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The aftermath of the bankruptcy of reinsurer Best Two following allegations of fraud has rippled through the insurance industry. Pouch Group Announcement On Tuesday, the company announced that its insurance subsidiary, Homeowners of America Insurance Company, has been placed under temporary oversight by Texas regulators.
Porch CEO Matt Ehrlichman called the Texas Department of Insurance’s move “a smart move for regulators to take given the wide-ranging impact of Vesttoo on the insurance industry.”
Since the termination of the Best Two reinsurance agreement on Aug. 4, Mr. Poach said Homeowners of America Insurance Company (HOA) has provided approximately $175 million under the agreement. It said it replaced 84 percent of its reinsurance coverage.
The HOA continues to manage day-to-day operations such as new business launches, renewals and claims payments, but will continue to operate as a Texas Department of Insurance (TDI) until “TDI is fully accustomed to HOA’s operations.” will be supervised. The post-Vest financials are similar,” Porch said.
best toe claim The business uses artificial intelligence to modernize the reinsurance industry and help insurers transfer some of the risk posed by claims to investors.
But Vesttoo Chapter 11 Bankruptcy Protection August 14 — 5 days later wall street journal report The Federal Bureau of Investigation and several state insurance commissioners are investigating whether the Tel Aviv-based company was a conduit for a multi-billion dollar fraud scheme using forged letters of credit.
Former Vesttoo CEO Yaniv Bertele protested on WhatsApp on Monday that he and his co-founder chief financial engineer Aaron Lifshitz had no knowledge of wrongdoing at the company, he said. trade paper reported. Insurance company report.
“First and foremost, Aron[Lifshitz]and I, personally and collectively, had no knowledge of any falsification of any document in the transaction and certainly never forged any document,” Bertele said. wrote. “We have not committed fraud, theft, or any other activity attributed to us.”
Porch, a marketplace for moving and remodeling, August 9 Quarterly financial results report Best2 has arranged capital for one of HOA’s reinsurance contracts, which provide up to $175 million in catastrophic event coverage, the company said.
“We will begin investigating the rapidly evolving situation immediately and are working quickly to analyze the impact on our business,” Porch told investors at the time. “Furthermore, we have been in touch and held meetings with regulators and other key stakeholders regarding the development of the situation.
HOA announced that it was able to seize $47.6 million as collateral from the reinsurance trust after the termination of the reinsurance contract. He also pleaded for $10,000.
The charge resulted in a net loss of $87 million in the second quarter, up from a loss of $27.3 million in the same period last year, despite a 39% increase in revenue to $98.7 million.
Hoa is a licensed property and casualty insurer with operations in 21 states, with most of its business conducted in Texas, South Carolina, North Carolina, Georgia, Virginia and Arizona.
Porch said Tuesday that HOA continues to raise additional capital and reinsurance to satisfy regulators at the Texas Department of Insurance. Porch has $358 million in unrestricted cash and investments as of June 30, of which $192 million is in HOA and $166 million is in Porch’s other businesses and legal entities. said.
“Vesttoo’s allegations of fraud are disappointing events for insurers and the reinsurance industry alike,” Ehrlichmann said in a statement. “Having said that, this was a one-off event and the Pouch team responded quickly and did an excellent job securing additional reinsurance coverage. We look forward to working with TDI to define HOA’s plans for continued enhancement.”
Porch, which went public in 2020 through a merger of special purpose acquisition companies (SPACs), provides software and services to more than 30,000 residential service providers, including home inspectors, mortgage brokers, title companies and moving companies. there is
The company helps prevent moving or closing by providing services such as insurance and warranties for homeowners, apps aimed at helping consumers with home repair and improvement services, security, and internet shopping. I think it can be simplified.
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