A Florida judge has ordered a homeowners’ insurer to shut its doors and hand its business affairs over to the state after state regulators found it no longer has enough money to pay its bills.
Florida’s Division of Rehabilitation and Liquidation has been given the go-ahead to liquidate HomeWise Insurance Co., which has been in financial trouble for months.
In September, the Tampa, Florida-based insurer lost its one financial rating, while an affiliated company, HomeWise Preferred, was placed under state control.
Under the terms of the liquidation order, the insurer and any of its affiliates are required to transfer all assets to the state, which will attempt to pay as many creditors as possible. Any outstanding claims dated prior to Nov. 1 will be transferred to the Florida Insurance Guaranty Association.
The judge’s decision comes just weeks after the Tampa, Florida-based insurer made deals with two other insurers to take over its existing book of business.
Homeowners Choice Insurance Co., through its wholly-owned subsidiary Homeowners Choice Property and Casualty Insurance Co. Inc., reached an agreement with HomeWise to assume its Florida book of business.
Under the terms of that deal, HomeWise transmitted $53 million in unearned premiums to Homeowners Choice. However, it fell far short of what is needed to cover the business. State regulators required Homeowners Choice to execute a $10 million cash infusion to its surplus in order to close the deal.
HomeWise’s 70,000 policyholders in the state have until Dec. 7 to accept Homeowners Choice’s offer of coverage or find coverage through another insurer.
HomeWise also reached a deal with the Lighthouse Property Insurance Corp. to assume its Louisiana book of business. That deal sent 11,000 state homeowners to the Bigfoot, Montana-based insurer, along with $25 million in premiums.
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