A giant international reinsurance company said Friday it has no knowledge of a life insurance program pitched to Pasco County schools with the company's name attached.
Under the proposal, private investors would put $400 million into life insurance plans for every school district employee. The investors would get tax-free returns, while the employees' families and the district would get $50,000 each upon the workers' deaths.
Neither the employees nor the district would pay anything.
The proposal — which has raised "too good to be true" questions — came as news to the insurer mentioned in talks with the school district.
"We are not aware of any involvement with this product, and we continue to investigate this matter," said Lindsay Kelly, a spokeswoman for Swiss Re, one of the world's largest reinsurance firms.
Bill Olive of Pollock Financial Group, who introduced the insurance program to the school district, said he could not comment about the latest developments. In the past, he has stressed that the concept is legal and, though new to the public sector, often used by private companies.
He has said the district could use the revenue to bolster employee benefits and pensions.
Several school district officials had in their notes that Pollock Financial referred specifically to Swiss Re during presentations about the plan. They noted, however, that the name Swiss Re never appears in any official documentation.
Pollock Financial mentioned dealing with a Bermuda trust during talks with the board. Swiss Re does not have offices in Bermuda.
Swiss Re's statement came in the same week that the Florida Office of Insurance Regulation launched an official inquiry into the proposal, asking for all documentation relating to the plan.
"Any time there's a potential red flag and Florida consumers could potentially be hurt, it doesn't hurt to take a closer look," said Alyssa Lathrop, assistant general counsel for the state insurance office.
Florida lawmakers directed the office last year to review state law and regulations to ensure there are "adequate protections for purchasers of life insurance policies in the secondary life insurance market."
Pasco School Board members have expressed reservations about the concept, even as they have given preliminary approval to move ahead.
Board chairwoman Alison Crumbley welcomed the added scrutiny.
"I am delighted that the Florida department of insurance is in on this. They have the tools. They have the resources," Crumbley said. "This is the due diligence phase."
Board member Allen Altman, an insurance agent, said the district must proceed cautiously.
"When fully vetted by the Office of Insurance Regulation and all the others that are reviewing it, if they find that it meets all the requirements of law and still benefits the employees and the district, then it is something we still should consider," Altman said.
School Board attorney Dennis Alfonso noted many details of the proposal have changed in the different versions that he and others have worked to review.
The state oversight should slow the process, which the financial group has pushed to get in place quickly in order to keep the investors on line, Crumbley said. Each investor is said to have $100 million to put into the system.
In the end, Lathrop said, "Everything could be perfectly legitimate. There's no way to tell at this time."
Still, she added, "It really, on the surface, sounds too good to be true. … There's no such thing as a free lunch."
Superintendent Kurt Browning said if the inquiry reveals that the negotiations have not been "on the up and up," he is prepared to recommend that the School Board end its talks with Pollock Financial.
Jeffrey S. Solochek can be reached at [email protected]