CompSource Mutual Insurance Co. is planning a significant change to its structure. The company intends to reorganize as a stock company, creating a new holding structure that it claims will be a “non-recognized” transaction for federal tax purposes. This move was submitted to the Oklahoma Insurance Department, and the company is currently awaiting regulatory approval.
As part of this reorganization, CompSource will establish a mutual holding company called CompSource MHC and a wholly owned subsidiary named Intermediate Holdings. The restructured insurance company will retain the name CompSource Mutual Insurance Co., S.I., and will operate as a subsidiary of Intermediate Holdings. Importantly, CompSource has stated that it does not plan to distribute or sell any stock within the first six months following the transaction’s effective date.
The board of directors approved this plan on April 25, and a public comment hearing is scheduled for August 28 as part of the review process by state regulators. If the insurance commissioner gives the green light, eligible members of CompSource Mutual will have the opportunity to vote on the proposal. For the reorganization to proceed, at least two-thirds of the voting members must approve it.
The company believes that this transition is in its best interest and will protect the interests of policyholders. They assert that the transaction is fair and equitable. CompSource Mutual, based in Oklahoma City with additional operations in Tulsa, has been providing workers’ compensation coverage to businesses in Oklahoma for over 85 years. The company has a long history of adapting to the state’s changing economic landscape while focusing on the needs of local employers and their employees.
This reorganization marks a new chapter for CompSource Mutual, and many are watching closely to see how it unfolds.