UPDATE–DFS/Poe Lawsuit Atttached: CFO Sink Announces Lawsuit to Recover Additional Money for Poe Companies’ Claims

CFTKA Newsletter--Apr. 1, 2008

UPDATE–A copy of the Florida Department of Financial Services Florida Department of Financial Services lawsuit against the officers, directors and affiliates of the Poe Companies is attached for your review, or click here to view the document directly.

 
Florida Chief Financial Officer (“CFO”) Alex Sink announced today that the Florida 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.

A copy of CFO Sink’s press release is reprinted below.

Should you have any questions or comments, please do not hesitate to contact this office.

CFO Sink Announces Lawsuit to Recover Additional Money for Poe Companies’ Claims

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.

Additional information about the Poe Companies’ Receivership can be found at www.floridainsurancereceiver.org.