The New York-based financial services company Foster Jennings Inc. purchased BancInsure in February from the Oklahoma City-based holding company BMSI Holdings Inc. for $1. The company had been struggling for the past several years with losses related to the 2008 financial crisis and was under orders from state regulators to strengthen its capital position or be placed into receivership.
BMSI Holdings filed for chapter 7 bankruptcy last week, reporting $59.7 million in liabilities against roughly $7,800 in assets.
Foster Jennings submitted financial instruments worth $30 million to boost BancInsure's capital and stave off a state takeover, but the Insurance Department claims in court documents that the company has not presented adequate proof of the assets' value.
Calls to Foster Jenning's offices in New York City were not returned.
Founded in Oklahoma in 1985, BancInsure provided fidelity bonds and officers' liability insurance to community banks and other financial institutions across the U.S. The company sold off the renewal rights to most of its business for financial institutions to AmTrust Financial Services Inc. last year, but remains licensed to write property and casualty polices in 49 jurisdictions, Bays said.
The company has 15 employees in Oklahoma City.
MORE FROM NEWSOK
The long-range plans of BancInsure are to recapitalize and move forward with new business and rebuild the insurance company.”
BancInsure president and CEO