Chief Financial Officer Alex Sink reports that the Department of Financial Services has filed a civil suit against the officers, directors, and affiliates of the former Tampa-based Poe Financial Group, seeking to recover damages in excess of $100 million.
Poe Financial consisted of three insurers that were taken over by the state two years ago after sustaining more than $2 billion in gross losses following the 2004 and 2005 hurricane seasons. In 2006, the Leon County Second Judicial Circuit Court ordered the group's three companies liquidated after state regulators were introduced. The move affected some 320,000 Floridians who had their coverage either through Southern Family Ins. Co., Atlantic Preferred Ins. Co., or Florida Preferred Ins. Co. Most of the affected policyholders were automatically transferred to Citizens Property Insurance Corporation.
As of January, the Florida Insurance Guaranty Association has paid some $1.2 billion in claims attributed to the three companies accused of wrongdoing. More than 46,000 policyholder claims have been filed against the companies, and FIGA expects to pay an additional $123.5 million in outstanding claims. As a result, policyholders statewide could face FIGA assessments totaling an estimated $790 million. After a thorough review of the companies' finances, lawyers for the DFS determined the state has the right to recover more money from the principals involved.
"Florida's insurance consumers footed the bill when the Poe companies became insolvent so that policyholders' claims would be paid," Sink said. "We will aggressively pursue any opportunity to recoup additional funds to reduce the assessments levied against Florida consumers."
