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Standridge also accused of premium finance fraud.

Since the discovery two years ago of problems with his purchase of Gilbraltar National Insurance Co. of Little Rock, Steve Standridge of Mount Ida has sold all of his agency offices across the state.

Standridge's handling of premium finance loans also came under scrutiny after the discovery of Gibraltar's trouble.

Commercial insurance premium is usually paid annually and in a lump sum, but some companies can't come up with the money for the policy all at once, so they take out a premium finance loan. The bank or lender has the policy as collateral.

But the AID told Arkansas Business in 2010 that Standridge sometimes used policies that never existed to get the loans from a bank or lender specializing in premium finance. Or he used real policies just long enough to get loans.

With the premium loan money in hand, Standridge then would tell the carrier that he wasn't able to get the funding, so he would have to cancel the policy. Instead of returning the money to the lender, Standridge kept it, the AID said in 2010.

The amount the AID has estimated Standridge generated from the practice is $10 million.

Last week, AID spokeswoman Alice Jones said in an email to Arkansas Business that the AID didn't have an update on Standridge's premium finance loan troubles. "Those are private contract matters between Standridge and the banks and premium finance companies," she wrote.

He also has faced other lawsuits. In 2011, Standridge was sued by Cornerstone Finance Co. of Columbia, Mo., for fraud and for defaulting on loans totaling $152,400.

On Jan. 26, Standridge, acting as his own attorney in that case, filed a response denying the allegations.

That case is set for trial in January in U.S. District Court in Hot Springs.
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Author:Friedman, Mark
Publication:Arkansas Business
Geographic Code:1U7AR
Date:Feb 13, 2012
Words:297
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