Insurer’s pitch surprises some
By John Hielscher
Published: Friday, August 29, 2008 at 1:00 a.m.
Last Modified: Friday, August 29, 2008 at 12:45 a.m.
Some local homeowners may have been surprised to receive a sales pitch this week urging them to call the Poe & Associates insurance agency.
The Tampa-based agency is owned and run by the same family whose three insurance companies failed in 2006, putting property owners in Florida on the hook for about $800 million.
The Poe Financial Group, headed by former Tampa mayor Bill Poe Sr., filed for bankruptcy in what became the largest insurance collapse in state history.
Poe & Associates, the insurance agency, remained in business.
"We have thousands of customers, and we solicit business just like any other insurance agency," vice chairman Bill Poe Jr. said Thursday.
Florida officials have filed several lawsuits against the Poe family and the insurance firms, claiming they engaged in a "fraudulent scheme" to siphon millions of dollars before the insurers became insolvent.
The insurance agency is not part of those complaints.
"They do have a valid license to sell insurance policies," said Tom Zutell, spokesman for the Florida Office of Insurance Regulation. "They are just selling the product, not creating the product, underwriting or setting rates."
Insurance companies are regulated by the OIR. Insurance agencies and their agents are separately licensed by the Florida Department of Financial Services.
Poe & Associates just blanketed the Sarasota-Manatee area with a promotional mailing. "Dropped by State Farm? We can help you secure alternate homeowner’s coverage with large discounts," the postcards read.
They also advise that policyholders with Citizens Property Insurance Corp. might want to switch carriers, because they could be hit with up to 15 percent assessments if the state-run insurer needs more money to pay claims.
Some may find a bit of irony in that pitch.
Florida’s insured property owners are paying an extra 2 percent on their premiums — the third time in two years — to clean up Poe Financial.
The Florida Insurance Guaranty Association — which pays the claims of defunct insurers — estimates those assessments will generate $800 million of the more than $1.2 billion needed to cover 46,600 claims from the Atlantic Preferred, Southern Family and Florida Preferred insurance companies. The balance will be covered by the companies’ reinsurance.
That 2 percent assessment, which adds $50 to a $2,500 premium, includes homeowners, commercial property, medical malpractice and aircraft insurance policies.
While Poe Jr. said he understands why people may connect the failed Poe insurers with the insurance agency, he bristles that some apparently object to the agency’s staying in business.
He says it is FIGA, not Poe, that is levying the assessment. He questions whether it was even necessary.
"The state has run those insurance companies since 2006, and the fact that there are assessments is the state’s issue, and they’ve not done a very good job for the taxpayers as it relates to those issues," he said.
He said the Poe insurers paid out $2.2 billion in claims from the 2004-05 hurricane seasons before the state declared them insolvent.
"We just had the worst set of circumstances you could possibly have," Poe said.
State officials believe otherwise.
In a civil suit filed in March, the state Department of Financial Services said Poe executives diverted millions in assets to themselves, funds that should have been used to pay claims. That suit seeks more than $100 million in damages from officers, directors and affiliates of Poe Financial.
OIR spokesman Zutell said he understands why some people, recalling the insurers’ failure, may get angry over the Poe agency’s sales effort.
"A lot of people got burned, and they are not happy about it," he said.