Ark. Regulators Suspend Agent License of Standridge for Dishonest Practices

Arkansas’ Insurance Commissioner Jay Bradford has immediately suspended the resident producer license of Steve Standridge, founder of the Steve Standridge Insurance Inc. based in Mount Ida, Ark., for allegations that he falsified collateral used to purchase another insurance organization and improperly retained and kept premium financing for a commercial client.

The department of insurance (DOI) alleges that it obtained information on Feb. 24, 2010, indicating that Standridge had “solicited and caused to be presented a premium financing agreement or loan arrangement for approximately $846,311 with the Bank of Star City…” based in Star City, Ark. The funds were for a commercial property policy for a Camden, Ark., based company for policies issued in November 2008 by RSUI Indemnity Co. with a participating policy issued by Chubb Group of Insurance Cos.

The RSUI policy was cancelled in August 2009 but the Bank of Star City was not notified, the order alleges. Standridge “retained or refused to return to the Bank an unearned premium” of approximately $429,717.53, the order says. On Feb. 26, the Bank of Star City filed suit against Steve Standridge Insurance, and the insured following delinquency in the payment of the premium financing arrangement in the Circuit Court of Lincoln County, Ark, No. LCV-2010-23-2.

The order also alleges that a department of insurance financial review of the purchase of Gibraltar National Insurance Co. by Steve Standridge Insurance uncovered misleading documents related to the funding of the agency’s purchase of Gibraltar.

On Sept. 29, 2009, the DOI says that a Ratification and Written Consent was received from the shareholders and board of Steve Standridge Insurance that stated that the proceeds of a Jan. 23, 2009, $4 million personal loan to Steve and Debbie Standridge (Steve’s wife), used to purchase Gibraltar were deposited in the form of certificates of deposits in the name of Gibraltar. The Consent also stated that all business assets of the agency were pledged as collateral for the personal loan, which was done with the knowledge of the agency’s board and shareholders.

Then on Feb. 12, 2010, the DOI discovered that $4 million of Gibraltar’s assets, held in two certificates of deposit, were pledged as collateral for the personal loan from First Service Bank to both Steve and Debbie.

On Feb. 17, Standridge endorsed the two certificates of deposit for withdrawal and instructed First Service Bank to apply the funds in satisfaction of his personal loan. However, he wasn’t an authorized signatory for withdrawal.

On that same day, Steve Standridge obtained a loan from First Arkansas Bank and Trust for $4 million to restore the assets to Gibraltar and purchased about $4 million in certificates of deposits at the same financial institution in the name of Gibraltar. Steve Standridge then told the Gibraltar board that all assets had been restored and not pledged as collateral for indebtedness.

But on Feb. 18, the board of Gibraltar learned that the new certificates of deposit were, in fact, pledged as collateral for the loan from First Arkansas Bank and Trust, and that they were the only collateral pledged for the loan to Steve Standridge Insurance.

On Feb. 25 and March 1, the DOI learned that at least two board members’ signatures had been forged on the board consent

Standridge, who founded the insurance agency 28 years ago, has agreed to retire immediately from the insurance business, said his attorney Thomas Curry of McMillan, McCorkle, Curry & Bennington LLP, based in Arkadelphia, Ark.

His children — Alisha Pollock and Jared Standridge — now have full control of the agency, according to the firm’s Web site. A call to Pollock, who now serves as president, was not immediately returned. Son Jared Standridge will now serve as vice president, working from the agency’s Clinton, Ark., office.

Steve Standridge Insurance, ranked No. 55 on Insurance Journal’s Top 100 Agency list, has 17 office locations throughout the state of Arkansas. Standridge was named the 2006 Professional Insurance Agents’ Agent of the Year.

On the Steve Standridge Insurance Web site, a message to customers says: “Steve Standridge, who founded our insurance agency 28 years ago, has decided to take an early retirement and spend more time with family. We assure you that you are in good hands and we will continue to provide you with the quality service that you have received over the years. We will be happy to continue to assist you, just as we have in the past. We appreciate your continued business with Steve Standridge Insurance and look forward to continuing that relationship.”