Tallahassee - April 15: Florida Chief Financial Officer (CFO) Jimmy Patronis has issued a consumer alert regarding Bank of America (BoA) termination of its banking relationship with Avatar Property & Casualty Insurance Company (“Avatar”).
Avatar is currently in receivership for purposes of liquidation. Avatar issued and mailed checks as part of its normal claims process prior to liquidation, but BoA has elected to not honor those checks. The court took control of Avatar on March 14th and the insurer had approximately 37,000 policies. The Department is working through Avatar’s records to communicate with policyholders on the issue.
Patronis advises that Avatar's Florida policyholders, and other recipients of checks issued by Avatar, should not deposit or cash Avatar checks because those checks will not clear, and the policyholder or other recipient may be charged banking and overdraft fees.
“Anytime policyholders have to deal with their insurer going out of business, it’s a challenging situation," said CFO Patronis. "But unfortunately Bank of America is making things even worse. The bank has outright declined to process checks already in the hands of policyholders so if someone has recently gotten a check from Avatar, we’re asking policyholders to not cash, or deposit, those checks."
If policy holders have a valid claim, they will get their money, but it’s going to come from the guaranty association and that will take time, said Patronis in a news release.
Consumers who have already received overdraft charges should keep those records. Patronis says he will formally ask BoA CEO Brian Moynihan to cover any overdraft fees that resulted from their actions.
"The bank has trillions of dollars in assets, and they market themselves as big believers in being good members of the community. I take them at face value and will work to make these consumers whole," said Patronis.
During liquidation, the guaranty association is responsible for reviewing and processing open claims that have not already been paid, and that takes time. The Department of Financial Services has identified all uncashed claim checks and will provide all payment and associated claims information to the Florida Insurance Guaranty Association (“FIGA”). Once the information is transferred, FIGA will review the original claim and pay according to their claim handling guidelines. If a policyholder or other payee received a Bank of America check from Avatar for payment unrelated to an insurance claim, they will need to file a proof of claim with the Receiver.
Proof of claim forms will be mailed to known creditors of Avatar and will also be posted on the following website at at a later date: https://avatar-liquidation.com/ .