If your clients were unlucky enough to be insured by First Keystone Risk Retention Group you must notify them of the group’s liquidation, which was ordered on Oct. 21 by a South Carolina judge—even if they’ve already been contacted by the liquidator.
As required by South Carolina law, where First Keystone is organized and licensed, agents must notify policyholders of the liquidation within 15 days of the order of liquidation, unless Michael J. FitzGibbons, of FitzGibbons and Company, Inc., Scottsdale, Ariz., the liquidator, waived the requirement.
The order also notes that notice by a general agent satisfies the notice requirement for any agents under contract to the general agent.
Any policies still in effect when the order was issued continued in force for 30 days from the date of the order, that is, until Nov. 20, 2014. Agents should confirm that they have sent the appropriate notices to policyholders; the notices must include the name and address of First Keystone, the name and address of the agent, identification of the policy, and the date coverage terminated. Agents must also file a report of compliance with the liquidator. Failure to comply with the notice requirements may subject the agent to a penalty of $1,000 for each policyholder that should have been notified but wasn’t.
All agents, brokers and premium finance companies responsible for the payment of any premiums must pay the liquidator any unearned premium and all unearned commissions held on Oct. 21, 2014, the date of insolvency.
FitzGibbon also is implementing a claims process and adopting a proof of claim notice form. The last date to file a time proof of claim is Feb. 28, 2015.
Although failures are relatively rare, according to FitzGibbon, agents and brokers have to monitor the companies they do business with, paying careful attention to as much financial information as is available. The last two failures FitzGibbon was part of involved commercial auto, livery, and general liability, as is the case with First Keystone. If your clients are taxi and limousine companies, be sure to review their carriers at least annually.
For more information on the liquidation, visit First Keystone’s website.
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Rosalie Donlon
Rosalie Donlon is the editor in chief of ALM's insurance and tax publications, including NU Property & Casualty magazine and NU PropertyCasualty360.com. You can contact her at [email protected].
