Insurer’s failure touches midstate [The Macon Telegraph, Ga.]

Jan. 8--Nearly 70 Middle Georgia businesses, municipalities and boards of education were among the clients of Southeastern U.S. Insurance Co., which is under investigation by Georgia Insurance Commissioner John Oxendine.

The Department of Insurance began an investigation of the company this week after evidence of financial dealings caused the Atlanta-based company to go belly up, said Glenn Allen, a spokesman for Oxendine's office.

Oxendine's office took over the company, which provided insurance in workers' compensation cases, in October, after a Fulton County Superior Court judge ordered the company be liquidated.

Allen said the investigation centers on Southeastern U.S. Insurance's former CEO M. Clark Fain III, who borrowed money from the company to purchase a multi-million dollar hunting preserve in southwest Georgia. Oxendine considers the company to have practiced "Enron-like bookkeeping," Allen said.

The company's losses are reportedly between $20 million and $30 million.

Dublin Mayor Phil Best, whose city was one of the company's clients, said city officials only found out about the company's problems after two city employees tried to get medical care last month, and their workers' compensation claims were denied. The city, which has since resumed service with its previous insurer, will be picking up the costs for at least one of the employees, Best said, though the costs are minor.

"We were very fortunate," Best said. "It's just a shame, I guess. I hate any city or business that has any losses" because of Southeastern U.S. Insurance.

Allen said Southeastern U.S. Insurance Co. often didn't list its payouts so it could show it had more cash on hand than it had in reality.

He said a parapalegic Gainesville man had medical costs that were about $30,000 a month. With the company out of business, no one is paying those expenses right now, Allen said.

Other Middle Georgia cities that used the company included Byron, Gray, Cochran, Eastman, Forsyth and Fitzgerald. The boards of education in Dodge, Putnam, Baldwin and Washington counties were among the other entities in Middle Georgia affected.

To contact writer Phillip Ramati, call 744-4334.

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