NU Online News Service, Aug. 17, 4:01 p.m. EDT
Cotton States Mutual Insurance Company has told Florida regulators it intends to leave the property insurance market in the state.
"The cost of maintaining our business is not proportional to the amount of premiums we earn," said company spokeswoman Melinda Zehr.
According to a letter to the Florida Office of Insurance Regulation (OIR), Cotton States also cited reinsurance costs and competition as reason for its withdrawal request.
"It was not a decision we took lightly," said Ms. Zehr. "We have been in Florida a long time. We considered many alternatives."
Cotton States, headquartered in Atlanta, has been writing in Florida since the 1960s, Ms. Zehr said. The company was founded in 1941.
If approved to leave, Cotton States will stop writing new property and casualty business on Nov. 1. Also starting Nov. 1, the insurer intends to begin sending out non-renewal notices to about 33,600 of its p&c policyholders. The last non-renewal should be completed at the end of May 2012.
Cotton States has about 24,300 homeowners policies-in-force and about 17,000 private passenger automobile policies-in-force in Florida. Many of the policies are written in the Tallahassee, Fla. area. The company had more than $23 million in direct written premium in Florida as of June 30, according to the withdrawal letter.
The company plans to stay in Florida to sell life insurance. Policyholders in Georgia, Alabama and Tennessee are not affected.
Ms. Zehr said Cotton States' 23 exclusive agents have been informed of the plan. Cotton States said it will work with agents to transfer ownership and control of the book of business from Cotton States to the agents and work to allow agents to seek appointments with other insurance companies.
Cotton States Mutual Insurance Co. reported net income of $567,500 at the end of 2009 and took a net loss of about $2.3 million in 2008, according to Highline Data, which is owned by Summit Business Media, which also owns National Underwriter.
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