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

Volume 2, Number 3, January 17, 2005    

A special committee formed by legislative leaders to pursue hurricane insurance reforms met for the first time last week. Our office participated and offered several recommendations to committee members. Let me share our recommendations with you. 

The total number of claims filed to date from four back-to-back hurricanes is 1.5 million.   

The 2004 hurricane season struck with Hurricanes Charley, Frances, Ivan, and Jeanne inflicting damage in 54 of Florida’s 67 counties within 45 days, with both Hurricanes Frances and Jeanne following very similar tracks with virtually identical landfall points.   

Many storm victims were blindsided by the initial 2 to 5 percent deductibles that had been established.  Currently, 64 percent of residential policies are written with a two percent or higher deductible.  Consumers deserve to have a choice in the amount of deductible they will pay. I recommend: 

·         Giving consumers a choice in what they will pay for a deductible, from 1 to 5 percent. 

·         Requiring companies to have consumers “sign off” in their policy on a clear calculation of how much their deductible will be.  The goal is to make sure that individuals are made aware of their deductible amount at the time they purchase their policy. 

·         Setting up hurricane savings accounts so homeowners, and condominium owners, can put money aside tax-free to cover deductible expenses, repair costs or to strengthen their home. 

Due to the widespread damage caused by the four storms, many residents will not obtain repairs for months due to the sheer volume of repairs needed and the lack of contractors available to do repairs.  There is a growing concern among homeowners that when their insurance policy comes up for renewal, their property will be uninsurable until repairs are complete.

Emergency rules are currently in place preventing insurance companies from canceling or non-renewing insurance policies for hurricane victims whose homes have yet to be repaired.  I recommend:

·        Amending Florida law to prohibit insurers from canceling or non-renewing a homeowner whose property has been damaged by a hurricane until 60 days after repairs are completed.

As the select committee continues deliberations, I plan to pursue additional reforms to help protect homeowners and to improve the availability of insurance coverage. I welcome your feedback as we move through the process email your ideas and suggestions to tom.gallagher@MyFloridaCFO.com.

My congratulations to our Department of Financial Services Law Enforcement Officers of the Year, Tommy Clark and Chris Scovotto.

                      -- Tom Gallagher


DEPARTMENT LAW ENFORCEMENT OFFICERS HONORED

Two law enforcement officers with the Department of Financial Services were among 14 nominees for the Attorney General’s Law Enforcement Officer of the Year 2004.  A ceremony was held Tuesday on the steps of the Old Capitol.

Investigator Henry “Tommy” Clark, left, of the Division of Insurance Fraud and Detective Chris Scovotto, right, of the Division of State Fire Marshal, Bureau of Fire and Arson Investigations, were chosen by their fellow officers.

Tallahassee Police Officer Chuck Perry was chosen among the nominees as the Attorney General’s Law Enforcement Officer of the Year.

Investigator Clark has been with the division for more than 10 years and has more than 30 years of law enforcement experience.  

As the lead investigator in the Jacksonville/Ocala Region, Clark works high-profile, complex cases that often involve coordinating with various state and federal law enforcement agencies.   In 2004, he was awarded the Florida Workers’ Compensation Fraud Task Force Outstanding Service Award and a letter of commendation from the Florida Insurance Guaranty Association for his making an arrest and ultimately getting a confession from an employee regarding a theft.  His nomination cited him as one of the “more consistent and productive investigators” in the division. 

Detective Scovotto is noted for having an arson clearance rate of 62.5 percent, 46 percent above the national average.   

Scovotto has been with the North Region of the Bureau of Fire and Arson Investigations since November 2003, and in his first 12 months he investigated 94 cases and made 29 arrests.  One of those cases was an early morning fire on April 16, 2004, that destroyed the sanctuary of the Episcopal Church of the Holy Spirit in Tallahassee.  The value of the damage was estimated at $700,000.  Scovotto worked with the agencies of the Leon County Arson Task Force to obtain an arrest warrant within 22 hours of the fire being reported.   

In his nomination, his major wrote, “Since his transfer, Detective Scovotto has established an outstanding relationship with representatives of the other agencies in the region.” 


FLORIDA INSURANCE AGENT ACCUSED OF STEALING PREMIUMS, PUTTING UNINSURED TRUCK DRIVERS ON ROAD

An insurance agent who allegedly failed to place auto and general liability coverage for at least 11 Florida trucking companies was arrested in Georgia on an outstanding warrant. 

Kim Laustra, 43, was an agent at the Medley, Florida, agency Transportation Insurance Consultants, Inc., 9657 NW South River Dr., at the time these alleged incidents occurred.  She was arrested Monday afternoon in Ludowici, Georgia, by the Long County Sheriff’s Office.  She was wanted on 12 felony charges following an investigation by the Department of Financial Services, Division of Insurance Fraud.  Investigators said she misappropriated more than $93,000 in premiums and issued fraudulent insurance certificates. 

“Such actions create a serious risk not only for the individual who sought to purchase the coverage but everyone sharing the road with these uninsured drivers,” said Florida’s Chief Financial Officer Tom Gallagher, who oversees the Department of Financial Services.  “We will pursue the highest criminal penalty under the law and if she is convicted we will revoke her agent license.”

TIC sold coverage mostly to small, independent trucking operations with one or two trucks.

Laustra is charged with one count of organized scheme to defraud in the first degree, which carries a maximum penalty of 30 years in prison; one count of misappropriation of funds in the second degree, which carries a maximum penalty of 15 years in prison; and 10 counts of misappropriation of funds in the third degree, which carries a maximum penalty of five years in prison for each count.

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 or another possible fraud scheme should call the department's FraudBusters Hotline at 1-800-378-0445.  A reward of up to $25,000 may be offered for information leading to an arrest and conviction.
 


TSUNAMI DISASTER RELIEF FRAUD ALERT

Washington, D.C. - The FBI is alerting the public to a variety of scams currently being facilitated online involving the solicitation of additional relief funds for the victims of the recent Tsunami disaster. The FBI, through the Internet Crime Complaint Center (IC3), has received reports of websites being established purportedly to assist with collection and relief efforts. Complaints submitted to the IC3 have identified several schemes that involve both unsolicited in-coming emails (SPAM), as well as reports of responses to posted email addresses, to assist for a fee, in locating loved ones who may have been a victim of the disaster. A fraudulent relief donation website has also been detected containing an imbedded Trojan exploit which can infect the user's computer with a virus if accessed. 

The FBI, in conjunction with domestic with international law enforcement and industry partners, take seriously these egregious actions and are resolved to aggressively pursuing those who would attempt to victimize philanthropic individuals.

The IC3 is cautioning citizens against participating in this type of on-line correspondence. Consistent with previous guidance on incidents of Phishing/Spoofing and Identity Theft, when considering on-line options for providing funding to this relief effort consumers should consider the following:

·         Do not respond to any unsolicited (SPAM) incoming emails.

·         Be skeptical of individuals claiming to be surviving victims or foreign government officials asking for help in placing large sums of money in overseas bank accounts.

·         To ensure that contributions to U.S. based non-profit organizations are used for intended purposes, go directly to recognized charities and aid organizations websites, as opposed to following a link to another site.

·         Attempt to verify the legitimacy of non-profit organizations by utilizing various Internet based resources which may assist in confirming the existence of the organization as well as its non-profit status.

·         Be leery of emails that claim to show pictures of the disaster areas in attached files, as the files may contain viruses. Only open attachments from know senders.

Several variations of this scam are currently in circulation. Anyone who has received an email referencing the above information or anyone who may have been a victim of this or a similar incident should notify the IC3 via the website, www.ic3.gov.

STATE FIRE MARSHAL’S OFFICE HOSTS THE GREAT FLORIDA FIRE SCHOOL

If you see hundreds of firefighters putting out a fire in the central Florida community of Avon Park, don’t panic. Chances are good they started it. And don’t bother calling the police, they may be in on it.

Firefighters from throughout Florida will be gathering at the South Florida Community College as part of The Great Florida Fire School. In its eleventh year, the fire school is a traveling training program intended to save firefighters from having to travel to other programs that often can be miles away.

“We bring these professionals the same classroom and practical training that they would get at the Florida State Fire College in Ocala,” said Florida’s Chief Financial Officer and State Fire Marshal Tom Gallagher. “But by bringing the training to a community near them, it saves their departments the expense of travel and lodging and keeps them near the communities that need them.”

This year’s fire school is being hosted by the Florida State Firefighters' Association, the Florida State Fire Marshal’s Office, the, the Florida State Fire College, the South Florida Community College, the Division of Forestry, the Convention & Visitors Bureau of Highlands County, Sun N' Lake of Sebring, Avon Park Chamber of Commerce, and the Highlands County Board of County Commissioners.

Thirty-five instructors along with a host of volunteers will be delivering courses in both structural and wildland firefighting operations, LP gas fires, firefighter safety, extrication, fire investigations, explosive device recognition and safety, emergency response to terrorism, rope rescue, emergency medical services, public education and stress management. More than 40 different courses will be offered.

Visit www.greatfloridafireschool.org for more information on the Great Florida Fire School.
 


DFS ARRESTS TWO MORE UNLICENSED PUBLIC ADJUSTERS

State insurance fraud investigators arrested two individuals - one in Broward County and one in Orange County - for working as public adjusters without licenses.

Arthur Lambright, owner of Lambright Claims Consultants formerly located in Miramar, and Gregory Hastings, DBA Greg Hastings Designs in Orlando, are facing felony charges. The arrests are the result of investigations by the Department of Financial Services’ Division of Insurance Fraud and the Division of Agent and Agency Services, Bureau of Investigations. State investigators have now arrested seven unlicensed public adjusters in the aftermath of the four back-to-back hurricanes last fall.

“We will not tolerate anyone taking advantage of our citizens, especially those who have already suffered so much because of the storms,” said Florida’s Chief Financial Officer Tom Gallagher, who oversees the Department of Financial Services. “We will seek the highest penalty under the law if these individuals are convicted.”

Investigators said one of Lambright’s former clients reported that he added additional rooms to her damage claim and told her that was the way he conducts business. Lambright, 51, was arrested Wednesday on charges of working as a public adjuster without a license, insurance fraud, and grand theft. He was booked into the Broward County Jail and faces up to five years’ in prison if convicted on the charges.

The investigation against Hastings is based on information from Florida Farm Bureau Insurance and Allstate Insurance Company. The insurers reported that Hastings submitted a “retainer agreement” on behalf of homeowners, requesting a public adjuster fee of 10 percent of the claim amount, but both companies determined that Hastings was unlicensed and reported it to the department.

Hastings, 50, is charged with two counts of working as a public adjuster without a license. He was arrested Tuesday and was booked into the Orange County Jail. He also faces up to five years in prison on each charge.

To verify licensure or to file a complaint, call the Department of Financial Services at 1-800-22-STORM.

 


Consumer Services HelpLine
(800) 342-2762.