Coronet Insurance Group Ordered into Conservation

CHICAGO, IL Illinois Insurance Director Mark Boozell announced today that he has obtained an Order of Conservation against the Coronet Insurance Group: Coronet Insurance Company, Crown Casualty Company and National Assurance Indemnity Company, all Illinois domestic insurance companies located in Chicago. The only member of the Coronet Group not included in the Director's order is Casualty Insurance Company of Florida, a Florida domestic that is not subject to regulation by the Illinois Department of Insurance.

The order was granted in response to a petition filed by Boozell based on the Insurance Department's finding that Coronet's policyholder surplus was impaired in excess of $2.5 million and Crown's by an excess of $200,000. National Assurance Indemnity Company is not known to be impaired at this time. The group primarily wrote nonstandard private passenger automobile coverages, as well as affiliated reinsurance covering the same lines of business. Coronet is licensed in 28 states. Crown and National Assurance are licensed only in Illinois.

The most recent annual statements of Coronet and its affiliates reflected approximately $80 million in direct premium as of December 31, 1995; however, they have not be actively writing new business since the Illinois Department issued a Cease and Desist Order earlier this month. The group's Florida affiliate voluntarily ceased writing business at the same time.

Coronet Insurance Company is a wholly owned subsidiary of Normandy Insurance Agency Incorporated of Chicago. Crown Casualty is a wholly owned subsidiary of National Assurance Indemnity Company which in turn is a wholly owned subsidiary of Coronet Insurance Company. The boards of directors of all three companies consented to the entry of the order.

The Conservation Order authorizes the Conservator: to take possession and control of the companies' property, books, records and assets; to supervise their business and affairs in an effort to conserve their assets for the protection of their policyholders and creditors; to ascertain the companies' financial condition; and to review their claims and other pertinent records consistent with the conservation proceedings. The order contains a temporary moratorium upon the payment of all claims and loss adjustment expenses subject to certain hardship provisions, as well as return premiums or other contractual obligations of the companies, until further order of the court; and an injunction prohibiting suits against the companies outside of the conservation proceedings.

The Conservation proceedings are being handled by the Office of the Special Deputy Receiver, 222 Merchandise Mart Plaza, Suite 1450, Chicago, IL 60654; (312) 836-9500.