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Court places Florida Specialty Insurance into receivership

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Court places Florida Specialty Insurance into receivership

The Second Judicial Circuit Court in Leon County, Fla., placed Florida Specialty Insurance Co. under the receivership of the state's Department of Financial Services, effective Oct. 2.

The announcement came months after Demotech downgraded Florida Specialty after the insurer disclosed in its second-quarter financial statement surplus in excess of the $10 million statutory minimum.

In its recent quarterly statement, the insurer disclosed "substantial doubt" related to its ability to continue with its operation given the current market environment. The insurer also revealed its plan to "substantially" reduce the risk of its portfolio from the fourth quarter.

Florida Specialty said in the quarterly statement that it was working with the Florida Office of Insurance Regulation and its rating agency on its business plans, but there was no certainty that any of its actions will result in the financial stability it was aiming for.

The outstanding policies of the property and casualty insurance company will be canceled effective Nov. 1, the court said.