Company withdraws scores for two property insurers, downgrades third

In one other signal of issues in Florida’s property-insurance market, a financial-ratings company has withdrawn scores for 2 insurance coverage corporations and downgraded one other firm.

The Demotech company on Monday withdrew financial-stability scores for Weston Property & Casualty Insurance coverage Co. and FedNat Insurance coverage Co., in line with Demotech’s web site.

It additionally modified United Property & Casualty Insurance coverage Co.’s ranking from “A Distinctive” to “M Average.”

The Insurance coverage Journal reported the scores modifications Tuesday morning.

Indicators had emerged earlier of monetary issues at FedNat and United Property & Casualty.

FedNat reached an settlement in Might with the state Workplace of Insurance coverage Regulation that referred to as for it to cancel insurance policies and shift different insurance policies to an affiliated firm, Monarch Nationwide Insurance coverage Co.

Monarch has an “A Distinctive” ranking from Demotech.

Additionally, United Property & Casualty mentioned final month that its board had began a “overview of its strategic and capital elevating alternate options” that would embody strikes reminiscent of a sale.

Monetary scores are essential, partially, as a result of mortgage-industry giants Fannie Mae and Freddie Mac require houses to be insured by financially sound corporations.

For insurers rated by Demotech, Fannie Mae and Freddie Mac require “A” scores or higher.

Florida regulators scrambled in July after Demotech indicated it might downgrade about 17 insurers to a stage that might not meet Fannie Mae and Freddie Mac requirements. Final month, Demotech CEO Joe Petrelli revealed that 27 insurers — not 17 — had acquired notices of looming downgrades.

The Workplace of Insurance coverage Regulation on July 27 introduced a stopgap plan to attempt to ensure householders can keep protection.

The plan concerned the state’s Residents Property Insurance coverage Corp. appearing as a monetary backstop.

Residents would tackle a reinsurance function to assist be certain that claims receives a commission if personal insurers go bancrupt.

Demotech final month didn’t publicly establish the businesses that it was taking a look at downgrading, so it was not instantly clear Tuesday whether or not Weston Property & Casualty, FedNat and United Property & Casualty had been among the many ones that Demotech was taking a look at.

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