger takes place.
Most of the letter of credits have language which states that it applies to the beneficiary “or successor by operation of law.” The surviving entity would be the “successor” company and you won’t need to amend the letter of credit. You should consult the Legal Department if your letter of credit does not have similar language.
What happens to audits that result in adding additional premium after the mergers?
The carrier merger will have no impact on the handling of premium audits. Your contact will remain the same. The insured’s and carrier’s obligations and rights under the policy will remain the same.
When issuing certificates of insurance, would it reflect the carrier correctly?
Certificates of insurance issued after the merger should clearly indicate the name of the new carrier.
Would there be any changes in the accounting/ payment process?
Producers and insureds should continue to handle payments and inquiries in the same manner as before the merger. Contacts will remain the same.
Since Evanston Insurance Company will be the single surplus line company and it is a licensed carrier in Illinois, will we no longer be able to write on a surplus lines basis in Illinois?
You will be able to write on a surplus lines basis in Illinois since Evanston has obtained a domestic surplus lines license, which permits it to write on a surplus lines basis in Illinois.
Do the surviving admitted and surplus lines carriers have all the licenses to write the line of business of the non-surviving entities?
If I am a managing general agent or a contract binding agent for Markel, how does this merger impact my operations?
Following the merger, all quotes, binders, and policy forms must show Evanston Insurance Company as the insuring company.
For IPPS users, we will update all forms within the IPPS system following the merger and the Essex forms will no longer be available.
For PPS users, we will release a an updated library for you to download on Markel Online following the merger.
For non-IPPS/PPS users, or MGAs with a proprietary quote/issue system, all quotes and forms labeling Essex as the insuring company must be switched to Evanston.
What happens if I have an certificate of insurance for Essex?
Effective June 30, 2016 at 11:59 p.m. (Eastern Time), Essex Insurance Company (“Essex”) merged into Evanston Insurance Company (“Evanston”). After the merger, Essex no longer legally exists. By operation of law, the companies merge as if Evanston wrote the business from policy inception (even if it occurred before the merger date). All policy transactions are assumed by Evanston for all current policy obligations. Evanston will accept all current, properly issued certificates of insurance with Essex’s name as the carrier, subject to the terms and conditions of the certificate and the policy.
Where can I find ratings for Markel’s operating companies?
Click here to view our financial strength and credit ratings sheet.