Texas Court Orders Auto Insurer Windhaven National into Liquidation

March 23, 2020 by

Private passenger auto insurer Windhaven National Insurance Co. (WNIC), a Texas-domiciled subsidiary of Florida-based Windhaven Insurance, has been ordered into liquidation at the request of the Texas Department of Insurance, which was appointed as liquidator.

The order for liquidation was granted by the District Court of Travis County, Texas, 419th Judicial District on March 5. The court also granted TDI’s request for a permanent injunction restraining WNIC officers and its agents from conducting business and restraining other parties from taking any actions against WNIC or its property, the order states.

The court’s approval of TDI’s requests follows Windhaven Insurance’s announcement to its agents and employees in Florida that it was winding down the insurance operations of its entities, including Windhaven National Insurance Co., software company ClutchAnalytics and managing general agent, The Hearth Group.

In its order, the court cited several findings as cause for the liquidation order including: WNIC does not have admitted assets at least equal to all its liabilities together with the minimum surplus of $5 million required to be maintained; it does not have liquid assets to meet its next 90 days current obligations; and the continuation of WNIC’s business would not be in the best interest of its policyholders, creditors or to the public.

As liquidator, the Texas Department of Insurance is entitled to take over all property of any kind, including physical and financial assets, the court order states.

WNIC was licensed in Texas in 2012 to write aircraft physical damage, auto physical damage, automobile liability, inland marine and other coverages, according to the Texas Department of Insurance website.

Windhaven National also offered auto policies in Florida through its Florida Windward program and had 30,600 policies in that state, as of Dec. 31, 2019, according to the Florida Office of Insurance Regulation (OIR).

WNIC’s parent company announced it was ceasing all new and renewal business for its Windhaven companies in a message sent to agents on Feb. 26. The Windhaven companies include Windhaven Insurance Holdings Corp., Windhaven Underwriters, Windhaven Select, Windhaven Claims Management, Windhaven National Insurance Co. and The Hearth Insurance Group. The Hearth Insurance Group is a Florida-based MGA offering homeowners coverage on State National Insurance Co. paper. Windhaven’s software technology company, ClutchAnalytics, is domiciled in Texas and builds digital insurance distribution systems.

Windhaven National closed its offices in Texas on Feb. 28; layoff notices filed with the Texas Workforce Commission showed that it had 96 employees in Dallas and 35 in Austin, the Dallas Morning News reported.

Employees at the Windhaven Claims Management’s facility in Miami were also told by the company they would be laid off on Feb. 28, 2020. A message to employees said the company had been unsuccessful in its efforts to seek financing to enable the company to continue operation, and as a result its lender had started a process to sell certain assets of the company at a public auction on March 4, 2020. No further information on the auction or the handling of claims has been provided.

Tampa, Fla.-based The Hearth Insurance Group has offered homeowners insurance through State National Insurance Co. in Florida since 1990, and also offers coverage in Texas.

Florida officials placed Windhaven’s non-standard auto insurer, Windhaven Insurance Co. (WIC), into receivership and began to liquidate that company in December of 2019.

WIC, which launched in 2005, had about 73,000 active auto policies in Florida as of Nov. 30, 2019. In December, the Florida Department of Financial Services placed the non-standard auto insurer into rehabilitation. Shortly after that, DFS declared the former Florida auto insurer insolvent and the company was ordered into liquidation.

Windhaven Insurance reported in a 2019 press release that, along with The Hearth, it had written close to $2 billion in home and auto insurance premiums since being established in Miami. It also said Windhaven Insurance had provided coverage to more than 240,000 policyholders through more than 8,000 local independent agents. It had additional offices in Tampa, Fla., and Dallas.