California Insurance Commissioner Dave Jones issued a cease and desist order against Access Insurance Co. after it reported policyholder surplus deficiencies in its income statements.
The company is required to immediately stop transacting, soliciting, negotiating or administering and writing any new or renewal insurance business of any kind in the state. The order alleges that Access Insurance is conducting business in a manner that threatens to render it insolvent or leave it in a financially hazardous condition in violation of the state's insurance code.
The order was issued after the company disclosed in its preliminary unaudited statutory income statement for 2017 that its policyholder surplus was negative $27.6 million as of Dec. 31, 2017. Access Insurance also stated in its preliminary unaudited statutory income statement for 2018 that its policyholder surplus was negative $29 million as of Jan. 31. The company failed to file its required yearly statutory statement as well.
The California Department of Insurance said in a statement that Access Insurance's unaudited financial reports indicated that the company failed to maintain the capital required by law, and that the insurance commissioner is authorized to place it under regulatory control, which could result in the company facing conservation or liquidation proceedings.
The department will conduct a public hearing on the cease and desist order on March 28. The agency previously warned Access Insurance that it could face conservation or liquidation proceedings over the deficiencies.
