Southern Title Insurance operates in receivership from an office off Forest Avenue. (By Michael Schwartz)
A local insurance company that has been under state control for the past two years could be headed for liquidation.
The state’s Bureau of Insurance has asked for a hearing to declare Southern Title Insurance Corp., a Richmond-based title insurer that was hit hard by an employee’s embezzlement, a candidate for liquidation.
![Read the most recent receivership filing. [PDF]](/wp-content/uploads/2013/11/Southern-Title-Insurance-application.jpg "In wake of embezzlement, liquidation looms 2")
Read the most recent receivership filing. [PDF]
The receiver’s attempt to rehabilitate the firm found a $30 million shortfall between its liabilities and its assets and reserves.
“The Deputy Receiver therefore submits that Southern Title is insolvent,” the receiver stated in documents filed in October.
The receivership dates to late 2011, when Southern Title laid off its underwriting staff and stopped taking new claims after the company admitted that one of its employees in Texas embezzled funds that were to be held in escrow.
A subsequent investigation left the company below proper capital levels. The court appointed the SCC to take the reins and protect the interests of policyholders and creditors.
There has since been a freeze on the firm’s ability to take on policies and pay claims.
“When they went into receivership, no new policies could be offered. In essence, what was occurring was just handling current policies,” said Ken Shrad, an SCC spokesman.
Southern Title, which had offices downtown at James Center, operates in receivership out of an office off Forest Avenue.
A hearing on the proposed liquidation and a declaration of insolvency is set for Feb. 4. The liquidation would take into account any claims from creditors and policyholders.
The State Corporation Commission building in downtown Richmond.
Southern Title Insurance operates in receivership from an office off Forest Avenue. (By Michael Schwartz)
A local insurance company that has been under state control for the past two years could be headed for liquidation.
The state’s Bureau of Insurance has asked for a hearing to declare Southern Title Insurance Corp., a Richmond-based title insurer that was hit hard by an employee’s embezzlement, a candidate for liquidation.
Read the most recent receivership filing. [PDF]
The receiver’s attempt to rehabilitate the firm found a $30 million shortfall between its liabilities and its assets and reserves.
“The Deputy Receiver therefore submits that Southern Title is insolvent,” the receiver stated in documents filed in October.
The receivership dates to late 2011, when Southern Title laid off its underwriting staff and stopped taking new claims after the company admitted that one of its employees in Texas embezzled funds that were to be held in escrow.
A subsequent investigation left the company below proper capital levels. The court appointed the SCC to take the reins and protect the interests of policyholders and creditors.
There has since been a freeze on the firm’s ability to take on policies and pay claims.
“When they went into receivership, no new policies could be offered. In essence, what was occurring was just handling current policies,” said Ken Shrad, an SCC spokesman.
Southern Title, which had offices downtown at James Center, operates in receivership out of an office off Forest Avenue.
A hearing on the proposed liquidation and a declaration of insolvency is set for Feb. 4. The liquidation would take into account any claims from creditors and policyholders.
The State Corporation Commission building in downtown Richmond.