Case Law Update: Capacity Insurance Enters Eleventh Supervision Extension

Background

On September 20, 2026, the Florida Office of Insurance Regulation (OIR) issued an Eleventh Consent Order extending the period of public administrative supervision for Capacity Insurance Company (Case No. 403222-26-CO). This latest extension continues a supervisory process that began more than three years ago, when Capacity first entered administrative supervision under Consent Order 307008-23-CO, filed March 3, 2023.

Since that original order, the OIR and Capacity have executed a remarkable string of extensions: five 120-day extensions, two 60-day extensions, and now, with this Eleventh Consent Order, an eleventh consecutive extension — this time for another 120 days, running from the prior expiration date of August 19, 2026. Under the terms of this newest order, Capacity's supervision period is now extended through approximately mid-December 2026.

What Administrative Supervision Means

Administrative supervision under Sections 624.80–624.87, Florida Statutes, is one of the tools the OIR uses to manage insurers that are winding down operations or facing financial or operational distress, without necessarily placing the company into full receivership. Under this framework:

• The insurer remains licensed and technically able to operate, but is subject to heightened regulatory oversight.
• The company must operate under an OIR-approved Runoff Plan governing the orderly transition and wind-down of remaining policies and liabilities.
• The OIR retains discretion under Section 624.81(8) to extend supervision “in increments of 60 days or longer…if conditions justifying supervision exist.”
• The insurer can waive statutory notice requirements and agree to binding timelines that differ from the default statutory framework — which Capacity did again in this Eleventh Consent Order.

Key Holdings and Findings

The Eleventh Consent Order makes several notable findings:

• Continuing conditions justify supervision. The OIR found that, as of the execution date, conditions still exist that necessitate an additional period of administrative supervision — more than 3.5 years after the original order.
• Capacity remains cooperative. The order reiterates language from the original Supervision Order stating that Capacity has been cooperative with the OIR throughout the process.
• All prior terms remain in force. Except as expressly superseded, all terms of the original Supervision Order — including the requirement that Capacity operate pursuant to an OIR-approved Runoff Plan — continue to apply.
• Voluntary waiver of statutory notice. Capacity again knowingly and voluntarily waived written notice requirements under Section 624.81(1), agreeing instead to the binding timeline set forth in the consent order itself.

Impact on Public Adjusters and Policyholders

For public adjusters, claims professionals, and policyholders with open or pending claims against Capacity Insurance Company, this extended supervisory status carries several practical implications:

• The company is still operating — for now. Administrative supervision is not receivership or liquidation. Capacity remains authorized to transact business in Florida and, in theory, should continue processing and paying valid claims under its Runoff Plan.
• Runoff means no new business. Companies under supervision pursuant to a runoff plan are typically winding down their book, meaning existing policyholders should not expect renewal offers and should be actively shopping for replacement coverage well before their current policy period ends.
• Watch for signs of escalation. The pattern of repeated extensions — eleven consent orders over more than three years — suggests Capacity's wind-down has been slower and more complicated than typical runoffs. Public adjusters handling claims against this carrier should monitor OIR's public orders database for any shift from supervision to formal receivership proceedings under Chapter 631, which would trigger different claims-handling procedures and potential involvement of the Florida Insurance Guaranty Association (FIGA).
• Document and press claims diligently. Extended supervision periods can sometimes correlate with claims-processing delays, staffing reductions, or reduced claims-handling capacity at the carrier level. PAs should maintain thorough documentation, adhere to strict statutory deadlines, and be prepared to escalate unreasonably delayed claims.

Practical Takeaways

• Confirm the current status of any Capacity policy before advising a client on renewal expectations — assume non-renewal is likely given the ongoing runoff.
• For claims currently in the pipeline, continue to press for timely payment under Florida's prompt-pay statutes (Section 627.70131, Florida Statutes), regardless of the insurer's supervisory status.
• If claim delays or non-responsiveness begin to appear consistent with financial distress, consult counsel promptly to evaluate options, including potential bad-faith exposure or preparation for a FIGA claim scenario should the company be placed into liquidation.
• Keep an eye on OIR's order database for the Twelfth Consent Order or, alternatively, for any order converting supervision into a formal delinquency proceeding.

How Louis Law Group Can Help

Navigating a claim against an insurer under prolonged regulatory supervision can be uniquely challenging. Policyholders and public adjusters need experienced counsel who understands both first-party property insurance law and the regulatory landscape governing insurers in runoff or financial distress. Louis Law Group closely monitors OIR actions affecting Florida carriers and stands ready to help policyholders protect their rights — whether that means pushing back against claim delays, evaluating coverage disputes, or preparing for the possibility of a FIGA-covered claim if a carrier's status changes.

If you have an open claim with Capacity Insurance Company or any other carrier under regulatory supervision, don't wait for delays to become denials. Contact Louis Law Group today at (833) 657-4812 for a free consultation and let our experienced property insurance attorneys help you pursue the full value of your claim.

Source: OIR Orders & Memoranda - Capacity Insurance Company Eleventh Consent Order (Case No. 403222-26-CO)