DCAP Group, a franchisor of independent storefront insurance brokerages, has announced the final sale of its retail insurance business.

DCAP, headquartered in Hewlett, N.Y., has completed a transaction for its 16 locations in the state operating as Barry Scott Agency and DCAP Accurate Agency. The buyer is NII BSA LLC of Montvale, N.J.

The company is still in the process of selling its Atlantic Agency, comprised of three Pennsylvania retail locations in Allentown, Philadelphia, and Upper Darby.

In April, DCAP, which offers property-casualty and life insurance coverages, said it was “narrowing the company’s focus” away from retail agencies to concentrate its attention and capital on its investment in Commercial Mutual Insurance Co.

Barry Goldstein

“With this transaction, DCAP has continued the reformation of its business model from a retail insurance brokerage operation to the ownership of an insurance company, subject to policyholder approval of the conversion of CMIC from an advance premium cooperative to a stock property and casualty insurance company,” said Barry Goldstein, DCAP’s chairman and CEO, in a statement.

Victor Brodsky, chief accounting officer for DCAP added, “in this difficult marketplace we have been able to dispose of a number of businesses at a price approximating book value.”

In April, the New York State Insurance Department approved a conversion plan for CMIC from an advance premium cooperative to a stock property-casualty insurance company. The plan provides that DCAP will receive a 100% equity interest in CMIC upon conversion of its $3.7 million principal amount of surplus notes of CMIC.

In addition, DCAP will forgive all accrued and unpaid surplus notes of CMIC and all accrued and unpaid interest on the surplus notes as of the date of conversion.

If approved by policyholders, those eligible will share in a distribution of $534,069.

DCAP said insurance regulators determined that the conversion would be “fair and equitable, and in the best interests of the policyholders and the public” it said.

Upon conversion, the new insurance company will become “Kingstone Insurance Company” and DCAP’s name will change to “Kingstone Companies, Inc.”
No date for a vote by policyholders has been announced.