Consumer eViews
FLORIDA CHIEF FINANCIAL OFFICER TOM GALLAGHER'S WEEKLY NEWSLETTER

Volume 1, Number 47, November 22, 2004     
 

In a few days Floridians will gather with family and friends to celebrate Thanksgiving. This day of tradition in America gives us an opportunity to give thanks for all the benefits of this land of plenty, and of course, for our freedom.

But even with all the gifts and blessings of this year, for many Floridians this year was full of tragedy. Sadly, many Floridians will not celebrate Thanksgiving in their traditional way - in their own homes. That’s because thousands of homes remain in disrepair following the onslaught of four hurricanes.

Even so, we are still fortunate. Remember that if you will sit at a dinner table on Thursday with a friend or someone you love, you are blessed.

Remember also that the dedicated employees of the Department of Financial Services throughout the state continue working hard to help all Floridians get their lives back to normal. Patience, understanding and the support of family and friends will see us through these difficult times.

Here’s wishing you and yours a safe, happy and blessed Thanksgiving.
 

                        -- Tom Gallagher


DFS HURRICANE STATUS REPORT
 
HURRICANE MEDIATIONS
Mediation meetings have begun in Punta Gorda, Orlando, Jupiter and Pensacola to provide Floridians with a process to quickly and fairly settle disputes with insurance companies, at no cost to them.  To date, more than 1,000 homeowners have requested mediation.  Several dozen participated in mediation on the first day. 

Mediation was instituted following Hurricane Andrew with a nearly 90 percent success rate. 

Storm victims can learn more about mediation services by logging on to the department’s website at www.MyFloridaCFO.com and downloading the “Mediation Program” brochure.  Consumers can sign up for mediation by calling the state’s hurricane hotline at 1-800-22-STORM. 

MEDIATION SITE LOCATIONS 

Punta Gorda
Mediation Center
   
350 E. Marion Ave.
Annex Office
Punta Gorda, FL 33950     

 

Jupiter
Mediation Center
  
900 U.S. Highway One
River Plaza, Suite 207
Jupiter FL 33477                              

Orlando Mediation Center   
8403 South Park Circle
Building 600, Suite 655
Orlando, FL 32819     

 

Pensacola                          Mediation Center
1550 Creighton Road
Pensacola, FL 32504
 

ESTIMATED INSURED DAMAGES
 
(Estimates based on data call through the Office of Insurance Regulation)

Hurricane Charley:      $7.5 Billion              
Hurricane Frances:     $4.5 Billion
Hurricane Ivan:            $4 Billion
Hurricane Jeanne:       $4 Billion

Total Insured Losses: $20 Billion

Number of claims filed to date: 1.4 million
Expected number of claims: 2 million. One in every five homes statewide damaged.

ACTIONS TAKEN TO HELP CONSUMERS

Instituted a moratorium on insurance companies canceling or non-renewing homeowners during hurricane season or because they have filed a storm claim.

Working with insurance companies and policyholders to resolve cases involving multiple deductibles.

Placed a 10 percent cap on what public adjusters can collect on a homeowner’s insurance claim and prohibited them from charging fees up front.

Required Florida’s health insurers and HMOs to waive restrictions on prescription refills to enable citizens to fill prescriptions in advance. 

Urged banks and credit unions to expedite loan applications, eliminate late fees on loans and waive ATM and check-cashing fees for storm victims.

Set firm deadlines for insurance companies to respond to policyholders and process claims.

Established mediation program to give storm victims a no-cost way to quickly and fairly resolve claim disputes with their insurance company.
 

CONSUMER RESPONSE 
Since August 13, the day Hurricane Charley made landfall, the department has received more than 136,000 calls and handled more than 29,000 consumer requests for assistance.

After each storm, mobile response units were deployed to impacted areas and mobile command centers were up and running within 72 hours of landfall. 

More than 150 department employees have been in the field providing insurance help, with the assistance of 30 insurance experts from eight other states.

Department staff have assisted thousands of consumers in their communities, with a presence in more than 50 disaster recovery centers statewide.

There are as many as 40,000 adjusters working storm claims. Of this number, 16,100 emergency adjuster licenses were issued to expedite the payment of insurance claims.


ELEVEN INSURANCE COMPANIES SUBPOENAED

TALLAHASSEE-Investigative subpoenas were issued today to eleven insurance companies in Florida by state regulators and investigators. The subpoenas require insurance companies to submit records and documents related to their contractual relationships and commission arrangements.

“We need to determine if insurance companies and brokers are manipulating the law for financial gain rather than what is in the best interest of the insurance-buying public,” said Florida’s Chief Financial Officer Tom Gallagher, who oversees the Department of Financial Services. “We will certainly take immediate action if we uncover any evidence of bid-rigging, kickbacks or improper fees.”

Subpoenas were issued to: National Union Fire Insurance Co. of Pittsburgh, PA; American International Specialty Lines Insurance Co.; Continental Casualty Co.; Lexington Insurance Co.; Scottsdale Insurance Co.; Federal Insurance Co.; Ace American Insurance Co.; Zurich American Insurance Co.; St. Paul Fire & Marine Insurance Co.; State Farm Florida Insurance Co.; and Twin City Fire Insurance Co.

“The kinds of practices and problems recently uncovered elsewhere often increase the costs to businesses, and in the end, to consumers. We need to determine if that is the case here in Florida,” said Kevin McCarty, Commissioner of the Office of Insurance Regulation. “If it is taking place, we need to rectify the situation.”

Gallagher applauded the coordinated efforts of the Florida Department of Financial Services, the Office of Insurance Regulation and the Attorney General’s Office.

Today’s subpoenas stem from a legal task force Gallagher established last month 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. The suit alleges civil and criminal misconduct involving insurance brokers steering business to insurance companies for a commission.
 


GALLAGHER WARNS ADJUSTERS AGAINST DISCOURAGING CONSUMERS FROM FILING A COMPLAINT WITH DFS

Responding to a few complaints that some insurance company adjusters may be discouraging consumers from contacting the Department of Financial Services for help with a complaint or with filing a hurricane claim, Florida’s Chief Financial Officer Tom Gallagher today issued an industry warning that such actions could result in license suspension or revocation. 

"Although we have received a limited number of complaints, the nature of the allegations are so serious I believe it warrants a public warning,” Gallagher said.  “I will not tolerate the rights of Florida’s citizens being impeded in any way.  Filing a complaint or request for the department’s help in no way inhibits the ability of claims adjusters to settle claims with an insured, nor does it delay or prolong the process unless someone is acting in bad faith.”

Some hurricane victims have reported that adjusters have warned that filing a complaint with the department would slow the claims process.  Adjusters engaging in this activity may include insurance company adjusters, independent adjusters or catastrophe adjusters. 

Using threats or coercion to dissuade Floridians from filing a complaint with the department violates the provisions of the Unfair Insurance Trade Practices Act as well as the rules regulating the ethical conduct of adjusters.  The department can suspend or revoke the license of an adjuster who violates the Insurance Code or department rule, or impose a fine of up to $3,500. 

Consumers who need assistance filing a hurricane claim or want to file a complaint should call 1-800-22-STORM (1-800-227-8676) or go to www.MyFloridaCFO.com and click on “Report Insurance Fraud.”

 


PASCO COUNTY MAN ACCUSED OF FILING FALSE INSURANCE CLAIMS

 A Pasco County man is charged with insurance fraud, grand theft and filing a false police report after he told investigators that he was mistaken when he reported a car and household belongings stolen when they had been shipped to Hawaii, and that another car had not been stolen but repossessed.

Arthur Koenig, of 7221 Auburn Lane, was arrested Monday by investigators with the Department of Financial Services, Division of Insurance Fraud, and booked into the Land o’ Lakes County Jail on a bond of $70,500.  

“Insurance fraud drives up the cost of insurance and makes it harder for honest people to get the coverage they need for their families, their homes and their businesses,” said Florida’s Chief Financial Officer Tom Gallagher, who oversees the Department of Financial Services.  “Insurance fraud is a serious crime, and the department treats it as such.”

Koenig called Liberty Mutual Insurance Company on May 4 and said that his 2002 Cadillac had been stolen from the parking lot of the Gulf View Mall on April 15. Investigators determined, however, that the Koenigs had contracted with All Star Movers of New Port Richey to pack household items and a 2002 Cadillac for shipment to Hawaii.  Koenig also reported a Corvette had been stolen from the home, but a neighbor stated that the Corvette had been towed from the driveway. 

The Pasco County Sheriff’s Office, the National Insurance Crime Bureau, and the Special Investigation Unit of Liberty Mutual Insurance Company assisted with the investigation.   

The Department of Financial Services, Division of Insurance Fraud, investigates various forms of fraud in insurance, including health, life, auto, property and workers' compensation insurance.  Anyone with information about this case is asked to call the department's Fraud Busters Hotline at 1-800-378-0445.



Consumer Services HelpLine
(800) 342-2762.