After successive National Automobile Dealer Assn. convention exhibits touting “leading-edge service contracts,” Ultimate Warranty Corp and its underwriter have ceased operations.
Based in Rocky River, OH, Ultimate Warranty said it served more than 8,000 franchised and independent dealer customers and was underwritten by Capital Assurance Risk Retention Group, of Columbia, SC.
Capital Risk's operations have been taken over by the South Carolina Department of Insurance. Court documents show other service-contract providers funded by Capital Risk included Extended Auto Warranty of Wisconsin, First Warranty Group, Warranty America LLC and Mechanical Breakdown Administrators.
The South Carolina insurance department says it is implementing a plan to pay any remaining claims over the next 10 years. More than $44 million in claims were left by Ultimate Warranty at the time of its collapse, according to the South Carolina department's deputy director of financial services, Charles Perry.
Prior to going out of business, Ultimate reported a loss reserve fund of $48 million. But Perry says state investigators found less than $15 million in the fund and more than $67 million in potential claims liability.
The South Carolina department asked dealers involved with Ultimate Warranty or any of its ancillary service-contract providers to request more information regarding claims at www.doi.sc.gov.