Weston Property Insurance becomes the 5th Florida company to enter receivership in 2022

TAMPA BAY, Fla. — In the first week of August, four Florida insurance companies had their ratings pulled from ratings agency Demotech’s database, and one of them is now in liquidation.

Weston Property & Casualty Insurance is the fifth property insurance company operating in Florida to enter receivership this year.

According to Florida’s Chief Financial Officer (CFO) website, Weston entered liquidation on August 8. That leaves its 20,000 customers just 30 days to find new insurance, and all existing claims will be transferred to the Florida Insurance Guaranty Association.

The CFO’s website states: “On August 8, 2022, Weston Property & Casualty Insurance Company was ordered into receivership for the purpose of liquidation by the Second Judicial District Court in Leon County, Florida. The Florida Department of Financial Services is the court-appointed receiver of Weston Property & Casualty Insurance Company.”

Weston Insurance and FedNat were the first companies to lose their financial strength ratings from Demotech after a review of reinsurance packages for the 2022 hurricane season.

The documents show FedNat transferred 78,000 policies to its subsidiary, Monarch National Insurance Company, and canceled all remaining policies.

According to our records, FedNat had about 152,000 policies before it filed for rehabilitation in May. They left 68,000 homeowners and continued to work.

Bankers Specialty and Community First are the other two companies that now have an NR or “no rating” from Demotech. Their parent company, Bankers Insurance Group, tells us they voluntarily withdrew their rating.

In a statement, they said: “We proactively withdrew our ratings from Demotech due to ongoing concerns about the company’s methodologies. AM Best is the world’s largest rating agency for the insurance industry. Bankers Insurance Group holds an AM Financial Strength Rating (FSR), which exceeds the requirement for mortgage lenders Fannie Mae and Freddie Mac.”

“The bankers are already rated by the global rating company AM Best. They have a B++ rating that qualifies all of their policyholders for federally-backed mortgages,” explained Mark Friedlander of the Insurance Information Institute. “It will be a seamless process for customers. There will be no difference in the way they are covered.’

But the bankers announced in July that they would no longer write homeowners insurance in Florida — only commercial lines, builders risk, renters and flood policies.

We also spoke with representatives from rating agency AM Best to ask them why they rate only some Florida companies and not others.

They told us in a phone call that they have specific criteria and “some companies may not be as financially sound as they appear and be hesitant to approach a rating agency like AM Best,” said Jeffrey Mango, managing director of strategy and communications for the agency.

Federal loans like Freddie and Fannie will accept insurance from a company rated “B” or higher by AM Best and only “A” by Demotech.

For homeowners with United Property And Casualty Insurance (UPC) that have been downgraded to “M” or moderate…they are still in line with federal loans as well. UPC joined the Florida Office of Insurance (OIR) reinsurance program with Citizens Property Insurance, which gives them the financial support they need.

As stated on the OIR website, “the temporary market stabilization agreement is a substitute for an acceptable financial stability rating for policies with mortgages backed by Fannie Mae and Freddie Mac. The agreement provides that if an insurer is covered by a reinsurer that assumes, by endorsement, 100 percent of the insurer’s liability or any covered loss due but unpaid by the insurer due to bankruptcy, it qualifies for the Fannie Mae and Freddie Mac exemption. “

→ Click here to read more about why Weston went into receivership.

Other property insurance companies that went into receivership this year and are in liquidation include Avatar, Southern Fidelity and Lighthouse (in Louisiana).

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