The Pennsylvania Department of Insurance has announced that it will be liquidating First Sealord Surety Insurance. The state’s Commonwealth Court yesterday approved a petition from the department that was filed last year regarding liquidation of the insurer. Insurance Commissioner Michael Consedine cites the insurer’s inability to pay off its debt and meet the needs of its policyholders as the reason for the liquidation. The insurer saw steep drops in its surplus capital in recent years, sealing its fate in an unforgiving regulatory environment.
The approval of the petition allows the Department of Insurance to institute a number of consumer protections for those that held policies with First Sealord. Regulators will be working to ensure that an orderly payment process is established to help consumers make the transition to more viable insurance companies. The state will now be responsible for assessing and paying claims coming from policyholders. Policyholders will have 30 business days to find a new insurance company before their policy is terminated.
First Sealord offered policies for construction general contractors and subcontractors, but ceased writing policies for coverage recently. The company had been working with the state’s Department of Insurance to resolve its financial problems, but was not able to recover quickly enough to instill a sense of confidence in regulators and shareholders. After regulators have distributed any surplus assets left over from the liquidation, the company will be officially dissolved.
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