Florida insurance officials have moved to shut down Northern Capital Insurance Co. after concluding that the firm is insolvent.
Agents and the company’s 70,000 policyholders are being advised to cancel their Northern Capital policies and seek new coverage immediately. If customers cannot get replacement coverage from a private insurer, they are eligible to apply for coverage with state-backed Citizens.
If the company is ordered into liquidation, as is expected, all policies will be cancelled no later than 30 days from the date of the liquidation order.
Insurance Commissioner Kevin McCarty said OIR had placed the insurer under close watch last May. Regulators were concerned about a high concentration of business in Dade, Broward and Palm Beach counties. Since then the firm’s finances have deteriorated and its management has been unable to attract additional capital or find a buyer.
Northern Capital and its affiliate, Northern Capital Select Insurance Co., had already stopped writing new and renewal business because surplus had reached minimum level. By Feb. 19, Northern Capital’s surplus had fallen below the $4 million minimum required by the state. At that time, the company lost its financial stability rating from Demotech.
The insurer was named the fastest-growing small company by Inc. Magazine in 2009.
Florida’s 21st Century Holding Co. subsidiary Federated National Insurance Co. has received a capital infusion of $10 million. The transaction follows notice from its rating agency Demotech Inc. requiring FNIC to obtain additional capital of $10 million by March 31 to maintain its “A” rating. The $10 million infusion consists of $5 million from 21st Century Holding Co. and a $5 million surplus note from American Vehicle Insurance Co., another subsidiary.
The company said that the capital infusion has been approved by the Florida Office of Insurance Regulation (OIR), and Demotech has affirmed FNIC’s “A” rating.
Eastern Insurance Holdings Inc. has established a satellite office in Nashville, Tennessee in support of its subsidiary Eastern Alliance Insurance Group (EAIG), which sells workers’ compensation insurance and offers a “pay-as-you-go” payment option.
EAIG opened a regional office in Charlotte, North Carolina in 2008. The Nashville site is a satellite location of the Charlotte regional office. The company said it has appointed seven Tennessee agencies to date.
The Hartford, TARP
The Hartford Financial Services Group, Inc. has repaid the U.S. government for its bailout by repurchasing all of The Hartford’s preferred shares issued to the U.S. Department of Treasury under the Capital Purchase Program (CPP), also known as the Trouble Asset Relief Program (TARP).
The Hartford paid $3.4 billion to the U.S. Treasury to repurchase the preferred stock, plus a final dividend payment of about $21.7 million. The Hartford funded the repurchase with proceeds from its recent equity and debt offerings, as well as from available resources.
Victor O. Schinnerer, HSBC Energy
Victor O. Schinnerer & Co. Inc. has acquired HSBC Insurance Services (USA) Inc., the energy insurance brokerage of HSBC Insurance. Schinnerer is a subsidiary of Marsh & McLennan Companies Inc. and this acquisition is part of the agreement in which HSBC Insurance Brokers Limited and related businesses and companies within the HSBC Group were acquired. The Energy P&C program is admitted in all 50 states.
Utica Mutual, Founders Insurance Co.
New York-based Utica Mutual Insurance Co. will acquire Founders Insurance Co. of Des Plains, Ill. for an undisclosed sum.
Founders has annual premium of approximately $115 million in 47 states and the District of Columbia. Founders employs 200 people, mostly in Illinois, and specializes in writing non-standard auto coverage, liquor liability and general liability coverage. Most of its automobile business is concentrated in the Midwest.
Utica Mutual has annual sales of over $600 million, is headquartered in New Hartford, N.Y. and employs 1,250 people at seven regional offices and three claims offices.
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