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Poe files lawsuit over fees to agents

The insurer, which was ordered liquidated, wants commissions on policies it sold but no longer holds.

By TOM ZUCCO
Published June 6, 2006

Poe Financial Group isn't ready to walk away from its homeowners insurance policies just yet.

The Tampa company, which was ordered into liquidation May 31, sued Monday in Hillsborough Circuit Court seeking to allow its agents to possibly collect millions in commissions on policies they sold but no longer hold.

The lawsuit states that after Poe's nearly 320,000 policies were transferred to Citizens Property Insurance Corp., the state-run insurer of last resort said it would directly write the policies, cutting out Poe's agents.

Although Citizens pays its own claims, all of its policies are serviced by private carriers, which receive fees to administer them.

And although the state now runs the Poe Financial Group, company officials want to continue to service - and get paid for - the policies they sold.

"Citizens has stated its intention to communicate directly with Poe & Associates' customers,'' the lawsuit alleges, "to write new policies without utilizing Poe & Associates as an agent.''

This isn't the first time Poe tried to collect fees. Before it was ordered into liquidation, Poe officials had tried to negotiate an agreement with Citizens that would have allowed Poe to continue servicing about 80,000 of its former customers. In return, Citizens would have had to pay Poe more than $15-million.

Officials from Citizens were unavailable for comment Monday, but Citizens board chairman Bruce Douglas and other board members adamantly rejected Poe's offer May 25 and were opposed to any agreement with the company.

The Florida Department of Financial Services has paid out nearly $117-million in claims for Southern Family and Atlantic Preferred, two of three insurance companies that were part of Poe Financial Group. Funding came from Poe assets.

Thursday, the day after the last of Poe's companies was ordered into liquidation, payment of claims was transferred to the Florida Insurance Guaranty Association, which covers claims left unpaid by companies that become insolvent.

About 10,000 claims remain unpaid, including about 600 commercial claims for Southern Family. The claims represent a projected loss of about $300-million.

According to the Insurance Information Institute, FIGA has $100-million in reserve but can raise money through bonding and assessments on property insurers.

QUESTIONS? Poe Financial Group policyholders can visit WWW.FLDFS.COM or call the Florida Department of Financial Services toll-free at 1-800-882-3054 .

Tom Zucco can be reached at zucco@sptimes.com or 727 893-8247.

[Last modified June 6, 2006, 06:42:57]