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N.Y.’s Interboro back in business

New York officials announced that the Interboro Mutual Indemnity Insurance Co. is on track to emerge in early 2007 from three years of insolvency and subsequent rehabilitation and return to the marketplace as a private sector company. Interboro was placed in rehabilitation on April 6, 2004.

Mineola-based Interboro primarily wrote private passenger auto, homeowners and general liability coverage, as well as a small amount of commercial auto and workers compensation coverage.

Most companies declared insolvent end up in liquidation. Interboro’s successful rehabilitation means the company will continue as a going concern, preserving close to 70 jobs, according to outgoing Superintendent of Insurance Howard Mills. The investor group scheduled to become the new owners has committed to keeping the jobs and the company’s operations on Long Island, according to officials.

The New York Liquidation Bureau, which secured the investor group, managed Interboro during the period of rehabilitation. The liquidation bureau was able to successfully set the stage for the first demutualization of an insurance company in rehabilitation in New York.

This will end with the transformation of Interboro into a stock company with stock to sell to the investor group, subject to court approval on or after an upcoming Feb. 1 hearing.

At the Feb. 1, 2007 hearing, the court will be asked to approve the conversion to a stock insurer (the demutualization), the acquisition by the investor group to bring in the capital to render the company solvent and the discharge of the company from rehabilitation thereby allowing it to commence business again as a stock insurer.