A Florida based residents group has had its certificate of authority to act as an insurer suspended because it failed to provide sufficient letters of credit (L/Cs) to underpin its financial strength.

Now the group is seeking to reverse a listing of it by the Office of Insurance Regulation (OIR) as a financially unsound organisation because of its failure to provide the L/Cs in time.

Self-insurance group

The Palm Beach Windstorm Self Insurance Trust emerged in January as a group of property owners who combined to arrange their own insurance rather than pay hefty premiums to insurance companies.

Now the member-owned trust for hurricane and hail coverage is working to disprove an OIR order listing it in "an unsound financial condition."

Temporary suspension

Officials at OIR say they temporarily suspended the trust's certificate of authority for failing to provide required L/Cs for each of the four initial members.

According to the trust, it had provided L/Cs for three of the four initial members by the time the order was issued, but unexpected delays occurred because some members needed to change banks to obtain the L/Cs.

Compliance

The trust has since complied fully with the order, with all four members now having provided the required L/Cs.

Now the trust says it wants the OIR to revoke its description of the trust as a body in an unsound financial condition.

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