Florida loses another property insurer as Orlando-based company deemed insolvent
The Florida Department of Financial Services will liquidate the Orlando-based St. Johns Insurance Co. and is seeking court approval of a “transition plan” that would move policies to Slide Insurance Co.
In another blow to the state’s troubled insurance market, a Leon County circuit judge Friday appointed the Florida Department of Financial Services as a receiver for a property-insurance company that records described as “insolvent.”
The department will liquidate the Orlando-based St. Johns Insurance Co. The department’s website said it was seeking court approval of a “transition plan” that would move policies to Slide Insurance Co., effective Tuesday.
The order Friday by Circuit Judge Angela Dempsey came two days after Insurance Commissioner David Altmaier sent a letter to state Chief Financial Officer Jimmy Patronis that said the company had agreed to receivership and acknowledged that “it is insolvent.”
“The referral of this company to the (Department of Financial Services’) Division of Rehabilitation and Liquidation is the first step in a comprehensive plan to provide a seamless transition for all St. Johns Insurance Company policyholders,” Altmaier wrote.
The letter, which was attached to the petition for receivership filed in court, did not detail how many policies are involved. The information on the Department of Financial Services’ website said the court order triggered a process in which the Florida Insurance Guaranty Association and the South Carolina Property and Casualty Insurance Guaranty Association will cover existing claims.
St. Johns Insurance sold homeowners policies in Florida and South Carolina, according to its website. The Florida Insurance Guaranty Association is a longstanding agency created to pay claims of insolvent insurers.
Dempsey’s order came less than two weeks after St. Johns Insurance notified agents that it was halting writing new business.
The Feb. 15 notice said the company had used “many strategies to manage our risks,” such as not renewing policies, using new rules for eligibility for business and making rate changes. But it said, “At this time, St. Johns Insurance has made the difficult decision to suspend all new business writing statewide as of February 15, 2022 … This closure applies to all lines of business.”
The receivership is another sign of problems in Florida’s property-insurance market, where insurers are shedding policies and seeking large rate increases because of financial troubles.
The problems have led to a surge in policies at the state-backed Citizens Property Insurance Corp., which was created as an insurer of last resort but has become a dominant player in the market. As of Jan. 31, Citizens had 776,790 policies, about a 75 percent increase over the past two years.
Lawmakers are considering proposals to try to bolster the market and slow the flow of policies to Citizens, with the Senate Appropriations Committee slated Monday to take up a bill (SB 1728) filed by Banking and Insurance Chairman Jim Boyd, R-Bradenton.
During a meeting this month, Boyd, an insurance agent, likened the property-insurance system to a “catastrophe.”