The Florida Insurance Guaranty Association must pay United Property & Casualty’s debts, which it estimates will be somewhere around $450M to $550M.
TALLAHASSEE, Fla. – A non-profit agency that handles claims of insolvent insurers could face $450 million to $550 million in costs from the insolvency of United Property & Casualty Insurance Co., the agency’s executive director said Tuesday.
The state-created Florida Insurance Guaranty Association expects to take on thousands of claims after a Leon County circuit judge Monday appointed the Florida Department of Financial Services as a receiver for United Property & Casualty.
FIGA Executive Director Corey Neal offered the $450 million to $550 million estimate during an agency board meeting.
FIGA also has been handling claims for other insurers that have gone insolvent in recent years amid major financial problems in the state’s property-insurance industry. It uses money collected through “assessments” on insurance policies across the state to cover claims costs.
After the United Property & Casualty insolvency, Neal said FIGA is working on a plan to provide “interim” financing and then would take the unusual step of issuing bonds to cover longer-term claims costs. Such bonds would be financed through assessments.
The FIGA board is expected to make decisions about financing issues in late March.
At the same time, the state-backed Citizens Property Insurance Corp. added more than 6,000 customers last week, as it approaches 1.2 million policies.
Citizens had 1,189,105 policies as of Friday, up from 1,182,904 a week earlier and 1,177,027 two weeks earlier, according to data posted Tuesday on its website.
Citizens, which was created as an insurer of last resort, has seen massive growth during the past two years as private insurers have dropped customers and raised rates because of financial problems.
By comparison, Citizens had 552,340 policies on Feb. 28, 2021, and 792,616 policies on Feb. 28, 2022.
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