Oklahoma Files to Liquidate Pegasus Insurance Co.

Oklahoma Insurance Commissioner has filed an application to liquidate workers’ compensation insurance provider, Pegasus Insurance Co. Inc. (PICI). The company was placed into rehabilitation in June.

Pegasus specialized in workers’ compensation coverage for professional employer organizations (PEOs), or employee leasing entities, according to information posted on the company’s Web site.

The court’s order authorizing rehabilitation indicated that Pegasus’s owner, Wayne Stark, consented to the appointment of the Oklahoma Department of Insurance and Commissioner Holland as receiver for rehabilitation of the company.

The department asserted, and Pegasus did not contest the assertion, that the company “is insolvent and a hazard to policyholders, the creditors of Pegasus and the general public,” according to the court order.

A hearing on the application to liquidate is set for Aug.12, 2010.

The insurance department has noted that claim payments may be temporarily interrupted due to the liquidation request. In the event of the failure of the company, it is believed most claimants will be protected by their State Guaranty Fund subject to statutory limitations; however, the State Guaranty Funds will not be activated until an Order of Liquidation is granted by the court.

In the application for liquidation, the department stated that the “Receiver has determined that PICI cannot be rehabilitated and, to date, efforts to sell PICI have not been successful.”