Michigan-based North Pointe Holdings Corp. announced its current estimates of hurricane- related losses and loss adjustment expenses for the third quarter of 2005.
North Pointe estimates its pre-tax losses and loss adjustment expenses for Hurricanes Dennis, Katrina and Rita will be in the range of $5.4 million to $5.9 million, net of reinsurance, or $3.6 million to $3.9 million after-tax, which will be recorded in the third quarter of 2005.
North Pointe also reported that it has received a $2.1 million assessment ($1.4 million after-tax) related to 2004 hurricane activity by the state of Florida’s Citizens Property Insurance Corporation (“Citizens”), which expense will be recorded in the third quarter of 2005.
Citizens is a special purpose insurer managed by the state of Florida that is principally funded by premiums from its policyholders and, to the extent necessary, assessments on insurance companies that underwrite policies in the state of Florida. Florida law authorizes insurers who are subject to such assessment to impose special surcharges on policyholders to recoup the full amount of the assessment. As a result, North Pointe expects to recover the amount of the assessment over the next twelve to eighteen months through such surcharges.
Based on the foregoing expenses and its results of operations, North Pointe expects to report break-even to slightly positive earnings for the third quarter ended Sept. 30, 2005.
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