September 23, 2022
  • September 23, 2022

Office of Insurance Regulation refers Weston Property Insurance to receivership

By on August 3, 2022 0

TAMPA BAY, Fla. — The Florida Office of Insurance Regulation is sending Weston Property & Casualty Insurance into receivership, meaning the company doesn’t have enough funds to continue covering its existing policies.

It comes a day after state rating agency Demotech withdrew the company’s rating from an outstanding ‘A’ to an ‘NR’ or no rating.

OIR submitted an affidavit for review and approval by a Leon County Court judge on August 2. Affidavit evidence reveals that OIR’s financial troubles with Weston began in 2020 when they saw the company borrow millions of dollars from Weston Insurance Management.

In May 2020, OIR asked Weston to create a capital management plan that would improve its liquidity and reduce receivables due. They also demanded that the company submit monthly financial statements.

In 2021, Weston started losing customers and merged two of their companies.

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The affidavit states that Weston’s net underwriting losses for the year 2021 were $58,378,023; it is the funding allocated to pay more claims than expected – often the money insurance companies pay in litigation and attorney fees in the event of a lawsuit.

Their net loss of income for the year was $57,681,556.

Together, they are significantly higher than their combined surplus for the year at $28,294,519 – which is the combined amount of money left after an insurer’s liabilities are subtracted from its assets.

In June 2022, Weston informed the OIR that “due to the cost and/or availability of reinsurance for its lower layer(s), Weston could not fully place its reinsurance program”.

Not being able to get enough reinsurance was the fear of many in Florida’s property insurance industry heading into the 2022 hurricane season. Experts told us that reinsurers want nothing to do with Florida due to the financial risk of fraudulent storm claims.

If the receivership referral is approved, Weston will be the fifth Florida property insurance company to go into receivership this year.

Customers will have 30 days to find new insurance, and any existing claims will go to the Florida Insurance Guaranty Association, which the legislation created and handles claims from insolvent P&C insurance companies. Weston policyholders are advised to contact their insurance agents.

The Insurance Information Institute told ABC Action News the company has about 20,000 policies in Florida and is based in the Miami area.

It comes on the same day Demotech withdrew the ratings of Bankers Specialty Insurance and First Community Insurance, both of which are owned by the St. Petersburg-based apex Bankers Insurance Group. Last week, Bankers announced it was pulling out of the Florida home insurance market at the end of July.

So far this week, Demotech has taken down the ratings of four companies and downgraded three.