With the economy continuing to strengthen, the number of insurance companies that failed in 2004 declined 48 percent, to 13 compared to 25 insurer insolvencies in 2003, according to Weiss Ratings Inc., an independent provider of ratings and analyses of financial services companies, mutual funds, and stocks. Three life and health insurers and 10 property and casualty insurers failed in 2003, compared to four and 21 respective failures in 2003.
The 13 failed insurance companies in 2004 were: National Health Insurance Co. in Grand Prairie, Texas; MIIX Insurance Co. in Lawrenceville, N.J.; Capitol Life Insurance Co. in Golden, Colo.; Interboro Mutual Indemnity Ins. Co. in Mineola, N.Y.; Life and Health Ins. Co. of America in Philadelphia, Pa.; Statewide Insurance Co. in Waukegan, Ill.; Cascade National Insurance Co. in Seattle, Wash.; American Superior Insurance Co. in Plantation, Fla.; Cumberland Casualty & Surety Co. in Tampa, Fla.; New America Insurance Co. in N. Lauderdale, Fla.; State Capital Insurance Co. in Lawrenceville, N.J.; Pinnacle Casualty Assurance Corp. in Montgomery, Ala. and Carrol County Mutual Fire Insurance Co. in Westminster, Md.
“Insurers have been reporting robust profits for several quarters now, which reflects both an improved securities market and economic growth, resulting in fewer company failures compared to the numbers reported several years ago,” commented Melissa Gannon, vice president of Weiss Ratings Inc.
To avoid financially weak companies, Weiss Ratings recommends that consumers and businesses monitor the financial health of their insurance company using safety ratings with a solid track record for accuracy. The Weiss ratings are based on an analysis of a company’s capital, profitability, quality of investments, liquidity, and stability.
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