Auto Insurer Windhaven National Ordered Into Liquidation by Texas Court

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Texas-based private passenger auto insurer Windhaven National Insurance Co. (WNIC), a subsidiary of Windhaven Insurance, has been ordered into liquidation at the request of the Texas Department of Insurance, which was appointed as liquidator.

The order for liquidation was granted by the District Court of Travis County, Texas, 419^th Judicial District on March 5. The court also granted TDI’s request for a permanent injunction restraining WNIC officers and its agents from conducting business and restraining other parties from taking any actions against WNIC or its property, the order states.

The court approved TDI’s requests just a couple weeks after Insurance Journal first reported that Florida-based insurer Windhaven Insurance had alerted its agents and employees in Florida that it was winding down the insurance operations of its entities, including Windhaven National Insurance Co., software company ClutchAnalytics and managing general agent The Hearth Group.

“Having considered the plaintiff’s verified petition, the evidence presented and the arguments of counsel, the court finds that the application be granted and enters this order,” the court document states.

The court cited several findings as cause for the liquidation order including: WNIC does not have admitted assets at least equal to all its liabilities together with the minimum surplus of $5 million required to be maintained; it does not have liquid assets to meet its next 90 days current obligations; and the continuation of WNIC’s business would not be in the best interest of its policyholders, creditors or to the public.

As liquidator, the Texas Department of Insurance is entitled to take over all property of any kind, including physical and financial assets, the court order states.

Insurance Journal reported last month that TDI had asked the court for Windhaven National Insurance Co. to be placed into receivership. A TDI spokesperson said then that the department was waiting on a hearing to be scheduled on the matter.

Windhaven National Insurance Co. was licensed in Texas in 2012 to write aircraft physical damage, auto physical damage, automobile liability, inland marine and other coverages, according to the Texas Department of Insurance website. Information about how many policies are currently in force was unavailable at press time. Windhaven National also offers auto policies in Florida through its Florida Windward program and currently has 30,600 policies in the state, as of Dec. 31, 2019, the Florida Office of Insurance Regulation (OIR) told Insurance Journal.

WNIC’s parent company announced it was ceasing all new and renewal business for its Windhaven companies in a message sent to agents on Feb. 26 that was obtained by Insurance Journal. The Windhaven companies include Windhaven Insurance Holdings Corp., Windhaven Underwriters, Windhaven Select, Windhaven Claims Management, Windhaven National Insurance Co. and The Hearth Insurance Group. The Hearth Insurance Group is a Florida-based MGA offering homeowners coverage on State National Insurance Co. paper. Windhaven’s software technology company, ClutchAnalytics, is domiciled in Texas and builds digital insurance distribution systems.

Employees at the Windhaven Claims Management’s facility in Miami were also told by the company they would be laid off Friday, Feb. 28, 2020. A message to employees said the company had been unsuccessful in its efforts to seek financing to enable the company to continue operation, and as a result its lender had started a process to sell certain assets of the company at a public auction on March 4, 2020. No further information on the auction or the handling of claims has been provided.

Tampa, Fla.-based The Hearth Insurance Group has offered homeowners insurance through State National Insurance Co., which did not respond to a request for comment, in Florida since 1990 and also offers coverage in Texas. According to its website, The Hearth Group writes more than $500 million in premium in the state of Florida and has 700 employees.

In a statement to Insurance Journal, State National Executive Vice President David Cleff said, “We want to assure all policyholders and agents that their insurance coverage and policies written on State National’s AM Best rated A insurance company via The Hearth, an independent Florida based managing agent, remain valid and that the strong security supporting their policies is unaffected. We are actively working on a solution to those services that had been provided by The Hearth Insurance Group via our network and affiliated partners to ensure that the obligations and servicing for all policyholders and agents continue to be fulfilled.”

Cleff further noted additional information would be provided soon.

Florida officials placed Windhaven’s non-standard auto insurer, Windhaven Insurance Co. (WIC), into receivership and began to liquidate that company back in December of 2019.

WIC, which launched in 2005, had about 73,000 active auto policies in Florida as of Nov. 30, 2019. In December, the Florida Department of Financial Services placed the non-standard auto insurer into rehabilitation. Shortly after that, DFS declared the former Florida auto insurer insolvent and the company was ordered into liquidation.

Windhaven Insurance reported in a 2019 press release that, along with The Hearth, it had written close to $2 billion in home and auto insurance premiums since being established in Miami. It also said that Windhaven Insurance had provided coverage to more than 240,000 policyholders through more than 8,000 local independent agents. It had additional offices in Tampa, Fla., and Dallas.