Two subsidiaries of Des Moines-based American Enterprise Group Inc. are leaving the state in part because of a section of the Patient Protection and Affordable Care Act better known as Obamacare.
American Republic Insurance Co. and World Insurance Co. have informed the Office of Insurance Regulation that they are leaving Florida due to a change in the regulatory environment.
American Enterprise Group's "view of the opportunities in the senior market, coupled with the changes in the major medical insurance marketplace and the resulting uncertainty brought on by the regulatory environment, has led the company to discontinue issuing individually underwritten comprehensive major medical products through its subsidiary insurance companies, the company stated in a release.
The Florida Office of Insurance Regulation noted in a release that the changes highlighted by the parent company include the Affordable Care Acts imposition of the minimum medical loss ratios.
Under the federal act, insurance companies will be required to spend 80 to 85 percent of premium dollars on medical care and health care quality improvement, rather than on administrative costs. Otherwise, starting in 2012, they will be provided a rebate to customers.
American Enterprise will have no subsidiaries in Florida when the pullout is complete. Mary Durand, a spokeswoman for American Enterprise, said customers will be able to convert coverage to Chicago-based Celtic Insurance Co.
The subsidiaries stopped accepting new policies on Oct. 20, a day before American Enterprise advised the state of its decision, Durand said.
According to the Office of Insurance Regulation, American Republic had $6.8 million in premiums and had 3,459 individually underwritten policies in force in Florida as of 2010. World had $6.1 million in premiums and had 2,457 underwritten policies in force in Florida as of 2010.
American Enterprise reports these companies now have 1,248 policies and 1,367 policies respectively.
In Florida, nonrenewals are effective on the anniversary date of the policy six months after the notice is submitted.
Reach Jim Turner at jturner@sunshinestatenews.com or at (850) 727-0859 or (772) 215-9889.
