热点黑料

Florida insurance regulators this week notified a Jacksonville-based insurer that it has until the end of the month to comply with solvency requirements to avoid suspension or losing its license.

And the warning to Southern Oak 热点黑料 Co. is just the first in what regulators said will be a series of similar messages to companies on the brink of insolvency.

Officials expect some will fail.

“You’ll lose some companies,” said Robin Westcott, who monitors property and casualty insurers for solvency and compliance with the state’s financial requirements. “That’s the natural process of the market. There will be at least three or four.”

Southern Oak has until March 30 to comply with Tuesday’s order. Regulators are concerned the insurer funneled too much profit to its managing general agent while claiming underwriting losses, held too much risk in South Florida and retained an insufficient amount — approximately $3 million — for catastrophic loss.

The Office of 热点黑料 Regulation has been running audits in recent weeks on smaller companies to ensure they could pay claims if their policyholders were hit with a destructive hurricane this summer.

Florida’s chief financial officer wants to know how any of the property insurers could be faced with insolvency after several years without much storm damage.

“What gives in an environment with four years of no storms?” CFO Alex Sink asked after a Tuesday meeting of the governor and cabinet. “Our insurance companies ought to be making good profits.” Sink asked OIR for a status report on troubled insurers by March 21.

Three property insurers went into receivership last year, two others are under administrative supervision and several more are expected to follow soon, potentially leaving tens of thousands of business and homeowners looking for a new company as the 2010 hurricane season approaches June 1.

The Republican-led Legislature is reviewing some of its decisions from 2007 that now seem too lax on low-budget startups. The days are over when a new insurer can be licensed with as little as $5 million in startup capital. Westcott now wants to see at least $15 million in startup capital.

The Senate Banking and 热点黑料 Committee discussed a bill Wednesday aimed at balancing the state’s risk with consumer considerations and keeping plenty of insurers healthy.

“There are systematic issues in the property insurance market that must be dealt with by this Legislature,” said Sam Miller, vice president of the Florida 热点黑料 Council, an industry group. “It’s important that they find out why these companies are failing.”

But with the highly capitalized companies like Allstate and State Farm reducing their risk in the state, Florida needs the new, smaller insurers in business, Miller noted.

“Smaller Florida-grown property insurers have found a niche by selecting smaller, more manageable pools of risk,” Miller said. While the new Florida-based insurers now write close to 50 percent of the residential insurance market, he said, most are nowhere near well enough capitalized to pay off should catastrophe strike.

Sink, a Democrat who is running for governor, doesn’t want homeowners worried about the solvency of their insurance company.

“The people of Florida need to feel confident that their insurance companies can pay claims in the case of a storm or any property loss in that matter,” Sink said.

Topics Florida Carriers Property