Florida insurance regulators have taken over supervision of a struggling South Florida based property insurer.
Regulators confirmed Tuesday that Coconut Grove-based Magnolia Insurance is financially troubled and that its president, H. James Irl, has resigned.
"The office deemed it to be in the best interests of Magnolia's policyholders and the state of Florida to assume supervision of the company's operation for the near future," Insurance Commissioner Kevin McCarty said. "The company agreed to the conditions of the administrative supervision."
Magnolia officials did not return a message left for them to comment on the Office of Insurance Regulation taking over its management responsibilities at least into mid-April.
Demotech, Inc. suspended Magnolia's exceptional financial rating earlier this month after the company failed to file a financial statement due Nov. 15 or inform the rating service if it had met the business goals required to maintain its previous high rating.
Magnolia began doing business in April 2008 with $20 million in capital and 60,000 policies shifted from state-supported Citizens Insurance, which carries policies on nearly 1.1 million Floridians.
It's likely many Magnolia customers are headed back to Citizens Insurance.
"Citizens is more than ready to assist with homeowners having difficulty finding coverage in the private market," company spokesman John Kuczwanski said Tuesday.
Kuczwanski urged insurance shoppers to check the Florida Market Assistance Plan, a free online referral service where they can enter specifics about their property and locate agents to help them get a policy in the private market.
Sam Miller, vice president of the Florida Insurance Council, has frequently said a catastrophic hurricane or series of devastating storms would likely bankrupt a significant number of the newer, less-capitalized companies.
Magnolia is the fourth startup property insurer and third from South Florida to run afoul of state regulators in recent months. Earlier casualties were American Keystone Insurance Co., Coral Insurance Co., and First Commercial Insurance Co.
Miami-based First Commercial was liquidated in August and Hollywood-based Coral went into receivership in April. Keystone, a Ponte Vedra Beach based company, went into receivership in October.