Volume 6 Number 7 February 13, 2009
This afternoon, the U.S. House of Representatives approved a $787 billion economic stimulus package; it is now en route to the Senate, and may be on President Obama’s desk in time for the Presidents’ Day holiday on Monday. The legislation has been discussed for weeks and has seen many revisions in both Congressional chambers, but the final version was agreed upon by House and Senate leaders on Wednesday and is expected to pass.
This federal stimulus will provide a much-needed boost during the current economic downturn by jump-starting short-term demand. The recession, as it stands, is the product of an unfortunate downward cycle: consumer confidence drops; consumers don’t purchase products; businesses can’t sell products and are forced to lay off workers; unemployment increases and even fewer consumers have money to spend. The extent of this problem was magnified this week when President Obama visited Fort Myers on Tuesday. Fort Myers is one of the areas hardest-hit by foreclosures, not only in our state, but in the nation.
The stimulus package aims to ease this cycle, and with its passage, Americans can look forward to tax cuts, an infusion of infrastructure and healthcare funds, and also increased assistance with food stamps and Medicaid. These aspects of the legislation aim to boost the employment sector and also provide help to the increasing number of families who are in need. While its specific impact in our state is still being analyzed, it is certain that Florida has been one of the hardest-hit states in this recession, and anything that can help resolve Florida’s extreme budget deficit and high unemployment rate is of the upmost importance. As President Obama pointed out, without the stimulus, our country’s crisis could become a catastrophe, and it is critical that our state and federal leaders continue to create policies to help us weather the economic storm.
Florida Chief Financial Officer Alex Sink on Friday offered the following statement:
“Today’s news brings clarity to thousands of Floridians who can now begin planning their insurance transition from State Farm Florida. It is appropriate to hold State Farm Florida to high standards and require an orderly transfer within Florida’s private property insurance market.
As Florida’s Chief Financial Officer, I am especially delighted that State Farm cannot interfere with its agents’ ability to place their customers with other insurance companies. This allows current State Farm policyholders to remain with their State Farm agents, who will now be free to help Floridians find the property insurance coverage that best suits their needs.
“We have posted helpful information for State Farm Florida consumers on our Web site, and I encourage all Floridians to shop around for coverage. There are a number of insurance companies who are committed to helping Florida’s families protect their property and assets.”
Link to CFO Sink’s letter to State Farm Florida.
On Thursday, Chief Financial Officer Alex Sink joined detectives from the Department of Financial Services’ Division of Insurance Fraud for the arrest of a woman accused of forging insurance documents in order to collect more than $38,000 in school readiness state funding. Today’s arrest is part of a week-long operation seeking more than 100 individuals from Pensacola to Miami on insurance fraud-related charges in which at least $3.5 million in insurance premiums were stolen or planned to be stolen. As of Thursday morning, 69 arrests have been made.
The charges stem from several months-long investigations by the Department of Financial Services’ Division of Insurance Fraud, a sworn law enforcement agency responsible for the investigation of insurance fraud. Restitution will be sought in every case.
Robbin Broadnax, owner of Little Explorers Daycare in Plant City, forged two certificates of insurance and knowingly submitted them to Polk County School Readiness to facilitate her receipt of early education tax dollars totaling $38,328. If a child at the daycare had been hurt, there would have been no insurance coverage to pay for injuries. She is accused of forgery, uttering (using the forged document), and grand theft; if convicted, she could face up to 30 years in prison.
“Arrests like this send a strong message we will not tolerate this costly crime in our state,” said CFO Sink. “Fraud inflicts real financial pain on families, businesses and communities.”
The operation has targeted nearly 110 individuals wanted on criminal charges including use of fraudulent identification to obtain employment/workers’ compensation benefits, mortgage fraud, personal injury protection insurance (PIP) fraud, and misappropriations of funds. The arrests were organized through the division’s regional offices; charges are being prosecuted by state attorney offices in the various jurisdictions. Potential sentences could range from five years to 30 years in prison per count.
The majority of charges in this week’s arrests involve auto insurance fraud, from staged accidents to fraudulent Personal Injury Protection (PIP) insurance claims. The second-largest category of charges involves workers’ compensation fraud, including both claim fraud and employer fraud. Some of the cases involve fraudulent homeowners’ claims and insurance agents who purposefully defrauded their customers. View list of fraud arrests.
The Division of Insurance Fraud made over 800 insurance fraud-related arrests in the last fiscal year. Insurance fraud in Florida has been estimated to cost the average Florida family as much as $1,400 a year per person. DFS 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.
Florida Chief Financial Officer Alex Sink announced Friday that Kyra Jennings will be starting as her new communications director, effective February 23, 2009. A Tallahassee native, Jennings has worked as a communications professional in Washington, D.C.
CFO Sink’s current communications director, Tara Klimek, announced earlier this year her decision to attend law school in fall 2009. Klimek will assist with the transition and continue to work on special projects for CFO Sink for the next several months.
"I am pleased to have Kyra Jennings join my team and know she will continue our office's strong tradition of keeping Floridians informed about the pressing financial and insurance issues in our state," said CFO Sink. "As Floridians face challenging economic times, Kyra will help me stress the necessity of fiscal responsibility and accountability for Florida."
"I'm honored that CFO Sink has given me the opportunity to help communicate her goals and ideas for Florida's financial future as her communications director," said Jennings. "I am eager to help CFO Sink serve Floridians and to highlight CFO Sink's constant commitment to fiscal responsibility and her continued leadership during these tough economic times."
Jennings most recently served as the Southern Regional Press Secretary for the Democratic Congressional Campaign Committee (DCCC), where she helped guide the communications strategy for successful Congressional campaigns across the Southern United States, including two winning campaigns in Central Florida. Jennings previously was communications director for Representative Zoe Lofgren (D-California) and worked at the Democratic Leadership Council (DLC). Jennings is a graduate of Duke University and Florida High in Tallahassee.
Florida Chief Financial Officer Alex Sink invites visitors to the 2009 State Fair, which kicked off last week and continues through Monday, February 16, to visit the Department of Financial Services’ (DFS) interactive display and booth to learn more about protecting their families and finances. Sink, who oversees the department, attended the Governor’s Luncheon and toured the fairgrounds on Monday. DFS representatives will staff the display every day from 9 a.m. to 5 p.m.
“During these challenging economic times, it’s good for Floridians to come together to celebrate all the wonderful qualities about living in our great state,” Sink said. “The Department of Financial Services has a wealth of information for making life better, easier and safer.”
Above: former State Senator Les Miller, CFO Sink and Gwen Miller, Tampa City Council member.
The department’s display includes the Division of Consumer Services’ booth staffed by consumer outreach coordinators who can answer questions and provide information on a wide variety of financial and insurance information. Visitors can also go on a “Treasure Hunt” for unclaimed property that the department may be holding for them. Brochures will be available on topics ranging from homeowners insurance to buying an annuity.
In addition, the Division of State Fire Marshal will have on display a Bomb Squad Response vehicle, a bomb suit, an explosive-detection robot and various other pieces of equipment. An accelerant-detection canine team is also scheduled for visits at various times throughout the fair.
The Department of Financial Services has consumer outreach coordinators available throughout Florida to present outreach programs on a range of issues from how to buy auto insurance to disaster preparedness. To schedule a program or to request further information about the department, please visit the CFO’s website at www.MyFloridaCFO.com.
The Florida State Fairgrounds are located at Interstate 4 and U.S. 301 in Tampa. Gates open at 9 a.m. daily.
In conjunction with a recent investigation, CBS-4 Miami’s I-team held a phone bank last week to assist consumers with concerns about the two different types of smoke detectors on the market, ionization alarms and photoelectric alarms. A fire protection specialist from the division of State Fire Marshal joined Miami-Dade fire rescue officers and other experts in the field of fire protection to answer questions; in the hour and a half of its duration, the phone back answered over 750 calls.
Watch the investigative report by clicking here.
Attorney General Bill McCollum and Chief Financial Officer Alex Sink today presented six Tampa area public entities with checks totaling over $1.48 million from two insurance-related settlements reached in 2007 and 2008. Hillsborough County School District was one of those entities, receiving a total of more than $886,000 from the settlements which resolved allegations over undisclosed fees paid to two national insurance brokers, Willis Group Holdings, Inc. and Aon Corp.
The Attorney General and the CFO presented checks to the following entities for these amounts: Hillsborough County School District for $886,038; Pinellas County School Board for $457,671; Pinellas County Board of County Commissioners for $181,440; Tampa Bay Water for $145,204; Tampa Hillsborough County Expressway Authority for $141,120; and City of Tampa Housing Authority for $79,834. The settlements were jointly negotiated by the Attorney General’s Antitrust Division, the Department of Financial Services and the Office of Insurance Regulation.
“One of the most important responsibilities of the Attorney General is to enforce Florida’s Antitrust and consumer protection laws,” said Attorney General McCollum. “I am pleased and proud to be able to return these funds to these public entities.”
“As Florida’s fiscal watchdog, I am proud of the role my department played in returning these ill-gotten funds back to the people that serve taxpayers,” said Chief Financial Officer Alex Sink.
“It is very important to me that we are able to protect Florida consumers and establish transparency in insurance transactions,” said Insurance Commissioner Kevin McCarty. “I am glad that money is being given back to these Florida entities that were charged unnecessary fees as a result of the bad business practices of these brokers.”
In July 2007, the Attorney General’s Office, the Department of Financial Services (DFS) and the Office of Insurance Regulation obtained a $2 million settlement with Willis, resolving allegations that the company improperly collected undisclosed fees or commissions from various public- entity clients. The company's clients included more than a dozen public entities in Florida, including economic development councils, city and county governments and school boards. A similar $2.6 million settlement was reached with Aon Corp. in May 2008; Aon Corp. had over 45 Florida public entities as clients.
“We thank Attorney General Bill McCollum, Chief Financial Officer Alex Sink, and Insurance Commissioner Kevin McCarty for their efforts,” said Hillsborough County School District Superintendent MaryEllen Elia. “They have provided at least a little relief during difficult budget times.”
Insurance brokers represent their clients by advising them on their insurance needs and options. The brokers also represent the clients when negotiating the price and terms of insurance coverage offered by insurance companies. Willis and Aon Corp. each brokered multiple insurance contracts in Florida from 1998 through 2004.
Under the agreements, both companies also agreed to make full written disclosure of commissions and to pay the costs of the investigation.
Florida’s Insurance Consumer Advocate Sean M. Shaw spoke to consumers one-on-one about insurance problems and complaints Wednesday at the St. Petersburg Times and Senior Living Guide Senior Expo held at the St. Petersburg Coliseum.
Shaw was promoting Florida Chief Financial Officer Alex Sink’s Safeguard our Seniors Task Force (S.O.S. Task Force), created to develop solutions to better protect Florida seniors from falling victim to financial fraud. Over the past several months, the S.O.S. Task Force has hosted roundtable discussions throughout the state gathering input and stories from seniors about fraud.
“CFO Sink and I are committed to helping consumers, especially our seniors who are often the target of fraud because of their lifetime of savings,” Shaw said. “The best way to do that is to hear firsthand what their problems and needs are.”
Shaw was accompanied by a consumer outreach coordinator and an insurance consumer specialist from the department’s Division of Consumer Services. The booth offered information and brochures on purchasing life insurance and annuities products.
As part of ongoing efforts to meet with seniors about her Safeguard Our Seniors (SOS) Task Force, Florida Chief Financial Office Alex Sink will host a roundtable discussion with senior investors and financial experts. The roundtable discussion is one of several CFO Sink is hosting to help better protect Florida seniors against financial fraud.
Find out more from 9 a.m. to 11 a.m. on Friday, February 20, 2009, in The Villages. The location is at The Savannah Center in the Atlanta Room at 1545 Buena Vista Boulevard. For more information, call 1-877-MY-FL-CFO (1877-693-5236.)
Sink appointed Shaw last year to serve as Florida’s Insurance Consumer Advocate. The Insurance Consumer Advocate is committed to finding solutions to insurance issues facing Floridians, calling attention to questionable insurance practices, promoting a viable insurance market responsive to the needs of Florida’s diverse population and assuring that rates are fair and justified. To learn more about the work of the S.O.S. Task Force to date, log on to www.flseniors.net.
This week, Andy Reiss, owner of Andrew’s Capital Grill and Bar in Tallahassee, unveiled the latest lunch menu featuring items named in honor of state and local politicos. The tradition of a politically-themed menu started 25 years ago, and continues to provide a fun look at “who’s who” in Florida’s legislative arena.
Some menu items correspond with names: Chief Financial Officer Alex Sink is honored by the restaurant’s “Everything but the Kitchen ‘Sink’” salad bar buffet, and Senator Dave Aronberg is recognized with the “Aronberg”-er spicy black bean burger.
For others, a characteristic inspires the dish, such as Senator Al Lawson’s “Too-tall” triple-decker turkey club sandwich, which draws its namesake from the tallest lawmaker in Tallahassee.
The restaurant is frequented by elected officials, Capitol visitors and the local community, and is especially busy during the Legislative Session. It is conveniently located across the street from the Capitol complex.
CFO Sink conferred with leaders of three of Florida's independent schools of higher education this week on issues of concern.
Dr. Karl Wright, President, Florida Memorial University in Miami; Dr. Trudie Kibbe Reed, President, Bethune Cookman University in Daytona Beach; CFO Sink; Dr. Claudette H. Williams, Edward Waters College in Jacksonville joined the CFO in Tallahassee.
On Wednesday, CFO Sink was the featured speaker for a class taught by former Governor Reubin Askew as part of Florida State University’s Master of Public Administration course. Along with Governor Askew, CFO Sink engaged in conversation with Pat Gleason, Governor Crist’s Director of Cabinet Affairs, as well as the students in attendance.
Keeping in tune with the theme of the course syllabus, CFO Sink spoke about the role of Chief Financial Officer in state government and as a member of Florida’s cabinet. She answered students’ questions about recent issues, including State Farm’s decision to discontinue selling policies in Florida and the state’s budget deficit. She also spoke about legislative matters including Florida’s “Government in the Sunshine,” laws, which are designed to guarantee that the public has access to the public records of Florida government.
Tax time is here, and you should have already received your tax forms and W-2 in the mail and are getting ready to file your 2008 tax return. As you review your year and think about refunds and deductions, pay attention to the details.
Consider whether you may have valid business- or employment-related expenses you can deduct on your taxes. As an employee, consider what things you may pay each year in order to maintain employment, professional certification or educational requirements that may be deductible on an itemized return.
Teachers often buy extra school supplies for students and classroom use -- these purchases are deductible whether you itemize your deductions or not.
The expense of required work clothes and uniforms may be deductible, and you may even be able to deduct applicable dry cleaning expenses. Employment-related union or business association dues, professional books, journals and employment-related education expenses may be deductible. Some education expenses such as tuition at an eligible institution may qualify for education credits, so read the instructions carefully.
If you are a freelancer or consultant, consider incorporating your business. That step will cost you a few extra dollars in terms of state and legal fees, but you may become eligible for more favorable tax treatment when it comes to health insurance premiums, travel and entertainment deductions, and even a retirement plan via a Simplified Employee Pension (SEP) IRA. Contributions to an SEP plan are deductible; they will lower a taxpayer's income tax liability in the current year.
When preparing your taxes it always makes sense to discuss and plan with an adviser and read up on the IRS tax laws before proceeding. The IRS posts answers to frequently asked questions about deductions at www.IRS.gov.
Valentine’s Day is just a heartbeat away. If the romance of your holiday includes a precious gift for your special someone, don’t forget — whether it’s a family heirloom, a diamond engagement ring or a new watch — to consider protecting your investment with insurance.
It’s important to know your options when it comes to insuring fine jewelry (including family heirlooms) against theft, damage or loss. This is especially relevant for the 10 percent of U.S. couples who will get engaged on Valentine’s Day1. The National Association of Insurance Commissioners (NAIC) offers the following tips for evaluating your insurance options for covering your jewelry.
With most homeowners and renter’s insurance policies, jewelry is often included as a type of personal property you can insure. However, the coverage might not be enough. Even if your policy allows you to insure jewelry, many policies set a limit on the amount of coverage and might not protect against all incidents. Given the sentimental value of certain jewelry, consumers need to be covered in all situations.
Homeowners and renter’s insurance policies have a maximum coverage limit for the combined value of all of your jewelry, and this limit might be only a fraction of the value of your item(s). Most policies will protect against theft; however, you also might be able to protect against damage or loss. Review your policy or check with your insurance agent to find out the scope of your current coverage. If it is insufficient, purchase a separate policy for the item or add an endorsement onto your existing policy. You should also talk with your insurance agent or company about how a jewelry loss would affect your existing insurance premium. If it would increase your premium, it might make sense to purchase a separate policy.
To ensure you have the right amount of coverage, you need to determine the value of your items. In many cases, insurers will require an appraisal as a condition for providing coverage for your jewelry. Some jewelers provide an appraisal with your purchase that you can use for your policy; however, these appraisals can be inflated, so you might want to consider getting an independent appraisal. It is also a good idea to have your jewelry re-appraised periodically to ensure accurate coverage. You should also keep photos of each item and a copy of the appraisal in your home inventory in case you need to file a claim.
The dollar value of the item has the most influence on your premium and deductible, which is why an accurate appraisal is important. The dollar value is generally the risk factor that insurers use to determine how much to charge for jewelry coverage. However, for very expensive pieces of jewelry, whether you have secure storage for your item and how often the item is worn might also affect your policy. Items that are worn daily, such as wedding and engagement rings, carry more risk due to more exposure to loss or damage. Items worn only on special occasions statistically will have less risk of theft, damage or loss. Although dollar value affects the premium cost the most, your insurer might also take into consideration these other factors. Don’t forget to ask if you qualify for discounts if you have a home safe, an alarm system or safety deposit box.
Shop around for the best coverage for your items. Ask about options, such as not having a deductible for jewelry, to help evaluate your choices. Double-check to ensure your policy covers theft, loss and damage. Find out if the coverage applies worldwide or if it is limited to domestic incidents. Know the difference between replacement coverage and actual cash value coverage. Replacement coverage replaces the item with a similar piece of jewelry that is equal in value. Actual cash value coverage provides a cash amount equal to the value of your item as agreed upon in your policy.
Once you think you know which policy will provide the best coverage for you, check out the insurance company. For help with your research, consult the NAIC’s Consumer Information Source (CIS) to review the company’s financial and claims history. Go to https://eapps.naic.org/cis/ to use this free resource.
If you are unsure about the insurance company or agent you are dealing with, STOP before signing any paperwork or writing a check; CALL your state insurance department — easily reached by phone; and CONFIRM the company or agent offering insurance is legitimate and licensed in the state. Go to www.naic.org/state_web_map.htm for a link to your state insurance department’s Web site.
If you have questions or are confused about your insurance policy, you can seek the help of your state insurance department. Visit www.NAIC.org to find answers to your questions or to find contact information for your state insurance department. For more information about auto, home, life and health insurance options, as well as tips for choosing the coverage that is right for you and your family, visit www.InsureUonline.org.
1Source: Diamond Information Center