American Keystone Insurance Co. of Ponte Vedra Beach is being placed into receivership and liquidated, the second Florida homeowners insurance company to fail this year.
Leon County Circuit Court Judge John C. Cooper approved the liquidation and appointed the Florida Department of Financial Services as receiver.
The 2-year-old insurer has about 7,800 homeowners, commercial, residential and wind policies in force, including 424 in the Tampa Bay area.
Regulators on Monday urged anyone who has homeowners insurance with American Keystone to immediately contact their agent to secure coverage with a new company. All policies will be canceled effective 11:59 p.m. Nov. 8, unless otherwise terminated before then.
Tom Zutell, a spokesman for the state Office of Insurance Regulation, said affected homeowners will be without coverage if they don't make the deadline.
"Given that this liquidation order comes during hurricane season, it is imperative that homeowners who have coverage with American Keystone immediately contact their agents to secure new coverage," Florida Chief Financial Officer Alex Sink said in a statement.
Florida Insurance Commissioner Kevin McCarty recommended American Keystone's liquidation after receiving the company's August financial statement last month. The company's reserves were $335,000 shy of the required $4 million. Based on cash-flow projections, he said American Keystone was unlikely to have enough money to pay private reinsurers and the state-run Florida Hurricane Catastrophe Fund.
"We worked with the company to resolve the outstanding issues," he said. "When it became evident the issues could not be remedied, I had to take action to protect their policyholders."
American Keystone is the second homeowners insurer to be seized by the state, following the April collapse of Hollywood-based Coral Insurance Co.
Jeff Harrington can be reached at email@example.com or (727) 893-8242.