Florida’s Southern Oak Agrees to Reduce MGA Fee, Wind Exposure

A Jacksonville property insurance company is back in the good graces of regulators.

Insurance Commissioner Kevin McCarty signed off on an agreement with the Southern Oak Insurance Co. after the insurer agreed to make some changes to its business plan.

Southern Oak, which insures 64,000 Florida homeowners, will stop writing policies in the high risk South Florida counties of Broward, Miami-Dade and Palm Beach until it reduces its wind risk in that region to less than 30 percent of its total exposure. Regulators had also told the company it was paying its managing general agency too much and the insurer has agreed to reduce the amount of cash it is sending to its management company.

Regulators warned Southern Oak last week that it had to be in compliance with regulatory safeguards or be at risk of losing its license.

The issue of Florida insurers diverting profits into management and reinsurance companies they own was the subject of a recent Sarasota HeraldTribune special report.

Topics Florida Insurance Wholesale