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State Seeks Money From Fallen Insurer

April 2nd, 2008 by Mike Vasilinda

Every homeowner in Florida is paying an assessment to cover the losses of the failed Poe Insurance Companies. But now the state says in a law suit that company officials and directors milked the company for more than 100 million dollars as the companies were going belly up. As Mike Vasilinda tells us, if the state is successful, it will mean less for future insurance policies.

Hear it here: State Seek Money From Fallen Insurer

As hurricane after hurricane struck the state in 2004 and 2005, A lawsuit filed by the state says executives at the Poe Insurance Companies were striking as well, milking the company assets for themselves. The suit alleges that for more than a year, officers and directors drained more than a hundred million dollars from the company, money that should have gone to pay claims.

Because the companies went belly up every homeowners policy in the state has A 20 dollar surcharge for every thousand dollars a homeowner pays in premiums the lawsuit seeks to recover more than 144 million.

The assets really belong to the policy holders and those people who have
Claims with the companies. In a statement, the Attorney Generals office said it stands ready to investigate any allegations of criminal activity if the CFO makes a request.

The lawsuit also alleges the POE companies mislead regulators about the companys financial health as executives were paying themselves huge dividends. Bob Lotane was at the office of Financial Services when the state was trying to close POE down.

They were not willing to do down. They werent willing to let us in the door. And once we did get in, they were not exactly welcoming, said Lotane.

Florida insurance buyers wont get a refund if the suit is successful, but the suit may help offset future surcharges that will be added to everyones policy because of the Poe Company losses. The suit is expected to take about a year to settle. The next step is for the company to respond in writing.

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