A Charlotte-based investor has agreed to put $15 million into Monarch National Insurance Co., a subsidiary of FedNat Holding Co., a Florida property insurer group now going through restructuring after heavy losses in the last 12 months.
Hale Partnership Capital Management, described as a hedge fund and investment firm, will become the majority owner of Monarch National, which will assume some 83,000 of FedNat’s Florida policies starting Wednesday, June 1. FedNat will also contribute an undisclosed amount of capital to Monarch, “further enhancing” Monarch’s surplus position, reads a statement from FedNat.
The restructuring of struggling FedNat was announced in a consent order from the Florida Office of Insurance Regulation on May 13, but the investor and the size of the infusion were not revealed. The order explained that while Monarch was taking on some of the FedNat Insurance homeowner policies, about 68,000 other policies held by FedNat and another subsidiary, Maison Insurance, will be canceled early – by the end of June.
Monarch will cancel some 8,400 policies before assuming the large part of FedNat’s HO book.
“Upon cancellation of the FNIC Florida policies, all unearned premiums will be remitted to policyholders in accordance with applicable law,” reads the press release from FedNat. “FNIC currently has adequate assets on hand to refund all required unearned premiums.”
FedNat officials have said the company was hit hard by hurricane losses in Louisiana and by the winter storm that gripped Texas last year. The publicly traded FedNat Holding Co. reported more than $103 million in net losses in 2021 and $31 million in losses for the first quarter of this year.
Hale Partnership Capital Management has been led since 2010 by Steven Hale, formerly of Babson Capital Management. In recent years, Hale Partnership has invested heavily in a range of companies, according to news reports and information from the investment firm.
In 2017, Hale was named chairman of the board for Stanley Furniture Inc. In 2019, Hale put $24 million into HC Government Realty Trust, a company previously based in Florida that buys properties leased by government agencies.
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