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United Home Insurance Co. of Paragould Placed in Receivership

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United Home Insurance Co. of Paragould was placed in receivership Wednesday, after the Arkansas Insurance Department said that allowing the company to continue would be hazardous to policyholders.

Arkansas Insurance Commissioner Alan McClain asked a Pulaski County Circuit judge to appoint a receiver on Tuesday because the company “is in such financial condition that continuing to conduct business would be hazardous to its policyholders, creditors, and the public,” according to the filing.

United Home’s board had agreed to be placed in receivership on Aug. 30, according to a filing in the case.

McClain said in an interview with Arkansas Business on Wednesday that the company fell below the surplus and capital requirements to maintain being an insurance company in Arkansas. He said that United Home had been monitored for “quite a while.”

In addition to Arkansas, United Home also wrote coverage in Kentucky, Missouri, Oklahoma, Tennessee. And those states had a lot of storm losses, McClain said. United Home told the AID that those losses “really took their toll on their bottom line,” he said.

McClain didn’t have United Home’s financial information immediately available, and didn’t immediately know how many claims were pending.

“They still have some assets,” he said. And once the assets are gone, a property and casualty guaranty fund, which is funded by the insurance industry, will help pay claims.

“People’s claims will continue to be paid, and we’ll have an orderly … dissolution of the company at some point,” he said.

United Home had 58,896 policyholders in all states, including 21,793 in Arkansas.

McClain said the policyholders’ agents will be working with them to secure new insurance coverage. United Home’s coverage offerings included homes and autos.

“United Home Insurance Co. is a family-owned personal lines carrier located in Paragould,” the company said on its website. “We take pride in our local roots and have a long history of providing exceptional coverage and service. After more than 100 years, we know great rates mean nothing without great service — so we specialize in both!”

The company was founded in Paragould in 1914 as an unincorporated farmers’ mutual fire association. In 2007, it merged with United Home Insurance Company of Newkirk, Oklahoma, and found a niche by specializing in coverage of older and middle-market homes.

As of 2017, it had grown to write about $53 million in premiums and was operating with $13.5 million in capital and surplus. It employed 32 people and the number of independent agents was about 500.

McClain said that in his more than three years as commissioner, United Home Insurance is only the second company the AID placed in receivership.

The AID’s head of the liquidation division, Michael Surguine, was on his way Wednesday afternoon to the company’s office to assess United Home.

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