Florida Chief Financial Officer Alex Sink announced that the
Department of Financial Services (DFS) filed a civil lawsuit against
the officers, directors and affiliates of three former Florida
insurance companies.
Lawyers for DFS, the court-appointed Receiver of Atlantic Preferred
Insurance Company, Florida Preferred Property Insurance Company and
Southern Family Insurance Company (Poe Companies), have now
determined the state has the right to recover additional money.
DFS’ lawsuit, filed Friday in the Second Judicial Circuit Court,
seeks damages in excess of $100 million from the officers, directors
and affiliates of the now-insolvent insurance companies.
“Florida’s insurance consumers were forced to foot the bill when the
Poe Companies became insolvent so that policyholders could have
their claims paid,” said CFO Alex Sink, who oversees DFS. “We will
aggressively pursue any opportunity to recoup additional funds to
reduce the assessments levied against Florida’s insurance
consumers.”
DFS has served as the court-appointed Receiver of the Poe Companies
since the Second Judicial Circuit Court ordered the Poe Companies
into liquidation on May 31, 2006. As Receiver, DFS took control of
the Poe Companies’ operations and liquidated the companies’ assets
to pay outstanding claims. More than 320,000 Floridians held
insurance policies from one of the Poe Companies when the companies
were ordered to be liquidated, and most policies were automatically
transferred into Citizens Property Insurance Corporation in July
2006.
The Florida Insurance Guarantee Association (FIGA), which was
established by the Florida Legislature to handle the claims of
insolvent insurance companies, has paid $1.2 billion in claims from
the three Poe Companies as of January 31, 2008. More than 46,600
policyholder claims have been filed against the Poe Companies, and
FIGA expects to pay approximately an additional $123.5 million for
claims still needing to be paid. As a result of the Poe Companies’
liquidation and need to pay outstanding claims, FIGA assessments
could total approximately $790 million on Floridians’ insurance
policyholders.
