Less than a month after United Property and Casualty Insurance was downgraded from an "A" to an "M" rating, the company has now lost its financial stability rating and has filed plans to withdraw from Florida.
In a news release, the company's chairman and CEO cited "...significant uncertainty around the future availability of reinsurance..." said the move was "...necessary to protect the Company and its policyholders."
"Because they were downgraded from 'A' to 'M' in the beginning of August, that put their reinsurance programs in jeopardy, and they were unable to get a fully secured reinsurance program for 2022," said Mark Friedlander of the Insurance Information Institute. "That's what led to Demotech completely withdrawing UPC's rating last week."
Friedlander said the company is also planning to withdraw from three other states. The Florida Office of Insurance Regulation said UPC has 166,000 policies in the state and that it is reviewing the company's plans for an "...orderly run-off, which means current policyholders won't have the option to renew at the end of their term."
Get South Florida local news, weather forecasts and entertainment stories to your inbox. Sign up for NBC South Florida newsletters.
"According to UPC, they will not initiate this runoff of business until 2023," Friedlander said. "And, according to Florida regulations, you must give 120 days written notice when you non-renew a customer's policy so no non-renewals will take place in 2022."
Last month, UPC qualified to participate in a temporary market stabilization arrangement, a program recently created by the state that allows insurance companies facing a financial rating downgrade to meet the requirements set by federally-backed mortgages. The impact of the program is unclear.
"The backstop program has not been approved by the federally-backed mortgage systems," Friedlander said. "They have indicated only that they are assessing it. That's all we know. This put UPC in a very precarious position."
Responds
Responding to every consumer complaint
If you have a UPC policy, you are protected, but "based on the recommendation of many independent agents across the state, they are recommending that you start to look for other coverage," Friedlander said.
He said the Institute knows of more than a dozen companies that are no longer writing new business in our state, so your options may be limited.
NBC 6 reached out to UPC for comment, but did not immediately hear back.
