Receivership, Hurricane Warning, & Codes
A very small property insurance writer in Florida is heading into receivership with state regulators, an early forecast warning for this year’s hurricane season, and perhaps an end to anonymous tips on code-enforcement violations. It’s all in this week’s Insurance Digest.
Receivership: Unfortunately, the Board of Directors of American Capital Assurance Corporation (AmCap), based in St. Petersburg, worked with regulators on Good Friday to voluntarily place the company into receivership. Insurance Commissioner David Altmaier wrote in a Consent Order that “the company admits that it is insolvent, so that delinquency proceedings can be initiated by the Department of Financial Services Division of Rehabilitation & Liquidation.”
Since 2012, AmCap has operated in Florida and throughout the Southeastern U.S. As of last September 30, the company had 1,936 mostly commercial residential policies in force in Florida with premiums of $78.5 million, with approximate exposure of $29.2 billion. These policies represent thousands of mostly retirees who live in these condominium and homeowner’s associations. Most will now have to find in their association reserves the entire annual premium to find alternative coverage while they wait for, most likely for many months, a refund of their current pro-rated premium. The company had reported $9.4 million in net underwriting losses in 2019 and was one of seven Florida domestic companies that didn’t report numbers for 2020. We know this is a difficult time for all of the AmCap team, their policyholders and agents. We will offer any assistance we can.
As we reported last month, Florida’s domestic companies are awash in lots of red ink in their 2020 year-end underwriting losses and net income. For those of you that have followed the story feel free to connect with me for updates and background.
Hurricane Season: AccuWeather is out with its early forecast for the Atlantic Hurricane Season, which officially begins June 1. The forecast calls for a more active than normal season, but not as active as last year’s record-setter that saw 30 named storms and six landfalls. While Florida missed a direct hit last year (barely with Hurricane Sally), we may not be as lucky this year. AccuWeather says Florida and the eastern seaboard face a heightened risk this year because of the weakening of the Bermuda high-pressure zone. That high steered many storms away from Florida last year.
AccuWeather projects there will be 16 to 20 named storms this year (a bit higher than the average of 14) with 7 to 10 of them becoming hurricanes, and 3 to 5 of those becoming major Category 3 storms with winds exceeding 111 mph. Please check out my “Lisa’s Lucky 7 Hurricane Season Prep” guide, with tips on how to make sure you and your clients are doing the right things right now to protect people and property this upcoming season. You can click the image at upper right or here for a printable version to share with your customers and friends. Prepare now and let’s stay safe!
Code Enforcement: A pair of bills making their way through the Florida Legislature would prevent local code-enforcement officials from automatically starting an investigation based on an anonymous tip. SB 60, sponsored by Senator Jennifer Bradley (R-Fleming Island) and HB 883 by Rep. Toby Overdorf (R-Palm City) would require those reporting violations to provide their name and address. There’s an exception that allows code officers to take action on a tip if they believe a violation presents an imminent threat to public health, safety, or welfare or may result in the imminent destruction of habitat or sensitive resources.
Rep. Overdorf, one of the brightest members of the Florida House of Representatives, said the bill is needed to stop frivolous complaints as well as prevent code-enforcement officers from becoming pawns in disputes among neighbors and businesses.
LMA Newsletter of 4-5-21
