NU Online News Service, June 3, 2:36 p.m.EST

Florida homeowners insurer Argus Fire and Casualty Insurance Co.has been ordered to stop doing business in the state.

The company, owned by United Automobile InsuranceGroup, cannot buy adequate catastrophe reinsurance for the2011 hurricane season, concludes an order from the Office ofInsurance Regulation (OIR).

"Therefore the office has decided that it is in thepolicyholder's best interest to cancel all of [Argus'] existingpolicies," reads a letter that will be sent to the company'spolicyholders. Policies will be cancelled 45 days from the timepolicyholders receive notice.

To carry out the cancellation process, Argus has been placedunder administrative supervision.

The OIR order outlines a series of financial statements receivedfrom North Miami Beach, Fla.-based Argus over the last month. Eachreveals a company in trouble, resulting in a May 23 meeting withthe OIR when Argus told regulators of its intention to run off itsbook of business and stop writing policies in Florida.

The OIR began reviewing Argus' reinsurance plans after theinsurer submitted information to comply with a data call from theOIR to get an indication of companies' reinsurance programs. Thecompany's surplus was $4.55 million at the end of April, leadingthe OIR to conclude that Argus' "proposed reinsurance program,specifically the company's retention, in conjunction with [itsfinancial statement], specifically its surplus position," preventsthe company from securing adequate catastrophe reinsurance.

All of Argus' $29.4 million in direct premiums are written inFlorida, according to Highline Data. The company's lastprofitable year was 2007, when it reported net income of $62,287.In 2010 Argus posted a loss of nearly $4 million, with anunderwriting loss of about $6 million and a combined ratio of148.

Higline Data is a part of Summit Business Media, which also ownsNational Underwriter.