Changes at American Coastal Insurance After Florida OIR Action on ‘No-Fly List’
Florida regulators’ effort to enforce a 2002 state law and keep insolvent insurers’ officers out of carrier leadership roles appears to be a reason behind a significant shakeup at St. Petersburg-based American Coastal Insurance Corp.
An official with Florida’s Office of Insurance Regulation said Thursday that several officers and directors with American Coastal, the surviving subsidiary that was rebranded after United Property & Casualty Insurance was deemed insolvent in 2023, have been removed or reassigned. The insurer appeared to confirm that – obliquely – in a news release this week.
OIR in 2023 notified 12 people at the publicly traded company – more officers than at any other Florida carrier – that they needed to explain why they should be allowed to stay in office despite the law that appears to forbid it, or they should take new positions. All of the officers and directors had been in key positions at United before it went under.
But removing all 12 people at once would have been too disruptive for the carrier, so OIR recently granted a second extension, for 90 days, to fully comply with Statute 624.4073, explained Samantha Bequer, communications director for OIR.
“They have replaced about half the people on that list or at least they moved them to different positions,” Bequer said Thursday about American Coastal.
In its June 25 news release, American Coastal officials said only that the board of directors had been reduced from 10 members to five. It also seemed to suggest that the company has a new person at the top. Christopher Griffith, formerly the chief information officer and chief operating officer at AmCoastal, is now president of the company, according to the news release. The release, however, also referred to Brad Martz, who has been in the job for the last few years, as president.
Martz and Griffith have both received letters from OIR about potentially being disqualified because of their time at United P&C.
The AmCoastal press statement, seen here, did not indicate the reason for the recent changes, and company leaders did not respond to Insurance Journal phone calls and emails seeking information. But at least five of the previous board members are on the OIR list and are no longer on the board of directors. These include: Alec Poitevint II, Greg Branch, Kent Whittemore, Kern Davis, Michael Hogan and William Hood III. All of them were once with UPC.
The new board members are: Sherrill Hudson, Patrick Maroney, James Andy Gray, Deirdre Brown, and Cathy Swanson. New officers include Svetlana Castle as chief financial officersf, and Andy Gray as chief compliance and risk officer, AmCoastal said.
The status of Dan Peed, the chair and CEO of AmCoastal, and Brooke Adler, the general counsel, both of whom were on the no-fly list, was not mentioned.
The state law focuses on officers that were with a troubled insurer in the two years before it became insolvent. So it’s possible that some of AmCoastal’s current officials had left UPC before that window closed and can remain at the corporation.
The AmCoastal statement did give some information about the two new board members, who must be approved by regulators before taking office: Cathy Swanson has 40 years in the banking industry and is with Cogent Bank in the St. Petersburg area. Deirdre Brown is a certified public account who led a number of departments at TECO Energy, based in Tampa.
It’s the latest development in OIR’s no-fly enforcement actions, now involving at least 20 officers at more than 10 Florida insurers. Some in the industry have said the 22-year-old law should be enforced and that Insurance Commissioner Michael Yaworsky is doing his part to stop a “revolving door” of executives in Florida’s long-stressed insurance industry.
But others said the law, rarely enforced until last year, is poorly written and enforcing it blames individuals for an industry-wide problem brought on by hurricanes, out-of-control claims litigation and spiking reinsurance prices.
“These were not bad actors. They were doing their best to run a successful insurance company,” said Melissa Burt DeVriese, president of Security First Insurance, based in Ormond Beach. “No one was seeking to fail.”
Security First received one letter from OIR in December, about an officer that was previously with Lighthouse Insurance Co., which was declared insolvent in 2022. That employee now works with Security First’s managing general agent, not with the insurance company, company executives have said. In hopes of bringing him on board Security First, the carrier months ago had asked for an OIR review of the matter.
As of Friday, the officer and the carrier were still waiting to hear from regulators about his status.
“It’s really not fair to those individuals and their families to keep their careers and their livelihoods in limbo,” DeVriese said. Most of the 10 Florida insolvencies came more than two years ago, and state lawmakers have taken steps to reduce the likelihood of more litigation-induced financial troubles.