I’ll admit it, until I was tipped I had no idea who Kingsway Financial Services was or whether they were doing business in Mississippi. Then again I am a hard hat CPA so that should be expected. But what about our DOI?
Curious, I began to google and before long I tuned up one of Kingsway’s subsidaries that did business in Mississippi in Southern United Fire Insurance Company based out of Mobile. Giving credit where it is due the folks at Southern United give a link to their AM Best rating on the front page of their web portal. It is not good by the way.
So my next stop was what should have been the first stop but I knew better than that. You see, at the Mississippi Department of Insurance seldom is heard a discouraging word about insurers whether solvent or not. For better or worse our state regulator Mike Chaney is asleep at the switch when it comes to these things.
As an independent agent that is not asleep at the switch told me today, insure with Southern United if you want the cheapest rate, just don’t count on them being around in 6 months to pay your claim. ‘Nuff said.
As I spoke with my source on the telephone my jaw literally dropped—-between my day job as a CPA and passion as a hobbyist investor I thought I had seen the sleaziest of the sleazy in characters like Angelo Mozilo, John Mack, Ed Liddy, Hank Greenberg etc but those guys have nothing on the management team of Canadian insurer Kingsway Financial Services Inc. Once again I was also reminded that while stories like the Balloon Boy and White House Party crashers dominate the news, the best stories in my opinion come from the world of finance and are generally under reported by the media. First some background courtesy of Yahoo Finance:
Kingsway Financial Services Inc., through its subsidiaries, provides property and casualty insurance to individuals and businesses in the United States and Canada. It primarily offers non-standard automobile and trucking insurance. The companys non-standard automobile insurance covers drivers who do not qualify for standard automobile insurance coverage because of their payment history, driving record, place of residence, age, vehicle type, or other factors; and trucking insurance cover liability, accident benefits, physical damage, cargo, and comprehensive general liability under a package program. It also provides standard automobile insurance; commercial automobile insurance; commercial and personal property coverages; motorcycle insurance; residential wind insurance coverage; construction defect claims; and other specialty coverages, such as customs, bail, and surety bonds. In addition, the company purchases reinsurance from third parties.
The Yahoo profile typically derives from the first footnote to the annual financial statements issued by the company. Not included of course is a short financial history which in Kingsway’s case we define as beginning in 2005 when this huge company began to implode racked by bad underwriting and investment decisions. In this case the shareholders tried to get management to right the ship led by activist investor Joseph Stilwell whose group owns over 10% of Kingsway. Mr Stilwell also could answer to the title bagholder as I’ll explain a bit later.
In Kingsway’s case the problems are massive and well documented. Over the past year several of the Board of Directors have resigned as has the Chief Financial Officer and Kingsway’s unresponsive CEO W. Shaun Jackson. Insurer specialized AM Best and the other ratings agencies have been steadily downgrading the company which also appears to be in violation of certain debt covenants. One particular operating company, Lincoln General Insurance Company, which underwrote commercial truck insurance in Pennsylvania was particularly unprofitable to the detriment of the entire organization. Continue reading ““Run-off” the cliff and into the ground. The sleazy (and continuing) story of multi-national insurer Kingsway Financial Services”
Wednesday, December 30, 2009
Baton Rouge, Louisiana
SO THIS TERRORIST WALKS INTO A LOUISIANA BAR
I was in the New Orleans airport this week waiting as a family member made her way through airport security with two small babies. Boy, were these guys with the Transportation Security Agency on the job and up to the task of stopping any terrorist threats. They all but strip searched her, opening every baby bottle and jars of baby food. Nothing gets by these guys. Well, except for Arabs loaded down with explosives.
No profiling allowed even though terrorist after terrorist fits a similar description. We can’t do that for it would be politically incorrect. Why is it that we profile clothes, but not the person? One guy years ago tries to set off an explosive with his shoe, so every traveler from that time on has to take off the shoes.
On Christmas day, A Nigerian national boarded a flight from Amsterdam to Detroit with his underpants packed with explosives. His frighty whities came with a special pouch to hold the explosives, no doubt sewn by al Qaeda’s finest seamstresses. You can just hear Louisiana’s own Jerry Lee Lewis hollerin’ “Great Balls of Fire.” All to no avail as his crotch bomb failed to ignite, and alert passengers wrestled the terrorist thug to the ground. Continue reading “Jim Brown on airline security and the latest would be terrorist: Great Balls of Fire!”