Spear Financial Unit to Fight Charges in Florida

Spear Financial Services Inc. said it will fight state charges that its James Mitchell & Co. unit violated Florida laws in the sale of annuities.

Through Mitchell, Glendale-based Spear Financial mainly markets insurance-related investments--such as annuities--through banks and other financial institutions.

But the Florida Department of Insurance has contended that Mitchell’s activities run afoul of state rules that limit a financial institution’s ability to market insurance products, Spear said.

Randy Stratt, Spear’s senior vice president, declined to say exactly how much Florida contributes to Spear’s business, but said that it’s a “material” sum and that Florida “is our single-largest client.”

The unit’s chairman, James Mitchell, said in a statement that “the allegations are without merit.”

“Our sales program in Florida is an important component of our business, and we will vigorously oppose the action of the (Florida) Insurance Department and pursue other legal remedies, if necessary, to protect our right to continue our efforts,” Mitchell said.

He said the Insurance Department’s action conflicts with another order recently issued by the Florida Department of Administrative Hearings that exempted insurance agents who market annuities through financial institutions.

Spear also filed a complaint in Florida Circuit Court asking that James Mitchell’s position be upheld, and that the Insurance Department be prevented from pursuing the administrative proceeding, which, if successful, would ultimately result in Spear being banned from Florida banks.