What’s New: In Brief (January 02, 2008)

State Farm Insurance is issuing refunds to roughly 23,000 automobile policyholders in Ontario. The average refund is about Cdn$120.The refund is due to an error in the application of the Graduated License Discount (GLD) and Driver Inexperience Factor surcharge (DIF), the company announced in a release. Customers entitled to a refund will receive written notification beginning this month and refunds, including interest, will be issued. “We apologize to our affected policyholders for any inconvenience this may have caused,” Bob Cooke, State Farm senior vice president and chief agent, said in a release. State Farm said it discovered its error during the process of an internal review and promptly reported it to the Financial Services Commission of Ontario.

Fairfax Holdings Limited and Cunningham Lindsey Group Inc. have closed a transaction pursuant to an agreement with Trident IV, L.P., a private equity fund managed by Stone Point Capital LLC. According to the agreement, Stone Point acquired for Cdn$88 million a 51% interest in a holding company that owns the operating businesses of Cunningham Lindsey. Fairfax invested roughly Cdn$35 million, in addition to investment by senior management at Cunningham Lindsey and its operating companies. The proceeds were used to repay Cunningham Lindsey’s Cdn$72.8-million, unsecured term loan facility and for working capital, according to a release issued jointly by Fairfax and Cunningham Lindsey. A condition of the investment by Stone Point was that Fairfax be the sole shareholder of Cunningham Lindsey. In order to satisfy this, Fairfax acquired the entire outstanding subordinate voting shares of Cunningham Lindsey, which it had not owned previously. Fairfax now holds an approximately 45% interest in the operating companies of Cunningham Lindsey through its 100% ownership of the company. Senior management of Cunningham Lindsey and its operating companies hold an approximately 4% interest in the operating companies.