Florida Takes Over Coral Insurance; Security First, MacNeill Step In

Coral Insurance Co., a residential property insurer in Florida, has been ordered into receivership for the purpose of rehabilitation. The Department of Financial Services was named as the receiver by Leon County Circuit Court Judge P. Kevin Davey as of April 9.

Coral, which has approximately 11,750 homeowner policyholders, reached an agreement with Security First Insurance Co. and the MacNeill Group, Inc. to provide replacement coverage. Homeowners with homes valued at under $1 million will have the option to get coverage with insurer Security First, while homeowners with homes valued at $1 million or more will have the option of coverage with the MacNeill Group, Inc., a managing general agency.

On April 7, Coral sent a notice to all appointed agents notifying them of the agreements made with Security First and the MacNeill Group with the goal of moving all of the in-force policies from Coral prior to the start of the 2009 hurricane season (June 1, 2009).

Agents who do not currently have an agency appointment with Security First can obtain one by contacting the insurer, according to officials.

Coral Insurance Co. consented to being placed in receivership for rehabilitation. The company stopped writing new coverage in early March and stopped writing renewal coverage after March 29, 2009.

On March 27, the state suspended the company’s license to write business for six months after determining that the insurer had about $2 million less than the $4 million in surplus it should have.

State auditors largely blame claims from Hurricane Wilma in late 2008 and early 2009, some of them re-opened by public adjusters, for the company’s financial weakness, according to Edward Domansky, FLOIR spokesman. The insurer had exhausted its reinsurance and been forced to pay more claims directly.

In late December, the carrier had received a $5 million cash infusion from investors to help deal with the burgeoning Wilma claims problem.

Topics Florida