Florida OIR: Commercial Insurer National Group Is Insolvent

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

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

Insurance Commissioner Kevin McCarty has recommended delinquency proceedings begin with the Division of Rehabilitation and Liquidation, according to a letter he wrote to Florida Chief Financial Officer Jeff Atwater late last week.

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

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

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

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

According to Highline Data, National Group Insurance Co. wrote exclusively in Florida, with $22.9 million in direct premiums. Commercial multiperil makes up 55 percent of direct premiums, with commercial-auto liability accounting for 18 percent. The company posted net income of $413,612.

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