United P&C plans to withdraw from 4 states
The company received notice from Demotech of its intention to withdraw the insurer’s financial stability rating.
United Property & Casualty Insurance Co. (UPC), the personal lines subsidiary of United Insurance Holdings Corp., has filed plans to withdraw from Florida, Louisiana and Texas markets, and expects to do the same in New York. The plans call for nonrenewal of personal line policies in those four states.
The plans will place UPC in an “orderly run-off” contingent on the company remaining in compliance with rules and regulations in each state.
“Due to significant uncertainty around the future availability of reinsurance for our personal lines business, I believe placing United P&C into an orderly run-off is prudent and necessary to protect the company and its policyholders,” Dan Peed, Chairman & CEO of UPC Insurance, said in a release.
The company’s commercial lines continue to perform well and will serve as a “stable platform to build new engines of growth and profitability,” according to Peed. He added UPC is pursuing strategic alternatives and opportunities ”to leverage our people, technology and other capabilities.”
Regulators in Louisiana have already approved the plan, while approval is still pending in Florida and Texas.
UPC reported it had received word from Demotech that the rating agency had intended to withdraw the insurer’s financial stability rating.
Earlier in August, UPC became the first company to participate in the Florida Office of Insurance Regulations’ temporary reinsurance arrangement through Citizens Property Insurance Corp. The program was developed to mitigate disruptions from potential Demotech rating downgrades, which could impact insurance companies that fall short of rating requirements set by Fannie Mae and Freddie Mac.
On Aug. 16, 2022, the Louisiana Department of Insurance alerted policyholders of the pending rating downgrade. At the time, the state insurance department granted a 60-day extension to help insurance agents place UPC and Weston Property & Casualty Insurance Co. with Louisiana Citizens, the state’s insurer of last resort.
“I urge Louisiana policyholders who have residential insurance policies with Weston to contact an agent and begin shopping for a new policy in the private market or, if necessary, with Citizens,” said Louisiana Insurance Commissioner Jim Donelon said in a release. “UPC policyholders should open any correspondence from their mortgage company in case it contains a notice of force-placed coverage, in which case they should contact their agent immediately.”
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