A provider of homeowners insurance in Florida has been stripped of its financial rating by one of the leading rating firms in the country, according to Insurance Journal. Coconut Grove-based insurance agency Magnolia Insurance Co. has lost its rating after failing to come to an agreement with Demotech, Inc. over implementation of a new business plan with key changes.
Magnolia began doing business in 2008 with $20 million in capital and $100,000 in primarily cheap home insurance policies shifted from state-run Citizens Property Insurance Corp. But the company’s finances have come into scrutiny, leading Demotech to make its recent “A” rating of Magnolia contingent on certain changes to Magnolia’s business operations. This rating is a key element used by consumers when making a purchasing decision after receiving home insurance quotes.
As of December 2, Demotech had not received a promised financial report from Magnolia or received a promised update of progress on the business plan implementation.