Florida Preferred Insurance Company policyholders will be protected this hurricane season because company officials finally agreed to let the financially-troubled property insurer to enter into liquidation effective June 1, according to Tom Gallagher, Florida CFO.
“This decision is in the best interest of 140,000 Floridians who were covered by Florida Preferred and deserve protection,” said Gallagher, who petitioned a court on May 9 to put Florida Preferred into liquidation. “Our focus will now be getting the company’s outstanding claims resolved as quickly as possible.”
A hearing, set for May 30, was originally scheduled to deliberate the company’s refusal to liquidate Florida Preferred. Now that company officials have consented to liquidation, the hearing will focus on having the judge sign the consent to liquidation agreements for three financially-impaired insurers with Poe Financial Group, including Atlantic Preferred, Southern Family and Florida Preferred.
The judge will also be presented with the transition plan for Poe’s policyholders for approval. Under the plan, Gallagher wants Poe policyholders unable to secure coverage in the private market to automatically transition to Citizens Property Insurance Corp. by July 2 without the need to fill out a new application.
If approved by the court, the Department of Financial Services, which Gallagher oversees, would be appointed receiver for the three insurers in liquidation. As receiver, the department assumes the company’s operations and liquidates its assets to pay outstanding claims.
Once the companies are in liquidation, the department can also tap into guaranty funds through the Florida Insurance Guaranty Association so claims get paid immediately. FIGA is funded by insurers with written premiums in the same lines of coverage.
Source: Florida Department of Financial Services