A Leon County (Florida) Circuit Court Judge Janet Ferris ordered liquidation for troubled Miami property and casualty insurance carrier Aries Insurance Company, making way for the use of state guaranty funds to pay outstanding claims.
Florida Treasurer and Insurance Commissioner Tom Gallagher said thousands of policyholders will have their outstanding claims paid in the coming weeks.
“Aries’ policyholders have suffered long enough,” said Gallagher, who has been pushing for liquidation of Aries since early September. “The judge’s order now allows the department to tap into guaranty funds so that claims get paid immediately.”
As a result of the judge’s order, remaining policyholders must obtain new coverage by Dec. 14, 2002. The company has nearly 52,000 policyholders and more than 38,000 claims are pending.
The Florida Insurance Guaranty Association and the Florida Workers’ Compensation Insurance Guaranty Association will be activated to help pay outstanding claims. The two guaranty associations are funded by insurance companies with written premiums in the same lines of coverage. Liquidated assets of the company will be used to reimburse the guaranty funds.
In May, the department was appointed by a Second District Circuit Court judge as receiver for purposes of rehabilitation. Aries was ordered by the court to stop writing new policies and this summer agreed to stop renewing policies.
In early September, the department filed a petition requesting that Aries be ordered into liquidation. Aries appealed the petition, and a hearing on the department’s petition was postponed by the First District Court of Appeals in Leon County.
Then in a dispute between Aries and its reinsurance company, General Reinsurance Corporation (Gen Re), an arbitration panel ruled last week that Aries owes Gen Re approximately $3.7 million for overpayments. Aries had claimed that Gen Re owed it more than $30 million.
Aries primarily writes personal and commercial auto and property coverage as well as some workers’ compensation coverage. Policyholders in need of coverage as a result of the liquidation should contact their local agent.
A copy of the order is posted at www.fldoi.com under news releases.
Topics Florida
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