VIRGINIA MUTUAL POLICYHOLDERS APPROVE ACQUISITION PLAN
RICHMOND, Va., Nov. 29 -- Policyholders of Virginia Mutual Insurance Company today approved the previously announced Plan of Conversion with Alfa Corporation. Under the agreement, Virginia Mutual will convert from a mutual company to a stock company and simultaneously merge with a wholly owned subsidiary of Alfa Corporation.
As a result of this conversion, Virginia Mutual's excess surplus will be distributed to eligible policyholders, and Alfa Corporation will recapitalize the business in a new subsidiary, Alfa Alliance Insurance Corporation. Virginia Mutual and Alfa companies have participated in a Strategic Affiliation Agreement since Aug. 10, 2001.
The Plan of Conversion has already been approved by the Virginia State Corporation Commission. The participants have a target completion date of Jan. 1, 2007.
Virginia Mutual Insurance, headquartered in Glen Allen, Va., is marketed via a network of more than 200 independent agents throughout Virginia and North Carolina. The company currently has almost 50,000 policies in force in the region. The conversion will not affect any of the premiums or benefits under the Virginia Mutual policies. Eligible Virginia Mutual Insurance policyholders will receive a cash payment under the terms of the plan approved today.
"The security that comes from the financial strength of Alfa Corporation will yield a number of potential benefits for our policyholders," said Doug Joyce, president of Virginia Mutual since 2002. "We plan to enhance our product line, expand our markets and secure new technology that will allow us to service our policies better. The fact that our loyal policyholders will receive a cash payment following the conversion should also be welcome news."
Alfa Corporation, headquartered in Montgomery, Ala., is engaged in insurance and financial activities through its subsidiaries. The common stock of Alfa Corporation is traded on the NASDAQ Global Select Market under the symbol ALFA.