Hollywood-based insurance company gets acquisition offer
Mar 4, 2009
A Hollywood-based insurer, which stopped writing new policies last week, has an acquisition bid from United Insurance Holding.
BY BEATRICE E. GARCIA
Miami Herald--March 3, 2009
United Insurance Holdings has made an offer to acquire Hollywood-based Coral Insurance.
In a two-paragraph memo, Coral told agents last week it had stopped writing new policies. Agents, like Gabriela Dominguez of Avante Insurance in West Dade, were left to find new coverage for clients who received a quote from Coral last week.
United Insurance, a publicly traded holding company for United Property & Casualty Insurance, disclosed the acquisition in a filing with the Securities and Exchange Commission filed Sunday.
Coral, formed in 2004, had 12,341 policies in force as of June 30, 2008. It was one of the few companies in South Florida in recent years willing to write new policies. It even insured older homes if they had been upgraded.
Robert Meyers, Coral’s president and chief executive, said ”we’re knee-deep in financial discussions” with United at this point.
When asked why Coral would consider being acquired, Meyers said Coral is always on the lookout for ways to strengthen the company. “That’s my job.”
The Office of Insurance Regulation said it was aware that Coral had stopped writing new policies last week, spokesman Ed Domansky said.
Also, OIR had been monitoring Coral during the fourth quarter.
Regulators had asked Coral to add additional capital and strengthen its reserves.
Meyers said the company complied with those two requests but declined to elaborate on how much money regulators required it to add to capital and reserves. Because of Securities and Exchange Commission rules, Meyers said, he couldn’t say more about the discussions with United Insurance.
With little information from the company, agents were left to wonder if Coral had run into financial trouble and wouldn’t be able to meet its obligations.
Last week, the company informed the Florida Association of Independent Agents that it wouldn’t take a booth at the agents’ annual conference in June. It also canceled a reception it usually hosted for agents during the conference.
OIR said Coral has yet to file its 2008 annual statement. The deadline was Sunday, March 1.
In its Sept. 30 filing for the first nine months of 2008, the company reported a loss of $631,334 compared to a loss of $1.6 million in comparable 2007 period. Coral’s direct written premiums fell to $23.3 million from $34.6 million in 2007.