The judge’s order noted further efforts would be “futile.” Tampa-based Lighthouse Property Insurance’s 27K policies in Fla. will be canceled within 30 days.
TALLAHASSEE, Fla. – Saying it would be “futile” to try further to rehabilitate the company, a Louisiana judge has ordered liquidation of Tampa-based Lighthouse Property Insurance because it is insolvent.
The order issued Thursday by Judge Richard “Chip” Moore III in Louisiana’s East Baton Rouge Parish was another sign of trouble in Florida’s property-insurance market, as Lighthouse had about 27,000 policies in Florida as of earlier this month.
All of Lighthouse’s policies in Florida will be canceled within 30 days, according to the order, posted on the Lighthouse website. The company also has insured homes in Louisiana, North Carolina, South Carolina and Texas.
The Florida Insurance Guaranty Association, an organization created to deal with insolvencies, said Friday that it has been activated to help pay outstanding Lighthouse claims.
The liquidation was not a shock, as Louisiana Insurance Commissioner James Donelon earlier placed Lighthouse into receivership. Lighthouse told insurance agents in February that it would stop writing new business in Florida. Also, the rating agency Demotech announced March 29 that it was withdrawing its financial-stability ratings for Lighthouse and the related Lighthouse Excalibur Insurance Co. The Demotech announcement pointed to losses from Hurricane Ida, which slammed into Louisiana last year.
In the order Thursday, Moore wrote that “further efforts to rehabilitate Lighthouse Property Insurance would be futile and would result in loss to Lighthouse Property Insurance’s creditors and policyholders.”
Lighthouse became the third Florida property-insurer to be declared insolvent since late February, following Avatar Property & Casualty Insurance Co. and St. Johns Insurance Co.
Slide Insurance Co. picked up the policies of St. Johns Insurance customers, but a similar arrangement was not in place for customers of Avatar. A document on the Lighthouse website said that as of April 20, it had sent out more than 360 “requests for proposals” to insurance companies licensed in Florida and the other affected states about the potential acquisition of policies.
Gov. Ron DeSantis on Tuesday called a special legislative session that will start May 23 to address problems in the Florida property-insurance market.
Insurers have shed policies and sought hefty rate increases because of financial losses in the state. As part of the fallout, thousands of customers a week are getting coverage from the state-backed Citizens Property Insurance Corp., which was created as an insurer of last resort.
The House and Senate could not reach agreement on an insurance bill during this year’s regular legislative session. It remains unclear what will result from the special session, though one issue drawing discussion is trying to help insurers afford and obtain reinsurance, which is crucial backup coverage.
During a meeting last week, the Florida Insurance Guaranty Association board agreed to borrow $250 million to pay claims stemming from insolvent insurers. That debt will be financed through “assessments” that are passed through to policyholders across the state.
Source: News Service of Florida
By Jim Saunders | Read the Original Article Here: Insolvent Property Insurer Liquidated