FLORIDA CHIEF FINANCIAL OFFICER ALEX SINK'S WEEKLY
Volume 4, Number 46, November 16, 2007
This past week CFO Sink hosted, along with
Commissioner Bronson, the last in a three-part series of climate change
discussions. The Cabinet workshop titled “Climate Change: The Bottom Line”
focused on identifying the financial impacts and opportunities presented to
Florida as a result of climate change. In kicking off the meeting CFO Sink
aptly observed that Florida is the Sunshine State and we should be a
national leader in renewable, clean energy.
The Cabinet heard from three nationally known speakers on financial aspects
of climate change. Mindy Lubber, the president of Ceres, a nonprofit
organization which advises a network of institutional investors on climate
risk, explained the risks that companies will confront more frequently.
Climate changes are physical risks, competitive risks
and regulatory risks. Once these risks are disclosed, investors are more
informed and companies generally begin
to take actions to mitigate against the risks.
Lewis Milford, president of the Clean Energy States Alliance, a coalition that works on climate and clean energy, provided an overview of
what other states are doing in creating clean energy funds.
Robert Muir-Wood, chief research officer for Risk Management Solutions,
spoke about insurance and risk. His company assesses how risks associated
with climate change will impact and affect insurance coverage and rates. His
company offers solutions to minimize risk and exposure.
At the end of the workshop, the following announcements were made:
CFO Sink has asked the state treasury investment
managers to assess their ability to disclose risk
from climate change. Florida is the first state treasury in the
United States to require investment fund managers to make such
disclosures. The goal is to safeguard tax dollars from the risks posed
by climate change and to encourage companies to capture financial opportunities
related to the changing climate.
CFO Sink will explore the
creation of a clean energy fund for the state. Eighteen other
states have created similar funds, which invest in renewable clean
energy resources, such as solar, wind and biomass.
Margaret Lowman, director
of environmental initiatives at New College of Florida in Sarasota, has
been appointed as science adviser on matters related to climate change.
CFO SINK ANNOUNCES
STATE TREASURY REQUIRING DISCLOSURE OF CLIMATE RISK; EXPLORATION OF CLEAN
ENERGY FUND FOR FLORIDA
Florida first state Treasury in United States to require climate risk
Florida Chief Financial Officer Alex Sink announced two new initiatives
designed to help Florida financially prepare for the threat of climate
change, including new disclosure requirements for the state’s Treasury
investment managers and the exploration of the creation of a clean energy
fund for Florida. Additionally, CFO Sink announced her appointment of Dr.
Margaret Lowman of New College of Florida as her science advisor on climate
CFO Sink’s announcements followed Wednesday’s third and final “Conversations
on Climate Change,” a Cabinet-level workshop co-sponsored by the CFO and
Commissioner of Agriculture Charles Bronson. Wednesday’s workshop, “Climate
Change: The Bottom Line,” highlighted the financial risks and opportunities
in climate change for Floridians.
“Florida has 1300 miles of coastline that could be impacted by rising sea
level and millions of taxpayers who depend on us to safeguard their tax
dollars and retirement funds,” said CFO Sink, oversees the Department of
Financial Services, the state’s $20 billion in Treasury funds and serves on
the board of the Florida pension fund, which has $140 billion in assets. “It
is my goal to help prepare Florida’s economy for the effects of climate
change, avoid potential risks and take advantage of the many financial
New Disclosure Requirements for Treasury Investment Managers— After
urging the Securities and Exchange Commission (SEC) in September to require
public companies to assess and fully disclose their financial risks from
climate change, CFO Sink is directing the state’s Treasury investment
managers to detail their abilities to assess climate risk. Earlier this
month, Bruce Gillander, Director of the Division of Treasury, met with
individual investment managers to ascertain the incorporation of climate
risk—or lack thereof—into their investment decisions. While some investment
managers have begun planning for the potential impacts of climate risk in
their portfolios, other managers have more work to do and need guidance on
how to assess potential climate-related financial risks when making
investment decisions. Investment managers will be required to report on
climate risk as a part of their semi-annual reviews.
CFO Sink’s goal is to safeguard Floridians’ tax dollars from the risks posed
by climate change and to encourage companies to capture opportunities
related to the changing climate. Climate change can affect corporations
financially in various ways, ranging from physical damage of 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. As a guide, CFO Sink is providing Treasury investment
managers with the “Global Framework for Climate Risk Disclosure,” created by
several leading investors and worldwide organizations in October 2006.
Additionally, CFO Sink is asking the Treasury investment managers to join
her in petitioning the SEC to require disclosure of climate risk for public
“As Florida’s fiscal watchdog, I want to ensure that Florida’s tax dollars
are being managed by firms that are aware of threats to our bottom line—and
this includes the financial threats presented by climate change,” said CFO
"Climate change will affect companies in a variety of ways, whether from
physical damage to facilities or increased costs to comply with new
regulations. Florida is showing great leadership as the first state treasury
in the U.S. to require its investment fund managers to disclose how they are
assessing these climate risks in their portfolios," said Mindy S. Lubber,
president of Ceres and director of the Investor Network on Climate Risk (INCR),
who spoke at Wednesday's climate change meeting.
Exploring the Creation of a Clean Energy Fund for Florida—After
hearing a presentation by Lewis Milford, the president of Clean Energy
States Alliance, CFO Sink today announced her intention to explore the
creation of a clean energy fund in Florida. The Clean Energy States Alliance
is made up of 18 states including California, New Mexico, Pennsylvania and
New York, which have created clean energy funds or programs for their
states. These clean energy programs have been used to invest in renewable
clean energy resources, such as solar, wind and biomass, and can be used for
consumer education or to provide incentives and tax credits to citizens
taking advantage of more energy-friendly products, such as hybrid
automobiles and solar water heaters. Over the next several months, CFO Sink
will work with the Clean Energy States Alliance to explore the different
funds used around the country and determine if there is a clean energy fund
model best suited to further a clean energy market in Florida.
“Florida is the first southeastern state to join CESA, and we are extremely
pleased that they are considering a clean energy fund,” said Milford. “We
hope to help Florida become a national clean energy investment leader.”
Dr. Margaret Lowman Appointed as Science Advisor—CFO Sink today
appointed Margaret Lowman, Ph.D. and Director of Environmental Initiatives
at New College of Florida, as her science advisor on matters relating to
climate change. Dr. Lowman has professorships in biology and environmental
studies and was a presenter at CFO Sink’s and Commissioner Bronson’s first
“Conversation on Climate Change” in April 2007. Dr. Lowman will advise the
CFO on the science of climate change.
“I am honored to contribute my 30 years’ experience in professional science
to serve as Science Advisor for Alex Sink, our state Chief Financial
Officer,” said Dr. Lowman. “Florida – now more than ever – needs both
science and economics at the table to map Florida’s future. As we face
challenges such as climate change, water conservation, and obtaining clean
energy, I hope that the integration of science, economics and policy will
insure a healthy and prosperous Florida for our children.”
This year, CFO Sink and Commissioner Bronson partnered to host three climate
change workshops, each featuring new topics and national experts in areas
such as: the science of rising sea levels, renewable energy sources, carbon
offset and pricing, the impact of climate change on the insurance and
financial industries and more. The sessions gave elected officials, business
leaders and Floridians the opportunity to understand how these challenges
and potential solutions present opportunities for the growth of new
industries in our state.
By logging onto
www.floridaclimatechange.com, Floridians can learn about climate change,
review the agendas and presentations from past conversations, watch a Web
cast of Wednesday’s workshop and read about initiatives in other states.
CFO SINK ANNOUNCES $5 MILLION TITLE
Florida Chief Financial Officer Alex Sink announced that First American
Title Insurance Company (First American) has agreed to pay $5 million in
penalties and costs after allegedly paying “kickbacks” to builders, bankers,
real estate agents and brokers for the referral of business in violation of
the Florida Insurance Code and federal law.
Following a year-long investigation by the Department of Financial Services
(DFS), both the U.S. Department of House and Urban Development (HUD) and the
Florida Office of Insurance Regulation (OIR) were invited to join DFS in
obtaining sanctions against First American. The three regulatory agencies
reached an agreement with First American this week after concluding
“I’m proud of the hard work of our title insurance investigators and
lawyers, which resulted in this settlement,” said CFO Sink, who oversees
DFS. “We will not tolerate anyone who violates insurance laws designed to
protect the public in order to gain an unfair advantage over their
The investigation looked into whether First American had created and
utilized limited partnership entities to act as sham title insurance
agencies as a means of funneling prohibited payments for the referral of
business. The entities enlisted real estate agents, mortgage brokers, banks
and homebuilders who referred business to First American's sham title
insurance agencies, resulting in unfair financial gains to First American
and its affiliated title insurance agencies.
Under terms of the agreement, First American is required to sever its
business relationships with 87 of its limited partnership title insurance
agencies in Florida, and to conduct future business activities under strict
requirements subject to review of a monitor who will report inspection
results on a monthly basis for a period of one year.
FLORIDA ADVISORY COMMITTEE ON ARSON
30th Annual Training Session at Florida State Fire College, in Ocala,
November 14-16, 2007
all over the state, 138 fire fighters registered for the annual training
event. The morning was kicked off with a welcome from Captain Jeff Merritt
of the State Fire Marshal's office, who is also the president of FACAP.
Thursday evening was highlighted by the presentation of the
FACAP Investigator of the Year award.
The 2007 award winner is Detective Thomas Barron of
the State Fire Marshal’s Office. Tommy is in the Northwest Region of the
Bureau of Fire and Arson Investigations, has been with the State Fire
Marshal's office since 1998 and previously was assistant chief of the
Lynn Haven Fire Department. He is a member of the SFM Forensic Investigative
Support Team and was recognized as the Northwest Region Detective of the
Year for 2006.
The surprise of the evening went to the longest
serving employee of the SFM,
Mary Fields. Mary retired from the Bureau in 2006; however, she has
maintained an active role in the FACAP organization. She was presented with
the Meshalko Distinguished Service Award.
After the welcoming ceremonies, the meeting moved to the live fire
training building that had been constructed through the efforts of FACAP in
1991. With thermal couplings and cameras in place, a fire was set on a small
Less than three minutes later flashover occurred, and then the fire was
extinguished. Flashover typically happens at 1,000 to 1,200 degrees when all
contents of a room reach their ignition temperature at about the same time.
Training participants watched through the open door or on the television screen
providing pictures of the event.
An identically set-up room on the opposite side of the
building had the same small flame set; however, this time an accelerant was
used. The comparison of the two fire settings was then used as the focus for
Classes and workshops provided training for
those new to the industry as well as those professionals who have experience
in the field of fire/arson, insurance fraud investigations, and for those
whose primary duties are working with claim files. The training provided both
public and private sectors with a unique and highly educational experience
with the focus on various aspects of fire and fraud investigations.
FINANCIAL LITERACY COUNCIL CONVENED
In an ongoing effort to increase financial literacy and help Floridians make
better financial decisions, Florida Chief Financial Officer Alex Sink held
the Financial Literacy Council's sixth meeting in Miami.
At Wednesday’s meeting, the council discussed the content of the annual
report due to the Governor and Florida Legislature on January 1, 2008, and
heard presentations from Acción USA Florida, CompuCredit Corporation, Miami
Saves, and the Human Services Coalition.
The council, authorized in 2006 by House Bill 825, was created to study the
financial problems that affect consumers, particularly young persons,
seniors, working adults and small business owners, which arise from a lack
of basic knowledge of financial issues. The council will also develop
recommendations to aid the Department of Financial Services in developing
programs and resources aimed at increasing financial literacy among
For more information regarding the Financial Literacy Council please visit
Consumer Services Helpline