The AmerInst Insurance Group Ltd., a provider of professional liability reinsurance to CPA firms, announced the results of a recent rights offering to shareholders.
According to a statement from group's board of directors, 212 shareholders purchased an additional 97,927 shares, for a total price of nearly $2.3 million. In percentage terms, over 10 percent of existing AmerInst shareholders purchased 9.8 percent of the stock that was offered during the period.
In a statement, board chairman Ronald Katch said that the offering will allow the group to explore diversification initiatives complementing its primary activity of reinsuring the American Institute of CPA’s Accountants Professional Liability Insurance Program.
Formed in 1988, the primary goal of the insurance holding company is to exert a stabilizing influence on the design, pricing and availability of accountant’s professional liability insurance. The company was formed purely for the benefit of its shareholder base, which is comprised entirely of CPAs and public accounting firms, where at least one equity owner is a member of the AICPA or a state CPA society.
The company currently provides reinsurance protection for approximately 24,000 insured CPA firms that are located throughout the United States. Its only source of income, aside from the return of its $40 million investment portfolio, is its reinsurance treaties.
Proceeds from the rights offering will go towards strengthening AmerInst’s capital base. AmerInst is also considering expanding its business, either offering the reinsurance of additional accountants’ malpractice insurance programs, or developing a securitized reinsurance product based on a business process patent application the company filed in 2005.
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