Enstar Group Limited Announces Significant Reinsurance Transaction And Closing Of Acquisition
HAMILTON, Bermuda, Jan. 4, 2011 (GLOBE NEWSWIRE) -- Enstar Group Limited ("Enstar") (Nasdaq:ESGR) today announced that on December 31, 2010, through a wholly-owned subsidiary, it entered into a 100% reinsurance agreement, administrative services agreement, and related transaction documents with three affiliates of CIGNA Corporation pursuant to which the Enstar subsidiary has reinsured all of the run-off workers compensation and personal accident reinsurance business of those CIGNA affiliates.
Pursuant to the transaction documents, the CIGNA affiliates have transferred assets into three reinsurance collateral trusts securing the obligations of Enstar's subsidiary under the reinsurance agreement and administrative services agreement. Enstar's subsidiary has transferred approximately $50 million of additional funds to the trusts to further support these obligations. Enstar funded the contribution to the trusts through a draw on a new $115 million credit facility entered into with Barclays Bank PLC on December 29, 2010.
In addition to the trusts, Enstar has provided a limited parent guarantee supporting certain obligations of its subsidiary. The amount of the guarantee will increase or decrease over time under certain circumstances, but will always be subject to an overall maximum cap with respect to reinsurance liabilities.Enstar also announced today that in a separate transaction it has completed the acquisition of Claremont Liability Insurance Company, a California insurance company in run-off, for approximately $14 million. This transaction was completed on December 31, 2010. Enstar, a Bermuda company, acquires and manages insurance and reinsurance companies in run-off and provides management, consultancy and other services to the insurance and reinsurance industry. The Enstar Group Limited logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5734 This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include statements regarding the intent, belief or current expectations of Enstar and its management team. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. Important risk factors regarding Enstar may be found under the heading "Risk Factors" in Enstar's Form 10-K for the year ended December 31, 2009, and are incorporated herein by reference. Furthermore, Enstar undertakes no obligation to update any written or oral forward-looking statements or publicly announce any updates or revisions to any of the forward-looking statements contained herein, to reflect any change in its expectations with regard thereto or any change in events, conditions, circumstances or assumptions underlying such statements, except as required by law.
CONTACT: Enstar Group Limited Richard J. Harris (441) 292-3645
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