Disregard for state law and history of unsafe conduct torpedoes Minnesota Surety and Trust Co.
12/05/2011
"This was a troubled company, with a history of unsafe financial and market conduct practices,"
said Commerce Commissioner Mike Rothman. "Given the company's history, its disregard for state law,
and its bad financial condition, the state had no other recourse."
Minnesota Surety and Trust Company, a fidelity and surety carrier, was the subject of multiple regulatory actions in
Minnesota and Colorado in recent years for repeated misconduct and its precarious financial condition. Rothman ordered the
liquidation based on the company's long history of financial problems, administrative incompetence, coercive and dishonest
business practices, and record of fraudulent activity.
The company reported negative equity capital of $32,454 at June 30 and lost $404,873 for the first six months of
the year. The Minnesota Department of Commerce had ordered MSTC to maintain its total capital and surplus at or above
$1.1 million at all times. It had been rated "Weak" for more than four years by Weiss Ratings and held an E ("Very Weak")
rating when ordered into liquidation.
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