S&P assigned its “R” financial strength rating to American Superior Ins. Co. based on the company’s recent announcement that it has agreed to be put under rehabilitation by the Division of Rehabilitation and Liquidation of the Florida Department of Financial Services.
American Superior, a small homeowners insurer covering about 60,000 Floridians, agreed to enter rehabilitation after concluding that it lacked the sufficient reserves and operational resources to handle claims related to Hurricanes Charley, Frances, Ivan and Jeanne.
The company was hit particularly hard because of the extent of storm-related damage done in the Florida panhandle area, where it holds significant business concentration. Under rehabilitation, the company will be precluded from writing new business, but will be able to renew existing business. No policies will be cancelled. American Superior reported a profit in only one of the last five years (2001). In 2003, the company reported surplus of $5.3 million and wrote total homeowners insurance premium of $34.3 million.
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