National States Insurance Co., St. Louis, has prospective buyers for its life and Medicare supplement policies but can't find insurers interested in its Florida long term care policies, says Bruce Baty, special deputy receiver for National States.
The life, long term care, and Medicare supplement insurer was placed into rehabilitation April 1 by a state judge and turned over to regulators at the Missouri Department of Insurance. John M. Huff, director of the department, was appointed receiver of National States and has taken over operations of the company along with Bruce Baty, a partner at Sonnenschein Nath and Rosenthal L.L.P., Kansas City.
The company is continuing to operate nearly 3 months into rehabilitation but has stopped writing and selling new policies, Baty says.
At the end of 2009, National States had a surplus of about $2.2 million, according to Baty. But at the end of the first quarter, the company had used up the surplus.
Baty attributed the company's financial difficulties to its LTC policies in Florida. National States is licensed to do business in Florida as well as in 36 other states. It has been unable to get rate increases in the long term care business in Florida, and these policies are running a 400% loss ratio, according to Baty.
