A non-profit agency that handles claims of insolvent insurers could face $450 million to $550 million in costs from the insolvency of United Property & Casualty Insurance Co., the agency’s executive director said Tuesday.
The state-created Florida Insurance Guaranty Association, or FIGA, expects to take on thousands of claims after a Leon County circuit judge Monday appointed the Florida Department of Financial Services as a receiver for United Property & Casualty.
FIGA Executive Director Corey Neal offered the $450 million to $550 million estimate during an agency board meeting.
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FIGA also has been handling claims for other insurers that have gone insolvent in recent years amid major financial problems in the state’s property-insurance industry. It uses money collected through “assessments” on insurance policies across the state to cover claims costs.
After the United Property & Casualty insolvency, Neal said FIGA is working on a plan to provide “interim” financing and then would take the unusual step of issuing bonds to cover longer-term claims costs.
Such bonds would be financed through assessments.
The FIGA board is expected to make decisions about financing issues in late March.
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