Florida’s HomeWise Continues in Run-Off; Sells Louisiana Policies

Nov 14, 2011

The following article was published in The Insurance Journal on November 14, 2011:

Florida’s HomeWise continues in run-off; Sells Louisiana policies

By Michael Adams

Florida-based HomeWise Insurance Co. is now is full run-off mode as it attempts to pay all outstanding claims and other debts in order to avoid being taken over by Florida regulators.

The Clearwater, Fla.-based home insurer has jettisoned the remainder of its book of business after reaching a deal with a Montana-based insurer that is an admitted writer in Louisiana to assume its Louisiana policies.

The Louisiana deal comes just days after HomeWise agreed to have a competitor in Florida assume its Florida book of business. Homeowners Choice Insurance Co. inked a deal  to assume HomeWise’s  70,000 policyholders and $53 million in premiums in Florida.

Now Lighthouse Property Insurance Corp. has announced it will assume the Louisiana homeowners policies of HomeWise. The deal sends 11,000 Louisiana policyholders to the Bigfoot, Montana-based Lighthouse, along with $25 million in premiums.

HomeWise has lost its one financial rating from Demotech in August and had its affiliated company, HomeWise Preferred, placed under Florida state supervision for lacking the resources to pay claims.

Most banks and mortgage companies will not accept an insurance policy issued by an unrated insurer as meeting the requirement under a mortgage, thus HomeWise has been seeking buyers for its policies.

Starting Jan. 1, 2012, the Louisiana policies will be renewed with Lighthouse. Lighthouse said policies will be issued with the same coverages as they would have had HomeWise renewed them.

Lighthouse said that many of the agents selling HomeWise policies are already contracted with Lighthouse and others will receive a contract to write new business with Lighthouse. However, some agencies will receive limited agreements which allow them to continue to service the assumed policies but not produce new business, according to the insurer.

Lighthouse says it pays a 12.5 percent commission.

Once policies are renewed on Lighthouse paper, Lighthouse MGA, LLC, its affiliated managing general agency, will be in charge of all policy administration matters. Lighthouse MGA, LLC has contracted with Blue Cod Technologies, the same company that provided policy administration services for Homewise.

Lighthouse has a Financial Stability Rating of “A” Exceptional from Demotech.

Find this article here:  http://www.insurancejournal.com/news/southeast/2011/11/14/223913.htm