Texas state regulators have taken over and began making plans to liquidate the state’s sixth-largest home insurance company after failing to find a buyer. The Department of Insurance will be canceling Texas Selects Lloyds, a subsidiary of Alabama based Vesta Insurance Group, polices by August 23, 2006. The Department of Insurance said policy holders should be receiving notices soon.

“The state process of liquidations is, in essence, the take all of the assets of the named companies and begin to sell them off and those assets are used to pay creditors and policyholders,” said Peter Brink, an analyst with Weiss Ratings.” “It’s not a great situation because some people are going to be left not getting paid back what they’re supposed to be.”

“Rating firm AM Best downgraded Vesta’s property casualty subsidiaries’ ratings to C++, or marginal, from B, or fair, in March because of the company’s higher than expected hurricane-related losses.”

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Pam