News Briefs

ALABAMA

Arlene’s Timing Perfect for Referral List

When Tropical Storm Arlene blew through Alabama it made the timing ideal for the release of a homeowners insurance referral list providing area homeowners with the names and contact numbers of insurance companies, agencies and agents writing property insurance in coastal areas, including Mobile and Baldwin counties. The list was released by the Alabama Department of Insurance in cooperation with the Alabama Independent Insurance Agents.

The referral list was compiled as part of a project of the Alabama Hurricane Insurance Issues Task Force, headed by Insurance Commissioner Walter Bell.

Insurance referral information is available from: Alabama Independent Insurance Agents Association: (866) 315-8324, 8 a.m.-4:30 p.m., weekdays; Baldwin County Association of Realtors: (251) 928-1708, 8 a.m.-5 p.m., weekdays; Baldwin County Home Builders Association: (251) 928-9927, 8 a.m.-4:30 p.m., weekdays; Mobile Area Association of Realtors: (251) 479-8654, 8:30 a.m.-5 p.m., weekdays; Home Builders Association of Metro Mobile: (251) 661-6523, 7 a.m.-4:30 p.m., Monday through Thursday, 8 a.m.-4:30 p.m. on Friday.

Bell and Gov. Bob Riley created the Hurricane Insurance Issues Task Force in response to problems that arose after Hurricane Ivan, a strong Category 3 storm that hit Alabama last September.

FLORIDA

Cincinnati Indemnity Asks OIR to Boost Fla. Rates

Cincinnati Indemnity Co. and Cincinnati Insurance Co. have joined the list of Florida home insurers asking the Florida Office of Insurance Regulation for permission to raise its premiums by as much as 37 percent, statewide. About 15,000 Florida policyholders would be affected by the request. The biggest increase would be in St. Johns County in northeast Florida.

A hearing on the request has been scheduled by the OIR June 22 in Sarasota, an area in which a large number of its policyholders reside.

FCCI Wins $16 M Judgment in Suspected Fraud Case

A Sarasota, Fla. Circuit Court has awarded FCCI Insurance Company a $16,174,977 judgment in a civil action dating back to 2002. The judgment against S&H Drywall of Inverness, Fla., and Premier Enterprises Unlimited of Tallahassee comes after an internal investigation conducted by FCCI’s Special Investigations Unit revealed inaccurate and incomplete information was provided to FCCI when the companies were obtaining workers’ compensation insurance from FCCI, a Sarasota-based property and casualty commercial insurance provider.

FCCI alleged that S&H and Premier misrepresented the nature of the construction work they did; understated the number of their employees; and failed to disclose true payroll figures, thus preventing FCCI from collecting the correct amount of premium.

“This is a victory for insurance companies across the state fighting fraud in the industry,” Joe Keene, FCCI executive vice president said. “We are quite pleased with the result after a long road of litigation.”

The partial summary judgment issued by Circuit Court Judge Deno G. Economou included a triple premium award of nearly $4,000,000 and an additional $12,276,810 as statutory damages pertaining to the difference of premium that the companies paid FCCI compared to what they should have paid. Additionally, FCCI is to be compensated $93,888 for unreimbursed costs relating back to some of the undisclosed employees. S&H and Premier have 30 days to file an appeal.

Federal Judges Order Claimants to Reimburse FEMA

Quiana Riggins and Lesley Johnson have been ordered by the U.S. District Court in Miami to repay the Federal Emergency Management Agency for funds they received after filing false hurricane damage claims.

Riggins and Johnson, the first two Miami-Dade County residents out of 14 indicted in March on federal fraud charges, pleaded guilty to cheating the federal government by filing false hurricane damage claims.

After Hurricane Frances hit 100 miles north of Miami, Riggs collected almost $25,000 for a sewer backup that according to court records occurred weeks before the stormy. According to the Fort Lauderdale Sun-Sentinel, U.S. District Court Judge K. Michael Moore sentenced her to two months’ house arrest and three years’ probation, along with the repayment.

U.S. District Judge Paul C. Huck ordered Johnson, of Homestead, to repay $6,203 and ordered her to four years’ probation and 400 hours of community service a year.

Last month, investigations by a U.S. Senate committee and the inspector general of the Department of Homeland Security found that FEMA inappropriately declared Miami-Dade County a disaster area and then awarded $31 million to 13,000 residents, often without verifying storm damage or a need for assistance.

PIP Fraud Tops Florida’s ‘Top 10 List’

Personal Injury Protection auto insurance fraud and title insurance trickery topped a summary of Florida’s top 10 costliest or boldest securities, financial and insurance fraud scams that resulted in arrests or convictions by the Division of Insurance Fraud just released by the Department of Financial Services. Tom Gallagher, Department of Financial Services CFO released the list, which tabulates cases during the fiscal year that began July 1, 2004, and ends June 30, 2005.

This year’s Top 10 fraud schemes ranged from title insurance trickery to the perennial list maker, PIP fraud. On the list is one PIP fraud case in which eight individuals posed as journalists to gain access to police accident reports in order to solicit crash victims to go to unscrupulous medical clinics. In another, more than two dozen individuals were arrested in a complex scheme that involved staging crashes in order to create “patients” for fraudulent medical clinics. The ringleader is suspected of staging more than 90 auto crashes. The 10 cases, listed in no particular order, add up to more than $2.7 million in financial losses. Additional potential losses in these 10 cases-losses that may have occurred if an arrest had not been made when it was-add up to more than $1 million.

NFI Program Recognizes Southern Family Insurance

Tampa, Fla.-based Southern Family Insurance Co., a member of Poe Financial Group, was recognized by the National Flood Insurance Program during its recent annual conference in Marco Island, Fla., Southern Family Insurance, one of the NFIP Write Your Own flood insurance companies, was a recipient of the “Administrator’s Club Award” for the second consecutive year. The award recognizes WYO companies for their contribution to the growth of the NFIP program. Southern Family Insurance was one of five companies recognized nationally for their efforts.

Poe Financial Group was formed anew in 1996 and is the latest business venture of its founder W.F. Poe. Poe’s previous firm was Poe & Associates, a publicly traded company that was the largest property and casualty agency in Florida and the 12th largest in the nation when it was merged as Poe & Brown in 1993. Under the direction of founding businessman, William F. Poe Sr., Poe Financial Group was established in 1996 as Southern Family Insurance Co. By January 2003, Poe Financial had acquired Atlantic Preferred Insurance and formed Florida Preferred Property Insurance Co.

Poe Financial Group’s member companies, Atlantic Preferred Insurance Co., Florida Preferred Property Insurance Co. and Southern Family Insurance Co., offer a broad range of insurance services while specializing in homeowner (including condo-unit owner) and commercial habitational insurance. Poe Financial is one of the largest property insurers in Florida.

Shoppers Jam Stores As Fla. Tax-Free Holiday Ends

Florida’s tax-free holiday on hurricane supplies and it seemed Tropical Storm Arlene made everyone check their supplies, realize they were not ready for a hurricane, and rush out to buy them before having to pay a 6 percent state tax-local stores were jammed with shoppers looking for everything from flashlight batteries to generators.

Shoppers looking for large-ticked, and out-of-stock items like power generators, got a break, because many stores issued “rain checks,” which meant that a consumer could prepay for a large out-of-stock item, wait a week, and the purchase would be “tax-free.”

Store managers said the tax holiday was very popular, and that many customers waited until the last day to attempt to buy their hurricane supplies.

Stores like Home Depot and Lowes, which also matched the tax break with their own discounts, reported their business grew more than 100 percent. Store spokespersons said customers stood in line waiting for the arrival of generators and when their orders of 25 to 50 arrived, they were again sold out within a few hours.

Bowditch Insurance Acquired by South Financial Group

Jacksonville, Fla.-based Bowditch Insurance Corp., an independent insurance agency based in Jacksonville, Fla., has been acquired by The South Financial Group of Greenville, S.C. The transaction became effective June 6, its terms were not disclosed.

Bowditch Insurance focuses on general commercial insurance services, but also provides personal, life and group related insurance, as well as risk management, cost control, premium allocation and other related services. Founded in 1983, it has two offices in the greater Jacksonville area.

“We are pleased to affiliate with Bowditch Insurance, an agency with an outstanding reputation and focus on customer service,” Andrew B. Cheney, president of Mercantile Bank, TSFT’s Florida bank subsidiary, said. “This affiliation enhances The South Financial Group’s ability to offer insurance products to our customers. Bowditch Insurance is a foundation agency for us, which we will use to build our insurance operations. This moves us closer to our goal of having a platform agency in each of our major banking markets.”

Bowditch Insurance will retain its identity. It will continue to operate in two locations under the leadership of Raynor E. Bowditch, its founder and president. Bowditch will continue to serve as president of this entity.

“We are very excited to join The South Financial Group,” Bowditch said. “We are teaming with an organization, like ours, that offers a personal style of service. I am particularly pleased to be part of building a quality insurance presence at The South Financial Group.”

TSFG is a financial services Co., headquartered in Greenville. It has 166 branch offices in Florida, North Carolina, and South Carolina and at March 31, 2005 had $14.7 billion in assets.

KENTUCKY

AIK COMP Members Assessed $97 M

Frankfort, Ky.-based AIK COMP. has announced it plans to assess former members in Kentucky more than $97 million in an attempt to cover its debts. AIK intends to recover the money in retroactive premiums in an attempt to keep injured workers’ claims fulfilled.

AIK is a self-insured workers’ compensation fund. It was established in 1979 as Associated Industries of Kentucky Selective Self-Insurance Fund. Member employers received reduced workers’ compensation rates. Members understood at the time they could later be retroactively charged for any shortalls.

On April 7, Franklin Circuit Court Judge William Graham signed an order enabling AIK COMP rehabilitator Martin J. Koetters to continue his efforts on behalf of the financially troubled self-insured group workers’ compensation fund.

Members of the fund were assessed for a shortfall of $58.5 million in November 2004. (The actual deficit is now estimated to be at least $100 million.) Approximately 1,800 of the fund’s more than 3,700 members paid at least the first installment of the assessment, resulting in the collection of $12.2 million in cash.

Some AIK COMP members, however, challenged the assessment in court, stalling the rehabilitation and leading to an order by Judge Graham on Jan. 27 for a 40-day mediation period between the rehabilitator and a group of opposing counsel. The April 7 order, in effect, ended the mediation process.

Under the order, Koetters is authorized to collect at least 20 percent of the total due from each member who has not previously paid. Assessments under $500 will be collected in full.

NORTH CAROLINA

Bridgefield Adds Workers’ Comp for N.C. Market

Bridgefield Casualty Insurance Co., a subsidiary of Summit Holding Southeast Inc., announced it is expanding its operations to North Carolina. Bridgefield Casualty is rated “A” (Excellent) by A.M. Best Co. and offers employers comprehensive workers’ compensation insurance services, including loss control, premium audits and claims handling.

Submissions through independent agents are now being accepted for North Carolina workers’ comp business.

Topics Florida Catastrophe USA Fraud Agencies Workers' Compensation North Carolina Property Alabama Hurricane Homeowners