ARIZONA DEPARTMENT OF INSURANCE
2910 North 44th Street, Suite 210, Phoenix, Arizona 85018-7256 · (602) 912-8456 · FAX: (602) 912-8452
|Executive Assistant Director|
|FOR IMMEDIATE RELEASE|
|December 5, 1996|
INSURANCE DIRECTOR SUSPENDS CERTIFICATE OF AUTHORITY OF CORONET INSURANCE COMPANY
John King, Director of the Arizona Department of Insurance, announced today the suspension of the authority issued to Coronet Insurance Company to transact insurance in the State of Arizona. The suspension order took effect on December 4, 1996.
Coronet is an Illinois corporation which has primarily sold non-standard auto insurance policies in Arizona. The Director's Order, which took effect immediately, specifically prohibits Coronet from issuing any new policies or renewing any existing policies and contracts of insurance in this state.
The Director issued the Order based upon Coronet's failure to make required financial filings with the Department and upon a finding that Coronet is in an unsound financial condition making its further transaction of insurance in this State hazardous to its policyholders or the people of the State.
The Illinois Department of Insurance, the agency that has primary regulatory responsibility for Coronet, issued a Cease and Desist Order on December 3, 1996 terminating the company's authority to transact insurance. The Illinois Cease and Desist Order found that Coronet overvalued its assets and investments, withheld approximately five million dollars ($5,000,000) of claims payments due to insufficient funds, and conducted its business and affairs in a manner hazardous to its policyholders, creditors and the public.
The Suspension Order entered by the Director specifically finds that Coronet "is in an unsound condition or in such condition as to render its further transaction of insurance in this state hazardous to its policyholders or to the people of this state." Under Arizona's private passenger motor vehicle insurance law, the finding for the protection of policyholders that an insurer is in hazardous financial condition serves to suspend the portion of the non-cancellation law that restricts an insurer from cancelling or refusing to renew motor vehicle coverage that has been in effect for more than 60 days. As a result of this finding, Coronet may immediately refuse to renew policies issued to existing policyholders in accordance with Arizona law. Further, Coronet has the right to cancel policies issued to existing policyholders in accordance with Arizona law.