St. Johns Insurance coverage Co., one of many bigger property/casualty insurers primarily based in Florida, is now bancrupt and can quickly be liquidated.
The Florida Division of Monetary Providers posted a discover Friday {that a} decide in Leon County, Florida, had appointed the division as receiver for the corporate. DFS will now take steps to liquidate the provider’s property.
The information comes lower than two weeks after the Demotech score company withdrew St. Johns’ monetary stability score, citing a scarcity of ample reserves. Slide, an insurtech firm primarily based in Tampa, has agreed to tackle lots of the St. Johns insurance policies in Florida, and policyholders will probably be moved to Slide beginning this week, DFS mentioned.
“The division has motioned the court docket to approve a transition plan that would offer transition insurance policies to Slide Insurance coverage Firm and supply policyholders with steady protection beginning on March 1, 2022,” DFS mentioned on its web site.
The liquidation order signifies that the Florida Insurance coverage Warranty Affiliation will cowl current claims. St. Johns additionally wrote insurance policies in South Carolina and that state’s insurance coverage warranty affiliation will take motion to cowl current claims.
St. Johns is the fifth Florida P/C insurer to be put by the liquidation course of within the final three years. The insolvency is the surest indicator but of the state’s worsening insurance coverage market – a market that some longtime business consultants have mentioned is now in meltdown, thanks partially to hurricane losses, fraudulent roof claims and extreme claims litigation.
St. Johns introduced earlier this month that it could cease writing new enterprise in Florida on Feb. 15. Six different carriers have introduced related plans. These embody United Property and Casualty, Florida Farm Bureau, Lighthouse Insurance coverage, Avatar and TypTap. Progressive mentioned it could not renew hundreds of insurance policies within the state.
Including to the considerations was the fourth quarter monetary report from Common Insurance coverage Holdings, dad or mum firm of Common Property & Casualty, Florida’s largest personal provider. The corporate introduced a $64.5 million loss, earlier than taxes, for This autumn 2021. The agency’s mixed ratio, thought of a key measure of profitability, additionally rose considerably for the quarter, to 131%, seven factors above the Q3 in 2020.
Common’s monetary report attributed that to a strengthening of its reserves, the results of inflationary pressures and better reinsurance prices. For the yr, Common’s mixed ratio improved over 2020’s quantity, however was nonetheless above 100%.
St. Johns is a few quarter the dimensions of Common and has been listed because the eighth-largest P/C insurer in Florida, with some 160,000 policyholders. The pinnacle of Demotech mentioned just lately that the belief of insurance policies by Slide, led by Slide CEO Bruce Lucas, previously with Heritage Insurance coverage, might have been sufficient to assist St. Johns survive.
However Friday’s information ended these hopes.
The Orlando Sentinel newspaper reported that Florida Insurance coverage Commissioner David Altmaier had despatched a letter final week to the state’s chief monetary officer, formally notifying DFS of the receivership.
“The referral of this firm to the DFS’ Division of Rehabilitation and Liquidation is step one in a complete plan to supply a seamless transition for all St. Johns Insurance coverage Firm policyholders,” Altmaier wrote final week.
Insurance coverage business leaders are hoping that the state Legislature will now come to the rescue for different insurers swimming in troubled waters.
Senate Invoice 1728, by state Sen. Jim Boyd, has handed the Senate Banking and Insurance coverage Committee and an Appropriations subcommittee. If authorized by the total committee in the present day, Monday, Feb. 28, it is going to transfer to the Senate flooring. The invoice would try to restrict some solicitation by roofers promising “free roofs” and would enable extra insurers to pay the precise money worth for broken roofs, not full substitute worth, as is now the case for a lot of house owner insurance policies.
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