Update Regarding United Home & Cameron Mutual Insurance Companies

Dear Big I Arkansas Member,

As we communicated with you yesterday, United Home Insurance Company was placed into receivership on September 6 for the purpose of its rehabilitation.

We want to share the latest information with our members as currently known in offering guidance in communicating with your customers that may be impacted, and relay some E&O risk management considerations. It is our hope that very soon we can also provide you a sample letter that can be used in communicating with policyholders, once specific information is obtained from the Arkansas Insurance Department.

Big I Arkansas is advocating with the Arkansas Insurance Department to give serious consideration to allowing our agents the most time possible (90 days) to move United policies elsewhere. When that timeline stipulation is known, as well as other pertinent policy specific information, we will certainly keep you updated.

Any questions regarding United Home Insurance may also be directed to the following:

Contact the Deputy Receiver at 501-371-2776 or [email protected].
Contact United Home Insurance Company at 1-800-467-0723.
Contact the Arkansas Insurance Department at 1-800-282-9134 or 501-371-2600.

Cameron Mutual Insurance Company Rehabilitation

In addition to the issues surrounding United Home, Cameron Mutual Insurance Company was also recently placed into rehabilitation. Cameron Mutual is a Missouri-domiciled carrier that does write insurance in Arkansas. While this carrier falls wholly under the jurisdiction of the Missouri Department of Commerce and Insurance, we know many of you may have policies with Cameron. Here is a sample letter that can be used in communicating with policyholders. The FAQs for Cameron can be found here, and our friends at MAIA have prepared a release with additional information you can find here.

E&O Risk Management Considerations

A carrier being placed into rehabilitation and/or liquidation can pose an increased E&O risk to your agency. It is extremely important to properly document all conversations you have with your clients (as well as with company personnel) to minimize your E&O exposure. It is key to offer your clients a choice when it comes to handling their policy with a liquidated or rehabbing carrier, and this letter clearly provides the choices available to your clients. Some best practices to remember when replacing coverage include determining if any loss exposures have changed, getting signed and updated applications, sharing any changes or reductions in coverage, delivering policies in a timely basis, and encouraging policyholders to review their policy upon receipt.

Your Agency’s E&O Coverage

Keep in mind that many agent's E&O carriers in the marketplace have insolvency exclusions in their policies. Many of you place your E&O insurance with Swiss Re through the association, and we feel it is important to remind you of the insolvency-related language included in the policy.

Section V. E. INSOLVENCY. The financial inability to pay, insolvency, receivership, bankruptcy or liquidation of any insurance company, any Individual Practice Association, Health Maintenance Organization, Preferred Provider Organization, Dental Service Plan, Risk Retention Group, Risk Provider Group, self-insured plan or any pool, syndicate, association, or other combination formed for the purpose of providing insurance, or reinsurance, or any healthcare provider or any reinsurer with which the coverage was placed.

However, this exclusion does not apply if, at the time the coverage was placed with any of the above described entities, such entity or entities were rated by AM Best as B or higher, or alternatively, such entities were member insurers of the state guaranty fund or guaranty association in the state or states of domicile of the subject risk, or such entities were guaranteed by a governmental body or bodies and/or operated by a governmental body or bodies, or the coverage was placed with an insurance carrier through a state established residual market insurance program; or the coverage was placed with a County Mutual or Fraternal reinsured by carriers rated by AM Best as B or higher; or the coverage was placed with an insurance carrier admitted in the state or states of domicile of the subject risk and rated A or higher by Demotech.

The Swiss Re insolvency exclusion does not apply if at the time of placement, the carrier had an AM Best rating of B or higher or is a member of the state guaranty fund or guaranty association; or rated A or higher by Demotech at the time of placement. This is something you should be aware of as you move forward with moving customers to a new carrier, particularly if utilizing a surplus lines carrier with a rating below B. If you are not with Swiss Re, we are happy review your current E&O policy and how coverage may be impacted by rehabilitation or carrier insolvencies.

Please feel free to reach out to Debbie Abels if you have any further questions.

With regards,

Kelley L. Erstine

Chief Executive Officer

Big I Arkansas

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