Virginia’s State Corporation Commission (SCC) announced that it has been appointed as receiver by the Circuit Court of the City of Richmond for Reciprocal of America (ROA) and the company’s attorney-in-fact, The Reciprocal Group (TRG). The decision follows an examination of the two companies by the SCC’s Bureau of Insurance, which found them to be “in a hazardous financial condition.”
The announcement described ROA as “a Virginia-domiciled insurance reciprocal writing primarily hospital professional liability and workers’ compensation insurance.” Its headquarters and TRG’s are located in Glen Allen, Virginia.
“ROA recently experienced financial difficulties because of poor claims experience and the inability of its Bermuda-based reinsurer, First Virginia Reinsurance, Ltd., to honor its reinsurance obligations,” the announcement continued. Virginia’s Commissioner of Insurance, Alfred W. Gross was appointed by the Court as Deputy Receiver. He will oversee efforts to rehabilitate ROA and will supervise the management of the company for the protection of its policyholders.
“ROA will continue to pay all claims arising under ROA’s policies of insurance,” said the SCC. But it noted that “A moratorium has been placed on the payment of all other claims until the Deputy Receiver completes his evaluation of ROA’s financial condition.”
“ROA will no longer issue new or renewal insurance policies,” it concluded.