FLORIDA CHIEF FINANCIAL OFFICER ALEX SINK'S WEEKLY NEWSLETTER
Volume 5, Number 12, March 21,
|Across Florida many people are
finding the American dream of owning a home is slipping through
their fingers. For many of these Floridians, the financial guidance
and assistance needed to navigate the system will come too late.
Through her work on the Financial Literacy Council, Florida Chief
Financial Officer Alex Sink is focused on helping Floridians make
better financial decisions and find the resources necessary to help
assist them with their financial matters.
On Monday, CFO Sink will address the council at their meeting in
Tallahassee. During her speech she will highlight the need for
increased financial literacy among young people, working adults,
seniors and small businesses.
For more information on CFO Sink’s Financial Literacy Council or
Monday’s meeting, please visit
CFO SINK WORKS WITH FLORIDA SENATE ON
LEGISLATION TO INCREASE PENALTIES ON ANNUITY FRAUD
Legislation targets agents using predatory annuity and life
insurance practices against seniors
Florida Chief Financial Officer Alex Sink congratulated members of
the Florida Senate’s Banking and Insurance Committee for unanimously
passing legislation (PCS/SB 2082) that comprehensively addresses the
issue of annuity fraud, including strengthening penalties against
agents who target Floridians, especially seniors and the
mentally-disabled, using predatory annuity and life insurance
practices. CFO Sink has been working with Senate President Ken
Pruitt (R- Port St. Lucie) and State Senator Michael “Mike” Bennett
(R-Bradenton) to better combat annuity fraud, which is investigated
and administratively prosecuted by CFO Sink’s Department of
Financial Services (DFS).
“We need to deter and punish those who commit financially
devastating crimes on Florida’s seniors,” said CFO Alex Sink. “I
applaud Senate President Pruitt and Senator Bennett for their
leadership and for working with me to reduce this widespread and
Florida consumers, and especially seniors, are commonly targeted
through the use of deceptive life insurance and annuity sales
practices known as “twisting” and “churning.” Twisting occurs when
an insurance agent knowingly makes misleading representations or
material omissions regarding insurance policies to induce a consumer
to take out an insurance policy with another insurer. Churning is
similar, but involves the surrender of a current policy to buy a
policy from the same insurance company.
Specifically, the legislation makes twisting and churning a
third-degree felony, and in instances where a pattern or practice
exists of victimizing consumers age 65 and older or who suffer from
a mental incapacity, penalties under the proposed legislation are
increased to a second-degree felony. The bill also prohibits
insurance agents from submitting applications or policy-related
documents bearing fraudulent signatures to insurers, making such a
violation a third-degree felony.
Consider the story of Virginia, a 75-year-old Boynton Beach consumer
who lived alone and suffered from undiagnosed dementia. In 2005, an
insurance agent knocked on Virginia’s door with the goal of selling
her an annuity. By the time the agent left Virginia’s house, he had
caused her to liquidate six fully-liquid in-force annuities that
Virginia could have accessed in full without penalty at any time had
she or her family needed those funds to pay for her living or
medical expenses. Because of this unscrupulous agent’s actions,
Virginia used her already-liquid funds to purchase new annuities
carrying 15 years of surrender charges as high as 19 percent. DFS
prosecuted the agent for his actions against Virginia and other
consumers. The agent lost his license and was ordered to pay $40,000
in administrative penalties.
“This important legislation will go a long way to protect our
Greatest Generation," said Senate President Pruitt. "I hope this
bill sends a shudder down the spines of those who try to deceive and
confuse our seniors out of their hard-earned savings.”
The legislation also strengthens suitability criteria and requires
increased disclosure from the agent selling the annuities or life
insurance policies. The new suitability criteria will require agents
to establish an objectively reasonable basis that the policies they
recommend are suitable for the consumer, and to document their
suitability determination in writing prior to making any sale. The
agent will also be required to disclose important information about
the new product, including a comparison of the consumer’s current
and proposed new policy, and to document for the consumer any
surrender charges he or she will suffer as a result of the proposed
“When I see citizens being taken advantage of by unscrupulous
agents, I think it’s time we in the Legislature step up to ensure
that the citizens of Florida are protected,” said Sen. Bennett.
During the past several years, DFS has witnessed a growing number of
cases where Florida seniors have been persuaded to purchase a life
insurance or annuity product that is harmful or financially
devastating. DFS opened 351 investigations related to annuity
transactions during the 2006-2007 fiscal year, a 41 percent increase
over the previous year. Since July 1, 2007, DFS has already opened
more than 260 annuity-related investigations, which trends to a 58
percent cumulative increase since the 2005-2006 fiscal year.
PCS/SB 2082 will now proceed to the Senate General Government
Appropriations Committee before it heads to the Senate Floor.
Companion House Bill 1003, sponsored by State Rep. Clay Ford
(R-Pensacola), has been referred to the House Jobs and
CFO SINK WILL DELIVER ADDRESS TO FINANCIAL
LITERACY STATE OF THE STATE ON MONDAY
Financial Literacy Council will meet on the 22nd floor of the Florida
Capitol to hear CFO Alex Sink present her policies, ideas and goals in a
financial literacy state of the state address. The public is encouraged to attend, on
Monday, March 24, from three to five p.m.
Florida’s chief financial officer, part of the job is to help promote smart
financial decisions for residents. As such, a top priority is helping
to educate consumers on important financial issues.
literacy education is an essential service for the people of Florida.
Together, we can lift Florida’s economy higher, ensuring all Floridians have
the tools necessary to adequately provide a more secure future for their
The Financial Literacy Council, authorized in 2006 by HB 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.
STATEMENT BY CFO SINK ON THE HOUSE COMMITTEE ON FINANCIAL
INSTITUTIONS’ UNANIMOUS PASSAGE OF THE ANNUITY FRAUD BILL
Florida Chief Financial Officer Alex Sink applauded the Florida
House Committee on Financial Institutions for unanimously passing
House Bill 1003, sponsored by State Representative Clay Ford
(R-Pensacola), which addresses annuity fraud and strengthens
penalties against agents who target Floridians, especially seniors
and the mentally-disabled.
“Deceitful, manipulative agents are not welcome in our state,” said
CFO Alex Sink. “I thank Rep. Clay Ford and his House colleagues for
their support of this good legislation to provide harsher
punishments for those who commit financial crimes upon Floridians.”
HB 1003 will now proceed to the House Jobs and Entrepreneurship
Council, before heading to the House Floor. The Senate Companion,
PCS/SB 2082, is sponsored by State Senator Michael “Mike” Bennett
(R-Naples) and was passed by the Senate Banking and Insurance
Idea of the Week
Spend less than you earn
If you earn a dollar and spend a
dollar fifty, it is time to analyze how you are living. Big earners and
small earners alike succumb to the allure of overspending -
between kids, housing, college costs, cars, vacations - people simply cannot
keep up much less get ahead.
The idea of saving money is lost
in the attempt to stay afloat. Modify your standard of living to fit your
income. Make a dollar and spend fifty cents, then save the rest and you will
be on the way to a more secure financial future.
For more financial savings tips click here
CFO SINK: SOUTH FLORIDA MAN PLEADS GUILTY
TO PIP FRAUD; SENTENCED TO 4˝ YEARS IN PRISON
Florida Chief Financial Officer Alex Sink announced the conviction of a
Miami-Dade County man on Personal Injury Protection (PIP) fraud charges.
Wilfred Cyriaque, 57, pled guilty to involvement in a staged accident ring
in South Florida last week and was sentenced to 54 months in prison,
followed by five years of reporting probation. As a condition of his plea
agreement, he was also ordered to pay restitution of $329,366 to the
following insurance companies: Allstate, Direct General, State Farm, Bristol
West, Illinois National/AIG and Budget Rent-A-Car.
“Insurance fraud costs us all more, and we will aggressively investigate
anyone suspected of defrauding others,” CFO Sink said. “I commend our
investigators for their work on this case and encourage their continued
pursuit of criminals who take advantage of others by committing insurance
Cyriaque was the suspected ringleader of a 24-person staged accident ring,
and in 2005 was charged with 51 counts each of insurance fraud and grand
theft, four counts of staging an accident, and organized scheme to defraud.
Investigators believe Cyriaque may have staged as many as 90 crashes.
The charges stem from investigations by the Department of Financial
Services’ Division of Insurance Fraud (DIF), a sworn statewide law
enforcement agency responsible for the investigation of insurance fraud. DIF
made more than 800 insurance fraud-related arrests in the last fiscal year.
Insurance fraud in Florida has been estimated to cost Floridians as much as
$1,400 a year for the average Florida family. The DIF investigates various
forms of fraud in insurance, including health, life, auto, property and
workers' compensation insurance. Depending on the estimated loss amount, the
department will pay up to $25,000 for information directly leading to an
arrest and conviction. Anyone with information about this or any other
suspected insurance fraud is asked to call the department's Fraud Fighters
Hotline at 1-800-378-0445 or log on to www.MyFloridaCFO.com/fraud.
Complaints can be tracked online.
STATEMENT BY CFO & STATE FIRE MARSHAL SINK ON
THE HOUSE COMMITTEE’S UNANIMOUS PASSAGE OF FIRE SAFETY BILL
Florida Chief Financial Officer and State Fire Marshal Alex Sink
applauded the Florida House Committee on Financial Institutions for
unanimously passing House Bill 1041, “Fire Prevention and Control
Bill.” CFO Sink’s legislation is sponsored by State Representative
Luis Garcia, Jr. (D-Miami Beach), a retired Miami Beach fire chief,
and enhances the State Fire Marshal’s authority in arson
investigations and related crimes and improves requirements for
firefighter training and certification.
“I thank Rep. Luis Garcia, Jr. and his House colleagues for their
efforts to champion fire safety and support those who serve
bravely,” said CFO Alex Sink. “This bill will strengthen all areas
of fire safety, including arson investigation, resulting in better
fire protection throughout our great state.”
HB 1041 will now proceed to the House and Jobs Entrepreneurship and
Policy and Budget Councils before heading to the House Floor. The
companion bill, SB 2388, is sponsored by State Senator Burt Saunders
FRAUDULENT EMAILS ARE BEING SENT TO CONSUMERS CLAIMING TO
BE FROM FDIC
Fraudulent e-mails are being sent to consumers that claim to be from the
FDIC in an attempt to obtain sensitive personal information, including bank
account information. These e-mails falsely indicate that consumers can
enroll in card insurance to protect against Internet fraud.
The Federal Deposit Insurance Corporation (FDIC) has received numerous
notifications from consumers of an e-mail that gives the appearance of being
sent from the FDIC. The "From" line of the e-mail displays the name "Federal
Deposit Insurance Corporation " and the subject includes the words "Consumer
Current versions of the fraudulent e-mail state:
"Who is FDIC?
The Federal Deposit Insurance Corporation (FDIC) preserves and promotes
public confidence in the U.S. financial system by insuring deposits in
What can FDIC do for you?
Despite the efforts of law enforcement, Identity theft is becoming more
sophisticated and the number of new victims is growing. In general,
consumers are protected against liability for unauthorized accounts or
transactions under federal and state law and by financial industry
practices. Identity Theft can affect consumers in many ways, thats [sic]
why FDIC is presenting a new card insurance which can restore you up to
$500 if you are a victim of internet fraud.
Learn more about Consumer Protection Card Insurance: Clicking here will
redirect you to a online signup page for this program."
The e-mail requests that recipients click on a hyperlink
that is provided. This directs the recipient to a "spoofed" Web page
requesting the user to enter personal information to receive $500 of "card
insurance." The requested information (name, phone number, Social Security
number, address, card number, bank name, card expiration date, card
verification code, and electronic signature/ATM PIN) could be used to
perpetrate identity theft and gain unauthorized access to bank accounts. Be
aware that the appearance of the fraudulent e-mails can be modified and that
additional variations are possible.
Consumers should NOT access the link provided within the body of the e-mail
and should NOT, under any circumstances, provide any personal financial
information through this media.
The FDIC has shut down the fraudulent Web site and is investigating the
source of the e-mails. Consumers are asked to report any similar attempts to
obtain this information to the FDIC by sending information to
Information about counterfeit items, cyber-fraud incidents and other
fraudulent activity may be forwarded to the FDIC's Cyber-Fraud and Financial
Crimes Section, 550 17th Street, N.W., Room F-4004, Washington, D.C. 20429,
or transmitted electronically to
email@example.com. Questions related to federal deposit insurance or
consumer issues should be submitted to the FDIC using an online form that
can be accessed at
For your reference, FDIC Special Alerts may be accessed from
www.fdic.gov/news/news/SpecialAlert/2008/index.html. To learn how to
automatically receive FDIC Special Alerts through e-mail, please visit
Consumer Services Helpline