An application for an order of liquidation has been filed in a Travis County, Texas, district court for a Houston-based nonstandard car insurance provider now in receivership.
With the arrangement of its board of directors, ACCC Insurance Co. was positioned into receivership on Oct. 21 by Travis County District Judge Tim Sulak at the request of the Texas Department of Insurance. The application for liquidation was filed Nov. 24 by the TDI-appointed Special Deputy Receiver (SDR) for ACCC, Prime Tempus Inc., which has actually found the business to be insolvent.
In a message to ACCC employees dated Nov. 17, Craig A. Koenig, representing Prime Tempus, stated no brand-new service would be written by ACCC going forward which a financially safe and secure insurance provider was being sought to take over ACCC’s book of organization. On Nov. 24 Koenig notified the business’s employees that the application for liquidation had actually been submitted. In that message to ACCC staff members, Koenig stated he is dealing with 3rd party entities that have revealed interest in checking out employment opportunities for some members of ACCC’s staff.
ACCC’s reported surplus had significantly declined in between completion of 2018 and June 30, 2020, at which time the business had an insurance policy holder surplus of $8,365,247, the application states.
At this time ACCC is now thought about to be insolvent and “remains in a condition such that continuing with the conduct of its business would not be in the very best interest of its policyholders, creditors or the public,” according to the liquidation application.
The company’s June 30, 2020, quarterly statement showed it owning business residential or commercial properties in Bedford, Houston and San Antonio with a combined value of just over $20.6 million. The business property in Bedford has actually since been offered. “Based on the list prices of the sold property, and broker evaluations and county appraisal district valuations of the other 2 residential or commercial properties, the SDR alleges that the marketplace value of these properties is no more than $10,432,079. This change to the realty property bring value, standing alone, lowers ACCC’s surplus as relates to policyholders below absolutely no,” the application states.
ACCC previously this year had acquired a $7,902,800 federal Paycheck Protection Program (PPP) loan, however since Nov. 24 there was no indicator that the loan had been forgiven. If represented as a liability, the PPP loan further reduces the business’s surplus, the SDR kept in mind.
” The history of ACCC’s operations reflect a continuous pattern of losses and erosion of surplus. ACCC can not continue to underwrite policies without a boost of the threat of loss to financial institutions, policyholders, or the general public. Its organization is not successful, so its losses continue to install,” the liquidation application states.
The application requests that ACCC be stated insolvent by the court, a finding that would authorize the state’s property/casualty warranty associations to pay the business’s outstanding insurance policy holder claims. In addition, “the SDR requests that the Order of Liquidation become effective at 12:01 a.m., December 30, 2020,” the court filing states.
The order for receivership had restricted the business’s “previous and present officers, directors, employees, underwriters and supervisors (consisting of Jack Henry Ikenaga Jr., Philip James Bither, Ross Edward Bennett, Jr., Frank M. Paris, Mike Cameron Weaver, Robert Mark Sumners, Michael Sear, and Jose Daniel Saenz); owners and affiliates (consisting of ACCC Holding Corporation, ACCC Claims Service, Inc., Best Texas General Agency Inc., Swift Premium Finance Company, Jack Henry Ikenaga, Jr., the Lutz Corporation, and Isthmus, Inc.); local tape-recording agents, handling general representatives (consisting of ACCC General Agency Inc. and Freedom National Insurance Services Inc.), agents, third party administrators, agents, partners, servants, adjusters, attorneys and accounting professionals (consisting of those acting in performance with them)” from carrying out any kind of organization on behalf of the business. That constraint would continue if the liquidation demand is authorized.
In April 2019, TDI struck ACCC Insurance and ACCC General Agency with a $110,000 charge for certain practices associated with its called motorist policies that the insurance coverage department found not to be in compliance “with all laws suitable to named chauffeur policies.” (Order No. 2019– 5916)
TDI’s 2019 Annual Legislative Report on Market Conditions revealed that for 2019, ACCC Insurance ranked 18th in regards to market share for individual car insurance in the state, though it just held a 0.96% share of the marketplace. The company had $221,473,617 in direct composed premiums for 2019 and an underwriting loss of $17,025,329, according to TDI’s market share report.
The application for liquidation is: Cause No. D-1-GN-20-006278. The application for liquidation is because of be addressed by the Special Master, Tom Collins, on Dec. 8, 2020.
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