Posted On: May 9, 2008, 11:28 am CDT

Posted By: Homer

Making a profit? Who are you kidding. The SCIF was writing about 60% of the business in the State a few years ago because they were significantly underpricing it and other carriers would not touch it for the prices they were offering.

There is a reason SCIF withdrew from the ratings like AM Best a few years ago. Because they were technically insolvant. Their liabilities exceeded their assets. They have been fighting to stay ahead of their claims tail for years, and only did it by increasing the amount of premium they were bringing in.

Now that their premiums have dropped, the tail will catch them. My prediction is that in 2 years or less the SCIF will be insolvant and the State will be trying to assess all the carriers operating in the State to prop it up. The next insurance hard market cycle will start with the collapse of the SCIF. This will bring several other carriers down with it.

There is no way they could sell them. They would probably have to pay someone to take them because their liabilities are greater than their assets. Why would anyone pay for a book of business that they are cherry-picking now anyway?