The Sun Sets on Sunshine State Insurance Company
By: Joseph Petrelli
On March 4, 2014, Demotech, Inc. withdrew the Financial Stability Rating® (FSR) assigned to Sunshine State Insurance Company after being advised that the Company would be unable to file its December 31, 2013 annual statement in a timely manner. Equally as important in the decision to withdraw the FSR was the rationale presented by management in their initial verbal communication to Demotech that several years of independently audited financial statements would likely need to be materially revised due to previous reporting errors associated with reinsurance contracts. On June 3, 2014, the Company was ordered into liquidation. Although the Company reported in excess of $7,000,000 of surplus in its March 31, 2014 financial statement to regulators, the Court deemed continued operation to be hazardous to policyholders.