Six months after the San Juan Superior Court placed National Insurance Corp. under trusteeship, employees were told Wednesday the operation has been sold to Venezuela’s Multinacional de Seguros C.A., News is my Business has learned.
“Employees were gathered late in the day and were given the news,” a source told News is my Business under the condition of anonymity.
Multinacional de Seguros was established Feb. 22, 1983, according to its website. At present, it operates about 50 branches throughout Venezuela, dedicated to selling health, vehicle, personal and property insurance products.
The Venezuelan company would be taking over what’s left of a company that racked up significant losses over the past three years. In May, the court ordered the Office of the Puerto Rico Insurance Commissioner to step in to handle the company’s operations. The court also appointed trustee José Mendoza to head National Insurance on an interim basis.
Upon taking over, Mendoza told employees that despite the company’s mounting problems, liquidation was not an option. However on Oct. 19, the San Juan Superior Court announced the start of a liquidation process, to be led by the Insurance Commissioner’s office. The transaction must be approved in court, according to sources.
From 2008 to 2010, NIC lost more than $34 million, according to published reports. NIC’s negative track record, coupled with A.M. Best Co.’s multiple decisions to downgrade its financial standing in April, seemingly triggering the court’s action.
NIC was founded in 1961 by executive Carlos M. Benítez and is part of National Group, a financial group of companies dedicated to the life insurance, premium finance, information systems, and claims handling businesses. The second-generation Carlos M. Benítez was one of several NIC executives the court order forced out of the company.
The source told News is my Business that NIC had less than 20 employees left upon making its announcement Wednesday.