Volume 1, Number 46, November 15, 2004
HONORING OUR VETERANS
There is no greater sacrifice Americans can make than serving their country during a time of war. Many have made that sacrifice with courage and honor, and it is with that in mind that I write.
As you know, last week we honored those who have served our country by celebrating Veterans Day. I realize that this holiday is of particular significance, as thousands of Floridians are serving or have served with pride in Iraq. I admire the bravery that all the men and women of our armed forces show in the face of difficult circumstances.
The recent hurricanes in Florida have brought out the same honor and courage in our citizens, whether first responders, volunteers, state and federal employees or, especially, victims of the storms. I admire their courage and strength as they have helped all of us pull together to begin the rebuilding process.
Thank you to all who give so much for our country and our state. Sacrifices by our citizens both at home and abroad speak volumes about character and valor. It is men and women like these that make me proud of our state and proud to be an American.
GALLAGHER VISITS MEDIATION CENTERS, GIVES STATUS REPORT ON HURRICANE RESPONSE
GALLAGHER RECOMMENDS EXTENDING MORATORIUM ON CANCELLATIONS TO HOMEOWNERS STILL WAITING FOR REPAIRS
At a meeting of Florida’s governor and Cabinet, state Chief Financial Officer Tom Gallagher recommended extending the current moratorium on insurance non-renewals or cancellations for hurricane victims whose homes have yet to be repaired.
“Homeowners who lose their insurance coverage before repairs are complete are uninsurable,” said Gallagher. “For the thousands of hurricane victims who are still waiting for repairs, extending the moratorium on non-renewals and cancellations gives them peace of mind as they rebuild their homes and lives.”
Recognizing that many homeowners are being told they must wait up to six months to schedule repairs due to a shortage of construction contractors, Gallagher has asked the Office of Insurance Regulation to develop an emergency rule prohibiting insurance companies from canceling or non-renewing homeowners insurance coverage until repairs are complete. The rule would be considered at the next scheduled Cabinet meeting, Nov. 23.
Gallagher said this issue may require legislation but wanted an emergency rule to be drafted in anticipation of approval by the governor and Cabinet at their next meeting.
GALLAGHER ISSUES INVESTIGATIVE SUBPOENA
Gallagher announced that he has issued an investigative subpoena against New York-based Marsh & McClennan, one of the nation’s largest insurance brokerages. The subpoena requests documents related to the purchase of property insurance coverage for state-owned buildings.
“While we are currently investigating potential abuses in the insurance industry to protect Florida’s consumers, we are now taking a deeper look at insurance contracts with state agencies and any impact on public dollars,” Gallagher said. “We will not tolerate any abuse of tax dollars.”
Gallagher announced a broader look at the insurance industry as a whole last week, establishing a legal task force to investigate whether any of the activities outlined in New York Attorney General Eliot Spitzer’s recent civil suit are taking place among insurance brokerages and companies in Florida, including bid-rigging, kickbacks and improper fees. Spitzer’s suit alleges civil and criminal misconduct involving insurance brokers steering business to insurance companies for a commission.
SAFE HOUSE MOUSE FIRE SAFETY TIPS
The State Fire Marshal’s Office has
created and distributed fire-safety bookmarks specifically targeting
The State Fire Marshal’s Office places special emphasis on education for children. The department’s “Safe House Mouse” program offers tips for kids and suggestions for parents and teachers to share practical advice on how to prevent and escape fire.
JUDGE RULES AGAINST MUTUAL BENEFITS IN FAVOR OF SEC
TALLAHASSEE-A federal magistrate judge late today upheld findings by the U.S. Securities and Exchange Commission (SEC) that Mutual Benefits Corporation (MBC), the nation’s largest viatical settlement company, engaged in violations of securities law and defrauded investors.
The Department of Financial Services (DFS) and Office of Insurance Regulation (OIR) cited many of the same allegations in administrative charges filed against the company in May.
“This recommended order goes a long way toward protecting Florida investors by upholding the hard work of SEC investigators and the actions they took,” said Florida’s Chief Financial Officer Tom Gallagher, who oversees DFS. “That in turn lends itself to upholding the findings of state regulators and our aggressive pursuit of those intent on taking advantage of our citizens.”
Kevin McCarty, Commissioner of the Office of Insurance Regulation, agreed and commended both his investigative staff and the SEC for their incredible investigative work.
Barry L. Garber, U.S. Magistrate Judge for the Federal District Court for the Southern District of Florida, recommended granting the SEC's motion for preliminary injunction to stop MBC from continuing its operations in light of these troubling findings by the SEC:
· 90 percent of MBC viators had lived beyond life expectancies.
· 74 percent of policies have a negative escrow balance.
· MBC misused investor funds by paying, in a Ponzi-like fashion, the insurance premiums on older policies with new investors’ monies.
· MBC has been subject to cease and desist orders from at least five state regulatory agencies
· Joel Steinger, defacto CEO of MBC, has a prior criminal conviction for wire and mail fraud.
The Steinger brothers have extensive disciplinary histories.
· The defendants and relief defendants paid themselves millions of dollars pursuant to undisclosed consulting agreements.
· MBC was selling interest in group policies without converting them into individual policies prior to purchase and was not disclosing the corresponding risk of investing in group policies.
U.S. Judge Frederico A. Moreno will issue a final ruling on MBC’s motion after hearing responses to Magistrate Judge Garber’s findings.