Within days of the 25th anniversary of Hurricane Andrew, a South Florida insurer with more than 20,000 customers appears headed out of business and the search is on for another firm to take its policies, records obtained Tuesday evening by The Palm Beach Post show.
Sawgrass Mutual Insurance Co. of Sunrise told state regulators an initial “plan for the orderly wind-down of the company’s operations” is “no longer feasible” and it agreed to consider other plans for the “orderly transition” of its business, records show.
Documents signed Tuesday by Sawgrass CEO Daniel O’Neal show the company agreed that an amended consent order with Florida’s Office of Insurance Regulation should be made public.
Under an order of administrative supervision, regulators are “working with Sawgrass Mutual Insurance Co. and interested parties to develop a wind-down plan for the company, which includes the orderly transition of policies from Sawgrass to another insurer,” OIR spokeswoman Amy Bogner said. “Coverage for current Sawgrass policyholders remains in force until a plan is implemented.”
Consumers can explore options for finding other coverage at www.floir.com, officials said.
An agreement Aug. 18 for the “wind-down” was treated as confidential under state laws, records show.
Tuesday’s document states the parties agree “it is in the best interest of its policyholders and the public to make this Consent Order public.”
A big warning sign appeared Monday when ratings firm Demotech said it was changing the insurer’s rating from A to L, meaning licensed by state officials but not qualifying for a higher grade from Demotech.
Demotech said the company’s “surplus and other financial metrics” no longer supported its previous rating. Attempts to reach company officials for comment were not successful.
Founded in 2009 and based in Sunrise, Sawgrass had just over 20,000 Florida customers as of March 31, including more than 650 in Palm Beach County, state records show.
It’s the latest sign of turbulence in a market where many national insurers have pulled back and smaller, untested companies have stepped in.
On the eve of hurricane season in May, Mount Beacon Insurance Co. went out of business and about 22,000 of its policies were transferred to Florida Specialty Insurance Co.