Thursday, August 3, 2006 - Insurance for 154,000 policyholders to be Canceled

Maybe this is a good time/reason to get in touch with your past clients....

About 154,000 Texas homeowners must find a new insurance carrier after regulators started shutting down Texas Select Lloyds, the state's sixth-largest home insurer.

Texas Select did not have the ability to protect its policyholders and so their policies will be canceled by Aug. 23, according to the Texas Department of Insurance.

"My primary goal in this action is to ensure policyholders have insurance that is able to pay their claims should a loss occur," State Insurance Commissioner Mike Geeslin said in a news release Tuesday. "We simply could not allow policyholders and ultimately Texas taxpayers to be at risk given the financial condition of these companies."

Texas Select's parent company, Vesta Insurance Group of Birmingham, Ala., has been mired in financial trouble, especially after huge losses from hurricanes Katrina and Rita.

The Texas Department of Insurance placed Texas Select in receivership two weeks ago, but it could not attract a buyer.

"We even had a potential buyer to take over these assets, but once we got the special deputy receiver in place to review everything, the picture was much bleaker than we thought," department spokesman Jim Hurley said. "It's much better to take this action now than after a hurricane."

Hurley said any prepaid premiums or outstanding claims are covered by the state's guarantee fund, which is designed to protect policyholders.

Policyholders needing help with the transition can reach the Texas Department of Insurance at (800) 252-3439 or go to the following Websites: http://www.tdi.state.tx.us or http://www.helpinsure.com