South Carolina hearing on Atlantic Coast Life policy ban postponed

A hearing to decide whether Atlantic Coast Life Insurance will continue offering new policies was postponed until Wednesday, a South Carolina official said.

The hearing was to take place Friday.

Atlantic Coast is owned by Advantage Capital Partners, known as A-Cap. Claiming the insurer's underlying financial condition is poor, South Carolina regulators banned Atlantic Coast from writing new life policies after Dec. 31, 2024. The South Carolina Department of Insurance order also covers Southern Atlantic Re, another A-Cap insurer.

Chief Administrative Law Judge Ralph King Anderson III granted a stay from the order Dec. 30.

Meanwhile, A-Cap suspended new business at Sentinel Security Life Insurance Co. Sentinel Security is domiciled in Utah, which also banned the insurer and two associated reinsurance companies, Haymarket Insurance Co. and Jazz Reinsurance Co., from writing new business after Dec. 31.

A judge is scheduled to hear A-Cap's appeal of the Utah order in March.

In granting the stay, Anderson wrote that permitting the status quo to continue would "prevent irreparable harm" to the A-Cap insurers. During a conference call with all parties, Anderson was not convinced that the insurers are financially unsound.

"The Department argues ACL has shifted its obligations to 777 Re, Ltd., a Bermuda-based reinsurance company who has since lost its license and ceased operations," Anderson writes in granting the stay. "In other words, the Department believes Petitioners are wholly unsound because one particular reinsurer that ACL is using is not financially strong. The insolvency of one reinsurer is simply not ample evidence to establish that Petitioners are unsound."

An A-Cap representative told Anderson that Atlantic Coast continues "to pay all their debts and that its pre-need insurance business has a positive cash flow," the order reads.

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com. Follow him on Twitter @INNJohnH.