Court Petitioned to Liquidate Poe Insurance Subsidiaries

May 10, 2006

The Leon County Circuit Court has been petitioned by Tom Gallagher, Florida’s CFO, to order the Poe Financial Group’s subsidiaries, Southern Family, Atlantic Preferred and Florida Preferred, into liquidation. According to a statement by the Department of Financial Services, all three insurers have refused to consent to liquidation.

Gallagher said the companies’ refusal only drains company resources that should be directed to pay outstanding claims.

“These insurance companies have not presented a viable plan to get back on their feet financially,” Gallagher said. “Our focus now needs to be getting outstanding hurricane claims paid as quickly as possible. Once the companies are in liquidation, the department can tap into guaranty funds so claims get paid immediately.”

If approved by the Leon County Circuit Court, the Department of Financial Services would be appointed receiver for the three insurers in liquidation. As receiver, the department would take over the company’s operations and liquidate its assets to pay outstanding claims. The Florida Insurance Guaranty Association is also activated to help pay claims. FIGA is funded by insurers with written premiums in the same lines of coverage.

Southern Family primarily wrote commercial residential and personal residential coverage, and covered approximately 43,000 policyholders. Atlantic Preferred and Florida Preferred together provided coverage to nearly 280,000 homeowners and condominium unit owners, mostly in South Florida.

In the coming weeks, Gallagher will also petition to the court to allow Poe policyholders unable to secure coverage in the private market to automatically transition to Citizens Property Insurance Corporation by July 2 without the need to fill out a new application. Citizens’ rates would be applied when a policyholder’s anniversary date arrives, which is when their current policy is scheduled for renewal.

Source: Florida Department of Financial Services

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