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PRESS RELEASE
June 15, 2006

JUDGE UPHOLDS GALLAGHER’S PLAN TO SMOOTHLY TRANSITION POE POLICYHOLDERS

TALLAHASSEE– Tom Gallagher, Florida’s chief financial officer, said today that a judge reaffirmed her approval of the Department of Financial Services’ plan to protect and to smoothly transition nearly 330,000 policyholders with Atlantic Preferred, Southern Family and Florida Preferred insurance companies to Citizens Property Insurance Corporation on July 1.  The three insurers are subsidiaries of the Tampa-based Poe Financial Group.

“We remain focused on protecting policyholders and ensuring they have continuous coverage this hurricane season,” Gallagher said.  “Tropical Storm Alberto was an important reminder of the need to protect our homes and our families, and our transition plan was developed with this in mind.”
 
At a hearing today in Tallahassee, Leon County Circuit Judge Janet Ferris heard a recent emergency motion filed by Poe officials regarding the three insurers they formerly managed.  Filed last week, Poe’s motion alleged the department’s transition plan should have required Citizens to use Poe’s affiliates – Poe & Associates, Poe Managers, and Mariah – and pay fees to service policies being assumed by Citizens.
 
In response, the department refuted Poe’s assertion because Poe’s affiliates had long provided the employees, facilities and equipment necessary to operate the three insurance companies the judge had ordered into liquidation. The department’s response is attached. 
 
On May 30, Judge Ferris signed orders directing the department to take control of the three insurance companies’ operations and to liquidate the companies’ assets to pay outstanding claims.  On June 1, the judge approved a transition plan to help homeowners who were covered by one of the three Poe companies to automatically transition to Citizens Property Insurance Corporation on July 1. 
 
 For more information, policyholders can contact the Department of Financial Services at 1-800-342-2762 or log onto www.myfloridacfo.com.  
 

PRESS RELEASE
May 31, 2006

JUDGE APPROVES LIQUIDATION OF POE INSURANCE COMPANIES
Gallagher successfully protects the companies’ policyholders this hurricane season

TALLAHASSEE– A judge today approved putting three financially-troubled insurance companies under the state’s control, a move Florida’s Chief Financial Officer Tom Gallagher said will protect more than 320,000 Floridians this hurricane season. The insurance companies – Atlantic Preferred, Southern Family and Florida Preferred – are subsidiaries of the Tampa-based Poe Financial Group.

“My priority is to ensure policyholders have continuous coverage this hurricane season, and we’ve achieved that,” Gallagher said. “Now our focus is resolving outstanding hurricane claims.”

Leon County Circuit Court Judge Janet Ferris signed liquidation orders for all three insurers and appointed the Department of Financial Services as receiver. As receiver, the department takes control of the companies’ operations and liquidates the companies’ assets to pay outstanding claims.

Gallagher, who oversees the department, said that since Southern Family and Atlantic Preferred entered rehabilitation on April 25, 2006, the department has already paid more than $76 million in outstanding claims for both companies. When an insurance company is in rehabilitation, the department oversees its operations to protect resources to ensure claims get paid.

Under the liquidation orders, homeowners who are currently covered by one of the three Poe companies and who are unable to secure new homeowner’s coverage in the private market will be automatically covered by Citizens Property Insurance Corporation on July 1. Gallagher said that a formal plan for smoothly transitioning policyholders to Citizens Property Insurance Corporation will be presented for the court’s approval by Friday.

Gallagher said effective tomorrow, June 1, the department will be able to tap into the Florida Insurance Guaranty Association (FIGA) to help resolve outstanding claims. FIGA is funded by insurers with written premiums in the same lines of coverage.

Southern Family covered nearly 43,000 homeowners and condominium and homeowners’ associations. Atlantic Preferred and Florida Preferred primarily provided coverage to approximately 280,000 homeowners, mostly in South Florida.

For more information, policyholders can contact the Department of Financial Services at 1-800-342-2762 or log onto www.myfloridacfo.com.
 

PRESS RELEASE
May 25, 2006

GALLAGHER SAYS FLORIDA PREFERRED POLICYHOLDERS
WILL BE PROTECTED THIS HURRICANE SEASON


TALLAHASSEE–Tom Gallagher, Florida’s chief financial officer, announced today that policyholders with Florida Preferred Insurance Company will be protected this hurricane season because company officials finally agreed to let the financially-troubled property insurer enter into liquidation effective June 1.

“This decision is in the best interest of 140,000 Floridians who were covered by Florida Preferred and deserve protection,” said Gallagher, who petitioned a court on May 9 to put Florida Preferred into liquidation. “Our focus will now be getting the company’s outstanding claims resolved as quickly as possible.”

A hearing, set for May 30, was originally scheduled to deliberate the company’s refusal to liquidate Florida Preferred. Now that company officials have consented to liquidation, the hearing will focus on having the judge sign the consent to liquidation agreements for three financially-impaired insurers with Poe Financial Group, including Atlantic Preferred, Southern Family and Florida Preferred.

The judge will also be presented with the transition plan for Poe’s policyholders for approval. Under the plan, Gallagher wants Poe policyholders unable to secure coverage in the private market to automatically transition to Citizens Property Insurance Corporation by July 2 without the need to fill out a new application.

If approved by the court, the Department of Financial Services, which Gallagher oversees, would be appointed receiver for the three insurers in liquidation. As receiver, the department assumes the company’s operations and liquidates its assets to pay outstanding claims.

Once the companies are in liquidation, the department can also tap into guaranty funds through the Florida Insurance Guaranty Association (FIGA) so claims get paid immediately. FIGA is funded by insurers with written premiums in the same lines of coverage.

For more information, policyholders can contact the Department of Financial Services at 1-800-342-2762 or log onto www.myfloridacfo.com.

 

PRESS RELEASE
May 9, 2006

GALLAGHER PETITIONS COURT TO PUT POE INSURANCE COMPANIES INTO LIQUIDATION
Gallagher says liquidation will ensure claims get paid and policyholders are protected

TALLAHASSEE–Tom Gallagher, Florida’s chief financial officer, announced today that he has petitioned a court to order three financially troubled property insurers of the Tampa-based Poe Financial Group into liquidation. All three insurers – Southern Family, Atlantic Preferred and Florida Preferred – have refused to consent to liquidation. Gallagher said the companies’ refusal only drains company resources that should be directed to pay outstanding claims.

“These insurance companies have not presented a viable plan to get back on their feet financially,” Gallagher said. “Our focus now needs to be getting outstanding hurricane claims paid as quickly as possible. Once the companies are in liquidation, the department can tap into guaranty funds so claims get paid immediately.”

If approved by the Leon County Circuit Court, the Department of Financial Services would be appointed receiver for the three insurers in liquidation. As receiver, the department would take over the company’s operations and liquidate its assets to pay outstanding claims. The Florida Insurance Guaranty Association (FIGA) is also activated to help pay claims. FIGA is funded by insurers with written premiums in the same lines of coverage.

Southern Family primarily wrote commercial residential and personal residential coverage, and covered approximately 43,000 policyholders. Atlantic Preferred and Florida Preferred together provided coverage to nearly 280,000 homeowners and condominium unit owners, mostly in South Florida.

In the coming weeks, Gallagher will also petition to the court to allow Poe policyholders unable to secure coverage in the private market to automatically transition to Citizens Property Insurance Corporation by July 2 without the need to fill out a new application. Citizens’ rates would be applied when a policyholder’s anniversary date arrives, which is when their current policy is scheduled for renewal.

For more information, policyholders can contact the Department of Financial Services at 1-800-342-2762 or log onto www.myfloridacfo.com. The order will be posted at www.floridainsurancereceiver.org.
 

PRESS RELEASE
April 25, 2006

SOUTHERN FAMILY INSURANCE COMPANY ORDERED INTO REHABILITATION, OTHERS PLANNED
Gallagher Says Policyholders with Southern Family, Atlantic Preferred and Florida Preferred Will Continue to Be Covered This Hurricane Season

TALLAHASSEE–Tom Gallagher, Florida’s chief financial officer, announced today that a judge has ordered one of three financially troubled property insurers of the Tampa-based Poe Financial Group into rehabilitation. To ensure the company’s policyholders are protected this hurricane season, Gallagher plans to petition the court to allow policyholders unable to secure coverage in the private market to automatically transition to Citizens Property Insurance Corporation by July 1.

Leon County Circuit Court Judge Thomas Bateman appointed the Department of Financial Services as receiver for Southern Family Insurance Company. As receiver for a company in rehabilitation, the department takes over the insurer’s operations and marshals the company’s resources to pay outstanding claims.

“With the hurricane season starting June 1, we are relieved the judge has taken the first step in our plan to transition policyholders to the state’s insurer of last resort without any change in their coverage or premiums,” said Gallagher, who oversees the department. “Our priority now is to get any outstanding hurricane claims paid as quickly as possible.”

The second insurer, Atlantic Preferred Insurance Company, is expected to be ordered into rehabilitation on May 1 due to failure to meet the capital and surplus requirements under Florida law.

In an official notice to Gallagher, Insurance Commissioner Kevin McCarty with the Office of Insurance Regulation recommended that both Southern Family and Atlantic Preferred be put into liquidation on or about June 1. If both companies consent, they will enter into liquidation without a hearing.

 Southern Family primarily wrote commercial residential and personal residential coverage, and covered approximately 43,000 policyholders. Atlantic Preferred provides coverage to nearly 140,000 homeowners, mostly in South Florida. Both companies were ordered by Insurance Commissioner Kevin McCarty to stop writing new and renewal business earlier this year.

 The third insurer, Florida Preferred Insurance Company, is expected to be ordered into rehabilitation on June 1. According to the Office of Insurance Regulation, if the company is unable to obtain reinsurance, it should be placed into liquidation. Approximately 100,000 homeowners are covered by the company.

When a company is in liquidation, the department continues to serve as receiver but the Florida Insurance Guaranty Association (FIGA) is activated to help pay outstanding claims. FIGA is funded by insurers with written premiums in the same lines of coverage. Liquidated assets of the companies will also be used to reimburse FIGA for outstanding claims that are paid.

Gallagher is urging policyholders to work with their insurance agents to obtain property coverage from private insurers rather than with Citizens, the state’s insurer of last resort.

Under the proposed plan from the Office of Insurance Regulation, if policyholders find that Citizens is the only option available, then they will not need to fill out an application or contact Citizens. If any of the companies are ordered into liquidation by the court, coverage would cease on or about June 30 but policyholders would be automatically provided coverage through Citizens on the same day without any disruption in insurance coverage.

Gallagher said that Citizens will provide the same level of coverage with no increase in premiums. However, Citizens’ rates will be applied when a policyholder’s anniversary date arrives, which is when the policy issued by one of the Poe companies was scheduled for renewal.

The Office of Insurance Regulation has suggested the following timeline for rehabilitation and liquidation for the three companies:

April 25, 2006 – Southern Family placed into Rehabilitation. Policyholders are encouraged to seek alternate coverage.

May 1, 2006 – Atlantic Preferred placed into Rehabilitation. Policyholders are encouraged to seek alternate coverage 

June 1, 2006 – If unable to obtain reinsurance, Florida Preferred will be placed into Liquidation. Policyholders are encouraged to seek alternate coverage.

 June 1, 2006 – Southern Family and Atlantic Preferred placed into Liquidation. Policyholders are encouraged to seek alternate coverage. 

On or about June 30, 2006 — Remaining policyholders with Southern Family, Atlantic Preferred and potentially Florida Preferred will be automatically covered by Citizens Property Insurance Corporation without any disruption in coverage, level of coverage or premium increase.

Gallagher said his goal is to get outstanding claims paid as quickly as possible and assist policyholders with existing damage get needed repairs so they can properly insure their homes when the next offer of coverage is made.

For more information, policyholders can contact the Department of Financial Services at 1-800-342-2762 or log onto http://www.floridainsurancereceiver.org .   
  
Southern Family Order Signed by Judge

Southern Family Letter to CFO Gallagher from Commissioner McCarty