Florida regulators have initiated the process to place United Property & Casualty Insurance Company (UPC) into receivership.
According to documents from Florida’s Office of Insurance Regulation (OIR), the state’s interim Insurance Commissioner Michael Yaworksy sent a letter to Chief Financial Officer Jimmy Patronis to trigger the procedure that will lead to securing court approval to place UPC into receivership. UPC had also agreed to the decision.
Last August, the St. Petersburg, FL-based UPC announced that it would exit Florida’s homeowners' insurance market. Tampa Bay Times reported that another insurer, Slide Insurance, took on 72,000 of UPC’s policies earlier this month.
A document filed with the SEC on February 06, 2023 indicated that UPC had about 135,000 policies in Florida before Slide took over a portion of them. In another SEC filing on February 10, parent company United Insurance Holdings Corporation said that UPC was expected to be placed into receivership due to insolvency.
“United was deemed insolvent on February 6, 2023, because if all of the assets of United, if made immediately available, would be insufficient to discharge all of the liabilities of United,” OIR Property & Casualty Financial Oversight director Virginia Christy said in an affidavit attached to Yaworksy’s letter.
Christy’s affidavit also noted that UPC had net underwriting losses of over $35 million each year since 2017.
While UPC was still in business last year, industry experts saw the writing on the wall when Demotech downgraded the insurer’s rating from “A” to “M” last year. Demotech eventually withdrew UPC’s rating in late August 2022 – a sign that the Insurance Information Institute took to mean that UPC would join Florida’s growing list of insolvent property insurers.
A total of six insurers were placed into receivership in 2022 due to insolvencies.
What are your thoughts about UPC being placed into receivership? And what’s next for Florida’s property market? Let us know in the comments below.