US-based insurance holding company FedNat has completed a $15m investment in Monarch National Insurance Company (Monarch).

The investment was made through funds managed by Hale Partnership Capital Management (Hale Group), which is now a majority owner of Monarch.

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FedNat will continue to hold a minority stake and a representation on Monarch’s board.

Concurrently, FedNat announced that the Florida Office of Insurance Regulation (OIR) approved the assumption of policy by Monarch. 

The authorisation will see Monarch assume around 78,000 policies from FedNat unit, FedNat Insurance Company (FNIC).

For the policies transferred to Monarch, servicing and claims administration will be undertaken by FedNat Underwriters, FedNat’s wholly-owned arm.

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FedNat CEO Michael Braun said: “FedNat has materially exited non-Florida markets and expects to complete our transition in coming months as we continue to refocus solely on our historical market in Florida, which we believe will result in a financially stronger company, with less volatility, that will be rightsized to our current capital and surplus position.”

The investment agreement between FedNat and Hale Group was first announced in late-May this year.

Steve Hale said: “My firm and investment partners are delighted to invest $15m into Monarch and facilitate the support of approximately 83,000 Florida policyholders. I look forward to exploring more opportunities for investment within the Florida insurance market.”

With effect from 29 June 2022, FNIC’s other remaining Florida policies were cancelled. At this time, its non-Florida policies were cancelled, expired or assumed.