State officials await a buyer for HIG
By Greg Wiles
Advertiser Staff Writer
By Greg Wiles
State officials hope to quell the turmoil surrounding Hawaiian Insurance & Guaranty by the end of the month by selling the No. 4 homeowners and motor vehicle insurer in Hawai'i.
The state yesterday said it was seeking an order of liquidation for Hawaiian Guaranty, also known as HIG, a step that's necessary to protect the insurance company's assets and policyholders while it is sold to a new owner. Insurance Commissioner J.P. Schmidt said he expected to receive at least three proposals from potential buyers by the close of business yesterday.
"This is always a very difficult situation, but we do have at least three interested parties," Schmidt said. "If we are able to make a sale, they will be able to put HIG back on its feet again."
Ernest Fukeda Jr., HIG president and chief operating officer, said six insurance companies and investor groups had gone over HIG's books in recent weeks. He said a buyer could be chosen sometime next week.
The state took over the company in late June because of financial troubles experienced by the insurance company's Alabama-based owner. Schmidt at that time said he acted to protect policyholders of the local company, which is solvent and has enough to pay its day-to-day claims.
HIG insures about 24,000 homes locally and was a subsidiary of Vesta Fire Insurance Corp., an insurer with large claims losses from Gulf Coast and Florida hurricanes during the past two years. On June 30, Schmidt got a court order allowing him to rehabilitate the company, something that gave him oversight of HIG while a possible sale was explored.
A liquidation order was anticipated as part of the sale process and includes having claims paid by the Hawaii Insurance Guaranty Association, a nonprofit funded by insurers to handle payments when local property and casualty companies are liquidated.
Splitting off the claims from HIG will make the company more attractive to buyers and ensure that claims are taken care of properly.
A hearing on the liquidation order was scheduled for Thursday.
Reach Greg Wiles at firstname.lastname@example.org.