After negative moves by ratings agencies last month to address its financial issues, Florida’s insurance regulator says American Capital Assurance Corp. (AmCap) is insolvent and should be placed in receivership.
In a letter dated April 2 to CFO Jimmy Patronis, Florida Insurance Commissioner David Altmaier said the Office of Insurance Regulation determined the “initiation of delinquency proceedings” against AmCap were necessary. Included in the letter was a consent to order of receivership signed by AmCap “in which it admits that is insolvent.”
The Florida-based insurer, which focused on commercial residential and non-residential property risks, as well as flood coverage, had more than 1,900 policies in force in Florida as of Sept. 30, 2020, with nearly $80 million in annualized premium. The company also writes business in Georgia, Louisiana, North Carolina, South Carolina and Texas.
Insurer liquidations are handled by the Department of Financial Services Division of Rehabilitation and Liquidation, which coordinates and directs the receivership process on behalf of DFS, of which Patronis oversees.
“Respondent specifically admits that it is presently unable to pay its debts as they become due in the usual course of business and therefore as of the date of this consent is insolvent as that term is defined pursuant [to Florida law],” the order states.
The order says AmCap has consented to the appointment of DFS as the receiver for liquidation purposes and any injunctions the receivership court deems necessary and appropriate.
It also waives “any and all rights to notice and hearing.”
The liquidation order comes after AmCap’s rating was downgraded by AM Best and withdrawn by Demotech at the company’s request when it was notified it would be downgraded.
Best also placed AmCap’s credit ratings under review with negative implications. Best further downgraded the company to D (Poor) on March 25 and withdrew its ratings as the company requested to no longer participate in Best’s rating process.
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