Key Insurance Co. has been placed into receivership, and Kansas Insurance Commissioner Vicki Schmidt has filed a petition seeking the company's liquidation, according to a recent order from the Shawnee County District Court.
The court order prohibits the automobile insurer from issuing or renewing any policies. A notice on the company’s website instructs policyholders to secure alternative coverage immediately.
Key stated that premium refunds will be issued for any policies with an effective date on or after March 4. Active policies will remain in effect through the end of their respective policy terms.
According to the Nevada Department of Insurance, more than 22,000 policyholders in the state will be affected and must find replacement coverage without delay.
In a March 18 petition for liquidation, the Kansas Insurance Department reported that a review of Key’s financial records – conducted alongside external consultants – showed the company would exhaust its available cash by the end of March.
Key reported $65.3 million in liabilities and $57.9 million in admitted assets in its year-end financial filings.
An actuarial review of Key’s claim exposure as of Dec. 31, 2024, estimated net reserve liabilities in a range of $58.6 million to $71.6 million. Based on those figures, the company’s projected year-end surplus was estimated to fall between negative $7.4 million and negative $20.4 million.
Key Insurance Co. has recorded net losses over the past four years, with a $16.3 million loss in 2024. During that same period, the company's policyholder surplus declined from $13.7 million to a negative $7.4 million.
Between 2023 and 2024, the US insurance industry witnessed several companies entering receivership or liquidation due to various financial and operational challenges.
In 2023, 13 property and casualty (P&C) insurers became impaired, with 12 undergoing insolvent liquidations and one entering rehabilitation. This brought the total number of impaired P&C insurers from 2000 to 2023 to 432, including 364 insolvent liquidations and 66 rehabilitations.
In 2024, regulatory interventions decreased, with four insurers placed into rehabilitation and one into liquidation. Of these, three were life and health companies, and two were P&C insurers.
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