The New York personal lines carrier Adirondack Insurance Exchange (AIE) is facing financial difficulties and has told its agents and customers that it is working on a transition plan for all existing policies.
The insurer urged agents and customers to look for alternative coverage in a message on its website.
Its subsidiary, Mountain Valley Indemnity Co., has a similar message on its website citing a deterioration in reserves and expiration of the reinsurance agreement between Adirondack and Mountain Valley on July 1, 2024.
The announcement comes a few weeks after Adirondack acknowledged that the insurance financial rating organization Demotech had withdrawn its rating on May 28.
According to The Big I of New York, the insurer told its agents it has been dealing with surplus issues the last several years due to rising loss costs.
The company said it has been working with the New York Department of Financial Services (DFS) on its problems but did not say what the withdrawal plan is.
AIE is a reciprocal insurance company that is owned by its policyholders. It is managed by an attorney-in-fact, Adirondack AIF, LLC. which is an indirectly wholly owned subsidiary of National General Holdings Corp.
The company has a reputation for offering low rates for its member policyholders.
A request to DFS for more information has not yet been returned.
New York has a property/casualty guaranty fund that backs up claims in the event a company cannot cover them.
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