California Regulator Pushes ‘Cease & Desist’ Order to Stop Access Insurance Business Operations from Hurting Policyholders
On March 7th, 2018, California Insurance Commissioner Dave Jones issued a formal “Cease & Desist” order against Access Insurance Company. The order serves as a cautionary notice that details the sender’s complaint of alleged wrongdoing and threatening legal action if not stopped immediately.
No New Business
The legal order pursued by the California regulator entails that the business, Access Insurance, can no longer acquire any new or renewing business of any kind in the state of California. The reason for the sudden request to halt all Access Insurance operations was due to an insolvency risk.
Access Insurance’s Insolvency Risk
Access Insurance’s Statutory Income Statement in 2017 showed their policyholder surplus was negative $27.6 million as of December 31, 2017. Furthermore, the insurance company’s 2018 Statutory Income Statements noted its policyholder surplus reached a negative balance of $29 million as of January 31, 2018. Given the insurance company’s failure to file the required annual statement, legal actions arose.
Access Insurance to ‘Cease and Desist‘
The repeated debt and lack of notice caused California officials to stop Access Insurance from their overall insolvency risk. This is in hopes of protecting innocent policyholders that initially signed up for these services for protection. The insurance company’s un-audited financial reports mention how the company failed to sustain their capital requirements, as mandatory and required by law. Given the declining debt the company has faced, the future of Access Insurance suggests being subject to conservation or liquidation proceedings. Irreparable loss and injury to the property and business of the company has occurred or may occur unless the commissioner acted immediately to correct, eliminate, and remedy such conduct and conditions.
“I have taken this action to protect consumers from buying insurance from a company unable to demonstrate it has the assets and capital to sustain its business as an insurer,” said Insurance Commissioner, Dave Jones. “As insurance commissioner, my first priority is protecting consumers and the integrity of the insurance marketplace-that includes making sure insurers are able to deliver on their promises to consumers.”
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