Liquidation Order Issued for Auto Insurer with More Than 42K Policies in Pennsylvania

A Texas court has issued an order of liquidation for Access Insurance Company, an auto insurer that has 42,785 policies in Pennsylvania. This means Pennsylvanians that currently have auto insurance through Access Insurance will have no later than April 12 to seek new coverage.

The liquidation order was signed after the Texas Insurance Department determined Access Insurance to be insolvent.

Access Insurance is primarily a provider of non-standard auto insurance and is licensed in 22 states. In its order of impairment dated March 14, 2018, the Texas Department of Insurance said Access Insurance is an impaired insurer and that the company’s liabilities are greater than its assets.

In light of this news, Pennsylvania Insurance Commissioner Jessica Altman assured Pennsylvanians who currently have auto insurance with Access Insurance that they continue to have coverage and can legally drive. However, they need to find new insurance with a different company within 30 days from the date the liquidation order was signed on March 13, or when their current Access Insurance policy expires, whichever is sooner. Indeed, all Access Insurance policies will terminate at 11:59 p.m. on April 12.

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Pennsylvania drivers who currently have coverage through Access Insurance should file any arising claims with the company until their current policy expires, or until April 12, Altman said in a press release issued by the Pennsylvania Insurance Department. Claims filed during this period will be paid through the Pennsylvania Property and Casualty Insurance Guaranty Association. Policy renewals ended March 13.

“Pre-paid premiums will be refunded to policyholders.as soon as practical,” Altman said in the release.
“Policyholders do not need to take any action to receive refunds.”

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Pennsylvania isn’t the only state alerting consumers of the Access Insurance liquidation order’s impact.

South Carolina Department of Insurance Director Ray Farmer also said in an announcement released by his office that Access Insurance had around 15,500 South Carolina private passenger automobile insurance policies in force, and the South Carolina Property and Casualty Insurance Guaranty Association will work to cover valid claims filed by insureds in his state.

The order of liquidation comes following news in early March that California Insurance Commissioner Dave Jones ordered Access Insurance to immediately stop transacting and soliciting insurance business in the state.

The California Department of Insurance said the action followed Access’s Statutory Income Statement 2017 Preliminary (unaudited), which showed its policyholder surplus was negative $27.6 million as of Dec. 31, 2017.

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The insurer’s Statutory Income statement 2018 Preliminary (unaudited) report noted its policyholder surplus was negative $29 million as of Jan. 31, 2018. It had also failed to file its required yearly statutory statement.

In a separate, July 2017 order, California alleged Access and some of its affiliates had engaged in improper claims handling and improper rating and underwriting practices in violation of the California Insurance Code and the Fair Claims Settlement Regulations. Those
actions are still pending.

Cantilo & Bennett L.L.P. of Austin, Texas, has been appointed as the special deputy receiver to manage the liquidation.

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