Illinois Insurance Director Nat Shapo announced that he obtained an Order of Conservation against United Capitol Insurance Company on Sept. 12, following the Department of Insurance’s determination that the company was insolvent by more than $1 million. The order was originally confidential pursuant to statute; however, the confidentiality order was lifted on Sept. 17.
United Capitol is a wholly owned subsidiary of United Capitol Holding Company Incorporated, a Delaware insurance holding corporation, which is in turn wholly owned by Frontier Insurance Company of Rock Hill, N.Y.
Frontier was placed into rehabilitation by the New York Department of Insurance on Aug. 27. Both companies are members of the Frontier Insurance Group.
United Capitol was originally incorporated in February 1981 as the Great Southwest Surplus Lines Insurance Company. The current name was adopted in June 1986, and the company was acquired by the Frontier Insurance Group through its subsidiary Frontier Insurance Company in May 1996. The company is licensed in three states (Arizona, Illinois, and Wisconsin), but operated on a surplus lines or non-admitted basis in Washington, D.C., Puerto Rico, the U.S. Virgin Islands and all other states. As of December 31, 2000, the company reported earned premium of $51 million.
The Conservation Order allows the Director to conserve the assets of the company for the protection of its claimants and creditors, pending further recommendations to the supervising court. The order also contains an injunction prohibiting suits against the company outside of the conservation proceedings, as well as a moratorium on the payment of claims and loss adjustment expenses.
Topics Illinois
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