CFO Sink Announces Lawsuit to Recover Additional Money for Poe Companies’ Claims
CONTACT: Tara Klimek or Kevin Cate
TALLAHASSEE— Florida Chief Financial Officer Alex Sink announced today 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.
As a statewide elected officer of the Florida Cabinet, Chief Financial Officer Alex Sink oversees the Department of Financial Services, a multi-division state agency responsible for management of state funds and unclaimed property, assisting consumers who request information and help related to financial services, and investigating financial fraud. CFO Sink also serves as the State Fire Marshal.