Olympus could not withstand a large storm and purchase more reinsurance without becoming insolvent, said the OIR.

Regulators are now satisfied with a reinsurance plan outlined by a new settlement in which Olympus has a $6 million retention for a 1-in-92 year storm and a 1-in-70 year storm.

This year the OIR is not requiring companies to carry catastrophe reinsurance for any specific probable maximum loss, such as the traditional 1-in-100 year level. The office said it is instead looking to ensure companies "can withstand a severe storm as well as a series of smaller storms," said OIR spokeswoman Brittany Benner.

The OIR is currently conducting an "annual data call" to make sure property insurers are prepared for storms this year. The office had to wait until companies purchased reinsurance at the start of June before making the data call, said Ms. Benner.

The settlement agreement reached between the OIR and Olympus also includes adjustments to commission fees paid to the company's affiliated managing general agency, Olympus MGA Corp.

The OIR said it approved an MGA agreement with 22 percent commission, not to exceed 29 percent of gross written premium, but the insurer was allegedly paying expenses averaging 34 percent.

Olympus submitted a plan, now approved by the OIR, with a 25 percent commission fee not to exceed 28 percent including underwriting expenses.

The OIR had a capital infusion for Olympus from its affiliated holding company, Gemini Financial Holdings Corp., but the settlement includes no plans for Olympus to acquire capital.

Olympus told the OIR it expects a profit in 2010, in part because of its new MGA agreement.

The OIR had estimated a $7 million loss for the company in 2010, resulting in a further reduction in surplus.

The insurer "estimates gross written premium to surplus and net written premium to surplus will both be well within the statutory requirements during 2010," the settlement reads.