A Miami-Dade District Court found the former owners of Aries Insurance Co. guilty of diverting funds for personal use. The jury awarded a $76 million verdict against former Aries owner Marcos Fraynd and his three children Paul Fraynd, Saul Fraynd and Fanny Fraynd. Aries was declared insolvent in 2002, leaving behind roughly 58,000 policyholders and creditors with unpaid claims. The Florida Insurance Guaranty Association and the Florida Workers’ Compensation Insurance Guaranty Association have paid out more than $165 million to Aries claimants thus far and that figure is expected to top more than $170 million when all claims are resolved.
The jury verdict will repay the guaranty funds for some of their payouts. In 2006, the state Department of Financial Services filed suit against the former owners and directors of Aries for diverting policyholder premiums and illegally distributing the money for personal use. The department so far has recovered over $20 million from other parties through previous lawsuits. The company wrote personal and commercial auto and workers’ compensation business. In 2007, the Fraynds pled guilty to criminal charges and received various sentences for their roles in the insurer’s insolvency.
Source: Insurance Journal
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