Consumer eViews
FLORIDA CHIEF FINANCIAL OFFICER ALEX SINK'S WEEKLY NEWSLETTER

Volume 4, Number 38, September 21, 2007

Fellow Floridian:

Florida Chief Financial Officer Alex Sink spoke at the annual NAACP conference this week in Gainesville. At the luncheon Friday, she spoke to hundreds of Floridians about the importance of diversity in state government and ensuring equal rights for all.

CFO Sink discussed the progress that the Florida Cabinet has made this year on the automatic restoration of civil rights. She will continue to advocate for this issue, as there is much more progress to be made. Drawing on her experience at this week’s Clemency Board meeting, CFO Sink described how many citizens who have paid their debt to society are still facing bureaucratic red tape as they try to restore their civil rights.

Read below to learn more about one of the Floridians who was granted a full pardon this week from the Florida Cabinet.

CLEMENCY BOARD VOTES TO RELEASE PASCO COUNTY MAN FROM PRISON

CFO Sink voted Thursday to commute the prison sentence of Richard Paey, who was convicted in 2004 of drug trafficking. On a motion from Governor Crist and seconded by CFO Sink, the Executive Clemency Board unanimously commuted the 25-year prison sentence for Richard Paey and remitted his $500,000 court- imposed fine. The Clemency Board also granted Mr. Paey a full pardon, which forgives his guilt and restores all of the rights he lost due to his felony conviction.

Clemency is one of the CFO’s many responsibilities in her role as a member of the Florida Cabinet. The Governor and Cabinet sit as the Executive Clemency Board, which provides a variety of relief to convicted felons including: commuting prison sentences, granting full pardons, remitting court imposed fines and granting civil rights and the authority to own, possess or use firearms.

Mr. Paey’s case exemplifies some of the inequities that exist with mandatory minimum sentences and the issues surrounding those suffering from chronic pain. Mr. Paey suffered a serious automobile accident and subsequent medical procedures proved unsuccessful in alleviating his pain, leaving him bound to a wheelchair. The only form of treatment that enabled Mr. Paey to function was prescription pain medicine. The state attorney’s office prosecuted Mr. Paey under Florida’s drug trafficking statute due to the large amount of medicine Mr. Paey was consuming, even though the medicine was prescribed by his physician.

Richard Paey was offered several plea deals that would have avoided a prison sentence, however, he rejected them and ended up spending nearly four years in prison. Mr. Paey was released from prison hours after the vote and was reunited with his wife, children and family in Hudson, Florida.

CFO SINK, MAJOR INVESTORS, STATE OFFICIALS AND ENVIRONMENTAL GROUPS SIGN PETITION TO SEC REQUIRING FULL CORPORATE CLIMATE RISK DISCLOSURE
Florida Chief Financial Officer Alex Sink, along with a broad coalition of investors, state officials with regulatory and fiscal management responsibilities, and environmental groups, filed a landmark petition asking the Securities and Exchange Commission (SEC) to require publicly-traded companies to assess and fully disclose their financial risks from climate change. The coalition today also formally asked the SEC’s Division of Corporation Finance to immediately begin “[c]losely scrutinizing the adequacy of registrants’ climate disclosures” under existing law.

“Florida has miles and miles of coastline that could be impacted by rising sea level and millions of retirees who depend on high performance in their retirement funds,” said CFO Sink, who serves on the board of the Florida pension fund, which has $140 billion in assets. “It is my goal to help our economy prepare for climate change, and action by the SEC on this petition will result in better, more informed decisions for Florida's investors.”

In addition to CFO Sink, the 22 petitioners include Environmental Defense, Ceres and leading institutional investors in the U.S. and Europe managing more than $1.5 trillion in assets. The signers include California State Treasurer Bill Lockyer, Maine State Treasurer David G. Lemoine, New York State Comptroller Thomas P. DiNapoli, North Carolina State Treasurer Richard Moore and Oregon State Treasurer Randall Edwards, as well as New York State Attorney General Andrew M. Cuomo.

The first-of-its-kind petition cites unequivocal scientific evidence, far-reaching regulatory developments and extensive business recognition that the risks and opportunities many corporations face in connection with climate change are material to shareholder investment decisions and must be disclosed under existing law.

“We represent well over $1 trillion of investment assets,” said CFO Sink. “So we aren't a small group of fringe investors asking the SEC to take this action.”
“Smart companies know that profits and jobs come from solving problems, not ignoring them. Investors have a right to know who is paying attention,” said Fred Krupp, president of Environmental Defense.

“The SEC needs to do more to protect investors from the risks companies face from climate change, whether from direct physical impacts or new regulations,” said Mindy S. Lubber, president of Ceres and director of the Investor Network on Climate Risk. “Shareholders deserve to know if their portfolio companies are well positioned to manage climate risks or whether they face potential exposure.”

“Our marketplace cannot properly function, our retirees’ pensions cannot be protected, unless investors’ right to know is fully enforced,” said California State Treasurer Bill Lockyer, a board member of California's Public Employees’ Retirement System (CalPERS) and State Teachers’

Retirement System (CalSTRS), which collectively manage more than $400 billion in assets. “We're asking the SEC to vindicate that right so investors can ensure their portfolios reflect the risks and benefits related to climate change.”

Climate change can affect corporate performance in ways ranging from physical damage to facilities and increased costs of regulatory compliance, to opportunities in global markets for climate-friendly products or services that emit little or no global warming pollution. Those risks fall squarely into the category of material information that companies must disclose under existing law to give shareholders a full and fair picture of corporate performance and operations, the petition says.

The petition asks SEC to clarify that, under existing law, companies must disclose material information related to climate change. Depending on the circumstances, this obligation may require disclosure of the following information:

• Physical risks associated with climate change that are material to the company's operations or financial condition;

• Financial risks and opportunities associated with present or probable greenhouse gas regulation; and

• Legal proceedings relating to climate change.

Despite a groundswell of demand from investors for more information about climate risks, corporate disclosure has been scant and inconsistent. Exxon Mobil Corporation, the world’s largest petrochemical enterprise, included only one cursory reference to climate change in its entire 2006

annual filing with the SEC. Allstate Corporation, which insures 1 in 8 homes in the U.S. and reported over $4 billion in losses from Hurricanes Katrina and Rita, did not mention climate change at all in its latest annual filing.

A January 2007 study published by Ceres and the Calvert Group, an asset management firm, found that more than half of the companies in the S&P 500 Index are doing a poor job disclosing climate

change risks to their investors. Companies in sectors with low greenhouse gas emissions, including insurance companies and banks, had especially poor disclosure.

Poor disclosure prevents investors from getting the full story. Full disclosure by Texas utility TXU on its potential exposure from climate change-related risks would have revealed the extensive financial exposure resulting from the company's proposal to build 11 new coal-fired power plants without limitations on the extensive global warming pollution. TXU’s business plan would have increased carbon dioxide emissions 78 million tons annually, and invested considerable capital in

long-term high-polluting resources. Investors are entitled to a rigorous assessment of regulatory and financial risks related to climate change so they can evaluate which business plans are reckless and which are prudent in managing these risks.

The petitioners today also called on the SEC to take immediate action on corporate climate disclosure as it develops the new guidance. The petitioners called on the SEC’s Division of Corporation Finance to devote close attention to the adequacy of climate risk disclosures under existing regulations. Because the obligation to disclose climate related risks and opportunities exists under current law, the Division of Corporation Finance "need not and should not wait" in immediately increasing “its scrutiny of the adequacy of climate risk disclosures in corporate filings.”

The 22 Petitioners are:

California State Controller, John Chiang
California Public Employees' Retirement System
California State Teachers' Retirement System
California State Treasurer, Bill Lockyer
Ceres
Environmental Defense
F&C Management
Florida Chief Financial Officer, Alex Sink
Friends of the Earth
Kentucky State Treasurer, Jonathan Miller
Maine State Treasurer, David G. Lemoine
Maryland State Treasurer, Nancy K. Kopp
The Nathan Cummings Foundation
New Jersey State Investment Council, Orin Kramer, Chair
New York City Comptroller, William C. Thompson, Jr.
New York State Attorney General, Andrew M. Cuomo
New York State Comptroller, Thomas P. DiNapoli
North Carolina State Treasurer, Richard Moore
Oregon State Treasurer, Randall Edwards
Pax World Management Corporation
Rhode Island State Treasurer, Frank Caprio
Vermont State Treasurer, Jeb Spaulding

As a statewide elected officer of the Florida Cabinet, Chief Financial Officer Alex Sink oversees the Department of Financial Services, a multi-division state agency responsible for management of state funds and unclaimed property, assisting consumers who request information and help related to financial services, and investigating financial fraud. CFO Sink also serves as the State Fire Marshal.

About Environmental Defense: Environmental Defense, a leading national nonprofit organization, represents more than 500,000 members. Since 1967, Environmental Defense has linked science, economics, law and innovative private-sector partnerships to create breakthrough solutions to the most serious environmental problems. www.environmentaldefense.org

About Ceres: Ceres is a leading coalition of investors, environmental groups and other public interest organizations working with companies to address sustainability challenges such as global climate change. Ceres also directs the Investor Network on Climate Risk, a network of 60 institutional investors with collective assets totaling more than $4 trillion. For more information, visit http://www.ceres.org or http://www.incr.com

CFO SINK: PENSACOLA MY SAFE FLORIDA HOME FAIR BREAKS ATTENDANCE RECORDS

TALLAHASSEE – Florida Chief Financial Officer Alex Sink announced today that the My Safe Florida Home (MSFH) Fair last Saturday in Pensacola broke all previous MSFH event records with attendance of more than 3,000 North Floridians. In a five-hour span, representatives from the MSFH program raised awareness about the safety and financial incentives available through the program and helped more than 1,000 homeowners sign up for a free wind inspection.

“I am thankful to the Floridians who attended the My Safe Florida Home Fair this past Saturday and the members of our department who worked so hard to make this event a success,” said CFO Sink, who runs the Department of Financial Services and oversees the MSFH program. “Not only were we able to sign-up 1,000 Floridians for a free wind inspection, we were also able to promote the importance of mitigation in our state.”

CFO Sink hosted the MSFH Fair along with the Escambia County Commission, Gulf Power Corporation and WEAR-TV. The fair featured various hurricane-preparedness exhibits and more than 60 vendors. State Representatives Clay Ford (R-Pensacola) and Dave Murzin (R-Pensacola), along with local elected officials from Escambia, Santa Rosa and Okaloosa Counties, were on hand Saturday at the Pensacola Civic Center to promote the program.

Recently, CFO Sink reported that nearly 75 percent of homeowners who have received inspections from the MSFH program have learned they are eligible for a discount of 16.3 percent on their wind insurance premiums. Savings vary by region, and through the program, 1,652 Escambia County residents have learned they are eligible to receive an average windstorm insurance discount of 20 percent, or $253.66 annually.

To date, the MSFH program has completed more than 92,000 free wind inspections. More than 113,000 Florida homeowners have signed up for free wind inspections through the program, signifying the program has exceeded 25 percent of its long-term goal of 400,000 free wind inspections in the next two years. More than 9,700 homeowners statewide have been approved to receive matching grants to make the improvements recommended on their inspection reports. To date, more than 1,100 homeowners have received matching grants totaling more than $3.4 million.

Any Floridian who lives in a single-family, site-built home is eligible for a free wind inspection through the MSFH program, which helps Floridians identify how they can strengthen their homes and reduces the overall potential for hurricane damage in our state. Floridians can apply on-line at www.MySafeFloridaHome.com or by calling the program toll-free at 1-866-513-6734. Homeowners who receive free wind inspections through the MSFH program will receive a detailed inspection report, complete with additional information on estimated insurance premium discounts, if insurance information is provided at the time they applied.

Additionally, some Florida homeowners receiving free wind inspections may be eligible for matching grant reimbursements of up to $5,000 to make recommended improvements. To be eligible, the Legislature requires that homeowners: have received a completed wind inspection after May 1, 2007; live in a single-family, site-built home built before March 1, 2002; have a valid homestead exemption; have an insured value of $300,000 or less; and be located in the wind-borne debris region. Additionally, while the free wind inspections will still cover seven potential wind-resistance improvements, matching grants may only be applied to opening protections, including windows, exterior doors and garage doors, as well as the bracing of gable ends.

FLORIDA TAX WATCH PRESENTS EFFICIENCY STUDIES

Florida Chief Financial Officer Alex Sink joined Governor Charlie Crist as Florida Tax Watch announced three new reports, which according to Tax Watch, “identified numerous ways the state government can both cut cost and increase accountability, efficiency and effectiveness in the wake of the call to cut $ 1 billion from the state’s budget.” 

As CFO and former Vice Chair of Florida Tax Watch, Sink is a strong proponent of identifying ways that government can operate in a more streamlined fashion and provide Floridians with better service.  In addition to working with the Governor and legislative leaders to develop long-term financial plans for the state, CFO Sink plans to use the report to identify ways the Department of Financial Services can implement cost-saving ideas.

Recent Prudential Financial/Davis Productivity Award winners were honored as the call for entries for the next series of awards goes out. The Davis Productivity Awards honor state government for increasing performance and productivity.

FLORIDA FINANCIAL SERVICES COMMISSION ADOPTS RULE TO PROTECT MILITARY PERSONNEL FROM INSURANCE SALES FRAUD

The Florida Financial Services Commission, which is comprised of Gov. Charlie Crist and members of the Cabinet, today adopted a Rule proposed by Insurance Commissioner Kevin McCarty that will protect active duty service members of the U.S. Armed Forces from dishonest and predatory insurance sales practices in Florida.

This new Rule defines as deceptive behavior the solicitation of soldiers by insurers to purchase life insurance coverage. In the multi-state case, the insurer solicited soldiers on base urging them to purchase more life insurance when in fact nearly all soldiers already had $250,000 in low-cost life insurance provided and partially subsidized by the federal government.

“Florida was part of a $70 million multi-state settlement last year against a Texas-based company accused of improper sales of insurance and investment products to U.S. military personnel,” McCarty said. “We want to make sure we have the appropriate regulations in place to prevent this from happening again to Florida residents.”

The adoption of the Florida Rule follows the creation of a similar Model Law adopted by the National Association of Insurance Commissioners (NAIC) in June that states may adopt to prohibit the same behavior. Florida’s Rule, however, goes further than the NAIC Model Law in that it applies to every active duty service member, regardless of rank and has a broader definition of active duty than the NAIC model.

“It is truly unthinkable that some would use misleading sales tactics upon our brave military men and women,” said Florida Chief Financial Officer Alex Sink, who oversees the Department of Financial Services. “I am proud to implement these rules today to increase protections for Florida’s servicemen and women, who deserve to receive only the best financial services and products.”

A copy of the complete Rule is available for your review.

About the Florida Office of Insurance Regulation
The Florida Office of Insurance Regulation (Office) has primary responsibility for regulation, compliance and enforcement of statutes related to the business of insurance and the monitoring of industry markets. Business units within the Office are organized based on regulatory expertise and include the areas of life and health, property and casualty, specialty lines and other regulated insurance entities. It is within the Office that the mission of public protection is implemented through regulatory oversight of insurance company solvency, policy forms and rates, market conduct performance and new company entrants to the Florida market.

STATE PURCHASES 51 MILES OF RAIL-TRAIL IN CENTRAL FLORIDA

The Governor and Cabinet, sitting as the Board of Trustees of the Internal Improvement Trust Fund, today approved the purchase from Florida East Coast Railway of slightly less than 51 miles of abandoned rail corridor for $16 million. The cost is 61% of the appraised value. Forty miles of the trail falls in Volusia County, while the rest in Brevard County. This purchase is particularly notable because it is Florida's largest single trail purchase ever. The corridor will be converted into recreational trails that may become part of a larger greenway project linking Maine to Key West. Once completed, the trail will have a 10-foot wide asphalt or rubberized path allowing water to seep into the ground. The path will narrow to about eight feet wide in environmentally sensitive areas. A four- to eight-foot-wide dirt horse trail will run parallel. Volusia and Brevard counties are responsible for creating the trail and managing it once complete.

RESOLUTION OF THE GOVERNOR AND CABINET ON FINANCIAL PLANNING WEEK

WHEREAS, the Financial Planning Association of Florida is the membership organization for the financial planning community, representing 1,800 members dedicated to supporting the financial planning process as a way to help Floridians achieve their goals and dreams; and

WHEREAS, by becoming aware of the value of financial planning, including tax, estate, investment, risk and retirement planning, citizens will have the tools necessary to increase their financial literacy and learn to apply the financial planning process to their personal situations; and

WHEREAS, the financial planning process provides a template for assessing, evaluating and achieving financial objectives through personal goal setting, budgeting, making smart financial decisions and monitoring results; and

WHEREAS, the financial planning process empowers individuals to achieve their dreams, manage realistic financial goals and negotiate the financial barriers that arise at every stage of life; and

WHEREAS, the State of Florida, through the Legislature and the Chief Financial Officer, have created a Financial Literacy Council designed to study the financial barriers for Floridians of all ages and encourages prudent financial planning as a means to overcome these barriers.

NOW, THEREFORE, BE IT RESOLVED that the Governor and Cabinet of the State of Florida do hereby recognize October 1 through 7, 2007, as

FINANCIAL PLANNING WEEK

in the State of Florida and remind her citizens of the importance of financial planning to assist in making prudent financial decisions to achieve their goals and dreams.

IN TESTIMONY WHEREOF the Governor and Cabinet of the State of Florida have hereunto subscribed their names and have caused the Official Seal of the State of Florida to be hereunto affixed in the City of Tallahassee on this 19th day of September, 2007.

 CHARLIE CRIST
 GOVERNOR

BILL MCCOLLUM
 ATTORNEY GENERAL

ALEX SINK
 CHIEF FINANCIAL OFFICER

CHARLES H. BRONSON
 COMMISSIONER OF AGRICULTURE

CFO SINK ANNOUNCES ARREST OF FORMER AGENT WHO STOLE MORE THAN $90,000 IN PREMIUMS FROM MORE THAN 40 VICTIMS

Florida Chief Financial Officer Alex Sink announced the arrest of a former insurance agent who allegedly pocketed tens of thousands of dollars in premiums and left dozens of homeowners in Pasco, Hernando and Hillsborough counties without coverage during the 2004-2005 hurricane seasons.

Bruce Anthony Fonte, 53, former owner of the now-defunct Family Insurance, located in Port Richey, is charged with organized scheme to defraud in the first degree, punishable by up to 30 years in prison if he is convicted. The arrest is a result of an investigation and joint effort on the part of multiple divisions of the Department of Financial Services, including the Division of Insurance Fraud (DIF), the Division of Agent and Agency Services, the Division of Legal Services, and the Division of Consumer Services. Fonte turned himself in this morning to the Pasco County Jail.

“This individual abused his customers’ trust and put them at great risk for his own personal gain,” said CFO Sink, who oversees the Department. “I commend those who worked quickly to stop additional customers from being harmed.”
DIF initiated the criminal investigation after Agent and Agency Services notified detectives that Fonte had sold phony homeowners policies to 44 citizens and kept the more than $90,000 in premiums for himself. Legal Services immediately suspended and then later revoked Fonte’s insurance license, permanently banning Fonte from the business of insurance in Florida.

Detective Doreen Rapp, DIF’s lead investigator in the criminal case, said the investigation revealed victims were defrauded and left without homeowners insurance from March 2003 until December 2005, a period in which Florida was struck by eight destructive hurricanes. Fonte allegedly stole the money to support a gambling addiction, and refunded premiums to some victims when confronted. One of the victims includes a single mother of two who has an unpaid homeowners claim totaling $8,945 for damages her home sustained when a hurricane ripped through Pasco County in 2005. The lapses in coverage forced several victims to obtain homeowners policies through the state’s insurer of last resort, Citizens Property Insurance Corporation, for hundreds of dollars more in premiums. A number of victims unable to afford the premium increases are living in homes that remain uninsured.

Criminal charges will be filed in Pinellas County by Attorney General Bill McCollum’s Office of Statewide Prosecution.

The Department of Financial Services, Division of Insurance Fraud, investigates fraud in all types of insurance, including health, life, auto, property and workers’ compensation. To report information about this case or any other possible insurance fraud case, call the department’s Fraud Fighters hotline at 1-800-378-0445. A reward of up to $25,000 may be offered for information leading to a conviction.

MY SAFE FLORIDA HOME PROGRAM TO BE ON HAND AT DEERFIELD BEACH HURRICANE EXPO
Florida Chief Financial Officer Alex Sink announced members of the My Safe Florida Home (MSFH) program will be on hand at a hurricane expo in Deerfield Beach Saturday, to sign up homeowners for free wind inspections and to raise awareness about the safety and financial incentives available through the MSFH program.

The Virtual Hurricane expo, hosted by the Disaster Survival House, is a week-long event featuring free information and resources for consumers about hurricane preparedness. In addition to registering homeowners for free wind inspections, representatives from the MSFH program will conduct a presentation about the program at the expo on September 22. Broadcasts of hurricane preparedness presentations will be streaming live online at www.GetTalkingNOW.com from September 20- September 25 and will remain available online after the expo is completed, to serve as a resource for consumers.

Recently, CFO Sink reported that nearly 75 percent of homeowners who have received inspections from the MSFH program have learned they are eligible for a discount of 16.3 percent on their wind insurance premiums. Savings vary widely by region, as homeowners with higher wind insurance premiums can realize greater savings. A county-by-county breakdown of eligible homeowners is available at http://www.mysafefloridahome.com/images/InspectionDiscount.pdf along with average potential savings on annual wind insurance premiums.

The MSFH program will be signing up homeowners at the Virtual Hurricane Expo as follows:

DATE: Saturday, September 22, 2007
TIME: 11:00 a.m. – 3:00 p.m.
LOCATION: 1345 FAU Research Blvd., Deerfield Beach, FL 33441

***MSFH presentation to take place at 11:30 a.m. ***

Any Floridian who lives in a single-family, site-built home is eligible for a free wind inspection through the MSFH program, which helps Floridians identify how they can strengthen their homes and reduces the overall potential for hurricane damage in our state.

Floridians can apply on-line at anytime, free of charge at www.MySafeFloridaHome.com or by calling the program toll-free Monday through Friday at 1-866-513-6734. Homeowners who receive free wind inspections through the MSFH program will receive a detailed inspection report, complete with additional information on estimated insurance premium discounts, if insurance information is provided at the time they applied.

Additionally, some Florida homeowners receiving free wind inspections may be eligible for matching grant reimbursements of up to $5,000 to make recommended improvements. To be eligible, the Legislature requires that homeowners: have received a completed wind inspection after May 1, 2007; live in a single-family, site-built home built before March 1, 2002; have a valid homestead exemption; have an insured value of $300,000 or less; and be located in the wind-borne debris region. Additionally, while the free wind inspections will still cover seven potential wind-resistance improvements, matching grants may only be applied to opening protections, including windows, exterior doors and garage doors, as well as the bracing of gable ends.
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