The Florida Office of Insurance Regulation (OIR) has approved the run-off plan for the UPC Insurance owned carrier United Property & Casualty Insurance Company (United P&C), with the insurer now placed under administrative supervision.
Back in August United Insurance Holdings Corp. (UPC Insurance) announced a plan for its personal lines subsidiary United Property & Casualty Insurance Company (United P&C) to withdraw from operations and go into an orderly run-off.
Availability of reinsurance capital was cited as a ket driver for the decision, reflecting the challenges some carriers had in 2022 to secure reinsurance at any price in the still-hardening market.
The company said that United Property & Casualty Insurance Company (United P&C) has filed plans of withdrawal in Florida, Louisiana and Texas, while intending to file a plan of withdrawal in New York as well.
Now, the Florida OIR has placed United P&C under administrative supervision and approved a run-off plan.
The goal is to achieve a solvent running-off of the carriers’ liabilities and a winding down of its affairs in an orderly fashion.
However, the run-off plan was not approved without some changes, as the regulator now requires 120 days notice for cancellation of policies, double the 60 days that had been proposed by UPC.
United P&C had been downgraded, and yesterday’s approval of the temporary stabilization arrangement through Florida Citizens is not going to be enough to support the carrier given that arrangement expires before the next hurricane season.
The goal will be to non-renew all policies before next June 1st, so the carrier doesn’t require any more reinsurance.
There were 42,785 policies in force in Florida on November 1st and some 70,287 would still have been in force on May 31st 2023, but the plan will be to cancel those in advance of that date.
The regulator explained that, due to the fact United P&C no longer has a rating adequate for the secondary mortgage market and has not been able to procure any reinsurance for the 2023 hurricane season, all policies must be cancelled by May 31st to protect policyholders.
The plan also features a Reinsurance Allocation Agreement, with an allocation methodology for reinsurance recoveries between United P&C and its affiliate, American Coastal Insurance Company, for limits shared across the core catastrophe reinsurance program, a further protection for policyholders.