A property insurance company with an estimated 10,700 policyholders in Louisiana is being liquidated after being declared insolvent by Florida regulators, putting more financial pressures on the state’s insurance industry at the height of hurricane season.
Weston Property & Casualty Insurance Co., which is based in Miami, was placed in receivership this week by the Second Judicial Circuit Court in Florida’s Leon County. The Louisiana Insurance Guaranty Association (LIGA), a nonprofit entity that acts as a safety net for consumers whose insurers become insolvent, reports that five other insurers serving the state have collapsed in recent months.
Louisiana Insurance Commissioner Jim Donelon has indicated that Weston’s policies would be canceled as of Sept. 7.
“The most important thing Weston policyholders can do is contact one or more insurance agents and begin shopping for coverage immediately,” Donelon said in a statement emailed to the Louisiana Record. “Louisiana Citizens, which is the state’s insurer of last resort, has the ability to take on the risk and provide coverage for Weston’s policyholders who are unable to find a policy on the private market.”
Citizens will offer Weston policyholders and their agents 60 days after cancellation to arrange a policy with Citizens while maintaining homeowners insurance coverage, he said.
“It’s also important to remind Citizens’ policyholders that they can continue shopping after binding a policy with Citizens and, if they are able to find a new insurer, they will receive a refund from Citizens for any unearned premium,” Donelon said.
Weston has informed policyholders that the cancellation of policies in September will not cancel outstanding claims that have been filed against the company for property insurance. The obligation to pay such claims will be transferred to LIGA, according to a company announcement.
The Second Judicial Circuit Court in Florida issued its order on Weston insolvency proceedings on Monday.
“The court … finds that it is in the best interests of respondent, its policyholders, creditors, stockholders and the public that the (Florida Department of Financial Services) be appointed receiver of respondent for the purposes of liquidation,” the court order states.