United Insurance Holdings Corp. (UPC Insurance) has announced plans for its subsidiary United Property & Casualty Insurance Company (United P&C) to go out of business and go into an organized meeting.
Availability of reinsurance capital is cited as one of the main drivers here, reflecting the difficulties some carriers have been facing to secure insurance at any cost in a drying market.
The company said United Property & Casualty Insurance Company (United P&C) has filed evacuation plans for Florida, Louisiana and Texas, while it plans to resubmit an evacuation plan for New York.
The plans include no-reinstatement laws in these states and legal approval has already been received in Louisiana but is pending in Florida and Texas.
This will make United P&C a better operator, the company said, as long as it complies with the laws and regulations of each state.
In addition, it noted that it had been informed by Demotech of the regulator’s intention to withdraw United P&C’s Financial Stability Rating.
Demotech downgraded United Property & Casualty Insurance Company two notches to “M” recently, putting the carrier at risk.
But, as we said recently, United (UPC) was eligible for support from the recently announced Florida Citizens, which will see the rest of the market guarantee that is on top of the FIGA caps for those who are insolvent.
It seems that was not enough for the carrier to remain a reliable line-writing business and now it is being shut down and discontinued.
Chairman and CEO Dan Peed explained, “Given the uncertainty surrounding the availability of insurance for our company, I believe that putting United P&C into a regulatory framework is prudent and appropriate to protect the Company and its policyholders.
“The Company is committed to capitalizing on opportunities to develop our people, technology, and other capabilities. Our commercial business continues to perform well and provides the Company with a sustainable platform to create new engines of growth and profitability.”
The company had just completed the consolidation of its Florida business and other restructuring plans, apparently unsuccessful in its attempt to continue the carrier’s operations.
KBRA has announced that it has downgraded United Property & Casualty Insurance Company (UPCIC) to BBB- from A-.
It also affirmed the issuer and credit ratings of United Insurance Holdings Corporation (UIHC) of BBB- and IFSRs of American Coastal Insurance Company (ACIC) and Interboro Insurance Company (IIC) of A-, but with all ratings now on Watch Downgrade.
KBRA said the downgrade and placement on Watch reflects the decision to put the company at risk and the significant decline in UPCIC’s balance sheet as of June 30, 2022.
The agency also pointed to underwriting performance in recent years and the continued sharp decline in catastrophic losses, which has improved underwriting and reduced risk exposure.
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