Vernon D. Smith has been much in the insurance news lately, as Florida Insurance Commissioner Kevin McCarty appears to be making him the poster boy for certain transactions. In the past week, the Office of Insurance Regulation has ordered Smith to repay $600,000 to Hillcrest Insurance Co. of Gainesville for a bank stock purchase subsequently deemed worthless, and to divest himself of all interest in Hillcrest, of which he is a director. Smith has three weeks to repay the $600,000 and six months to divest himself of Hillcrest. Additionally, the Florida Department of Financial Services fined the insurance firm $10,000.
Over his career, the entrepreneurially minded Smith has owned a cattle ranch, citrus groves, radio stations, and a weekly newspaper. He founded Riverside National Bank (the bank involved in the stock buy) in 1982 as an independent "community-style" institution. He stepped down from his top post there in January 2009 as the bank entered its second round of layoffs within a year, amid financial rating downgrades and office closings.

Smith's daughter and son-in-law currently serve as Hillcrest Insurance's chairman and CEO, respectively. They formed Hillcrest in 2005, with 90 percent of its ownership coming from a family trust that state incorporation records show Smith controlled.

According to various news sources and filings with regulators, in early 2009 Hillcrest Insurance paid $600,000 for 4,000 shares of Riverside Bank Co. stock from Smith. Seven months later, the stock was written off by the insurer as worthless.