By Julie Patel, Sun Sentinel
Insurance Commissioner Kevin McCarty said today that Olympus Insurance Co. must beef up its claims paying reserves and resolve accounting issues by May 7 or face suspension.
In an order to the company, McCarty said the company doesn’t have enough money to pay claims if more than one major hurricane were to strike this year. He said the company said it was profitable but his office estimates a $7 million loss last year for the company, which knocks its claims-paying reserves down to $14 million. Regulators said the company must straighten out the accounting discrepancies and attempt to have its parent company provide money to beef up its reserves.
In addition, the company told regulators it would pay a 22 percent to 29 percent fee to its affiliate for acting as its managing general agent — or MGA — but McCarty said his office found the company was paying closer to 34 percent.