Another Florida property insurer, Southern Fidelity will be liquidated after a June 3, 2022 consent order with the Insurance Department when the company failed to provide an adequate plan for the orderly wind down of their business by the June 8th deadline, and was declared to be in hazardous condition. The company consented to an order of liquidation on June 9th. Southern Fidelity was unable to secure required reinsurance by June 1, 2023 in order to continue as a going concern. This is the fourth Florida insurance company to be liquidated in 2022. The Florida Insurance Guaranty Association (FIGA) is triggered to provide protection for the Florida insureds up to the statutory limitations of coverage.

While the reforms passed by the Florida Legislature in May provide some relief to insureds and insurers they are too little too late for some insurance companies, including Southern Fidelity. The company was ineligible to participate in the newly created RAP program established to provide $2 billion in reinsurance to Florida insurers due to its hazardous financial condition.

Southern Fidelity had previously announced on May 26th that they were ceasing the writing of new business in all lines and renewals pending the outcome of their attempts to secure the necessary reinsurance for next year in the marketplace, which ultimately proved unsuccessful. The company had its rating withdrawn on June 3, 2022 by Demotech, which has been a precursor to regulatory action by the Florida Department.