Acacia Life Insurance Company
The ‘’’Acacia Life Insurance Company’’’ was established in 1867 as a mutual company owned by its policyowners. Its headquarters are in Washington, D.C.
In 1997 it formed a mutual insurance holding company, Acacia Mutual Holding Company of Washington, D.C. In that process Acacia Life became a stock life insurance company wholly-owned by its parent holding company.
The type of reorganization undertaken by Acacia Life is not allowed in the state of New York, where attempts by mutual insurance to pass similar permissible legislation failed. Opponents of mutual insurance holding companies referred to it in New York as “legalized theft,” since the ownership interests of policyowners are extinguished without compensation.
In 1999, the Acacia Mutual Holding Company merged with Ameritas Mutual Insurance Holding Company. The latter had been formed in 1998 by the Ameritas Life Insurance Company of Lincoln, Nebraska which had been established as a mutual life insurer in 1887.
The new organization was named the Ameritas Acacia Mutual Holding Company. It was the first time two mutual life insurance holding companies had merged in the modern era. Organizationally, Ameritas Acacia Mutual Holding Company became the parent company with ownership of Ameritas Holding Company. The latter company, in turn, became the owner of 100% of the stock of both Ameritas Life Insurance Corporation and Acacia Life Insurance Company, which are became stock life insurance companies.
On January 1, 2006 Ameritas Acacia Mutual Holding Company merged with the Union Central Mutual Holding Company of Cincinnati, Ohio and became UNIFI Mutual Holding Company. Union Central Life was originally established as a mutual life insurance company in 1867 and it had formed its own mutual insurance holding company in 2005.
Mutual life insurance companies were originally organized to provide insurance-at-cost. Despite that fundamental fact, Norman F. Dacey in his best-selling book, What’s Wrong With Your Life Insurance, showed that mutuals accumulated massive profits over the years by overcharging policyowners for insurance and paying them too little in dividends.
At the beginning of the 21st century numerous mutuals such as Prudential, MetLife, and John Hancock decided to demutualize and return to policyowners all the profits retained over the years. Policyowners were awarded cash, stock and policy credits exceeding $100 billion in a wave of demutualizations, which have been regarded as socially desirable.
The obvious advantages of demutualization to policyowners were vividly demonstrated by the fact that every demutualization received the approval of more than 90% of policyowners.
Acacia Life is among the few mutual life insurers that have not demutualized. Acacia Life’s whole life policyowners would receive an estimated $11,337 per policy and its other policyowners would receive $1,538 per policy in a demutualization according to financial data contained in Acacia Life’s 2006 Annual Statement to the National Association of Insurance Commissioners (NAIC), the company’s 2006 Annual Report and shown at http://policyownersfordemutualization.blogspot.com.
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