Volume 2 Number 26 June 27, 2005

TEXT VERSION

It has become apparent that Allstate Insurance Company plans to file a 28 percent statewide average rate hike in July, but has already begun sending the bills to Florida homeowners.  Allstate's move to implement a rate hike and then file for approval blatantly ignores a new law that requires a public hearing for any rate request exceeding 15 percent. This is unconscionable.  Just one month ago, Allstate announced the non-renewal of 95,000 Floridians. Now they are hitting their remaining policyholders with a rate hike that they are afraid to hold up to public scrutiny.  With these actions, Allstate has broken faith with their policyholders and the people of Florida.  This conduct is even more reprehensible considering just four months ago Allstate’s chairman Edward Liddy characterized the company’s 2004 financial performance as a 'great year for Allstate’ and ‘We’re growing and generating solid returns for our shareholders.’  This is a company that says one thing to analysts and investors and something else to its policyholders when it sticks them with the bill.  I am urging Insurance Commissioner Kevin McCarty to do everything in his power under Florida law to stop Allstate from circumventing the law and to tell Allstate to cease and desist billing this unapproved rate increase to Florida homeowners.    Allstate’s policyholders and the people of Florida deserve straight answers from the company and we intend to hold Allstate accountable. Sarasota County courthouse was built in 1925 and was praised as one of the most artistic public buildings in the United States.

GALLAGHER URGES FLORIDIANS TO CELEBRATE SAFELY ON JULY 4  Florida’s Chief Financial Officer and State Fire Marshal Tom Gallagher is urging Floridians to think about fire safety as they make their Fourth of July plans. “The Fourth of July is a great time for families and friends to relax together and reflect on the freedoms we all enjoy,” Gallagher said.  “But don’t let the celebration turn to tragedy.  If you're buying fireworks to celebrate, remember that if it launches or explodes, it is illegal in Florida." Gallagher is encouraging Floridians to instead attend a professional fireworks display or enjoy any of the hundreds of legal sparklers listed on the State Fire Marshal’s web site at www.MyFloridaCFO.com/sfm. Illegal fireworks include shells and mortars, multiple tube devices, Roman candles, rockets and firecrackers.  Floridians should not sign “waivers” in order to purchase fireworks. Signing a waiver will not clear you of responsibility should you be caught using them, and using fireworks illegally is a first-degree misdemeanor punishable by up to one year in jail and a $1,000 fine. CONTINUED

Initial Review of CIC FL HO Filing

GALLAGHER CALLS FOR REJECTION OF UNSUPPORTED RATE INCREASE TALLAHASSEE – Florida’s Chief Financial Officer Tom Gallagher today urged Insurance Commissioner Kevin McCarty to reject a 36.7 percent rate increase requested by Cincinnati Indemnity Company/Insurance Company.  “After directing our Consumer Advocate’s office to review the request for an increase, our team revealed deficiencies and unsupported claims in Cincinnati’s rate filing,” Gallagher said.  “Cincinnati has not justified the numbers it submitted for projected losses and reinsurance costs.”  Gallagher has asked his consumer advocate to present the findings of the independent review at a public hearing on Wednesday, June 22, at the Sarasota-Bradenton International Convention Center in Sarasota.  Gallagher concluded, “We will be vigilant in protecting against unwarranted and unsubstantiated rate increase requests. I urge Commissioner McCarty to reject this rate request."

LIFETIME CAPITAL, INC., PRINCIPALS SENTENCED TO COLLECTIVE 22 YEARS IN PRISON ON FRAUD CHARGES $21 million to be forfeited; restitution expected to surpass $100 million Florida’s Chief Financial Officer Tom Gallagher announced today that three individuals affiliated with LifeTime Capital, Inc., a viatical company that once operated out of Dayton, Ohio, and South Florida, have been sentenced to a collective 22 years in prison for their roles in a large-scale money laundering conspiracy.  The sentences were handed down late Thursday afternoon in the United States District Court, Northern District of Florida. The convictions stem from an investigation by the Department of Financial Services, Division of Insurance Fraud, which Gallagher oversees, as well as the Office of Financial Regulation’s Division of Investigations and the Federal Bureau of Investigation.  The United States Attorney’s Office for the Northern District of Florida prosecuted the charges.  U.S. Federal District Judge M.C. Rodgers handed down the sentences. “Viatical fraud poses a serious financial risk for both consumers and investors, many of whom are senior citizens who invest their life savings in these policies,” said Gallagher, who worked with LifeTime victims to demonstrate the need for legislation to regulate viaticals as a security.  That legislation passed this year and Gallagher joined Governor Jeb Bush for the bill signing last week. Viatical settlement providers match those who want to sell their life insurance policies at a discount with investors willing to buy the rights to those policies.   CONTINUED

GALLAGHER ANNOUNCES SOUTHEAST FLORIDA WINNERS IN CONTEST PROMOTING FINANCIAL LITERACY AMONG TEENS Florida’s Chief Financial Officer Tom Gallagher announced the names of three students who were the top picks in an essay contest aimed at encouraging financial literacy among middle and high school students.  The contest, “Cash in on Your Money Smarts,” asked students, ages 14 to 18, to submit at least a 750-word essay on why they considered themselves money smart and offered students a chance at more than $7,500 in prizes statewide.  First, second and third place prizes are being awarded to teens in five geographic regions, for a total of 15 winners statewide.  Nearly 600 students participated this year. “This essay contest was a great way to encourage Florida’s young people to show off their financial knowledge and writing skills, and reward them for it,” Gallagher said.  “Learning these valuable skills now will pave the way for a lifetime of financial success.”  CONTINUED