Chemung Financial in Elmira, N.Y., is set to form an insurance unit.
The $1.6 billion-asset company disclosed in a regulatory filing that it had received approval to create Chemung Risk Management. The unit is expected to fill gaps in commercial coverage and uninsured exposures, while allowing the company to "strengthen its overall risk management program," the filing said.
Chemung said it will record about $170,000 in one-time expenses in the first half of this year tied to creating the unit. The business will also incur about $90,000 in annual expenses.
The unit is also expected to provide a $370,000 annual benefit to the company tied to the insurance premium exclusion, for income tax purposes, provided to captive insurance companies. This net benefit, however, will be reduced by claims submitted to the business.