FedNat

This would become an event of default under the company's outstanding $100mn senior unsecured notes due 2029 and $21mn convertible notes due 2026 if not discharged within 60 days.

Loss creep from Hurricane Ida has led to the loss and an increase in loss reserves.

Demotech earlier warned that more than 15 possible carrier downgrades could come in July.

Board member David Patterson took on the role on an interim basis, while Monarch has recruited a new CFO who previously served at Security First.

Group chief accounting officer Erick Fernandez will step in as an interim.

The company previously had its Demotech rating downgraded from 'A' to 'S'.

The company cited its continued Q1 2022 underwriting losses and recent rating downgrade.

The Floridian carrier must improve its financial strength rating ahead of its 1 July reinsurance renewal.

The downgrade was attributed to weather claims from Louisiana and Texas following the company’s expansion into those markets.

Net income was impacted by $4.4mn of reserve strengthening, net of reinsurance recoveries.

The Floridian carrier recorded $8.1mn cat losses net of reinsurance compared with $27.9mn a year earlier.

Just under half of the $8mn cat losses stem from insurance books FedNat is running off, with reserve strengthening impacted by 2020 reinsurance gaps.