Florida Preferred Insurance Company policyholders will be protected this hurricane season because company officials agreed to let the financially-troubled property insurer enter into liquidation effective June 1.
“This decision is in the best interest of more than 140,000 Floridians who were formerly covered by Florida Preferred and deserve protection,” said Tom Gallagher, Florida CFO, who petitioned a court to put the firm into liquidation.
“Our focus will now be getting the company’s outstanding claims resolved as quickly as possible,” Gallagher explained.
During a May 30 hearing, the judge signed the consent order and liquidation agreements for all three of Tampa, Fla.-based Poe Financial Group’s subsidiaries. The financially-impaired insurers included Atlantic Preferred, Southern Family and Florida Preferred.
The judge was also presented with a transition plan by Gallagher, a plan which would determine the status of all of Poe’s policyholders. Under the plan, Gallagher is seeking to have all of Poe’s policyholders who are unable to secure coverage in the private market automatically transferred to Citizens Property Insurance Corp. by July 2, without the need to fill out a new application.
If the transition plan is approved by the court, the Department of Financial Services, which Gallagher oversees, would be appointed receiver for the three insurers in liquidation. As receiver, the department assumes the company’s operations and liquidates its assets to pay outstanding claims.
Once the companies are in liquidation, the department can also tap into guaranty funds through the Florida Insurance Guaranty Association so claims get paid immediately. FIGA is funded by insurers with written premiums in the same lines of coverage.
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