On April 28, a Louisiana court declared the homeowners’ carrier Lighthouse Property Insurance Corporation insolvent and placed it into liquidation. Lighthouse was among the top 40 homeowners writers in Texas in 2020.
When Lighthouse Property Insurance Corporation quit writing insurance in Florida in March, Demotech withdrew the company’s rating. Then on April 5, Louisiana Insurance Commissioner Jim Donelon placed the financially troubled homeowners insurance company and its subsidiary, Lighthouse Excalibur Insurance Company, into receivership. It was the fourth Louisiana insurer to become insolvent following the 2020 and 2021 catastrophic hurricane seasons.
Lighthouse Property and Lighthouse Excalibur were domiciled in Louisiana with administrative offices in Tampa, Florida.
Lighthouse exhausted its reinsurance tower largely due to losses from the 2020 and 2021 hurricane seasons. The Louisiana Insurance Guaranty Association (LIGA) is set to take over payments of Louisiana claims, and the receiver will transfer pending claims to other states where the company wrote policies.
In March, the Texas Department of Insurance published a consent order for a $90,000 administrative penalty against Lighthouse Property for multiple violations found in a targeted market conduct examination. According to a TDI spokesperson, as of May 6, the fine has not been paid.
Louisiana’s liquidation order enjoins all persons, including policyholders and creditors, from instituting or further prosecuting any action against Lighthouse, except within the liquidation proceedings. In addition, the Texas Guaranty Act imposes an automatic six-month stay of proceedings in any case in which Lighthouse was obligated to defend a party. This stay is effective until Oct. 28, 2022.
According to the Texas Property and Casualty Insurance Guaranty Association’s website, the liquidation order cancels all in-force Lighthouse policies as soon as they expire or are replaced, but in no event later than 12:01 a.m. on May 28, which is 30 days after the order. TPCIGA recommends that policyholders contact their insurance agent or financial advisor immediately about securing other insurance.
New claims should be reported to Lighthouse at 888-544-4885. TPCIGA is working with the Louisiana receiver to arrange for transfer of the Texas claims to TPCIGA for handling. TPCIGA is unable to discuss the status of pending claims until the files are transferred. TPCIGA recommended that hardship situations be addressed to the receiver email@example.com or 225-342-0826.
TPCIGA is not bound by a settlement or release entered by Lighthouse or its insureds, and such a settlement is not evidence of liability or damages against TPCIGA or an insured. In accordance with Texas law, TPCIGA is obligated to review all claims to determine the extent to which they may be payable under the Guaranty Act.
Claims for unearned premium will be processed by TPCIGA when it receives all necessary financial information from the receiver.
The deadline for filing claims against the estate in liquidation is Aug. 28, 2022.
The Texas Department of Insurance 2021 Annual Report shows that Lighthouse ranked 37th in premium volume among insurers writing homeowners in Texas in 2020. The company’s Texas premium was $67.34 million, which represented 0.63 percent of the Texas homeowners’ market. Lighthouse wrote business in Texas, Louisiana, North Carolina, South Carolina and Florida.