Kingsway Financial Services has announced the closing of the previously announced sale of Zephyr Insurance Company to Zephyr Acquisition Company for initial gross proceeds of $31.5 million U.S., plus a contingent, deferred earn-out amount.

Zephyr is a specialty property insurance company founded specifically to protect Hawaii homeowners and residents from catastrophic loss due to hurricanes. For the first six months of 2009, Zephyr had gross premiums written of approximately $36 million, or 7 percent of the premiums of the Kingsway group of companies, and produced an underwriting profit.