Gwynn Oak insurer is ordered into rehabilitation

The Maryland Insurance Administration announced Tuesday that a Baltimore court recently ordered Paramount Insurance Co., a small automotive insurer based in Gwynn Oak in Baltimore County, into rehabilitation, a form of receivership.

The state’s insurance regulator sought the rehabilitation with the consent of Paramount, which has about 8,000 policyholders in Maryland and close to 800 in Washington, D.C.

“The decision to place Paramount into receivership came after many hours of discussion and deliberation,” said Al Redmer Jr., the state insurance commissioner, in a statement. “The Insurance Administration supports competition in the marketplace; however, it became apparent to us and to Paramount’s board of directors that placing Paramount into receivership was the right course of action for their policyholders.”

At Redmer’s request, the Circuit Court for Baltimore City placed Paramount into the rehabilitation on Sept. 13 and appointed Risk & Regulatory Consulting LLC as the receiver. The receiver took possession of Paramount and will administer the company in order to rehabilitate it or liquidate it.

“Paramount is in such condition that its further transaction of business would be financially hazardous to its policyholders, creditors and/or the public,” according to the court order.

The company also was ordered to no longer sell new policies or renew existing ones, but policyholders should continue to pay their premiums to ensure coverage remains in force, the administration said.