(Bloomberg) -- American Transit Insurance Co., the dominant player in New York City’s commercial car insurance market, said the company is addressing its troubled financial condition after racking up losses this year that far exceed its assets.
“The company is working tirelessly to address a longstanding issue of statutory solvency amid rampant fraud and escalating costs,” the insurer said in a statement on Thursday. “We are working closely with industry participants towards a solution that does not unduly impact the broader market in an adverse manner. “
Known as ATIC, the company posted more than $700 million in net losses in the second quarter, according to a filing with the National Association of Insurance Commissioners, prompting warnings from analysts and industry participants over its ability to keep insuring drivers and pay claims.
The company, which insures more than 60% of the city’s more than 117,000 taxis and for-hire vehicles, also faces legal challenges. Uber Technologies Inc. sued ATIC in federal court in February, accusing the insurer of “a pattern and practice of failing to adhere to reasonable claims-handling practices and failing to reasonably resolve claims,” resulting in 23 lawsuits brought against Uber and its drivers over crashes involving bodily injuries.
“ATIC firmly and unequivocally denies any allegation that we failed in our responsibilities to our insureds,” according to the statement. “ATIC is vigorously defending the ongoing Uber lawsuit.”
The insurer has for years been deficient in its reserves, according to public filings. But the losses have crossed a threshold known as a “mandatory control level event,” according to a Dec. 31 report by Huggins Actuarial Services, a consultant hired by ATIC. This could require New York’s Department of Financial Services, the state agency that regulates insurers, to step in and possibly place the company into receivership or liquidate it.
DFS said it has been “working with the company and other stakeholders to address these longstanding financial issues, and protect drivers, passengers and the stability of the New York livery insurance market.”
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