Running Clock Rant: “It Has Come To Our Attention”
July 25, 2009
July 23, 2009
It has come to our attention that some mortgage companies have recently mailed letters to Castle Key (formerly Allstate Floridian) property customers concerning the company’s recent downgrade by A.M. Best. We are in the process of contacting the two mortgage companies from which we have copies of customer notices to explain that Castle Key maintains a sound capital position and extensive reinsurance. Our emphasis in these discussions is that, despite the A.M. Best downgrade, Castle Key was recently reaffirmed with an A´ (A Prime), Unsurpassed financial rating from Demotech, Inc. Demotech is an independent financial and actuarial services firm. Many property insurance companies in Florida operate with only a Demotech Financial Stability Rating®.
One of the customer letters, from Midland Mortgage Company, indicated that they will accept a Demotech financial rating. As stated above, we are having discussions with this company to advise them of our Demotech rating and will request that they discontinue sending customer notices. We hope to resolve this issue with little customer disruption. In the meantime, you or the customer may contact Midland and provide them a copy of Castle Key’s rating. The website www.demotech.com contains the ratings for Castle Key and other Florida property insurance companies.
The other letter, from Taylor, Bean, and Whitaker Mortgage Company, indicated that their company will accept policies written only by insurers who earned high ratings from A.M. Best. We will contact them and request that they accept Castle Key policies based on the companies’ Demotech rating. If they do not agree to accept Demotech for Castle Key, you may want to consider calling the customer and offering to place them with one of the available expanded market carriers. If this transpires, we will provide you with an audit of policies listing this mortgage company that are associated with your agency.
Your agency can affirm to customers that the Castle Key companies are financially strong and stable companies. At the end of 2008, the Castle Key group held $162 million in surplus and $233 million in cash and invested assets. Our reinsurance program for 2009 was developed using methodologies supported by the Florida Office of Insurance Regulation (OIR).
We will provide you with additional details as they develop. If you receive any additional customer calls involving mortgage companies other than those mentioned above, please contact your Product Management Consultant and if possible, provide a faxed copy of the mortgage company letter.
By DAVID EGGERT
Associated Press Writer
July 13 2009, 5:37 PM CDT
ALAIEDON TOWNSHIP, Mich. — Insurance companies would face millions of dollars in fines, damages and attorney fees for denying or delaying valid claims under legislation a state House committee is preparing to debate.
The complete article can be viewed at:
http://www.chicagotribune.com/news/chi-ap-mi-insurancedenials,0,1635193.story
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