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

Volume 3, Number 39, September 25, 2006

Pensacola is the site of the second in a series of free homeowner expos that bring together businesses and not-for-profit agencies to help Floridians learn ways to make their homes more hurricane-resistant.

“Fortify Florida: Pensacola Prepares!”  will be held from 10 a.m. to 4 p.m. this Saturday, Sept. 30, at the Pensacola Civic Center. More than 70 exhibitors will be on hand to provide information, services and products.

Fortify Florida: Pensacola Prepares! will also have insurance company representatives on hand to help homeowners understand which hurricane-resistance measures will protect their homes, and how they can apply for discounts on their insurance premiums. By law, insurance companies are required to offer policyholders discounts on the wind-coverage portion of their homeowner policy premiums for specific measures that reduce their homes’ exposure to windstorm damage.

Workshops will also be held throughout the day to highlight methods and products homeowners can use to make their homes safer. All exhibits and workshops are free.

Fortify Florida: Pensacola Prepares! is being held in conjunction with the My Safe Florida Home program, a program administered by the Florida Department of Financial Services (DFS) to protect Floridians and assist them in making their homes safer against hurricanes.

For more information on these events and to learn the steps you can take to make your home more hurricane-resistant, visit the My Safe Florida Home website at www.mysafefloridahome.com.

 -- Tom Gallagher


GALLAGHER ENFORCES TOUGHER FRAUD REPORTING BY FLORIDA’S INSURANCE COMPANIES

Tom Gallagher, Florida’s chief financial officer, announced that the department has ratcheted up its fight against insurance fraud by requiring insurance companies to better document their own in-house fraud fighting efforts.

Noting that the Department of Financial Services’ Division of Insurance Fraud (DIF) is consistently recognized as leading the nation in insurance fraud arrests and convictions, Gallagher said the next step was to ensure any information about suspected fraud is promptly reported.

“Floridians are facing an insurance crisis that is being driven by a number of factors,” Gallagher said. “We are determined to do all we can to keep costs down for Floridians and that is why we are requiring greater accountability from insurers and companies in reporting fraud.”

The department’s aggressive fight against workers’ compensation and auto insurance fraud has led to lower rates in recent years, including a more than 30-percent decrease in workers’ compensation rates in the last three years. A fourth consecutive rate drop is pending.

Gallagher called for the new rule more than a year ago to require all property and casualty, life and health insurers, and health maintenance organizations (HMO) licensed to do business in Florida to:

• Refer fraudulent claims directly and electronically to DIF;

• Track the date that suspected fraudulent activity is detected and the date it is reported to DIF;

• Detail the process they have in place for identifying and referring suspicious claims; and

• Establish minimum standards for training employees in anti-fraud efforts.

In the last fiscal year that ended June 30, the fraud division made 795 arrests and garnered 620 convictions. The new rule is effective October 5.

“We need to continue aggressively rooting out fraud that financially impacts Florida’s families,” Gallagher said.


FUNERAL DIRECTOR CHARGED WITH GRAND THEFT,
SELLING INSURANCE WITHOUT A LICENSE


A funeral home director is facing felony charges that he sold a pre-need funeral services contract without a license to a woman he met at church and then pocketed the money.

Tebbie Singleton, owner of Singleton Funeral Home in Tampa, negotiated a contract for $3,855 for funeral goods and services and received a check for $3,155 with the remainder to be paid when the services were provided. An investigation by the Department of Financial Services, Division of Insurance Fraud (DIF), and the Division of Funeral, Cemetery and Consumer Services, determined Singleton never forwarded the money to complete the deal and was not authorized to enter such a contract.

“It is unconscionable that an individual would take advantage of someone trying to prepare for the end of life,” said Gallagher, who oversees the department. “If this individual is convicted, we will seek to ensure this victim and any others are repaid and that he no longer works in this industry.”

Only one possible victim has been identified so far, but Gallagher said anyone who thinks they may be a victim should contact the department at www.MyFloridaCFO.com or by calling 1-800-342-2762. If convicted, Singleton could face up to five years in prison on each charge.

This is the first arrest stemming from a joint investigation between DIF and Division of Funeral, Cemetery and Consumer Services since the latter joined the department late last year. The new division was created by consolidating the Board of Funeral and Cemetery Services, which had operated under DFS, and the Board of Funeral Directors and Embalmers, which had operated under the Department of Business and Professional Regulation.

For more information about the Division of Funeral, Cemetery and Consumer Services, log on to www.MyFloridaCFO.com/FuneralCemetery/.


FLORIDA HISPANIC HERITAGE MONTH

The fourth annual Florida Hispanic Heritage Month runs through October 15 to pay tribute to Florida's Hispanic culture. The theme for this year's celebration is "La Florida: Honoring Our State's Spanish and Latin American Influences."  Celebrate the achievements and contributions of our state's Spanish-speaking cultures and communities with Floridians across the state to honor and embrace our state's rich heritage. 

This month honors the independence days of seven Latin American countries -- Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Mexico and Chile – and recognizes the discovery of America. The first event in Florida’s recorded history was the landing of Ponce De Leon in 1513. Since then, Spanish-speakers have converged in Florida, giving it one of the most unique and diverse Hispanic populations in the world.

An exhibition of Latin American art, featuring relevant modern and contemporary works by Frida Kahlo, Diego Rivera, Fernando Botero, Rufino Tamayo, Guillermo Muñoz Vera, Roberto Matta and Pablo Atchugarry, are on display in the Governor’s Mansion from September 15 to October 15, and the show is open to the public by appointment. The Governor and First Lady were joined at the event’s opening by Mexican businessman and telecommunications mogul Carlos Slim Helú along with Hispanic business, community and cultural leaders from across the state.

Partners and sponsors for the 2006 Hispanic Heritage Month include the Volunteer Florida Foundation, Volunteer Florida, Florida Department of Education, City of Tallahassee, Wal-Mart/ Sam' s Pharmacy, the Sallie Mae Fund, Florida Prepaid College Foundation, Greenberg Traurig, Ford Motor Co. Fund, Telefonica USA, Walt Disney World, Prudential Financial, Florida Education Foundation, Pollo Tropical, Hayes Computer Systems, Brown & Brown, Florida Coca Cola Bottling Group and the Cuban American Bar Association.

For more information on Florida’s Hispanic Heritage Month, please visit www.floridahispanicheritage.com.


LONG-TERM CARE INSURANCE PROTECTION

In June 2006 Governor Jeb Bush signed into law new protections for long-term care insurance policyholders. The measure prevents insurers from contesting policies years after selling them and also stops the practice that results in rapidly escalating premiums for aging policyholders.

The Florida Department of Financial Services Consumer Services Division receives hundreds of questions and complaints each year regarding long-term care (LTC) insurance. Consumers have lodged complaints regarding companies accepting premiums for years and then contesting the policies when claims were filed.

Specifically, the new law includes the following provisions:
1. provides that a long-term care policy is incontestable after being in force for two years, except for non-payment of premium;
2. prohibits an insurer from imposing a new waiting period when a policy is replaced through an affiliated insurer;
3. eliminates the current minimum nursing home benefit of 24 months of coverage;
4. prohibits existing policyholders from being charged premiums that exceed the premiums the insurer is charging to new policyholders;
5. requires the company to provide new benefit options to existing policyholders faced with a significant rate increase, including a modified benefit plan at the existing premium or a paid-up policy equal to the sum of all premiums paid during the life of the policy; and
6. requires insurers to pool the claims experience of all affiliated carriers when calculating rates rather than only the policy forms providing similar benefits of the insured.

Factors to consider before purchasing long-term care insurance:

1. Do your homework before signing a contract.
2. Look for a financially strong insurer as you are purchasing a policy that may not be used for many years.
3. Buy a flexible policy that will help you meet tomorrow’s advances in medical care.
4. Consider inflation coverage to meet future health care costs
5. Know what the qualifying requirements must be met before benefits can be received (most policies require that you be unable to perform certain "activities of daily living.”)
6. Ask what services are covered by the policy and what is excluded.
7. Find out about the daily benefits, the maximum benefit period and the elimination period.
8. Consider whether you can afford the policy and whether you can medically qualify.

Statistics show that a 65-year-old person faces a 40 percent lifetime chance of a nursing home stay, according to the U.S. Department of Health and Human Services.

The Florida Department of Financial Services offers a useful consumer guide called Long-Term Care & Other Options for Seniors. You can have the guide sent to you by calling our helpline at 1-800-342-2762 (TDD 1-800-640-0996) or you may download the guide from the website at www.MyFloridaCFO.com.

Before you purchase an LTC policy or any other insurance or financial product, verify that the agent, company and the products offered are licensed in the state of Florida. You can verify this on the Florida Department of Financial Services website, www.MyFloridaCFO.com/consumers/verify_before_you_buy/, or by calling the consumer specialists at 1-800-342-2762.


LIFE INSURANCE AWARENESS MONTH

Nearly half of all U.S. households don't have life insurance or fear they need more, according to a study by LIMRA International Inc.

Life insurance is meant to replace income in case of death. Who is dependent on you financially? What major living expenses will your dependents need help with if you were to die?  Is your life insurance adequate and how much is enough to cover your family’s needs?

Visit “Your Money, Your Life,” a financial information Web site provided by the Department of Financial Services, and review your insurance needs at different stages of your life.  

September is Life Insurance Awareness Month, and all Floridians should give themselves and their families an insurance checkup. The key to financial security is knowledge, and assessing your life insurance needs is an important step in finding that security.


Consumer Services HelpLine (800) 342-2762

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