The state said it took the action to protect policyholders, creditors and others at Hawaii's fourth-largest homeowners insurance company. HIG has 26,000 policy holders for its homeowners and hurricane insurance in Hawai'i.

"We hope that we are going to move along quickly and that this will not have an adverse impact on any of the policy holders," said State Insurance Commissioner J.P. Schmidt. He and insurance regulators in Alabama, Texas and Florida, states where HIG's parent company, Vesta Fire Insurance Corp., does business, want to engineer a sale of Vesta or its subsidiaries.

The state's action ends some of the uncertainty surrounding HIG, which in recent months lost about 4,000 customers. The turmoil can be traced to the financial woes of Vesta, an Alabama-based insurer hit hard with losses from Gulf Coast and Florida hurricanes over the past two years.

In March A.M. Best downgraded Vesta and its subsidiaries' financial strength ratings to C++, or marginal, from B, or fair. The ripple effect from that included local insurance agencies and mortgage companies recommending clients switch their hurricane and homeowner's coverage to different insurers.

Ernest Fukeda Jr., HIG's president and chief operating officer, said he will report to Schmidt, who will have a say in the company's big decisions. Fukeda said the company still had enough assets to pay day-to-day claims.