Division of Rehabilitation and Liquidation
What is a Receivership?
How does an insurance company get placed into Rehabilitation?
When a company is found to be financially impaired, pleadings are filed by the Department of Financial Services petitioning the receivership court to place the company into receivership. Receivership hearings are held in the Leon County Circuit Court in Tallahassee, Florida. If the court accepts the petition, it will name the Department of Financial Services as Receiver of the company for purposes of rehabilitation.
What is the purpose of Rehabilitation & how does it work?
The goal of the Receiver is to try to preserve the company and eliminate the issues that resulted in a company being placed into Rehabilitation. The company continues to operate under the supervision of the Receiver who places staff on- site to manage the daily operations of the company. The Receiver supervises all aspects of the company including the collection of premiums and payment of company insurance claims and other expenses.
Summary of Rehabilitation under Chapter 631, Part I, Florida Statutes
Unlike the liquidation portion of Chapter 631, Part I, Florida Statutes, the rehabilitation portion of the law is very general. It provides the Receiver, as the rehabilitator, with great discretion to prepare a plan to assist a company to resolve its difficulties. The Receiver is responsible for taking actions necessary to correct the conditions that necessitated the receivership.
By Statute and Court Order:
What happens if the Rehabilitation process is not successful?
Title Insurance companies are not likely to be liquidated under Florida Statute 631.400. The Receiver will continue to administer the estate until such time as the issues that resulted in the company being placed into Rehabilitation are eliminated.
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