The Hanover Insurance Group has asked state insurance regulators for permission to shut down two of the three property insurance companies it operates in Louisiana and shift about half of the affected 15,500 policyholders to another company.
Under the proposal, Hanover American Insurance Co. would remain in the state, while The Hanover Insurance Co. and Massachusetts Bay Insurance Co. would leave.
Hanover American would pick up about half of the policies and move the rest to Gulfstream Property and Casualty Insurance Co., a Florida company licensed in Louisiana in December, Insurance Commissioner Jim Donelon said.
“My concern is the precedent that that would set for someone bigger than Hanover _ obviously State Farm, Allstate, Travelers _ who couldn’t hope to find a Gulfstream or a bunch of Gulfstreams to make as soft a landing for their policyholders as Hanover,” Donelon said. “So I’m in the process of deciding whether or not I can allow them to do what they’re proposing to do.”
Donelon said he believes he has the authority to stop the move if he decides to.
The policy reduction is a continuation of a corporate strategy to concentrate its homeowners business among a select group of agents who write a significant amount of business across multiple lines of insurance, said Hanover spokesman Michael Buckley.
Buckley said that Hanover intends to maintain a presence in Louisiana and plans to continue writing new homeowners coverage.
Hanover plans to drop two-thirds of the roughly 45 independent insurance agents who now write policies in Louisiana, Donelon said.
Mitch Sattler, president and chief executive officer of Gulfstream, said the company does not have any Louisiana policyholders at present. Under the agreement with Hanover, Gulfstream would renew the Hanover policies it picks up with no change in cost, Sattler said.
Gulfstream was formed in 2004 and began by taking over policies held by Florida’s property insurer of last resort. The company has around 32,000 policyholders at present. The company has the ability to pay around $150 million in claims and that amount would rise to around $200 million with the addition of the Hanover policyholders, Sattler said.
Information from: The Advocate, http://www.2theadvocate.com
Topics Louisiana
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