Paul Sanchez
American Capital Assurance Corp., also known as AmCap, was a Florida-based insurance carrier that offered flood insurance and wrote commercial multi-peril and allied coverage lines in several states. In April 2021, AmCap was deemed insolvent and placed into liquidation, leading to the cancellation of most of its insurance policies. The Florida Department of Financial Services (DFS) serves as the receiver, managing the liquidation process and ensuring the protection of policyholders. Policyholders were advised to work with their agents to find new insurance coverage, and state insurance guaranty associations were activated to assist with outstanding claims and refunds. The liquidation of AmCap has raised concerns among insured individuals and claimants, who are navigating the transition to new policies and understanding their rights and options.
| Characteristics | Values |
|---|---|
| Company Name | American Capital Assurance Corporation |
| Common Name | AmCap |
| Industry | Insurance |
| Location | Florida, Georgia, Louisiana, North Carolina, South Carolina, Texas |
| Status | Insolvent, in liquidation |
| Liquidation Date | May 14, 2021 |
| Liquidator | Florida Department of Financial Services |
| Court | Second Judicial Court in Leon County, Florida |
| Policies | Commercial multi-peril and allied coverage |
| Number of Policies | 2,300 in Florida |
| Policy Status | Cancelled except flood insurance |
| Premium Refunds | Sent directly to policyholders |
| Outstanding Claims | Processed by state insurance guaranty associations |
| Claim Deadline | October 14, 2021 |
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What You'll Learn
AmCap's insolvency
Florida-based insurance carrier American Capital Assurance Corp. (AmCap) was deemed insolvent by Florida's Office of Insurance Regulation in April 2021. AmCap's insolvency was likely caused by net underwriting losses from multiple severe weather events in the second half of 2020, particularly in Louisiana. These losses led to significant surplus loss and negatively impacted AmCap's risk-adjusted capitalization. As a result, AmCap's ratings were downgraded by AM Best and withdrawn by Demotech in March 2021.
Following the declaration of insolvency, AmCap entered into receivership and was placed into liquidation by the Florida Department of Financial Services (DFS). The DFS serves as the receiver for any insurer placed into receivership in Florida and was granted a consent order for liquidation and receivership by the Second Judicial Court in Leon County, Florida, on April 14, 2021.
As a result of the liquidation, all insurance policies issued by AmCap, except for flood insurance policies, were cancelled effective 12:01 a.m. on May 14, 2021. Policyholders with other types of insurance were advised to immediately contact their agents and obtain new coverage before this date. AmCap policyholders were also informed that any unearned premiums would be automatically calculated and returned, subject to a $100 statutory deductible.
The DFS is authorized to investigate the causes of AmCap's insolvency, including any potential violations of laws related to the solvency of the insurer. The department will also work to discover and recover assets. Policyholders with outstanding claims or lawsuits against AmCap may still receive compensation through their state's Guaranty Association, which has been activated to help process and pay pending covered claims. Additionally, policyholders who had flood insurance with AmCap can now direct their policy or claims-related inquiries to the National Flood Insurance Program ("NFIP") Direct.
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Liquidation and receivership
On April 14, 2021, the Second Judicial Circuit Court in Leon County, Florida, ordered American Capital Assurance Corp. ("AmCap") into receivership for liquidation purposes. AmCap was a Florida-based property and casualty insurance company with a strong presence in Louisiana and Texas.
The Florida Department of Financial Services ("DFS") serves as the receiver for any insurer placed into receivership in Florida. The DFS was granted a consent order for liquidation, injunction, and notice of automatic stay of AmCap on the same day. The order prohibited judicial and administrative proceedings against the company.
AmCap was deemed insolvent by Florida's Office of Insurance Regulation, and the company had approximately 2,300 in-force policies at the time of receivership. All insurance policies issued by AmCap, except for flood policies, were cancelled effective 12:01 a.m. on Friday, May 14, 2021. Policyholders were notified of the liquidation and advised to work with their agents to find new coverage.
The processing and payment of existing and new covered losses incurred prior to May 14, 2021, will be handled by FIGA, subject to policy limits or statutory maximum caps. Policyholders with potential return premium claims do not need to file a claim to receive their return premium. The deadline for filing a claim in the receivership was October 14, 2021.
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Policy cancellations
AmCap policyholders were notified of the company's receivership and subsequent liquidation in April 2021. The Florida-based insurer, which provided property and casualty insurance, was deemed insolvent and unable to pay its debts. As a result, all active insurance policies were cancelled effective May 14, 2021, unless they were terminated prior.
Policyholders were advised to work with their agents to find new insurance coverage as soon as possible. AmCap agents were also notified of the policy cancellations and were directed to assist their clients in locating alternative insurance providers. It is important to note that flood insurance policies administered by AmCap but issued under Federal law were not cancelled due to the liquidation order.
In terms of refunds, policyholders will receive checks for unearned premiums covered by their state's Guaranty Association. The Florida Insurance Guaranty Association (FIGA) is responsible for processing and paying outstanding claims for property and casualty policies. There is no set timeline for returning unearned premiums, as it depends on FIGA's ability to process AmCap's outstanding liabilities. Policyholders can visit https://figafacts.com for more information about the refund process.
To file a claim for a covered loss, policyholders must complete and submit a "Proof of Claim" form to the Florida Department of Financial Services (DFS) by October 14, 2021. Additionally, claimants are requested to refrain from contacting TPCIGA, an organization that protects Texas insurance policyholders, on non-hardship matters for four weeks to allow for file transfer and initial review.
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Flood insurance
AmCap flood insurance policies have transitioned to the National Flood Insurance Program (NFIP) Direct. Flood insurance is a crucial consideration for property owners, as flooding is the most common and costly natural disaster, affecting 90% of all presidentially declared U.S. natural disasters.
The NFIP was established by Congress in 1968 through the National Flood Insurance Act (NFIA) and is administered by FEMA. It offers flood insurance coverage to homeowners, which goes beyond standard homeowners' insurance policies, protecting against severe water damage from heavy rain, melting snow, and coastal storms. This is particularly important as most homeowners' insurance does not cover flood damage.
To obtain flood insurance through the NFIP, individuals can use the NFIP Quote Tool to find a suitable policy and receive a free, personalized quote. It is important to plan ahead, as there is typically a 30-day waiting period for an NFIP policy to take effect unless specific conditions are met. Additionally, individuals can explore private insurance companies that participate in the Write-Your-Own (WYO) program, selling and servicing NFIP policies.
In the event of a flood, individuals should immediately report their loss to their insurance agent or carrier. The NFIP can assist in recovery by covering losses directly caused by flooding. It is recommended to keep important documents like birth certificates, passports, medical records, and insurance papers in a safe, dry place, preferably in a watertight safety deposit box.
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Premium refunds
Florida-based insurance carrier American Capital Assurance Corp. (AmCap) has entered receivership and is in the process of liquidation after being deemed insolvent. This means that all insurance policies issued by AmCap are cancelled, except for flood insurance coverage, which has transitioned to the National Flood Insurance Program (NFIP) Direct.
Regarding premium refunds, if your premium was paid directly from your mortgage company to AmCap, the refund will be sent directly to you as the policyholder. It is important to note that your refund claim may not be covered by your guaranty fund if the refund amount exceeds the statutory maximum. In such cases, you will need to file a claim in the estate, and you are not required to submit a Proof of Claim form for timely filing.
For unearned premium refunds, there is no fixed timeline for the return of these premiums. The processing depends on FIGA's ability to manage AmCap's outstanding liabilities. Any unearned premiums paid to AmCap will be automatically calculated and returned to policyholders, subject to a $100 statutory deductible. If you dispute the amount of the unearned premium, you must file a "Proof of Claim" form with the Florida Department of Financial Services (DFS).
To ensure you receive any mailed information regarding premium refunds, it is your responsibility to notify the Receiver in writing of any changes to your name or mailing address. You can do this by filing a "Name and/or Address Change" form, which is available for download. When corresponding with the Receiver, be sure to reference the company name and your policy number and/or claim number.
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Frequently asked questions
AmCap flood insurance policies transitioned to the National Flood Insurance Program ("NFIP") Direct. You may contact the NFIP Direct by telephone at (800) 638-6620 for inquiries.
You received this notice because your name was listed as a policyholder in AmCap's records. The notice was sent to inform policyholders of the receivership.
It is your responsibility to notify the Receiver, in writing, of any changes to your name or mailing address. You can download the "File a Name and/or Address Change" form from the website.
If your return premium claim exceeds the maximum amount payable per statute or if your net worth exceeds the statutory cap, you will have a claim in the estate. Policyholders are not required to submit Proof of Claim forms for timely return premium claims.
You should immediately contact your insurance agent or financial advisor and obtain new coverage. You may also need to work on obtaining a loan or passing a special assessment.
