The assembly of mutual members rejects the proposals for merger and voluntary dissolution
July 1 () –
The general assembly of mutualists of Purísima Seguros has refused to initiate a corporate process or agree to the voluntary dissolution, for which the mutuality is torn between forced dissolution or the search for a viable alternative.
This Thursday the general assembly of Purísima Concepción Mutualidad de Previsión Social was held at the Palacio de Vistalegre in Madrid, after having had to postpone the call for May 30 due to the fact that the mutualists who attended the meeting doubled the permitted capacity.
The mutual society suffers from a situation of patrimonial imbalance, for which reason it proposed to the assembly of mutual members the opening of a process of integration of Purísima in another more solvent insurer to avoid its dissolution or, failing that, the voluntary dissolution of the mutual society and the start of the liquidation process.
The mutualists rejected both proposals yesterday, as they also voted against the management report, report and annual accounts for 2021 and the ratification of the appointments of the new members of the board of directors.
After rejecting the proposals, the mutualists asked the board to look for alternatives for the viability of the mutual. “At the moment the board is debating between forced dissolution or meeting this request, all of which will depend on the requirements of the regulator, the General Directorate of Insurance,” they said from Purisima.
EQUITY IMBALANCE
Purísima Concepción Mutualidad de Previsión Social was established in 2005 and is a non-profit private insurance company. In 2008, an agreement was reached to assign the goods and obligations of the Archconfraternity of the Purísima Concepción to the Fundación Purísima Concepción to transfer them to the mutual society.
Before that, the business that was practiced in the Archconfraternity was assimilated to death insurance. To comply with the requirements applicable to the insurance activity, the mutual society requested authorization from the General Directorate of Insurance and Pension Funds (DGSFP) to operate in the field of deaths, together with the assignment of the members of the Archconfraternity.
A plan was then established to adapt the provision for deaths corresponding to the group of archconfraternities to the provisions set out in the legislation in force at that time. But the plan was outdated, identifying a deficit of 47 million euros at the end of 2020 after updating the hypotheses of the plan, which had to be provisioned in the 2021 accounts.
In the special report on the independent review of the 2021 accounts, Deloitte pointed out that, in this situation, the mutual society had insufficient eligible own funds to cover the solvency capital requirement “which could lead to the adoption of control measures special”.
In addition, the reviewing firm emphasized that the net worth of the mutual society was less than half the amount of its mutual fund, so “it is in cause for dissolution”, a situation that indicated the existence of “an uncertainty material that may cast significant doubt on the mutual’s ability to continue as a going concern”.
In its last financial report, Purisima explained that, faced with this situation, the board of directors of the mutual society was analyzing the different alternatives to respond to the situation, which would be raised in the mutual assembly.
The alternatives finally proposed were the integration with another insurance company of greater dimension and solvency or, failing that, the dissolution of the mutual society. Both proposals were rejected this Thursday by the mutualists, so Purísima Seguros could face forced dissolution.
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