Weston Property & Casualty Company has now had a receiver confirmed for insolvency proceedings and the winding up of the company, and it has been claimed that the insurer’s assets are insufficient to meet its liabilities, while it does not Nor had it succeeded in renewing its reinsurance in the middle of the year.
The Florida Department of Financial Services has now been appointed receiver to liquidate the insolvent insurer, sell its assets and collect assessments.
Among the issues listed that caused the carrier’s insolvency, which was also spurred by a downgrade in Demotech’s rating, was the fact that Weston Property & Casualty Company was found to have insufficient assets to make facing its responsibilities, if they had been called.
Additionally, Weston’s failure to close his reinsurance placement was also considered a critical factor in determining his insolvency.
As we explained last week, Weston never completed its Marlin Re catastrophe bond issue.
Weston, whose majority shareholder is insurance-linked securities (ILS) investment manager Hudson Structured Capital Management (which invests as HSCM Bermuda), has had its all-important Demotech “A” rating downgraded to NR Not Rated.
The Florida Office of Insurance Regulation has deemed Weston P&C Insurance “impaired or insolvent,” but it does not appear the carrier is deemed viable enough as a going concern to qualify for the new guarantee agreement with the support of the citizens of Florida.
Weston was unable to fill the lower layers of its reinsurance tower that it needed during renewals, but the lack of assets to meet liabilities may have been an even more critical driver of its journey. towards insolvency, it seems.
With somewhere around the 20,000 policy mark in Florida, Weston’s head towards insolvency means policies will be canceled from September 7, and as a result, it is expected that additional policies will now be passed on to the residual market insurer Citizens, Weston being the fifth carrier to go. insolvent in Florida since February.
Numerous Hudson Structured and HSCM entities, including founder Michael Millette, are named as Weston affiliates in a consent order assigning the receivership which was seen by Artemis. It is unclear how much of the investment made in Weston could be recovered through the liquidation process.
All Affiliates shall cooperate with the Florida Department of Financial Services throughout the insolvency process, and all assets, property or property owned by Weston in Affiliates’ hands shall be returned to the liquidation process.
This process will involve an ongoing investigation into the causes of Weston’s insolvency and whether any misrepresentations have been filed or any laws violated.
The number of Florida citizen polices looks set to start growing faster again, with Weston’s policies set to spur his exposure growth.
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