Business Moves

Argus Fire & Casualty

A Florida insurance company is on its way to closing its door as it informed agents it is going to start dropping policyholders when their policies are up for renewal.

Argus Fire & Casualty, a subsidiary of the Miami Gardens-based United Automobile Insurance Co., has roughly 15,000 policies in force. The insurer has been under regulatory review since last year. Regulators agreed to let the insurer go into run-off mode as opposed to be taken by the state.

A.M. Best indicated the insurer was having problems as far back as 2008 and it lost its Demotech rating in March 2010. Last year, regulators allowed Argus to move 4,000 policies it had taken from the Citizens Property Insurance Corp. back into the state-run insurer.

Coastal Risk Underwriters

Coastal Risk Underwriters (CRU), a subsidiary of Insight Catastrophe Group, will begin writing homeowners insurance in Louisiana and 15 counties in Florida.

CRU provides insurance capacity to large national and regional specialty channels, as well as through independent agents and brokers. CRU already offers residential property capacity in Alabama, New York and South Carolina. The company anticipates expanding into Virginia later this year and several additional states in 2012.

Strate Insurance Group

Strate Insurance Group Inc. of Morristown has become Keystone Insurers Group’s sixth franchise partner in Tennessee.

Strate Insurance Group President Tom Strate and Keystone Tennessee Vice President Doug Dukes announced the new arrangement. Strate Insurance has provided insurance and benefits products to clients since 1978.

Earlier this month, four other Tennessee agencies became Keystone partners.

Homeowners Choice

Homeowners Choice Inc., a Clearwater, Florida-based provider of homeowners’ insurance, reported that Francis X. McCahill III has resigned from his position of president and chief executive officer and director of the company and its subsidiaries, effective date of June 30, 2011, for personal reasons. In a letter to the board, McCahill said his resignation was “strictly for personal reasons.”

Board Chairman Paresh Patel will assume McCahill’s duties until a successor is named. Patel is a founder of the company and has served as executive chairman since its inception. As executive chairman, Patel has played a “substantial role in the company’s day to day operations,” according to the company.

Patel said McCahill’s resignation was neither expected nor requested.

Founded in 2006, Homeowners Choice has 65,000 policyholders in Florida, representing $135 million in annualized premiums. In February, the company said it would be expanding to Alabama this year.

Aries

The former owners of Aries Insurance Co. are on the hook for millions after a Miami-Dade District Court found them guilty of diverting funds for personal use.

Florida CFO Jeff Atwater said that a Miami-Dade Circuit Court entered a $76 million judgment against former Aries owner Marcos Fraynd and his children Paul Fraynd, Saul Fraynd and Fanny Fraynd.

Aries was declared insolvent in 2002, leaving behind roughly 58,000 policyholders and creditors with unpaid claims. The Florida Insurance Guaranty Association and the Florida Workers’ Compensation Insurance Guaranty Association have paid out more than $165 million to Aries claimants thus far and that figure is expected to top more than $170 million when all claims are resolved.

The jury verdict will repay the guaranty funds for some of their payouts.

In 2006, the state Department of Financial Services sued the former owners and directors of Aries for diverting premiums and illegally distributing the money for personal use. The department so far has recovered over $20 million from other parties through previous lawsuits.

The company wrote personal and commercial auto and workers’ compensation business.

In 2007, the Fraynds plead guilty to criminal charges and received various sentences for their role in the insurer’s insolvency.

Topics Florida Tennessee