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Insurer Can't Write Policies

The Post and Courier

August 29,2007

SECTION:Insurance

LENGTH: 498 words

HEADLINE:Insurer Can't Write Policies

By Peter Hull, The Post and Courier, Charleston, S.C.

Aug. 29--The state Department of Insurance has suspended a Florida-based
health insurer from writing any new business in South Carolina amid concerns
that the company's rapid growth has outstripped its ability to pay claims.

The department has placed an "order of supervision" on Universal Health Care
Insurance Co. of St. Petersburg, Fla., after its business in South Carolina
increased by more than 10 times what the company had predicted.

The move means Universal is not allowed to accept or solicit any new
policies until further notice.

Insurance regulators in Florida, Georgia, Nevada and Utah have taken similar
measures.

Justin Murphy, a Universal spokesman, said the company is working with the
states to resolve the issues as quickly as possible and before its
open-enrollment period in November.

Existing policies in South Carolina are not affected, an Insurance
Department official said Tuesday.

Universal had 11,702 policies in the Palmetto State as of April, the most
recent available data, said agency spokeswoman Ann Roberson.

"They're honoring those policies they have," Roberson said. "They're just
not writing new business."

A statement on the company's Web site states that policyholders will receive
all the benefits and services of their plans, and that physicians and other
care providers will continue to be paid.

According to the Insurance Department's order, Universal Health Care
generated far more premiums in 2007 than projected when the company applied
to be an admitted carrier in South Carolina.

According to state data, Universal forecast that it would write policies
totaling $3.2 million in premiums in South Carolina throughout this year and
$74.3 million nationwide.

But as of May, the company had generated $38.8 million in premiums in the
state and $265.8 million nationwide, an overshot of 1,112 percent and 257
percent, respectively.

"The insurer has grown so rapidly ... that it lacks adequate financial and
administrative capacity to meet its obligations in a timely manner," the
South Carolina Insurance Department said in its ruling.

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