CMIS Policyholders Receive E-mail From CUNA Mutual's Union Urging 'No' Vote on Merger and Redomestication
PARKER, Texas -- Last week, credit union CEOs around the country received an e-mail directing them to a Web site that urges CUNA Mutual Insurance Society (CMIS) policyholders to "Vote No on CUNA's Proposal" to merge CMIS with CUNA Mutual Life Insurance Company and to change CMIS' state of incorporation from Wisconsin to Iowa.
The Web site, www.keepcunamutual.com, lists four reasons to vote against the proposal. While "We are CUNA Mutual policyholders just like you" is the only identifying statement of sponsorship found on the Web site, the site is registered to OPEIU (Office and Professional Employees International Union) with Michael Goodwin, OPEIU president, listed as the administrative contact. OPEIU is the union that represents CUNA Mutual employees.
CMIG President and CEO Jeff Post responded April 3 to credit unions with his own e-mail intended to communicate the "facts" about the merger and redomestication. The memo begins, "CUNA Mutual has determined the Web site originated from a party outside the credit union movement with no expertise on insurance matters, or the CUNA Mutual merger, specifically. It is unfortunate that a non-credit union party has chosen to speculate and provide misinformation to our customers and policyholders on the reasons behind CUNA Mutual's proposed merger and redomestication."
The e-mail assures readers that proposals to merge the companies and be regulated by one state (Iowa) are "in the best interests of our policyholders and the future strength of CUNA Mutual" and encourages them to follow a link to a March 30 Webinar conducted by Post for more information on the issue.
He then addresses individually each of the four reasons the site gives for voting "no" on ballots, which must be received at CUNA headquarters by April 19. The four reasons are listed below with Jeff Post's corresponding rebuttal:
Statement 1: Your membership interest in CUNA Mutual Insurance Society is safer under Wisconsin insurance regulators.
Post: Both Wisconsin and Iowa have excellent insurance departments committed to the protection of insurance policyholders. Wisconsin regulators analyzed the redomestication proposal and have approved it. Iowa regulators have no objection to redomestication, and we expect their approval, pending a favorable policyholder vote. Iowa regulators, likewise, will consider policyholders' interests in determining whether to approve the merger.
Statement 2: Conversion to a mutual holding company structure is a bad deal for policyholders.
Post: We are NOT proposing a mutual holding company structure. We are merging one mutual insurance company into another mutual insurance company. The net result is a larger, stronger, mutual insurance company better prepared to meet the future needs of you and your members, not a mutual holding company.
Statement 3: Demutualization is a bad deal for policyholders.
Post: We are NOT proposing a demutualization. Like the credit unions we serve, CUNA Mutual is a cooperative--the cooperative terminology used in insurance happens to be "mutual." We believe our mutual structure provides us with significant competitive advantages in serving our credit union customers, allowing us to share our successes with you, our policyholders.
Statement 4: Jeff Post and the rest of the CUNA Mutual Insurance Society leadership team have enough on their plates. The last thing CMIS needs is more turmoil.
Post: CUNA Mutual believes these two proposals are important to the company and to our customers. If we did not believe this to be important, we would not be pursuing it. The fact is a $15-20 million one-time tax benefit, potential for stronger financial ratings and greater ability to grow your company are just three of the reasons to move forward. Most of the work of integrating the two companies has occurred since 1990 and little work remains. The fact is the time is right now to consummate a business relationship that began 17 years ago.
CUNA Mutual officials believe the original e-mail was sent to "a minimum of several hundred credit unions."
"We've been very open and upfront in communicating with our members the reasons for redomestication. Our Webinar last week on this topic was designed expressly to answer any outstanding questions. It's unfortunate that an outside party would decide to communicate information that is not factual," a CUNA Mutual spokesperson said.
OPEIU President Michael Goodwin could not be reached for comment as of press time.
Ballots have gone out and an in-person vote is scheduled for April 20 in Madison on the merger. A simple majority is needed to approve the merger. If approved, it is expected to go into effect Jan. 1, 2008. --email@example.com