“Throughout this process, we have been very open with CUMIS policyholders on how a merger and domicile change would benefit their company,” said Jeff Post, CUNA Mutual President & CEO. “This vote–a more than 93% approval–reflects policyholder understanding of the issue and sends a clear message that our owners agree these changes will make for a stronger, more flexible company.”

The state of Wisconsin has already approved CMIS' request to change its domicile to Iowa and the state of Iowa has confirmed it has no objection. The domicile change is expected to occur next month.

The two insurance companies have been affiliated for years and have long discussed merging, but the company maintains that tax law discouraged any such merger until relatively recently and that making the change will help bring policyholders a stronger and more responsive company.

Critics, including most notably the Office and Professional Employees International Union and Mr. Charles Eikel, a longtime policyholder and retired CUNA Mutual employee, have charged that the company's leadership is merely setting the company up for an eventual demutualization, a charge the company has denied for some time.

Mr. Eikel's father, Charles Eikel Jr., was CEO of CUNA Mutual from 1956-1973. The Eikel family has been involved in the credit union industry since 1934, according to the Web site keepcunamutual.com, which the union and Eikel joined together to launch. After the CUMIS vote, the critics continued to contend that CUNA Mutual is taking steps to its eventual demutualization and decried what it said was the inability of CUNA Mutual policyholders to get both sides of the story. The union noted that a lower percentage of policyholders voted on this change than voted on what it called “minor amendments” to the company's bylaws in 2001. It also observed that while it had been able to contact, at most, 5,000 of the company's policyholders, almost 2,800 policyholders voted no on both questions. “CUNA Mutual Group was able to mail a 160-plus page document to 100% of its policyholders–a document which mentions 'demutualization' 133 times. Only 20% and 21% of all policyholders voted 'Yes' on the company's two proposals,” the organization Keep CUNA Mutual said in a prepared statement. “The fact that nearly 80% of policyholders did not vote is troubling–but it is also encouraging. Surely the 'turnout' in this vote would have been higher if CMG had been more forthcoming about its true intentions.” Legal Battle In The Works?

The merger fight moves next to Iowa where the CUNA Mutual Life Insurance Company policyholders must vote to approve it, and the contest over the terms for the campaign and balloting appear headed to court. At issue is whether opponents of the merger are going to be able to get a copy of the life insurance company's list of policyholders. Ray Rehberg, one of the organizers of the anti-merger effort on the part of the Office and Professional Employees Union said the union's reading of Iowa law allows them to get a copy of the list while a CUNA Mutual executive has insisted that they do not.

“In no instance will we allow anyone to obtain or copy our policyholder lists or any portion of them,” wrote Jim Buchheim, vice-president of communications for the company. “Under Iowa law and CMLIC Bylaws, policyholders do not have a right to inspect or copy the policyholder list.”

Buchheim and CUNA Mutual insist that the Iowa law which the union cites as requiring it to share the list does not, in fact, do so; applying only to publicly held companies. But Rehberg maintained that Iowa law does allow such copying and he acknowledged that the two parties are in “uncharted territory” about the dispute. “I think this is going to wind up going to the Iowa insurance commissioner and when he makes a decision the unhappy party will have no other place to go but to court,” Rehberg said.

Buchheim called any talk of legal action at this stage “grandstanding” and observed that CUNA Mutual, prior to the CUMIS balloting, had offered to send a communication from the union to its policyholders, at the union's expense, provided it was for a “proper purpose.” Buchheim allowed that even opposing the merger, provided the message was kept on topic and was not allowed “to stray into other union issues” would be a proper purpose.

Rehberg acknowledged that this was so pointed out that the offer from CUNA Mutual lacked the control of the information that the merger opponents needed. “Frankly, it's an issue of resources,” he explained. “There is no way we could afford to send all the policyholders a mailing like the one CUNA Mutual sent,” he said. “This is much more grassroots.”

Rehberg explained that, instead, the union might use the list to get a geographic profile of the membership and pinpoint areas where literature drops or targeted advertising might be more cost effective.

A date has not yet been set for the CUNA Mutual Life Insurance Company vote, but it is expected to be sometime this summer. –[email protected]