Mike Colodny in the Insurance Journal: New Insurer Ascendant to Rescue First Commercial Insureds, Jobs in Florida
September 4th, 2009
September 4, 2009
By Andrew Simpson
Florida officials announced that a new Miami-based insurance company will pick up the insurance for about 15,000 of the policyholders now with bankrupt First Commercial Insurance Co., which is in liquidation.
Florida CFO Alex Sink said her office negotiated the transition plan for the policyholders of First Commercial Insurance Co. (FCIC) and its subsidiary, First Commercial Transportation and Property Insurance Co. (FCTPIC). These insurers were ordered into liquidation on Aug. 24, 2009.
The insurer assuming the business will be Ascendant Commercial Insurance Inc., which was just licensed by the state on Sept. 1.
Ascendant is being capitalized with $6 million in cash from its parent company, Ascendant Holdings, which is controlled by the Cejas family, according to attorney Michael Colodny, a partner with Colodny, Fass, Talenfeld, Karlinsky & Abate, who represented Ascendant.
Paul Cejas is a well-known Florida business and civic leader. He was founder of CareFlorida Health Systems, Inc., a large health care company, which merged with a California firm in 1994. He founded and runs the private investment firm, PLC Investments. He also served as Ambassador to Belgium.
His son, Pablo Cejas, who is a director of PLC, will serve as chairman of the board for Ascendant and Paul Cejas will sit on the board, according to Colodny.
He said the new company will use independent agents and brokers for sales.
The firm has also promised to hire some of the 100 employees at First Commercial. Colodny said the new firm hopes to be able to retain more than half of the employees.
Under the agreement Ascendant will offer replacement coverage to most of the business policyholders. The effective date of the new policy with Ascendant will be Sept. 23, 2009 or upon expiration of the policyholder's coverage with FCIC/FCTPIC, whichever event occurs sooner.
Ascendant's initial focus will be small to medium sized business owners to whom it will offer workers compensation, general liability, commercial vehicle, garage keepers and for-hire transportation. Ascendant will not initially be offering policies for commercial multi-peril, monoline commercial automobile, warranty, errors and omissions, or medical malpractice.
The agreement stipulates that policyholders, except for the lines not provided new coverage from Ascendant, will receive a premium quote based on FCIC and FCTPIC policy data using Ascendant rates, and an invoice. This documentation will be mailed to customers no later than Sept. 15, 2009.
"Our department has worked diligently to ensure that many employees were offered positions with the new company and that Florida policyholders were protected," said CFO Sink. "Especially in these challenging times, it was important to us to save these jobs and allow for an orderly transition for consumers."
FCIC wrote workers' compensation, commercial auto, general liability and commercial multi-peril insurance policies in Florida and Georgia. FCTPIC wrote commercial auto insurance coverage in Florida. Together, the companies at one time had approximately 18,000 in-force policies.
The Florida Department of Financial Services has acted as the appointed receiver of both FCIC and FCTPIC since July 10, 2009, when the companies were placed in receivership for the purpose of rehabilitation. All automobile service warranty policies written by FCIC were cancelled as of Aug. 24, 2009, the date of liquidation.