Newspaper article The Florida Times Union

Guarantee Security Life Insurance Co.'s 1991 Collapse Left 56,000 Policyholders in a Lurch -- and the Saga Continues

Newspaper article The Florida Times Union

Guarantee Security Life Insurance Co.'s 1991 Collapse Left 56,000 Policyholders in a Lurch -- and the Saga Continues

Article excerpt

Tragedy crept up on William Ray Gossett one sunny morning in

1978 in the form of a toxic gas.

Working atop a 50-foot refining tower at the Continental Oil

Co. near Lake Charles, La., he had his back turned to the Olin

Chemical Corp. plant.

As Gossett worked to repair a valve, a cloud of vapor drifted

over the highway from the chemical plant. The cloud swirled with

hydrogen chloride and phosgene gas -- phosgene was responsible

for 80 percent of gas casualties in World War I.

He never saw it coming.

A co-worker noticed first. Rather than leave an open valve on

the tower, Gossett stayed behind to close it and sent his

partner for help. After closing the valve, he struggled down the

ladder, gasping for breath, skin burning.

"I remember getting on the ground, all fours, trying to vomit,"

he said.

Three other workers grabbed him. His next clear memory was of

the inside of a hospital room.

Emergency workers took 66 other victims of the accident to

hospitals that morning on March 14, 1978, according to the Lake

Charles American Press.

"I was gassed," said Gossett, the most seriously injured. "I

didn't even know it was happening. I got too much of it . . .

they put me to pasture."

On its journey through his system, the gas caused lung and

brain damage.

Gossett, the father of three daughters, had to learn to walk

and talk again. It was 10 years before he could drive a car.

When the accident happened he was 46; after the accident, his

working life was over.

A lawsuit eventually brought a $650,000 settlement. About half

of that went to medical bills and lawyers.

Building for the future, Gossett invested $300,000 with Paul

Revere Life Insurance Co. and Annuity; in five years, his nest

egg had grown to $500,000.

When time came to reinvest, the same agent who introduced

Gossett to Paul Revere talked him into putting his money with a

different company -- Guarantee Security Life Insurance Co. of


Guarantee was offering policyholders as much as 11 percent

interest on annuities and a fat commission for agents who sold

them. It sounded almost too good to be true.

It was.

While Gossett was buying annuities in Louisiana, Mark C.

Sanford was in Ponte Vedra Beach, investing in a chain of nude

dance bars and filling the driveway of his oceanfront home with

exotic sports cars.

Sanford was Guarantee Security Life Insurance Co. and

regulators would say later the money he was spending on himself

should have stayed with his insurance company.

Together with business partner William Blackburn, he had taken

a modestly profitable insurance company and turned it into the

sixth largest in the state.

It brought him millions in salary and fees. He bought an island

in the Bahamas and minted his own coin.

Barely three years after Gossett invested in Guarantee, the

company was seized by insurance regulators who said the company

had been "looted" of more than $100 million between 1985 and

1991, its dire financial condition camouflaged with the help of

the company's accounting firm and Wall Street broker.

A lawsuit filed by Florida after the seizure would cost in

excess of $20 million to litigate on the state's side alone and

would fill a warehouse in Koger Center with 35 million


Lost somewhere in the piles of court records have been the

stories behind the 56,000 policyholders -- including 6,200 in

Florida -- who suffered through the collapse. …

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