Florida Group Alerts Members About Poe Financial’s Status

The Professional Insurance Agents of Florida has issued a member alert about Southern Family Insurance, a subsidiary of Poe Financial Group and its subsidiaries, Atlantic Preferred and Florida Preferred.

“It’s hard to imagine good news when we’re reporting that an insurance company is going into receivership, but this story does have an upside,” the alert said. “As we’re sure you’ve heard, Southern Family Insurance Group has been ordered into receivership. State officials are working to develop a plan that will move any Southern Family policies that cannot be placed elsewhere into Citizens Property as seamlessly as possible.”

“I have been aware of Poe’s struggles for quite some time. PIA of Florida followed it closely because Poe had grown into one of the largest property insurers in the state, and anything that happened to them was going to significantly impact us,” Mark O’Connell, PIA of Florida CEO said. “I watched them for another reason, too. Poe never has been a typical insurance company. Their early entry into the residual market take-out sweepstakes alienated a lot of agents. Take-outs, after all, stole business away from agents.

“It’s been said that the creation of Citizens and the addition of Consumer Choice to the take-out process marked Poe’s move to becoming a stronger partner with agents,” O’Connell said. “That’s simply not true and it’s unfortunate because PIA had a strong working relationship with Poe before Citizens was even an idea. Bill Poe and Jim Wurdeman made the decision to build their insurance company around its agents—there hasn’t been a stronger partner or a bigger supporter of agents than the people running the Poe Group. Their recent troubles make them an easy target but make no mistake—they will be missed.

“The upside to this story is the plan that Florida’s Chief Financial Officer Tom Gallagher has developed,” O’Connell continued. “As we contemplated the potential demise of the Poe companies, we struggled to comprehend the strain it was going to place on agents as they processed thousands of applications. We couldn’t imagine how Citizens could possibly handle that same volume in such a short time. Apparently Gallagher had the same thoughts. Through some very creative forethought, Gallagher has devised a plan that will allow policyholders to keep their policies on Poe paper without the need to cancel and apply for new coverage. Citizens will assume the risk.

“This transition will prevent the major disruptions in business normally associated with liquidations. Agents won’t have to send out thousands of notices informing their customers of these pending cancellations, nor will they have to calculate and return unearned commissions. Policyholders will not have to come up with additional premium at this time. However, any policies that are moved into Citizens will be subject to Citizens underwriting and rate structure when they come up for renewal after July 1, 2006.”

O’Connell urged all PIA of Florida members who have customers with Southern Family and/or Atlantic Preferred policies, to try to find coverage elsewhere for these policies. Policyholders should continue to pay their premiums, and those who find coverage in the private market will have the right to unearned premium. Those who find coverage in Citizens will have their unearned premium applied to their new Citizens policy.

“As insurance professionals, we know this is a difficult time for you,” O’Connell said. “Your first priority is your customer. Our priority at the Professional Insurance Agents of Florida is you—our member. We are working hard with you in mind in hopes that state officials handle this issue efficiently.”