Guarantee Insurance Company (GIC) In State Receivership
GIC In State Receivership
On November 17th, 2017 Florida Insurance Commissioner David Altmaier asked Chief Financial Officer Jimmy Patronis to initiate delinquency proceedings against the workers compensation insurance provider, GIC."After a financial audit found the company overstated its level of capitalization in 2016, the Office of Insurance Regulation in August entered into a consent order with Guarantee barring it from writing new business while implementing a plan of reorganization.According to a spokeswoman for the Office of Insurance Regulation, the reorganization plan was to have included Guarantee’s affiliates, including Patriot National, an insurance industry services provider that counts Guarantee as its largest client."
Notable information from Altmaier's letter:
Both companies are controlled by Steve Mariano, which Altmaier’s letter identified as recipient of $15.7 million in transfers from Guarantee in 2016 and the first half of 2017 “with no documented business purpose and no discernible benefit to [Guarantee], adding the “Office has deemed them detrimental” to Guarantee.“While Mr. Mariano benefited individually from these transactions by receiving cash from GIC, this indebtedness diverted funds that otherwise could be used to increase the surplus of GIC and otherwise be available for the payment of policyholder claims.”By transferring the funds to Mariano, Guarantee violated state law prohibiting ”direct or indirect notes or other evidence of indebtedness of any director, officer, or controlling stockholder of the insurer, except as to [authorized] policy loans,” Altmaier’s letter states.“Further, the Office has identified other transactions involving parties with known association to Mr. Mariano that have been harmful to GIC,” the letter states.Lastly, Altmaier’s letter also states the company’s insolvency “renders its further transaction of insurance hazardous to its policyholders, subscribers, claimants, creditors, and the citizens of the state of Florida.”These are all big statement's that all GIC policyholders should be aware of and be proactive on.Please contact Brian Urso, if you have any questions or if I can be of any assistance for those being impacted by this news.Hope all is well -Brian Ursoburso@libertateins.com(407)613-5494*More details can be found here:https://www.insurancejournal.com/news/southeast/2017/11/21/471913.htmhttp://www.sun-sentinel.com/business/fl-bz-guarantee-insurance-receivership-20171117-story.html
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