Majestic's parent company, Majestic Capital, had a planned merger with Bayside Capital Partners which fell through recently.  Bayside cited a deterioration in Majestic Capital's capital surplus, plus their inability to secure regulatory approval along with dissatisfaction with the closing condition to terminate Majestic Capital's lease for office space in Poughkeepsie, New York. 

As a result, Majestic Capital canceled a special meeting of its shareholders. Company officials also announced that Majestic Insurance entered into a non-binding letter of intent to sell its renewal rights to AmTrust Financial Services and AmTrust would assume Majestic Insurance Company's loss reserves and in-force insurance business through a loss portfolio transfer and 100% quota share reinsurance agreement.

Such a move will have to be approved by the California Department of Insurance. Pending the closing of the transactions, Majestic Insurance Company will arrange for workers' compensation insurance policies to be underwritten by the AmTrust group companies and reinsured by Majestic Insurance Company under the previously announced 90% quota share reinsurance agreement.

This is, yet again, another unfortunate demise of a California workers' compensation carrier.

lonce@adjustercom.com