Florida Select, formed in 1996, is one of the 10-largest property insurers in Florida.

Leon County Circuit Court Judge Thomas Bateman, in addition to ordering the insurer into rehabilitation as a result of the June 30 reinsurance expiration, also appointed Mr. Gallagher's Department of Financial Services as receiver for the company.

As receiver, the department will administer the insurer's operations and assets, and assist the carrier to gain financial strength to continue doing business.

“Our first priority is to the policyholders, and making sure they have coverage during the hurricane season,” said Mr. Gallagher.

The court action, he said, “will protect homeowners while conserving the company's assets, with the goal of helping it regain enough financial strength to actively compete for business.”

Mr. Gallagher said that policyholders should continue to pay premiums in order to maintain their insurance coverage.

On July 3, the Texas Department of Insurance announced that it obtained a rehabilitation order and injunction from the 126th Judicial Court in Travis County (issued June 28), placing Vesta Fire Insurance Corp., with Florida Select's parent group, into rehabilitation, along with its Texas-domiciled affiliates: Texas Select Lloyds Insurance Company; Vesta Insurance Corp.; Shelby Casualty Company; and the Shelby Insurance Company.

In Texas, the department said it sought the rehabilitation after Vesta Insurance Group–the parent company of Vesta Fire Insurance Corp.–was unable to complete capital-raising initiatives.

Texas noted that the rehab order gives the Texas commissioner and his appointed agents the ability to pursue and finalize a sale of Texas companies, adding that the rehabilitator is in active negotiations with a potential buyer that will recapitalize a number of the Vesta companies.

A remaining Vesta company–Hawaiian Insurance & Guaranty Company, Ltd.–was subject to similar action in Hawaii. According to the Insurance Division of the Department of Commerce and Consumer Affairs in Honolulu, the state's First Circuit Court granted Hawaii Insurance Commissioner J.P. Schmidt an Order of Rehabilitation on The Hawaiian Insurance & Guaranty Company, Ltd. on June 30.

As in Florida, Texas and Hawaii said, all Vesta companies in rehabilitation continue to issue new and renewal policies, pay agent commissions and pay claims.