White Mountains Re is to acquire Central National Insurance Co of Omaha from Drum Financial Corporation. In run-off since 1989, Central National has been operated under an order of Rehabilitation in the State of Nebraska since 1990. Among other conditions, the transaction is subject to the termination of the rehabilitation proceedings by the court and the approval of the Nebraska Department of Insurance. Under the terms of the agreement, White Mountains Re will pay approximately $5 million. Central National's statutory surplus as of 30 September 2009 was $13.3 million

‘We are very pleased by the terms of this transaction put together by the White Mountains Re Solutions team,’ says Allan Waters, president and CEO of White Mountains Re. ‘Although modest in size, this transaction continues our long history of building shareholder value through acquisitions of run-off insurance and reinsurance companies.’

Neal Wasserman, president of White Mountains Re Solutions adds: ‘Despite a competitive market the past few years in the run-off sector, this acquisition demonstrates our ability to successfully complete value-adding acquisitions that meet our return thresholds while at the same time allowing sellers to achieve their goal of extracting trapped capital and obtaining a full and final exit from the insurance business.’ Central National is the sixth run-off acquisition by White Mountains Re Solutions.

The transaction is expected to close during the first quarter of 2010 subject to regulatory approvals and other customary closing conditions.