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RECORD $100 MILLION SETTLEMENT WINS COURT APPROVAL

TALLAHASSEE, Fla., March 8 /PRNewswire/ -- The Florida Department of Insurance today issued the following:

Florida Treasurer and Insurance Commissioner Bill Nelson today announced a circuit court judge has given approval to the largest settlement ever won in a Florida lawsuit stemming from the collapse of an insurance company.

The order by Circuit Judge F.E. Steinmeyer in Tallahassee all but clears the way for the release from escrow of funds from a $100 million settlement reached by the Florida Department of Insurance in a case involving Jacksonville's defunct Guarantee Security Life Insurance Company (GSLIC). There remains one last legal step before the money can be disbursed to consumers with unresolved claims and to emergency funds that already reimbursed consumers.

"We achieved a major victory for consumers with this settlement and now a judge has put his stamp of approval on it," Nelson said.

In August 1991, the Department of Insurance declared GSLIC insolvent by more than $300 million, which was the largest failure of a Florida- based insurance company. Four months later, the department acting as Receiver filed a lawsuit in state court against the company's officers, its auditing firm, a securities firm and a law firm. In essence, the lawsuit contended certain officers of the GSLIC drove the company into debt while putting millions in their own pockets.

The settlement has been reached with Merrill Lynch, Pierce, Fenner & Smith for $45 million; accountants Coopers & Lybrand for $50 million; and, the New York law firm of Sheriff, Freidman, Hoffman & Goodman for $5 million.

Separate from the Insurance Department's case, GSLIC customers filed a class action lawsuit in federal court. Now, a judge in the federal case will be asked to dismiss the counts against the defendants who have settled in the state lawsuit. This will clear the way for release of the $100 million held in escrow.

As Receiver, the Insurance Department still is suing GSLIC officers and directors, including Mark C. Sanford; his brother, Robert C. Sanford; William B. Blackburn; and, Melanie R. Furlong for fraud, civil theft, breach of fiduciary duty and waste of corporate assets. Also named as defendants are GSLIC's holding company, Transmark USA Inc., and Mark C. Sanford's wife, Margena Burnett Sanford.

When GSLIC failed, there were more than 55,000 customers nationwide, including about 9,000 in Florida. Many were protected by emergency funds used to cover insurer failures. The $100 million will be distributed according to a liquidation plan to pay unresolved claims of policyholders and to reimburse the emergency funds.
 -0- 3/8/96


/CONTACT: Don Pride or Dan McLaughlin, Florida Department of Insurance, 904-922-3108, ext. 2842/

CO: Florida Department of Insurance ST: Florida IN: INS SU:

CM-TL -- CHF007 -- 1785 03/08/96 18:29 EST
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Publication:PR Newswire
Date:Mar 8, 1996
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