Volume 2, Number 19, May 9, 2005
The legislative session ended late Friday with a flurry of bills passing. I applaud state lawmakers for tackling a variety of issues and for supporting legislation that will improve the protections of, and opportunities for, Florida’s families, seniors, businesses and insurance consumers.
Several measures that I supported and helped initiate that passed include reforms of Florida’s homeowners insurance policies and market to increase availability and accountability; better protections for Floridians who invest with viatical companies; a fire safety bill requiring sprinkler systems in all nursing homes to safeguard our seniors; and a bill that lays the groundwork for Floridians to set up hurricane savings accounts.
Two other key bills that passed critical to our economy were the repeal of the substitute communications tax and a 50 percent reduction in the intangibles tax.
Finally, many Floridians came together last Thursday for the National Day of Prayer to pray for America, its leaders and the brave men and women who are serving our country. I encourage all of us to continue to reach out in prayer and compassion for the families who are still recovering from the hurricanes of the past year.
-- Tom Gallagher
GALLAGHER LAUDS PASSAGE OF HOMEOWNERS INSURANCE PROTECTIONS FOR FLORIDIANS
GALLAGHER COMMENDS STATE LAWMAKERS FOR POSITIVE ACTION ON A VARIETY OF BILLS
Florida’s Chief Financial Officer Tom Gallagher praised state lawmakers for passing a variety of bills that will greatly help or protect Floridians and their families.
Several measures that passed include:
The homeowners insurance consumer protection bill, championed by Sen. Rudy Garcia and Rep. Joe Negron, which will:
Legislation to better protect Florida investors from viatical companies that commit fraud or fail to properly disclose the risks involved when investing in viatical settlements. The legislation, which would define viatical settlements as “securities,” was sponsored by Sen. Rudy Garcia and Rep. Dudley Goodlette. Gallagher also thanked Gov. Bush for his support of the investor protection bill. “This legislation will enable us to proactively protect investors and aggressively pursue fraudulent practices in this industry,” Gallagher said.
Legislation repealing the substitute communications tax. “This tax was a ticking time bomb for Florida’s businesses, particularly when no other state in the country had this onerous tax,” Gallagher said.
A fire safety bill that will protect elderly residents in older nursing homes by requiring all nursing homes to have fire sprinkler systems by Dec. 31, 2008. The bill was sponsored by Sen. Daniel Webster and Rep. John Stargel. “A fire sprinkler system could be the difference between life and death for nursing home residents, particularly for those who are disabled and need help to get around,” Gallagher said.
Legislation reducing the intangibles tax by half. This tax burden has fallen almost entirely on seniors, small business owners and middle-aged savers – the very people who drive our economy.
CFO GALLAGHER ON HURRICANE CLAIMS REPORTING DEADLINE
The Office of Insurance Regulation was asked to provide an update on compliance with the rule at last week’s Cabinet meeting. OIR Commissioner McCarty reported 186 insurers had a total of 57,830 claims still open.
The preliminary numbers look positive and it appears things are moving in the right direction. However, judgment is being reserved by Gallagher until the Office of Insurance Regulation has time to develop more concrete data. It appears many of the open claims can be closed once contractors can finish repairs, and it is known contractors have been in short supply. The focus will remain on getting the 57,830 claims resolved.
STATE FIRE MARSHAL’S OFFICE INVESTIGATION FINDS PRESENCE OF GASOLINE MAIN FACTOR IN MARGATE FIRE
Florida’s Chief Financial Officer and State Fire Marshal Tom Gallagher today issued a report that gasoline played a major role in a fire that destroyed part of a Margate apartment complex in March. The State Fire Marshal’s Office was called to investigate because a man died in the fire. Dozens of residents also were left homeless.
The Bureau of Fire and Arson Investigations is a law enforcement branch of the Division of State Fire Marshal that assists other state and local fire and law enforcement agencies in the investigation of fires of suspicious origin. Anyone with information about this case or any incident of fire is asked to call 1-877-662-7766 (1-877-NOARSON).
GALLAGHER APPLAUDS LAWMAKERS FOR LAYING THE GROUNDWORK FOR HURRICANE SAVINGS ACCOUNTS
“As balances accumulate tax-free, consumers would also have the option to purchase higher deductible policies which would result in lower annual premiums,” Gallagher said.
FLORIDA OFFICE OF INSURANCE REGULATION ANNOUNCES PUBLIC HEARINGS REGARDING SERVICE MOBILE HOMEOWNERS’ RATE REQUEST
The Florida Office of Insurance Regulation has announced public hearings regarding a proposed rate increase filed by Service Insurance Company. The rate filing is for Service’s Mobile Homeowners Insurance Program.
The Bradenton-based company’s filing requests an average statewide rate increase of 32%. The average rate change varies by county from 0% in several counties to 37% in Highlands County. A list of average, county rate changes by policy is included with this notice.
The filing took effect on February 25, 2005 for new policies and April 2, 2005 for renewal policies. The company filed under a statutory provision allowing companies to implement a rate adjustment before it has been approved by the Office. If the rate filing is disapproved or approved at a lower rate, the company must refund the premium difference to their policyholders.
The Florida Administrative Code (Rule 4-166.051, F.A.C.) requires a public hearing to be held when a rate filing exceeds 25%. Service’s rate filing meets this criteria.
All Service policyholders and interested parties are invited to attend the hearings. The hearings will take place from 3-5 p.m. and 6:30-8:30 p.m. on Wednesday, May 11, 2005 at the Spartan Manor on 6121 Massachusetts Ave. in New Port Richey, Florida due to the high number of policies in the area.
“Policyholders will have the opportunity to interact with company representatives in person and discuss their insurance concerns at these hearings,” said Florida Insurance Regulation Commissioner Kevin McCarty.
A copy of the hearing agendas will be posted on the Florida Office of Insurance Regulation website at www.MyFloridaCFO.com/companies/.
For more information on these hearings, please call the Florida Consumer Helpline at 1-800-342-2762.
Pursuant to the provisions of the Americans With Disabilities Act, any person requiring special accommodations to participate in this hearing should advise the Office of Insurance Regulation at least 5 calendar days before the hearing, by contacting the number listed above.
CFO GALLAGHER COMMENDS LEGISLATURE
FOR PASSING NURSING HOME SPRINKLER BILL
Florida’s Chief Financial Officer and State Fire Marshal Tom Gallagher commended the Legislature for passing legislation to protect some of Florida’s most vulnerable citizens – the elderly. Sponsored by Sen. Daniel Webster and Rep. John Stargel, the legislation requires all of the state’s nursing homes to have automated fire sprinkler systems by December 31, 2008. The bill also establishes a loan guarantee program to help nursing homes defray the cost of installing sprinkler systems.
The legislation, House Bill 1267, heads to Governor Bush for his consideration. If signed, a loan guarantee program would be available to the estimated 35 nursing homes, mostly older facilities, which currently are not protected by any kind of sprinkler system.
SARASOTA ATTORNEY CHARGED WITH INSURANCE FRAUD
An attorney is facing an insurance fraud charge after state fraud investigators documented that he had continued to work while collecting more than $130,000 in disability benefits.
Peter W. Martin, 58, surrendered on the charge Wednesday afternoon at the Sarasota County Jail and was released on a $2,500 bond. The charge was based on an investigation by the Department of Financial Services, Division of Insurance Fraud. If convicted, Martin faces up to 15 years in prison in addition to fines and restitution.
FLORIDA OFFICE OF INSURANCE REGULATION UNDERTAKES ANALYSIS OF LONG TERM CARE INSURANCE MARKET
The Florida Office of Insurance Regulation (Office) has begun a comprehensive analysis of the Long Term Care insurance market. The project will include at least two public hearings to solicit input from those who may be affected by changes in the Long Term Care market.
This project examines the economic, regulatory and public policy aspects of the private long term care market. Detailed analysis focuses on innovative pilot projects developed in a number of different states.
The Office looks forward to working with the Florida Legislature and executive branch on finding solutions to protecting our seniors. “Florida’s most vulnerable population purchases Long-term Care insurance to protect their independence, their assets and their families,” said State Senator Mike Fasano (R-New Port Richey). “We are going to ensure that the problems in this market are remedied.”
Although private Long Term Care insurance has been available for some time, recent estimates suggest that this insurance pays only about 3% of all expenses. The remainder falls to either families or Medicare/Medicaid. Nationally, there have been significant issues regarding pricing, contract specifications and Long Term Care availability.
“Management of Long Term Care expenses is a facet of personal risk management that is becoming increasingly important nationally as our population ages,” said Florida Insurance Regulation Commissioner Kevin McCarty. “This is especially true for us in Florida. Private Long Term Care insurance could be an important tool in this process; to date, however, it has not lived up to its potential. Through careful research and analysis, we want to know why, and more importantly, we will use what we learn to help structure a healthy market for the people of Florida; with products and pricing practices that will restore consumer confidence in Long Term Care insurance.”
This project is being conducted by the Office’s newly created Market Research Unit.
RESOLUTION FROM THE BUREAU OF COLLATERAL MANAGEMENT, DIVISION OF TREASURY, DEPARTMENT OF FINANCIAL SERVICES TO CFO GALLAGHER
WHEREAS, the Chief Financial Officer (CFO) acts as the State of Florida’s financial watchdog, serving as the State Fire Marshal, administrator of the Deferred Compensation plan for employees of the State of Florida and the Florida Security for Public Deposits Act; and
WHEREAS, the CFO is also responsible for administering the receipt and disbursement of state moneys, the investment of excess funds, and the maintenance of regulatory collateral deposits; and
WHEREAS, the mission statement of the Department of Financial Services declares “To Serve the Citizens of Florida by Ensuring Fiscal Accountability, Enhancing Fire Safety Services, and Protecting and Assisting All Insurance and Financial Consumers”; and
WHEREAS, the CFO is directly responsible for 7 billion dollars in regulatory collateral deposits and protecting 9 billion dollars of the public’s deposits; and
WHEREAS, the CFO provided the environment to reorganize, redirect and reengineer the business processes that oversee the regulatory collateral deposits under his authority; and
WHEREAS, the CFO provided the funding source for the successful implementation of the reengineered technology solution through the Aspire-Collateral Administration Program for the regulatory collateral deposits; and
WHEREAS, the Collateral Administration Program has successfully increased efficiency, reduced costs, enhanced customer service and is poised to become nationally recognized for improving service delivery.
NOW, THEREFORE, BE IT RESOLVED that the Bureau of Collateral Management, Division of Treasury, Department of Financial Services to hereby recognize and commendCHIEF FINANCIAL OFFICER TOM GALLAGHER
for his outstanding contributions and commitment to Florida through creative support of the Collateral Administration Program and all divisions and division staff in their pursuit of the mission of the Department of Financial Services.
IN TESTIMONY WHEREOF, the Collateral Administration Program Project Staff have hereunto subscribed their names and have caused the Official Seal of the Bureau of Collateral Management to be hereunto affixed in the City of Tallahassee on this 21st day of April, 2005.
Rebecca Priddle, Financial Administrator, Project Manager
Brenda Chukes, Financial Analyst Supervisor, Collateral Administration
Kenneth Lee, Financial Analyst Supervisor, Program Administration
Ernie Domondon Jr., Financial Analyst II, Collateral Cash Management
Terry Wile, Financial Analyst II, Collateral Account Management
Cheryl Carter, Accountant III, Collateral Transaction Management