How to accomplish a Loss Portfolio Transfer
"Loss Portfolio Transfer" is an agreement whereby the liabilities of the
insurer in receivership are transferred to another insurer in exchange for some
portion of the assets of the insurer in receivership.
In order to enter into a loss portfolio transfer with an insurer in
receivership, the potential purchaser will need to be a licensed insurer who is
authorized to write the types of insurance products that were written by the
insurer in receivership.
For a list of books of business that are currently for sale as a loss
portfolio transfer, please click here
Below are the procedures involved in entering into a loss portfolio transfer
agreement with an insurer in receivership. The first step will allow an
interested party to pre-register with the Receiver to receive notification when
a Loss Portfolio Transfer is available. The remaining steps identify various
processes that have to be completed to finalize the transaction.
- Register with
the Receiver to be notified when the Receiver intends to enter into a Loss
- Execute a Confidentiality
Agreement for a specific insurer in receivership and return it to the
- Request information from the Receiver in order to perform due diligence.
- Submit an offer for entering into a loss
portfolio transfer agreement with the Receiver.
- If the offer is recommended, execute a loss portfolio transfer agreement with the Receiver.
- If the policies are located in the state of Florida, file a notice of the
transaction with the Florida Office of Insurance Regulation. If policies are
located outside of Florida, obtain approval from the insurance regulator in that
state, if required.
- If the Florida Office of Insurance Regulation (or other state regulator)
approves or has no objection to the proposed purchase, the Receiver will seek
Court approval of the transaction.*
- If the transaction is approved by the Court, complete all remaining
requirements within the executed agreement.
*The Court previously approved the Receiver’s plan to sell books of business
of the insurer.