The Oklahoma City-based insurer that has the state contract to provide temporary liability coverage for uninsured motorists in Oklahoma is insolvent and its assets should be liquidated, state regulators claim.
The Oklahoma Insurance Department has filed a civil action in Oklahoma County District Court to take control of Red Rock Insurance Co. The company was awarded the state contract in November to provide temporary insurance for uninsured drivers under a new Oklahoma law that allows law enforcement to seize the license plates of motorists without liability coverage until they purchase a policy.
Red Rock President Michael Beasley said the company’s management team is committed to trying to save the firm, and will submit a plan to state insurance regulators to recapitalize the insurer. Beasley declined to comment further.
This is the second time in less than two years that Red Rock has drawn the attention of state Insurance Department for allegedly hazardous financial conditions. The company, formerly known as BancInsure Inc., had been struggling for the past several years with losses related to the 2008 financial crisis before it was acquired by the New York-based company Foster Jennings Inc. in February 2013. At the time, the company was under orders from state regulators to strengthen its capital position or be placed into receivership.
Foster Jennings has been unable to inject sufficient capital into the company to address its dangerous financial condition, said Kelly Collins Dexter, a spokeswoman for the Insurance Department.
“We had appointed first a supervisor, then a conservator, but it has become clear that judicial action is needed in order to protect the interests of the company’s insureds and creditors,” Dexter said.
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