Erie Indemnity Takes Action on Dividend, Management Fee Rate and ...
ERIE, Pa., Dec. 10 /PRNewswire-FirstCall/ -- At its December 8, 2009, regular meeting the Board of Directors of Erie Indemnity Company (Nasdaq: ERIE) approved increases in shareholders' dividends and set the management fee rate charged to Erie Insurance Exchange.
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The Board increased the regular quarterly cash dividend from $0.45 to $0.48 on each Class A share and from $67.50 to $72.00 on each Class B share. The dividend is payable January 20, 2010, to shareholders of record as of January 5, 2010, with a dividend ex- date of December 31, 2009. This represents a 6.7 percent increase in the payout per share over the current dividend rate. This is the 76th consecutive year Erie Indemnity Company has paid dividends.
The Board also voted to maintain the management fee rate paid Erie Indemnity Company by Erie Insurance Exchange at 25 percent, effective January 1, 2010. The management fee rate was 25 percent for the period January 1 through December 31, 2009. The Board has the authority to change the management fee rate at its discretion; however, the maximum fee rate permissible by the agreement is 25 percent. This action was taken after the Board's consideration and review of the relative financial positions of Erie Insurance Exchange and Erie Indemnity Company.
In a separate action, the Board voted to not fill a vacancy that currently exists on the Board and to reduce the current size of the Board from 12 to 11 Directors. The vacancy resulted from the death of Director Patricia Garrison-Corbin who passed away on October 17, 2009.
On December 10, 2009, Erie Indemnity Company amended its existing loan documents with PNC Bank, National Association, to renew a $100 million revolving credit facility and extend its term for an additional two years. As amended, the expiration date of the line of credit is extended from December 31, 2009, to December 31, 2011.
According to A.M. Best Company, Erie Insurance Group, based in Erie, Pennsylvania, is the 14th largest automobile insurer in the United States based on direct premiums written and the 18th largest property/casualty insurer in the United States based on total lines net premium written. The Group, rated A+ (Superior) by A.M. Best Company, has over 4.1 million policies in force and operates in 11 states and the District of Columbia.
