The owner of a private insurance company approved by the state to assume the largest number of policies from Citizens Property Insurance Corp. has an almost two-decade history of not paying personal bills.
At one point, it got so bad that a judge ordered Henry James Irl's own insurance company — the very one the state approved to take out about 116,000 policies from Citizens this year — to garnishee his wages to repay some of his debt.
"You have to wonder how he would pass (the Office of Insurance Regulation) examination," said Bill Newton, executive director of the Florida Consumer Action Network. "It's got to shake the consumers' confidence to read something like this, to read this guy is a deadbeat."
Magnolia Insurance is one of 14 private firms that are part of an increasingly aggressive move by the Legislature to reduce the number of policies held by state-run insurer Citizens Property Insurance. Of the 14, Magnolia was approved to take out the most policies, more than a quarter of the almost half-million policies approved for takeout by the end of December.
Incorporated in 2006, Magnolia began operations in April and has 102,204 policyholders. The company has at least one advantage over some other private insurers: It hired former Citizens claims manager Lou DiPaulo as its vice president for claims.
Irl asked that questions about his finances be put to him in writing. In his written response, he did not address those questions. He wrote:
"Magnolia Insurance Company currently has no outstanding debt obligations. Magnolia Insurance Company is a solvent, financially strong company, well-placed to handle the risks of the Florida homeowners market through its sound business practices including, but not limited to, catastrophe reinsurance."
On Magnolia's application to the state, the Office of Insurance Regulation deleted the background information on Irl and other officials from Magnolia.
Spokesman Ed Domansky would not discuss Irl, but issued this statement:
"What the Office of Insurance Regulation looks for is evidence that a proposed officer is incompetent or untrustworthy. The Office looks into any suggestion that an applicant does not deal fairly or honestly in financial transactions. ... Based on the totality of the explanations and evidence in light of the statutory standards, the Office approved the Magnolia application."
Domansky said personal information is confidential by law. But the information about Irl can be found in the public record. The debts, judgments and liens are in court documents in Miami-Dade County and Somerset and Middlesex counties in New Jersey.
Those cases include:
• A wage garnishment order for Irl to repay Chase Bank U.S.A. more than $36,000 in $600.42 monthly installments from July 10, 2006, to June 10, 2011. Chase voluntarily terminated the garnishment early, on Oct. 4, 2007.
• An order in February for Irl to repay Citibank $10,000 in monthly payments that would begin at $100 and increase to $225.
• Judgments in New Jersey that include debts of $35,000 and $2,100 as well as thousands of dollars in separate unpaid bills found in lawsuits dating to 1992. Some of the smaller debts have been settled or satisfied.
Irl and his company have done well. The building that houses his Magnolia Insurance Co. in Miami towers over Dinner Key with the likes of the Ritz-Carlton Hotel surrounding it.
Magnolia has a 2005 Range Rover registered to the company, while Irl himself owns a Lincoln Navigator and a Ford Mustang. Irl also maintains properties in Florida and New Jersey.
Because of the financial concerns of the insurance industry, workers in the business are held to personal financial standards that mirror those in the banking industry.
"You want to make sure that ... they take care of their own things in their own home," said Lynn McChristian, a spokeswoman for the Insurance Information Institute. She said the insurance industry holds its workers "to high standards."
The Office of Insurance Regulation says it carefully scrutinizes the financial soundness of the companies it approves to take policies out of Citizens.
It says the strength of takeout insurance companies is based on several factors, including how much capital they have saved and their backup insurance.
Magnolia borrowed $23.8-million to support its capital investment of $20-million from Allianz Risk Transfer Inc., a New York-based subsidiary of Allianz Risk in Zurich, Switzerland. Irl said Magnolia "currently has no outstanding debt obligations.''
Irl also entered a $115-million agreement with CGI Group Inc., an information technology and business process service, to handle its administrative operations, billing, accounting, claims administration and statistical reporting.
Magnolia was one of three insurance companies deemed ineligible for a state program to build up insurers' capital. The insurance agency did not say why Magnolia was declined. Thirteen others received more than $247-million to help bolster their capital.
The state Financial Services Commission — the governor, attorney general, chief financial officer and commissioner of agriculture and consumer services — oversees the Office of Insurance Regulation.
Attorney General Bill McCollum's spokeswoman said OIR had assured his office that the questions about Irl's personal finances had been thoroughly addressed in the application process.
CFO Alex Sink's spokeswoman said she expected OIR to act in the best interest of consumers and follow the law.
Agriculture Commissioner Charles Bronson's spokesman said the information was "concerning'' and he would be checking with OIR to find out more.
Newton, the consumer advocate, said he questions how Irl and his company can handle all they have taken on and why the Office of Insurance Regulation has allowed him to do it.
"Somebody believes in him enough," Newton said. "It sure raises a lot of questions."
Times staff writers Kris Hundley and David Adams and researcher Shirl Kennedy contributed to this report. Ivan Penn can be reached at firstname.lastname@example.org or (727) 892-2332.