United (UPC) putting carrier into orderly run-off
United Insurance Holdings Corp. (UPC Insurance) has announced a plan for its personal lines subsidiary United Property & Casualty Insurance Company (United P&C) carrier to withdraw from operations and go into an orderly run-off.
Availability of reinsurance capital is cited as one of the major drivers here, reflecting the challenges some carriers have been facing to secure reinsurance at any price in the currently hardening market.
The company said that United Property & Casualty Insurance Company (United P&C) has filed plans of withdrawal in Florida, Louisiana and Texas, while intending to file a plan of withdrawal in New York as well.
The plans entail non-renewing personal lines policies in these states and regulatory approval has already been received in Louisiana but is still pending in Florida and Texas.
This will effectively place United P&C into an orderly run-off, the company said, as long as it remains in compliance with the rules and regulations of each state.
In addition, it noted that it has been notified by Demotech of the rating agency’s intent to withdraw United P&C’s Financial Stability Rating.
Demotech had downgraded United Property & Casualty Insurance Company two notches to “M” recently, putting the carrier at-risk.
But, as we reported recently, United (UPC) was eligible for coverage under the recently announced arrangement with Florida Citizens, that will see the residual market guaranteeing claims above FIGA caps for any insolvent carriers.
It seems that was insufficient to enable the carrier to remain a viable personal lines writing business and so it is now being shuttered and put into run-off.
Chairman and CEO Dan Peed explained, “Due to significant uncertainty around the future availability of reinsurance for our personal lines business, I believe placing United P&C into an orderly run-off is prudent and necessary to protect the Company and its policyholders.
“The Company is actively pursuing opportunities to leverage our people, technology, and other capabilities. Our commercial business continues to perform well and provides the Company a stable platform to build new engines of growth and profitability.”
The company had only recently completed a consolidation of its Florida business and various other plans of reorganisation, which all seem to have been futile in attempts to continue this carrier operation.
Read all of our news and analysis on the Florida insurance and reinsurance market.
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