$1 Leads to Oklahoma-based Insurer's Survival

Lisa G. Bays, President and CEO of BancInsure

By Mark E. Ruquet

Property and casualty insurance leaders proudly boast that the industry came through the financial meltdown in 2008 unscathed except for a few. While American International Group received the bulk of the attention among P&C carriers, every now and then a forgotten victim of the collapse comes back to remind us of how devastating it was.

Recently, Oklahoma City-based BancInsure says it is making a come back after the Oklahoma Insurance Department declared the company insolvent and threatened to place it under receivership.

The Oklahoman reports BancInsure was purchased by New York-based private equity firm Foster Jennings Inc. in February for $1. The company received a cash infusion of $30 million from the firm and plans to direct its business strategy at short to medium tail insurance products with low limits.

BancInsure, which insured community banks and other financial institutions, was declared insolvent by the insurance department earlier this year. However, with the investment, BancInsure, under the leadership of President and CEO Lisa Bays, is now re-entering the insurance market, prompting the insurance department to withdraw a legal request for receivership.

On its website, BancInsure said it will take minimum risk positions of 10-25 percent "on profitable niche oriented programs controlled by professional program administrators and using strong 'A rated' reinsurers to protect its balance sheet." The company said it will focus on property, surety and general liability business that will include non-standard auto, low limit surety bonds such as bail bonds and contractors licensing bonds, low value dwellings in non-catastrophe prone areas, marinas, retail general liability, and small niche public and private transportation classes. The company is non-rated and admitted in 48 states.