South Carolina Seeks Rehabilitation for Atlantic Coast Life Insurance

The South Carolina Department of Insurance has petitioned a state court to place Atlantic Coast Life Insurance Co. and its subsidiary, Southern Atlantic Re Inc., into rehabilitation. Director Michael Wise stated the insurers are in a "financially hazardous" position, citing significant exposure to the collapsed investment firm 777 Partners.

Regulators allege that the companies overstated their asset values and failed to disclose specific affiliate investments. The financial instability is linked to Advantage Capital Holdings and its affiliates, which a bankruptcy filing from 777 Partners indicates may be owed nearly $1.3 billion.

Atlantic Coast Life Insurance Co. and Southern Atlantic Re Inc. are currently slated for takeover by Oaktree Capital Management as the state seeks to stabilize the entities.