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Surplus Lines: Miami Herald Reports on New Carriers |
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08/05/2008 |
Surplus lines companies' rates unregulated
Miami Herald, 8/4/2008
BEATRICE E. GARCIA
With two quiet years on the hurricane front, another group of insurance companies has turned to the Florida market: surplus lines companies.
The firms, many backed by deep pockets and savvy investors, are licensed by the state, but their rates aren't regulated.
Rates are usually negotiated on a per-policy basis. Many surplus lines companies will cover homes or buildings that admitted carriers won't touch, such as historic homes that may be 70 to 80 years old.
Among the companies new to Florida are two surplus carriers owned by Lancashire Holdings Ltd., a Bermuda-based insurance group: Lancashire Insurance Co. Ltd. and Lancashire Insurance UK Ltd.
Both companies, registered to sell commercial residential coverage for condo and homeowner associations in Florida, were well-funded with a total of more than $1.24 billion in surplus.
Ironhorse Insurance Ltd. was licensed to sell surplus coverage to commercial properties in Florida last year. The company, based in Bermuda, raised nearly $1 billion to provide commercial coverage. Its initial focus has been coastal states including Georgia, the Carolinas, and the Gulf states. It's also offering earthquake insurance in California.
Sterling Capital Partners, a New York-based investment group, was the money behind AIX Specialty Insurance. The company started out with $15 million in surplus.
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