South Carolina Insurance Co., part of the Columbia-based Seibels Bruce family, has been declared insolvent by state insurance regulators and will be liquidated.
The company and its subsidiary, Consolidated American Insurance Co., will be closed by a court-appointed receiver called in to settle remaining claims and other obligations.
The Department of Insurance has filed a liquidation petition and given Insurance Commissioner Eleanor Kitzman control of the two companies.
According to a Department of Insurance spokesperson, South Carolina Insurance stopped writing and renewing policies about three years ago in the 45 states where it once did business. No claims exist in South Carolina, but policies in a handful of other states with environmental coverage and workers’ compensation claims still could be filed.
The insurance department will pay off such claims with whatever money is left. When that runs out, last-resort guaranty funds in states where claims surface will kick in to cover policyholders.
Two weeks ago, the insurance department placed both companies under state supervision when it discovered South Carolina Insurance allowed its surplus of assets over liabilities to slip below a $3 million threshold required by law.
The insurer’s 2004 annual statement showed the company carrying a deficit of $2.3 million, compared with a $4.4 million surplus the year before.
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