Volume 7 Number 25 June 18, 2010
This week I had the opportunity to meet with President Obama in Pensacola and personally visit a BP claims office. And after weeks of calling for increased federal oversight and changes in the claims process, I welcomed the news that BP will put aside $20 billion to pay claims for damages resulting from the oil disaster and an independent administrator will take over the claims process.
Since the beginning of this disaster, the claims process has been too slow, reimbursements too small, and as a result, many small businesses on our Gulf Coast are having trouble paying their bills and employees. Some are even facing bankruptcy. This just isn’t right – these hardworking Floridians should not have to pay for BP’s mistake. I will continue to monitor the claims process closely so that our coastal communities and industries get the assistance they deserve.
State of Florida
Florida CFO Alex Sink on Friday sent a letter to Kenneth Feinberg, the independent claims administrator for the new $20 billion escrow account for Gulf oil spill claims from BP, requesting that the new claims facility be located in Northwest Florida.
“Today, I’m writing to request that the new facility be strategically located in Northwest Florida,” wrote CFO Sink. “In addition to being one of the most beautiful places in the world, a Northwest Florida facility would enable you to hire Floridians and Gulf Coast residents affected by this disaster while also boosting our local economy.”
Florida CFO Alex Sink, in continuing support of her Safeguard Our Seniors (SOS) initiative, this week released a new video produced by her Department of Financial Services (DFS) to help seniors understand the questions to ask and the potential pitfalls to avoid when considering the purchase of an annuity. Watch the Annuities Video.
Over the past two years, DFS has held more than 400 free SOS workshops that have helped recover nearly $12 million for seniors who were scammed by annuity salespeople. The video is the product of findings and advice that the Department has accumulated through the workshops, as CFO Sink and the Department’s efforts have repeatedly proved effective in teaching seniors how to identify potential financial fraud.
“I've stood up to the special interests for three years on behalf of Florida's seniors to enact the Safeguard Our Seniors legislation that will protect them from scammers, and these new protections will make a big difference for our seniors when it takes effect in January,” said CFO Sink. “Also, this new video is very useful in helping seniors to educate themselves on what to look out for.”
Governor Crist signed CFO Sink’s Safeguard Our Seniors legislation, sponsored by Senator Mike Bennett and Representative Maria Sachs, on June 1. The new legislation increases financial penalties for willful “twisting” or “churning” of an annuity, extends the free look period from seven days to 14 to 21 days, and provides better disclosures among other protections for seniors who buy annuities. The legislation takes effect January 1, 2011.
After learning how to identify annuity fraud at one of CFO Sink’s SOS workshops, a vigilant senior tipped off investigators and participated in an undercover sting operation that led to Tampa Bay senior scammer Randolph Kahl-Winter being convicted a second time last week. Kahl-Winter, who had already lost his agent’s license because of his previous arrest in March 2009 for grand theft and insurance fraud, met with the victim as she signed documents for an annuity transaction. Division of Insurance Fraud investigators arrested Kahl-Winter as he left the meeting. He was sentenced to two years of community control, followed by 30 months of felony probation, in addition to fines and costs.
“Kahl-Winter demonstrates why our seniors need to be well-informed and protected, and why I am committed to continue to fight to see that our seniors have all the information they need to make the best decisions for their financial future,” said CFO Sink.
To learn more about CFO Sink’s Safeguard Our Seniors initiative or what to consider when purchasing annuities, visit www.FLSeniors.net. Floridians who believe they may have been the victim of financial fraud should call (850) 413-3089 or toll-free at 1-877-My-FL-CFO (1-877-693-5236), or visit www.MyFloridaCFO.com to file a complaint.
Florida CFO Alex Sink offered the following statement after President Barack Obama announced that BP has agreed to set aside $20 billion to pay claims for damages resulting from the oil disaster and that an independent administrator will take over the oil claims process.
“After weeks of calling for a change in the claims process, this announcement couldn’t come soon enough for me,” said CFO Alex Sink. “Our small business owners need cash now, and I will be watching like a hawk for an increase in the speed at which claims are paid. I will continue to fight for our small business owners, who shouldn’t have had to go through BP to have their claims paid.”
On May 11, CFO Sink urged BP to clarify the claims process for impacted businesses. Unsatisfied with BP’s claims process and responsiveness, on May 24 CFO Sink asked President Obama for the federal government to oversee and manage the claims process. Yesterday, CFO Sink personally pressed President Obama to get BP out of the claims process, get cash into the hands of small business owners, and just send BP the bill.
Dylan Ratigan (DR): Joining us now, the Sunshine State's Chief Financial Officer Alex Sink. What degree of confidence do you have that all the talk from escrow to you'll be made whole will happen.
Alex Sink (AS):I have a large degree of confidence. I heard it with my own ears today. The President promised the people of the Gulf Coast of Florida that they will be held harmless and that their lawsuits would be compensated for. That's what we have to hold the President and the federal administration accountable for.
DR: BP's Lamar McKay, who was being interrogated from BP has offered potential escrow of money to protect those in Florida and along the Gulf Coast. Here's what he had to say:
McKay: I cannot comment on whether there will be a fund set aside or not. We made it clear the company stands behind these commitments. We have a strong balance sheet. We have a strong company. We intend to stand behind those.
DR: Does that make you more confident, less confident, or is his commentary at this point irrelevant because the president holds the bag?
AS: Well, BP has spent millions of dollars on a public relations campaign. We've seen all the full-page ads and newspapers across the country with all these promises. I think it's time for the president to stand up to BP when he meets with them tomorrow and say put your money where your mouth is. Put several billion dollars into an escrow fund and show the people of the Gulf Coast and the people harmed by this, all the many small businesses, that you mean what you say and the money is absolutely there to pay these enormous claims that we're already beginning to experience.
In the second installment of the Patient Protection and Affordable Care Act series, the Office of the Insurance Consumer Advocate will detail the benefits consumers can expect to enjoy in future years. While the first part of this series focused on immediate benefits, the benefits in this edition have yet to take effect.
The Patient Protection and Affordable Care Act (PPACA) of 2010 (H.R. 3590) and the Reconciliation Act of 2010 (H.R. 4872) will change current law to implement the following:
Beginning in 2011, the following provisions will be implemented:
Consumers will find that numerous changes will be enacted in 2013/2014. As a result, consumers should contact their agent health care plan, or the Department of Financial Services, Division of Consumer Services periodically in an effort to stay abreast of the various reforms.
In 2015 and beyond other reforms are expected to take place, consumers should check with their health care provider or the Department of Financial Services regarding any additional reforms.
As more information is available and additional changes become effective, the Office of the Insurance Consumer Advocate will generate advisories regarding their effect on consumers. More information regarding the PPACA can be found on the website of the Insurance Consumer Advocate at http://www.myfloridacfo.com/ica/federalhealthcare.asp. Consumers who have questions regarding health care reform can contact the Department of Financial Services, Division of Consumer Services on-line at http://www.myfloridacfo.com/Consumers/ or by phone at 1-877-MY-FL-CFO (1-877-693-5236), toll-free in Florida, and (850) 413-3089 from out of state.
The Insurance Consumer Advocate is appointed by Florida CFO Alex Sink and 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.
Federal lawmakers still have not reached an agreement on an extension for the National Flood Insurance Program (NFIP) that expired on May 31.
As of midnight on May 31, 2010, insurance agents have not been able to provide new or renewal flood insurance policies. This can affect consumers who are in the process of closing on real estate or are seeking flood insurance for the first time on their home.
While no new or renewal policies can be issued during a lapse in NFIP authorization, consumers with current flood insurance policies remain covered. Claims payments for current policyholders are not affected.
When preparing for hurricane season, everybody knows to stock up on batteries, water, non-perishable foods and other items to sustain them through and after a storm. One thing too many people overlook is renters insurance.
Nearly 30 percent of housing units in Florida are rented, but not everyone thinks to get renters insurance. Maybe they believe their personal property is covered by their landlord’s insurance, or maybe they believe they just cannot afford it. But tenants’ personal property is not covered by the landlord’s policy.
Renters insurance is an important way to protect your personal property. It can also provide additional living expense coverage if the unit is damaged and you cannot live there until the repairs are made. Some leases require you to continue the rent payments, even if you are living somewhere else.
Think of these options when considering renters insurance:
To find out more about renters insurance, please visit www.MyFloridaCFO.com.
Be sure you understand what you are buying. Some standard policies do not cover damage from hurricanes. Check to see if a separate policy is needed for hurricane coverage in your area.
Find out when a Hurricane Preparedness Event will be in your area from our calendar: Upcoming Disaster Preparation Events. Check back with us next week for more ideas.
Florida Housing Help assists homeowners who are at risk of losing their homes to foreclosure or may be facing mortgage fraud issues.
Saturday, June 19, 2010 Englewood Neighborhood Center, 6123 La Costa Drive, Orlando, FL 32807 from 10:00 a.m. - 3:00 p.m.
Saturday, June 19, 2010 Glasser Schoenbaum Center, 1750 17th Street Building J, Sarasota FL 34234 from 9:00 a.m. - 2:00 p.m.
Monday, June 21, 2010 The University Area Community Development Center, 14013 N. 22nd Street, Tampa Florida 33613 from 5:00 p.m. - 8:00 p.m.
Saturday, June 26, 2010 Beaver Street Enterprise, 1225 W. Beaver Street, Jacksonville, FL 32204 8:00 a.m. - noon
For more workshops that include community partners and resources and offer great information for citizens, visit http://www.myfloridacfo.com/Consumers/OutReach/EventsbyCategory.asp.
On June 14, 2010, the Treasury Department announced that all payments from the U.S. government will be made electronically to consumers. People receiving Social Security, Supplemental Security income, Veterans, Railroad Retirement and U.S. government benefits will receive payments through direct deposit into a bank account or through Treasury's Direct Express debit card - already in use by one million recipients.
Some 85% of seniors already receive their Social Security payments online.
It is estimated that the program will save the government $303 million in the first five years – including $48 million annually on postage.
The Treasury Department has several mechanisms in place to make for easier adoption of the new electronic banking. New recipients of Social Security and other government benefits as of March 1, 2011, will receive their benefits electronically.
If you're already receiving benefits, you have from now until March 1, 2013, to convert to the electronic system, and a call center will be available to answer your questions.
Every day, hundreds of Floridians fall victim to financial fraud. Many of these victims are trusting seniors who were misled into making risky or inappropriate financial investments including annuities and reverse mortgages by unscrupulous agents and scam artists. in response, CFO Sink created the Safeguard Our Seniors Task Force to develop solutions to better protect Florida seniors from falling victim to financial fraud.
Florida CFO Alex Sink’s Department of Financial Services hosted Safeguard Our Seniors workshops in Fort Walton Beach and Destin this past week as part of CFO Sink’s ongoing statewide initiative to protect seniors from financial fraud through education and increased awareness.
The Department of Financial Services was joined by a local victim of financial fraud who told her story, along with representatives from the department’s Division of Agent and Agency Services, the Division of Insurance Fraud and the Division of Consumer Services.
Over the last two years, CFO Sink’s Department of Financial Services has held more than 400 Safeguard Our Seniors events throughout the state to teach how to guard against fraud and scams targeting seniors.