According to philly.com, the Pennsylvania Department of Insurance has filed suit against the four founders of the First Sealord Surety Company for diverting funds to other business interests. First Sealord was taken over by the Pennsylvania Department of Insurance in February of this year.
The suit also blames the group for “under-reserving and underreporting” claims and losses to state officials and the firm’s own auditors and actuaries, and for “the secretive diversion of their time, attention, and other resources” away from the insurer and “to the betterment of multiple real estate development and hotel companies owned and operated by certain Defendants.”Read the article here
Many construction companies bonded by First Sealord were required to replace the performance and payment bonds issued by the defunct company. This caused many contractors to scramble and find replacement bonds and often the contractors had to pay the premium over again on the bonds. Surety1 was not an agent and did conduct business with this surety company.