Florida, Georgia Insurer First Commercial to Be Liquidated

Miami-based First Commercial Insurance Co. and its subsidiary have been declared insolvent and ordered liquidated about six weeks after being placed under state control.

All policies written by FCIC and its subsidiary, First Commercial Transportation and Property Insurance Co., are being cancelled.

Policyholders with claims will be protected by the state’s backup insurance guaranty fund that is supported by private insurance companies.

FCIC wrote workers’ compensation, commercial auto, general liability and commercial multi-peril insurance policies in Florida and Georgia. FCTPIC wrote commercial auto insurance coverage in Florida. Together, the companies have approximately 18,000 in-force policies.

The Florida Department of Financial Services has acted as the receiver of both FCIC and FCTPIC since July 10, 2009, when the companies consented to be placed in receivership for the purpose of rehabilitation.

Regulators said that the companies wrote more than 2,000 automobile service warranty contracts they never reported. Those are cancelled immediately under the liquidation order issued by Leon County Circuit Court Judge Charles A. Francis. The department said it is investigating this matter further.

All other policies are cancelled effective 12:01 a.m. on Sept. 23, 2009, unless otherwise terminated prior to that date. This includes approximately 550 commercial auto insurance coverage or “for hire” insurance policies written by FCTPIC and approximately 100 in-force policies written by FCIC for Georgia policyholders.

According to its financial statements dated at the end of the first quarter of this year, the insurer wrote more than $50 million in business and lost close to $10 million in 2008.

Florida Chief Financial Officer Alex Sink advised all Floridians who have property insurance with FCIC should immediately contact their insurance agent to secure coverage with a new company. All questions relating to current FCIC and FCTPIC policy and coverage issues should be directed to FCIC/FCTPIC’s customer service department at (866) 570-2184 until Sept. 23, 2009.

“Given that this liquidation order comes in the middle of hurricane season, it is imperative that consumers who have property insurance with First Commercial immediately contact their agents to secure new coverage,” said Sink. “Our department will continue working diligently to help make the transition as smooth as possible for Floridians.”

The department said a notice is being sent to agents and brokers.

More information is available on the CFO’s web site.

The department offered the following advice to policyholders based on the different types of policies issued by FCTPIC and FCIC:

For any other questions, Floridians can call the Florida Department of Financial Services at (850) 413-3089 or toll-free at 1-877-My-FL-CFO or visit www.MyFloridaCFO.com.