Florida Workers’ Compensation Insurance Guaranty Association To Review Insurer Insolvencies Correlative to Use of High-Deductible Policies and Professional Employer Organizations
Jul 12, 2012
The Florida Workers’ Compensation Insurance Guaranty Association (“FWCIGA”) Workgroup (“Workgroup”) met today, July 12, 2012. After calling the meeting to order, Board member Brett Stiegel stated that it was the result of discussions at the most recent FWCIGA Board meeting regarding recent insurer insolvencies relating to large deductible policies and professional employer organizations (“PEOs”) or employee leasing companies. He stated that the Workgroup should formulate some recommendations to help prevent these types of insolvencies and thereby reduce the exposure of the FWCIGA.
FWIGA Executive Director Sandra Robinson gave an overview of three recent insolvencies: Park Avenue Property and Casualty Insurance Company, Pegasus Insurance Company and Southern Eagle Insurance Company. Ms. Robinson noted that Park Avenue was an Oklahoma-domiciled insurance company doing business primarily in Florida. The FWCIGA expects the Park Avenue insolvency to cost Florida $25 million. The FWCIGA also estimates that the Southern Eagle insolvency will produce $21 million in claims.
Mr. Stiegel stated that the Workgroup should formulate a problem-solving plan to take to the Board for approval to move forward.
The Workgroup plans to review the problems associated with insolvencies and the correlation of the use of high-deductible policies and PEOs. It will identify potential options for improvement that could prevent these insolvencies or reduce the FWCIGA exposure.
At the next meeting, the Workgroup plans to discuss recommendations and have two or three additional meetings before the FWCIGA meets in September 2012.
With no further business, the meeting was adjourned.
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