Florida Judge Orders First Commercial Insurance Co. Into Liquidation

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August 27, 2009 Thursday 04:05 PM EST

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Florida Judge Orders First Commercial Insurance Co. Into Liquidation

Chad Hemenway

TALLAHASSEE, Fla.

The Florida Department of Financial Services said a state circuit court judge has placed Miami-based First Commercial Insurance Co. and its subsidiary, First Commercial Transportation & Property Insurance Co., into liquidation.

The companies wrote about 18,000 policies. FCIC wrote workers' compensation, commercial auto, general liability and commercial multiperil in Florida and Georgia. Its subsidiary wrote commercial auto in Florida, the DFS said.

According to data from the National Association of Insurance Commissioners, FCIC had experienced a drop in direct premiums written each of the last five years and reported a $9.5 million loss in net income in 2008. The company's combined ratio was 125.8 last year.

The order prompted Alex Sink, Florida's chief financial officer, to strongly encourage policyholders of FCIC to immediately contact an agent for new insurance coverage. All policies are canceled as of Sept. 23.

"Given that this liquidation order comes in the middle of hurricane season, it is imperative that consumers who have property insurance with First Commercial immediately contact their agents to secure new coverage," Sink said in a statement.

The DFS was appointed receiver of both companies early in July. Sink said the state financial services department found that FCIC sold more than 2,000 auto service warranty policies that were not reflected in their books, records and financial statements. The DFS continues to investigate the matter, she said, and all such policies were canceled as of Aug. 24.

(By Chad Hemenway, associate editor, BestWeek: [email protected])

August 28, 2009