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the financial criteria required for licensure. The Commissioner also states that Frontier's <br />surplus as of December 31, 2001, is not adequate in relation to its outstanding liabilities or <br />financial needs, and that the New York Insurance Commission has directed Frontier to not <br />write any new or renewal business in New York. The Colorado Commissioner suspended <br />Frontier's license for failure to submit an annual report and because there are use of practices <br />or existence of conditions which render Frontier's financial position unsound to the public or <br />its policy holders. Frontier has waived its right to a hearing on the suspension of its license. <br />Therefore, the suspension is final. The Colorado Commissioner's Order and Frontier's <br />waiver of a hearing are attached as Exhibits A and B.Z <br />It is unknown whether Frontier itself will file a petition in bankruptcy or be required to <br />liquidate under the laws of the New York Insurance Commission. <br />It is with this background that the Division issued both NOVs and specifically on <br />December 14, 2000, issued a notice of violation (NOV CV2000-0010) to Powderhorn that <br />required Powderhorn to replace the Frontier bond by January 16, 2001. The deadline for <br />replacement of the bond, as extended, is May 31, 2001. Powderhorn to date has failed to <br />replace the bond. <br />Z Contrary to Powderhorn's argument, the Commissioner did not simply suspend Frontier's <br />ability to do future business; he suspended Frontier's license to transact insurance business <br />altogether. The Commissor's Order states that during the period of suspension, Frontier <br />cannot transact future or renewal business. The Order also indicates that Frontier must honor <br />its current policies. However, this Order does not establish whether Frontier is able to honor <br />7 <br />