ST. MARYS, Ga. - Southeast Georgia cities, counties and school districts are scrambling with others in the state to find new workers' compensation insurance after Southeastern U.S. Insurance Co. was declared insolvent and will be liquidated.
State officials estimate 53 municipalities in Georgia were affected.
Insurance Commissioner John Oxendine said the action was taken after an official with the insurance company was involved in unauthorized land transactions without state approval and filed "incorrect, false and misleading" financial statements to regulators.
Oxendine said there were warning signs the company was headed for financial problems.
"We became concerned the company was growing very rapidly," he said. "They were becoming a very large insurance company."
In southeast Georgia, Baxley and St. Marys have found a new provider and officials in Nahunta are still searching. School boards in Coffee, Lowndes and Wayne counties also had to find new carriers for workers' compensation claims.
School districts and municipalities must find a new provider by Nov. 26, the date state coverage from an insolvency pool runs out. Some cities, counties and school districts, however, had a sense of urgency because the insolvency pool established by the state only covers employers with a net worth of $25 million or less.
Those eligible for the pool are covered, but "there are limitations to guaranteed funds," Oxendine said.
"It's not unlimited coverage," he said. "It's based on the assets we are able to acquire. How much is refunded depends on how much money we can raise."
Workers' claims have a priority, he said.
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