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Florida’s Office of Insurance Regulation is asking the state’s chief financial officer to initiate delinquency proceedings against an insurer underwriting workers compensation, claiming the company “is impaired or insolvent” or “is about to become insolvent,” according to a letter issued Friday.
Fort Lauderdale, Florida-based Guarantee Insurance Co. issued financial statements in June claiming $42.4 million in surplus; a later audit instead found a deficit of $236,775, according to the letter addressed to CFO Jimmy Patronis of the Florida Department of Financial Services in Tallahassee.
The letter also states the company, formerly the biggest customer of Fort Lauderdale-based Patriot National Inc., “is found by the office to be in such a condition or is using or has been subject to such methods or practices in the conduct of its business, as to render its further transaction of insurance presently or prospectively hazardous to its policyholders, creditor, stockholders, or public.”
The letter also claims the company has been a victim of fraud, stating that at least $15.7 million of the company’s cash was transferred to the company’s owner Steve Martin, who owns Patriot National, with “no documented business purpose and no discernable benefit” to the Florida insurer.
Calls for comment to Guarantee Insurance were directed to Patriot National, where press officials could not be reached for comment.
According to Guarantee Insurance’s website, the company writes workers comp insurance and is licensed in 34 states as well as the District of Columbia.
SAIF Corp. board members on Monday offered ousted CEO John Plotkin a $1.7 million settlement that would end the dispute between the insurer and the executive that began nearly three years ago.