COLUMBIA, S.C. -- Seibels Bruce Group Inc. and a Florida insurance company have won lucrative contracts to insure South Carolina's risky drivers as the state phases out the hated recoupment fees and the state Reinsurance Facility.
With the new contract, Columbia-based Seibels, which has been trying to recover from near-financial devastation earlier this decade, can keep most of its workers who were in jeopardy because of the pending change in the state insurance system, company executives said.
"That's why it is so important to us. It allows us to maintain our economies of scale," said Stephen Harding, who is in charge of Seibels' auto insurance business in South Carolina.
All drivers currently pay recoupment fees to cover the accident costs of risky drivers or those with bad records who have their policies backed by the Reinsurance Facility. That high-risk pool backs the policies of about a third of the state's drivers.
In 1999, the state changes the Reinsurance Facility to a joint underwriting association, which is more like a big state-run insurance agency. In March, drivers can begin buying policies through the South Carolina Associated Auto Insurers Plan.
Seibels will evenly split the Auto Insurers Plan business with Bankers Insurance Co. of St. Petersburg, Fla.
"We're really excited about it," said Jeff Bragg, chief operating officer of Bankers' Insurance Management Solutions Group. "It's a good opportunity for us."
Bankers sells home insurance policies in South Carolina and planned to begin selling auto insurance policies as the state's insurance laws changed, Bragg said.
Harding said the Auto Insurers Plan business will probably total about $100 million. That money is needed because Seibels would have seen its Reinsurance Facility revenues evaporate around 2002, he said.
Seibels Bruce was one of three insurers with special contracts who handled about $207 million in Reinsurance Facility premiums in the 1997 fiscal year, which ended in October.
State Insurance Department Director Lee Jedziniak would not estimate what the total contract is worth because he doesn't know exactly how much business will be in the Auto Insurers Plan.
Jedziniak hopes that the plan will handle only between 2 percent and 4 percent of polices written.