Clearwater, Fla.-based Heritage Insurance Holdings, Inc. announced Wednesday that it reached an agreement to offer coverage for the 35,000 policies of Sunshine State Property & Casualty Insurance Company (SSIC), representing roughly $60 million in property premium.
The deal is pending approval with the applicable court.
If the deal is approved, the policies will be offered coverage by Heritage’s wholly-owned subsidiary, Heritage Property & Casualty Insurance Company.
On June 3, 2014, SSIC was placed into receivership and a court-ordered its liquidation.
Under the terms of the agreement, Heritage will have the right to offer coverage to all policies (covering homes, condos and commercial residential buildings) on or before June 27, 2014 and issue bridge coverage until the policy renews.
The policies issued by Heritage will use SSIC’s current rates and forms during the transition period.
According to Heritage, consumers may see rates decline when policies renew. The policies will be rated using SSIC’s rates or Heritage’s rates, whichever are lower.
Bruce Lucas, Heritage Chairman and CEO, promises that the transition will be “smooth and seamless” for agents and policyholders, with Heritage working “behind the scenes” and guaranteeing continuation of coverage, rates, forms, and systems. “It will be largely unperceivable by agent and policyholder.”
In a statement, Lucas said that 10 companies submitted bids to acquire SSIC’s policies. “We feel it is unconscionable to see SSIC consumers hurt by unnecessary rate increases from our peer companies,” he said.
Rich Widdicombe, Heritage’s President, said that Heritage is also paying a $100 deductible required by the Florida Insurance Guaranty Association on behalf of customers, and Mel Russell, Chief Underwriting Officer, said that Heritage is agreeing to pay the unearned agent commissions that would agents would otherwise have to repay under Florida law.
Source: Heritage Insurance Holdings