A Florida-based insurance company looks to be headed out of business, according to a consent order from the state’s insurance regulators.
Sawgrass Mutual Insurance, a property and casualty insurer, was founded in 2007 and had more than 20,000 policies across the state of Florida. However, there have been questions about the company’s financial condition. The consent order came a day after ratings agency Demotech
downgraded Sawgrass’s financial-stability rating from A (“exceptional”) to L (“licensed”).
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According to a report by the Sun-Sentinel, Sawgrass initially submitted a year-end financial statement that reported a surplus of more than $20 million. But on August 16, the company submitted a second-quarter financial statement that Demotech said reflected a “present surplus and other financial metrics at levels that no longer support the (A rating).” Demotech said that Sawgrass also missed a deadline for submitting an independent financial audit.
Jay Neal, president of the Florida Association for Insurance Reform, said the downgrade effectively killed the company.
“At a certain point, you’re only as good as your rating,” Neal told the Sun-Sentinel.
The consent order, signed by Florida Insurance Commissioner David Altmaier, said that Sawgrass would be placed in “administrative supervision” while implementing “an orderly wind-down of the company’s operations.”
The wind-down will include “the orderly transition of policies from Sawgrass to another insurer,” according to a statement from the state’s Office of Insurance Regulation.
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