Ohio Revokes Licenses of Two Insurers

The Ohio Department of Insurance has revoked the licenses of two out-of-state insurers, New York City-based Atlantic Mutual Insurance Co. and Imperial Casualty and Indemnity Co. of Oklahoma City.

The action taken against Imperial Casualty by Mary Jo Hudson, director of the state insurance department, stems from the company being placed into receivership in Oklahoma on March 18.

A judge granted Oklahoma Insurance Commissioner Kim Holland's request to take over the workers' compensation insurer, which she claimed was insolvent and involved in potentially deceptive financial transactions (BestWire, March 24, 2010).

Imperial Casualty entered into a loss portfolio transfer and 100% quota share reinsurance contract that transferred the majority of its business to its parent company, Park Avenue Property and Casualty, according to records on file in Oklahoma District Court.The LPT was not triggered, and the primary liability remained with Imperial, which Holland said rendered the company insolvent, according to the filing.

Under Ohio law, the state's insurance director can revoke the license of a company that is subject to liquidation or dissolution proceedings in another state.

"Commissioner Holland has control as a designated receiver," said Marc Young, a spokesman for Holland's office. "Our first obligation is to protect the existing policyholders and resolve the receivership as quickly as we can."

Attempts to reach Imperial Casualty for comment were not immediately successful.

PAPC, formerly Providence Property & Casualty Insurance Co., entered receivership November 2009, according to BestLink, which provides online access to A.M. Best's Global Insurance & Banking Database. All in-force policies were subsequently cancelled by Dec. 18, 2009, with protection for policyholders provided by the state guaranty associations in the 28 states in which PAPC was licensed to do business (BestWire, March 24, 2010).

The other company, Atlantic Mutual, reported negative capital and surplus of $25.1 million as of Dec. 31, 2009. Ohio state law requires commercial lines carriers to maintain a minimum capital and surplus of $5 million.

Atlantic Mutual has not written new business in Ohio since November 2007, and there are no current policyholders in the state, according to statement issued by Hudson's office. Hudson suspended Atlantic Mutual's license on March 15, and revoked the license effective May 3.

Arkansas Insurance Commissioner Jay Bradford had already suspended Atlantic Mutual's license for the negative 2009 surplus (BestWire, March 15, 2010).

Atlantic Mutual could not be immediately reached for comment.

Atlantic Mutual is not rated by A.M. Best. Imperial Casualty and Indemnity currently has a Best's Financial Strength Rating of F (In Liquidation).

(By Al Slavin, senior associate editor, BestWeek)