Florida’s Northern Capital Goes Under

A Florida court has ordered Miami-based Northern Capital Insurance Co. (NCIC) into receivership for the purpose of rehabilitation. At the same time, the court ordered the subsequent liquidation of the company, effective May 1, 2010.

NCIC, a Florida corporation licensed in 2006, primarily wrote homeowners, automobile and inland marine policies in Florida.

During the rehabilitation phase prior to May 1, 2010, NCIC’s policies remain in effect and claims will continue to be processed and paid to the extent possible. All NCIC policies will be cancelled as of 11:59:59 p.m. on May 30, 2010, unless otherwise terminated prior to that date.

Upon liquidation, policies will be covered by the Florida Insurance Guaranty Association.

The court ruling was expected. The Office of Insurance Regulation (OIR) had placed the insurer under close watch last May and monitored it as its finances deteriorated and its management was unable to attract additional capital or find another carrier to purchase it.

Last December, Northern Capital and its affiliate, Northern Capital Select Insurance Co., stopped writing any new business and soon thereafter stopped renewing existing policies after the companies’ surplus had reached the minimum level.

By Feb. 19, Northern Capital reported it had been under-reserving for claims by about $6.4 million, which impaired its surplus even further, dropping it below the $4 million minimum required by the state. At that time, the company lost its financial stability rating from Demotech.

Following the liquidation order, Tampa-based American Integrity Insurance Co. said that it would provide insurance coverage for up to 20,000 of the 62,000 customers of Northern Capital. Lisa Miller, company spokesperson, said most of Northern Capital’s agents also represent her company and it would sign up any who do not.

She said American Integrity agreed to get involved after inquiries from the OIR, which was looking for private carriers for Northern Capital accounts.

American Integrity has already assumed over 70,000 homeowners, manufactured housing and dwelling fire policies from the state-backed Citizens Property Insurance Corp. and now has more than 85,000 customers.

In other Florida company new, 21st Century Holding Co. announced that its subsidiary Federated National Insurance Co. (FNIC) has received a capital infusion of $10 million, which it needed to do to retain its “A” rating with Demotech.

Topics Florida