Florida regulators want to shut an insurer out of the state’s long term care insurance market for 12 months because of concerns about a financial statement filing delay.
The Florida Office of Insurance Regulation has told Penn Treaty Network America Insurance Company that its certificate of authority to conduct business in Florida has been suspended for at least 12 months because the company did not file its 2006 audited statutory financial results on or before June 1, according to the company’s parent, Penn Treaty American Corp., Allentown, Pa.
Penn Treaty says the financial condition of the subsidiary is strong and notes that the subsidiary has received a financial statement filing extension from the Pennsylvania Department of Insurance.
Penn Treaty has filed an immediate appeal with the Florida OIR and is seeking a review of the suspension notice by an administrative law judge, the company says.
Penn Treaty the suspension move “by the Florida OIR premature and is vigorously pursuing a stay of the order or reversal,” the company says. “The company is actively working with the Florida OIR in reaching a resolution as its audited financial statements are being finalized.”
Florida sales accounted for 5.9% of Penn Treaty’s new business applications for the first 5 months of 2007, and the amount should be immaterial to the company’s anticipated financial performance, Penn Treaty says.
Penn Treaty helped create the modern long term care insurance market, but it suspended news sales in 2001, after some regulators questioned whether it had enough capital to support the business it was writing. The company later obtained new sources of financing and resumed sales.
Penn Treaty says it agreed in a 2006 consent order with Florida to file required state annual financial filings by June 1, unless previously approved by the Florida OIR.
Under the 2006 Florida consent order, Penn Treaty has filed its annual statutory financial statements for 2006, its quarterly reports for 2006 and 2007, and its required monthly financial results for 2006 and 2007 within the required timeframes, the company says.
Penn Treaty notified the Florida OIR more than 5 weeks ago that it would be getting a 30-day filing extension from its home state regulator, and that its audited surplus likely had increased more than 10% from the level reported a year earlier because of a federal excise tax refund, the company says.
Penn Treaty President William Hunt has put out a statement expressing disappointment in the Florida OIR suspension decision.
“While we appreciate their perspective in this matter, we contend that this is a ‘form over substance’ issue,” Hunt says. “We believe that the latest order fails to consider the many mitigating factors in support of our continued operations in Florida.”