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HAMILTON, Bermuda--Thirteen more shareholder members are departing energy industry mutual Oil Insurance Ltd., reducing OIL's shareholder base to a total of 61 as of May 31.
OIL--the largest of three mutual companies making up the Hamilton, Bermuda-based OIL Group of Cos.--on Friday announced that 12 shareholders elected to withdraw from OIL and not renew their policies effective June 1. The shareholders had an April 16 deadline to give notice of withdrawal from the mutual.
Additionally, OIL said, one member became ineligible for continued membership after it merged with a non-OIL member. "Under the rules, if the new parent is eligible and they elect not to join, then the existing member must withdraw," OIL President and Chief Executive Officer Robert Stauffer said.
The latest departures are in addition to nine shareholders that exited the OIL structure effective Jan. 1. Prior to that, OIL had 83 shareholder members.
Of the 12 members leaving in June, nine are utility companies, according to OIL.
The number "wasn't outside of our range of expectations...obviously we would prefer for it to be much smaller," said George F. Hutchings, OIL's senior vp and chief executive officer. "It wasn't a stunning blow to us."
Effective on their withdrawal, the companies will be obligated to pay to OIL the full amount of their respective withdrawal premium/avoided premium surcharges, which are estimated to total more than $100 million.
"The organization is certainly disappointed to see any members leave, but we respect their decisions and wish them well," Mr. Stauffer said in a company statement.
OIL said in the statement that it "does not believe that the departure of these shareholders will have a material adverse effect on the ability of OIL to continue to provide its members with the capacity and coverage our shareholders have come to expect."