NU Online News Service, June 6, 2:06 p.m.EDT

The Florida Office of Insurance Regulation says commercialinsurer National Group Insurance Co. is insolvent.

Insurance Commissioner Kevin McCarty has recommended delinquencyproceedings begin with the Division of Rehabilitation andLiquidation, according to a letter he wrote to Florida ChiefFinancial Officer Jeff Atwater late last week.

The news comes days after McCarty issued an order approving aplan submitted by Argus Fire & Casualty Insurance Co. to cancel all of itspolicies. The company cannot buy adequate reinsurance coverage forthe hurricane season, which began June 1.

McCarty recently told NU Online News Service several companieswould be leaving Florida due to financial hardships or choice, andothers will seek merger or acquisition opportunities.

McCarty says Coral Gables, Fla.-based National Group is in thered by about $10.8 million and has insufficient assets to get outof the hole.

National Insurance Co., parent to National Group, was placed inreceivership in Puerto Rico in mid-May. According to that order,National Insurance Co. was providing disability, marine casualty,transportation, property, accident, title, agricultural andwarranty coverage in Puerto Rico.

According to HighlineData, National Group Insurance Co. wrote exclusively inFlorida, with $22.9 million in direct premiums. Commercialmultiperil makes up 55 percent of direct premiums, withcommercial-auto liability accounting for 18 percent. The companyposted net income of $413,612.

However, San Juan, Puerto Rico-based National Insurance recordedincome losses from 2007-2009 and has been under supervision ofPuerto Rican regulators since 2010. The insurer took a $7.6 millionloss in 2009, the latest year available.