Windhaven Insurance Ceasing Operations, Assets to be Auctioned Off

Auto and home insurer Windhaven Insurance has alerted its agents and employees in Florida that it is winding down the insurance operations of its entities, including Windhaven National Insurance Co., ClutchAnalytics and The Hearth Group, and that its assets are being foreclosed on by a lender intending to sell them.

Additionally, Windhaven National Insurance Co., a Texas-based private passenger auto insurer, is being placed into receivership by the Texas Department of Insurance.

These moves come less than two months after Florida officials placed the group’s non-standard auto insurer, Windhaven Insurance Co. (WIC), into receivership and began to liquidate that company.

In a message sent to agents on Feb. 26 that was obtained by Insurance Journal, Windhaven said it has ceased all new and renewal business for its Windhaven companies, which include Windhaven Insurance Holdings Corp., Windhaven Underwriters, Windhaven Select, Windhaven Claims Management, Windhaven National Insurance Co. and The Hearth Insurance Group. The company writes home and auto insurance in Florida and Texas through these entities. The Hearth Insurance Group is a Florida-based MGA offering homeowners coverage on State National Insurance Co. paper. Windhaven also owns software technology company, ClutchAnalytics, that is domiciled in Texas and builds digital insurance distribution systems.

The full message to agents reads:

“To Our Valued Agents, This notice is to inform you of important changes that will be occurring to the Windhaven, ClutchAnalytics and The Hearth businesses. We have ceased all new business and renewal business in all FL and TX programs for Windhaven and the Hearth. We are winding-down our business operations. One of our lenders will foreclose on a number of assets providing collateral for its loan. As part of the foreclosure process the lender will sell the foreclosed assets at an auction slated to occur on March 4th. If a sale occurs we expect that the buyer may seek to continue the producer agreements or want to work with you to make new producer agreements. Please note, we cannot guarantee that an auction will occur, that it will be successful or if or which producer agreements a buyer may look to continue. We regret the impact this decision may have.”

Employees at the Windhaven Claims Management’s facility in Miami were also told by the company on Wednesday they would be laid off this Friday, Feb. 28, 2020. A message to employees said the company had been unsuccessful in its efforts to seek financing to enable the company to continue operation, and as a result its lender had started a process to sell certain assets of the company at a public auction on March 4, 2020.

“This notice … is to inform you that your position will be eliminated due to the facility shutdown, and the company is forced to lay you off effective February 28, 2020,” the employee message reads.

Windhaven National Insurance Co. was licensed in Texas in 2012 to write aircraft physical damage, auto physical damage, automobile liability, inland marine and other coverages, according to the Texas Department of Insurance website. Information about how many policies are currently in force was unavailable at press time. Windhaven National also offers auto policies in Florida through its Florida Windward program and currently has 30,600 policies in the state, as of Dec. 31, 2019, the Florida Office of Insurance Regulation (OIR) told Insurance Journal.

The Texas Department of Insurance has filed for Windhaven National Insurance Co., to be placed into receivership. A TDI spokesperson said Wednesday they are waiting on a hearing to be scheduled on the matter.

Tampa, Fla.-based The Hearth Insurance Group has offered homeowners insurance through State National Insurance Co., which did not respond to a request for comment, in Florida since 1990 and also offers coverage in Texas. According to its website, The Hearth Group writes more than $500 million in premium in the state of Florida and has 700 employees.

Update: In a statement to Insurance Journal, State National Executive Vice President David Cleff said, “We want to assure all policyholders and agents that their insurance coverage and policies written on State National’s AM Best rated A insurance company via The Hearth, an independent Florida based managing agent, remain valid and that the strong security supporting their policies is unaffected. We are actively working on a solution to those services that had been provided by The Hearth Insurance Group via our network and affiliated partners to ensure that the obligations and servicing for all policyholders and agents continue to be fulfilled.”

Cleff further noted additional information would be provided soon.

The now-liquidated Windhaven Insurance Co. (WIC), which launched in 2005, had about 73,000 active auto policies in Florida as of Nov. 30, 2019. In December, the Florida Department of Financial Services placed the non-standard auto insurer into rehabilitation. Shortly after that, DFS declared the former Florida auto insurer insolvent and the company was ordered into liquidation.

WIC was the carrier for its Windhaven, Icon, Select and Optimum auto insurance programs.

DFS was appointed receiver for the purposes of WIC’s liquidation, effective Jan. 6, 2020, and was authorized to take possession of all assets, estate, and property belonging to the insurer. All policies of insurance or coverage contracts that had not expired were canceled as of Feb. 5, 2020.

At the time of its WIC rehabilitation order in December, Windhaven told its agents in an e-mail that its other insurance entities, including The Hearth or Windhaven National, were not going to be controlled by DFS and the rehabilitation did not apply to its other companies.

Windhaven Insurance reported in a 2019 press release that, along with The Hearth, it had written close to $2 billion in home and auto insurance premiums since being established in Miami. It also said that Windhaven Insurance had provided coverage to more than 240,000 policyholders through more than 8,000 local independent agents. It held additional offices in Tampa, Fla., and Dallas.

The Florida Department of Financial Services said it does not regulate Windhaven National because the company is domiciled in Texas and the receivership is being handled by TDI. OIR said Thursday it continues to monitor the situation on behalf of Florida policyholders.

“There is a competitive auto insurance market in Florida, and OIR recommends that, if policyholders receive a cancellation notice, they reach out to their agent to find alternate coverage,” a spokesperson told Insurance Journal.

Representatives from Windhaven did not reply to request for comment from Insurance Journal.

This is a developing story…