Florida, Georgia Insurer First Commercial to Be Liquidated

Miami-based First Commercial Insurance Co. and its subsidiary have been declared insolvent and ordered liquidated about six weeks after being placed under state control.

All policies written by FCIC and its subsidiary, First Commercial Transportation and Property Insurance Co., are being cancelled.

Policyholders with claims will be protected by the state’s backup insurance guaranty fund.

FCIC wrote workers’ compensation, commercial auto, general liability and commercial multi-peril insurance policies in Florida and Georgia. FCTPIC wrote commercial auto insurance coverage in Florida. Together, they have about 18,000 in-force policies.

The Florida Department of Financial Services has acted as the receiver of both FCIC and FCTPIC since July 10, 2009, when the companies was placed in receivership.

Regulators said that the companies wrote more than 2,000 automobile service warranty contracts they never reported. Those are cancelled immediately under the liquidation order issued by Leon County Circuit Court Judge Charles A. Francis. The department is investigating this further.

All other policies are cancelled effective 12:01 a.m. on Sept. 23, 2009, unless otherwise terminated prior to that date. This includes approximately 550 commercial auto “for hire” policies written by FCTPIC and about 100 in-force policies written by FCIC for Georgia policyholders.

According to its financial statements dated at the end of the first quarter of this year, the insurer wrote more than $50 million in business and lost close to $10 million in 2008.