Volume 3 Number 44
October 30, 2006

Department of Financial Services button
Consumer Services HelpLine Number 800-342-2762
e-mail CFO Tom Gallagher
Press Releases button
Previous Issues button
CFO location button
Subscribe to Eviews button
Unsubscribe to eViews button
Text Version button

Florida Department of Financial Services logo

Late last week, the National Council on Compensation Insurance filed for a decrease of 15.7 percent in the state’s workers’ compensation insurance rates, representing $600 million in savings for Florida employers.

This year’s decrease marks the fourth annual drop in rates since reforms to the state’s workers’ compensation system were approved in 2003, bringing the cumulative savings for Florida’s businesses to nearly $2 billion. And despite the criticism of those reforms at that time, the results were worth the effort. We have been able to significantly lower costs for Florida employers, and boost job creation for Florida’s working families.

We now also need additional reforms in property insurance to help homeowners and employers obtain affordable property coverage and those reforms must happen at both the state and federal level. At the state level, Governor Bush has responded by creating the Property and Casualty Insurance Reform Committee which is expected to soon recommend solutions for state lawmakers to consider in an upcoming special session. At the federal level, legislation is being championed by Congresswoman Ginny Brown-Waite and Congressman Clay Shaw to create a national catastrophe plan.

As with any complex issue facing our state, we need to work together to solve it.





Tom Gallagher, Florida’s chief financial officer, announced that free home inspections will soon begin in Hillsborough, Manatee, Pinellas and Sarasota counties for nearly 3,300 homeowners who applied through the My Safe Florida Home program. The program, funded with $250 million by the Florida Legislature, was created to better protect Floridians by strengthening their homes against hurricanes and to reduce the state’s exposure to hurricane damage.

“Before this hurricane season ends, my goal is to provide 12,000 free home inspections across the state to help Floridians strengthen their homes and better protect their families against catastrophic storms,” said Gallagher, who oversees the Department of Financial Services which administers the My Safe Florida Home program.

Gallagher said that 3,300 homeowners in Hillsborough, Manatee, Pinellas and Sarasota counties who have submitted completed applications will soon be contacted by a department-approved inspector to schedule an inspection. Gallagher is encouraging these homeowners to verify that they are dealing with a department-approved inspector by referring to the Service Request number on the front page of their completed application. Remaining and future applicants will be served with additional funding of the My Safe Florida Home program.


Tom Gallagher, Florida’s chief financial officer, announced the arrests of 33 individuals suspected of setting up or participating in more than a dozen staged accidents and fraudulently billing 11 auto insurance companies nearly $1 million for treatment of non-existing injuries and auto damage claims. 

The arrests follow a two-year investigation that is part of a major crackdown by the Department of Financial Services’ Division of Insurance Fraud working together with the National Insurance Crime Bureau (NICB) and representatives of the insurance industry in fighting a problem that costs consumers millions of dollars a year.  One estimate indicates auto insurance fraud costs the average Florida family nearly $250 a year in higher premiums and higher costs for goods and services.

Staged accidents extract a toll on all of us as consumers and taxpayers, and both time and dollars are wasted by police and emergency services when they respond to a fake accident scene,” Gallagher said.  “We are committed to continuing this fight against auto insurance fraud and protecting our citizens from this abuse.”

In staged accidents, the planners and organizers, usually in connection with unscrupulous clinic owners, target the personal injury protection (PIP) insurance of drivers, and bill as much as $10,000 to insurance companies for each patient.  Florida law requires drivers to carry at least $10,000 in PIP coverage and $10,000 in property damage liability coverage. 

The department’s aggressive efforts along with tougher enforcement measures passed by the Legislature have been credited with lowering auto insurance rates in recent years.  The department’s Division of Insurance Fraud has made more than 1,100 PIP fraud arrests associated with $36 million in PIP fraud since 2001, and consistently has been recognized as leading the nation’s fraud bureaus in insurance fraud arrests and convictions.





Tom Gallagher, Florida’s chief financial officer, announced that the Department of Financial Services has uncovered another scam seeking to lure Floridians into buying potentially inappropriate financial products.  As a result, Gallagher is again warning consumers to “Verify Before You Buy.”

Earlier this month, Gallagher ordered Ohio-based Investors Union, LLC and its managing member, Peter J. Bonnell III of Medina, Ohio, to immediately stop sending misleading postcards to Florida seniors bearing the word “NOTICE” and advising consumers that they “may have an annuity that has reached the end of its surrender period.”  When recipients call a toll-free number listed on the postcard, they are not given any information regarding their own investment accounts, but are instead asked for personal financial information and advised they should set an appointment to review their existing annuities and other investments.   

“These deceptive practices against our seniors in attempts to manipulate them out of their hard-earned savings will not be tolerated”, said Gallagher, who oversees the Florida Department of Financial Services.  “I commend the investigators who discovered these activities early on before too many seniors were scammed.”




Tom Gallagher, Florida’s chief financial officer, announced that a former insurance agent whose license was revoked in March for luring senior citizens into buying inappropriate annuities is now facing felony charges for continuing to transact such deals.

Bijan Razdar, 52, of Port Richey, was arrested on Oct. 18 at his home in Pasco County and is charged with knowingly transacting insurance and/or otherwise engaging in insurance activities without a license, a third-degree felony.  The Department of Financial Services, Division of Insurance Fraud, determined Razdar had continued the illegal activity for six months following his license revocation.  Detective Steve Firestone was the case investigator.

“We have zero tolerance for anyone who seeks to cheat our seniors out of their hard-earned retirement funds,” Gallagher said.  “We will continue to bring the full force of the law against scam artists and aggressively educate our seniors against these scams.” CONTINUED





This week Governor Bush announced that Florida will receive more than $100 million from the U.S. Department of Housing and Urban Development to harden homes in the state to protect against future disasters. The Community Development Block Grant disaster relief funds are a portion of the additional $5.2 billion allocated nationwide by the federal government following the destructive Hurricanes of Dennis, Katrina, Rita and Wilma.

Fortifying Florida is essential for instilling a 'culture of preparedness.' Hardening homes is an investment that can save Floridians money on their annual insurance premiums and spare them the anguish of losing their homes during a natural disaster.

Florida is currently finalizing a plan to use these funds to complement the "My Safe Florida Home" program. Through the program, homeowners can apply for a free inspection and a grant up to $5,000 from the Florida Department of Financial Services to help protect their homes. The final plan must be approved by the U.S. Department of Housing and Urban Development.

Visit www.mysafefloridahome.com to find out more about the free home inspection and matching grant program.

For information on creating a Family Disaster Preparedness Plan, please visit www.floridadisaster.org.


Investors Urged to Carefully Monitor Online Trading Accounts

The North American Securities Administrators Association warned investors to carefully monitor their online trading accounts in the wake of “hack attacks” in which predators have broken into customer accounts at online brokerages in the United States and Canada and made unauthorized trades worth millions of dollars.

Federal and industry authorities are investigating recent cases in which hackers gained access to customer accounts at several large online brokers and used the customers’ funds to buy certain thinly traded microcap securities, also known as penny stocks. The hackers appeared to be running a “pump and dump” scheme, trying to drive up share prices so they could sell the stocks at a profit.

These scams typically begin with a hacker obtaining customer passwords and user names, then liquefying that person’s existing stock holding and using the proceeds to buy shares in the microcap. They then wire the money to either an offshore account or through a series of straw men or dummy corporations.

For details, please see: