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Ninth insurance company goes under

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Posted at 1:33 PM, Sep 26, 2022
and last updated 2022-09-26 14:33:20-04

Fednat Insurance Co., a Florida-based insurer with a presence in Louisiana, has been steered into insolvency by regulators after struggling to pay existing claims, our media partners at The Advocate are reporting. It’s the ninth company with policies in Louisiana to go under since a flurry of storms hit the state starting in the summer of 2020.

Fednat had filed a notice to withdraw from Louisiana in May, a move that allowed it to cancel its existing 13,500 policies in the state, records show. At the time, the insurer said it had enough money to pay off existing claims and related expenses, the newspaper reports.

However, Florida insurance regulators moved to shutter the company on Sept. 23, asking a judge to allow the state to take it over. The move would send any outstanding claims to the industry bailout programs in each state where the insurer operated, including Louisiana, the newspaper reports.

“I expect very few premium refunds, as those should have been paid by now, but there could be some check reissues,” John Wells, the executive director of the Louisiana Insurance Guaranty Association, the state’s bailout program for insurers, told The Advocate. “As for claims, we have been told they have about 1,500 open Louisiana claims.”

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