UPDATE April 6, 2023: This article has been edited to clarify that the insurer in question is United Property & Casualty Insurance Company and not another insurer sometimes known by the acronym "UPC."
UPDATE March 28, 2023: On March 7, 2023, the Florida Department of Financial Services asked the New York DFS to commence "ancillary receivership" proceedings with regard to UPC. An ancillary receiver handles the liquidation of a business headquarterd in another state, where that state has started liquidication. The NYS DFS applied to a Manhattan court on March 22 for an order appointing it as ancillary receiver. The court has scheduled a hearing for April 25, at which time the NYS DFS request will likely be granted. Once NYS DFS has been appointed ancillary receiver, it wil lhave the legal ability to begin liquidating UPC's New York business.
UPDATE March 22, 2023: We have been advised that Interboro Insurance Co., an affiliate of UPC's, is attempthing to rewrite as many of the New York UPC policies as it can. This may be a viable market for some or all of your UPC clients.
UPDATE March 1, 2023: On February 27, 2023, a Florida circuit court granted the Florida Department of Financial Services' request to be appointed as receiver of the estate of UPC Insurance. The court's order gives the FL DFS authority to liquidate the carrier's assets. All UPC policies will be cancelled effective March 29, 2023. All claims for coverage must be presented to the department no later than February 27, 2024. Visit the department's website for the liquidation for more details.
Florida-based property-casualty insurer United Property & Casualty Insurance Company (UPC) is insolvent and is to be liquidated, according to a consent order made public on Feb. 17. If you have clients who own UPC policies, we urge you to contact them as soon as possible to inform them of this development and discuss replacing coverage.
The insurer, which as of last summer had 151,325 policies in force in six states other than Florida (including New York,) was under the supervision of the Florida Office of Insurance Regulation pursuant to a runoff plan agreed to by the insurer and the OIR last December. The plan was for the insurer to remain solvent while making an orderly exit from its markets.
However, the OIR informed the Florida Department of Financial services on Feb. 16 that UPC is insolvent According to an affidavit signed by Virgina A. Christy, the OIR's director of property & casualty financial oversight, the company's policyholder surplus at the end of 2022 was negative $217,603,217. This means that if the company sold all its assets on Dec. 31, 2022, almost $218 million in losses would remain unpaid.
The company signed a consent order on Feb. 8 agreeing to the appointment of the DFS as receiver "for purposes of Rehabilitation or Liquidation ..." Once a state court formally appoints DFS as the receiver and approves a liquidation plan, the department will begin the process.
Under a prior consent order, UPC was under court orders to cancel all policies by May 31, 2023. It is unclear whether the Florida DFS will seek to have that date moved up.
According to a report in Insurance Journal, the Florida Insurance Guaranty Association will handle as many as 20,000 claims resulting from the liquidation.
If you have clients insured by UPC, you may want to contact them to inform them of the insolvency and discuss what their next steps might be. Big I New York members have free access to our ebook The Big I NY Big Book of Form Letters & Other E&O Tools. Among the form letters included in the book is one titled "Letter To Customer Advising that Insurer's Financial Rating Has Been Downgraded." You may find this form letter useful for your communications with clients. You can download a copy of the book in PDF format from the Big I New York Portal.