Four insurance executives of a now defunct Florida property insurer have been found not guilty of defrauding the state’s reinsurance facility of over $20 million in a case stemming from hurricane losses dating back to 2004. Former Vanguard Fire and & Casualty Co. President William Sanders, Chief Executive Officer Thomas Stinson, Controller Richard Magsam, and Vice President of Claims John Henry Axley were cleared of all charges.
They had been accused of improperly obtaining $20 million from the Florida Hurricane Catastrophe Fund when the Maitland, Fla.-based Vanguard faced a deficit after incurring heavy losses from Hurricane Frances and Hurricane Jeanne in 2004.
Vanguard’s losses from Frances met a necessary $37 million threshold to qualify for reimbursements from the Cat Fund while losses from Jeanne did not.
The executives argued that since Jeanne followed a similar path to Frances by just a few weeks, the insurer had trouble determining which claims were attributable to which storm.
Email evidence showed they fully informed the Cat Fund officials of their methodology. Vanguard was liquidated in 2007.
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