Consumer eViews

Volume 3, Number 14, April 3, 2006

The Legislature is poised to take aggressive action again this year against fraud artists who steal money from Florida’s hard-working families by staging or fabricating auto crashes and making fraudulent auto insurance claims.  The pending legislation, along with continued strong enforcement by the Division of Insurance Fraud, will help ensure Florida drivers continue to have access to medical care if they are injured in an auto crash.

Fraud artists have targeted the Personal Injury Protection (PIP) insurance coverage, but aggressive arrests and prosecutors along with hard-hitting legislation passed in 2001 and 2003 have driven the costs of premiums down in recent years.  Legislation I have proposed this year to continue that success is being sponsored by Sen. J.D. Alexander and Rep. David Rivera.  The legislation passed in key committees last week and moves on to the Senate Health Care Committee and the House Fiscal Council this week.  

The legislation would make it a second-degree felony if a driver files a fraudulent accident report or insurance claim on a crash that never happened and would revoke the driver's license of any individual convicted of committing auto insurance fraud.   It would also amend the patient-brokering statute to make current provisions more widely applicable to all medical practitioners, and establish penalties for insurance companies that fail to report fraud. Other legislation would provide funding for more dedicated prosecutors.  The dedicated prosecutor in Miami-Dade County has already resulted in an increase of more than 20 percent in arrests and convictions. 

I applaud Floridians who have come forward to tell legislators how their PIP coverage was critical to helping them or their loved ones get needed medical care.  And I commend our legislators for working to find more ways to combat auto insurance fraud in Florida.

-- Tom Gallagher


Tom Gallagher, Florida’s chief financial officer, will present a resolution to the Governor and Cabinet designating April 4 as Healthy Kids Day in Florida. The resolution recognizes Florida Healthy Kids, a non-profit, public-private partnership that provides quality, affordable health insurance coverage to uninsured school-aged children in Florida.

Gallagher, who helped establish Healthy Kids in 1992 as a pilot project in Volusia County, said that more than one million children statewide have been served to date.

“For many working families, the greatest need they have is health insurance coverage for their children,” said Gallagher, who serves on the Cabinet. “Healthy Kids has helped meet that need and ensured the care and well-being of more than one million school-aged children in Florida.”

To qualify for the Healthy Kids program, children must be between the ages of five and 18, not currently enrolled in any other health insurance program and not eligible for Medicaid. A major focus of the program is preventive health and dental care services, including regular check-ups, immunizations, X-rays, emergency care, hearing and vision screening, surgery and hospital care.

Most families pay $15 or $20 per month. And some services have small co-payments, for example, $5 for prescriptions or $10 for eyeglasses. All coverage is provided through reputable and well-established providers.

Current statewide enrollment is approximately 212,000. Florida Healthy Kids is currently promoting the program through television and radio commercials. Data from a recent study by the University of Florida indicates that another 143,000 children in Florida are potentially eligible for the program.

The application process is easy and can be submitted at any time of the year. For an application or more information, contact Healthy Kids toll free at 1-888-540-KIDS (1-888-540-5437). You may also visit the Web site at

Gallagher said since its inception, Healthy Kids has become a model for other states and has been recognized by the Robert Wood Johnson Foundation and honored with the Harvard University Innovations in American Government Award.


Bill would better protect child victims, emergency responders and communities

State Fire Marshal Tom Gallagher joined legislative leaders, law enforcement and firefighters in calling for the passage of legislation aimed at combating methamphetamine or “meth” labs in Florida and enhancing protections of children, law enforcement and other emergency responders exposed to meth manufacturers.

“The spread of meth in our communities is a serious threat to our families and our first responders, and it is a challenge which requires a comprehensive approach,” said Gallagher, who first proposed the reforms last June. “The legislation I am proposing today will increase penalties for meth makers, increase protections for firefighters and first responders, and rescue innocent children from toxic living conditions. Attacking meth in our state is my number one legislative priority as Fire Marshal.”

Gallagher was joined by Senator Carey Baker (R-Eustis) and Representative Faye Culp (R-Tampa), who are sponsoring legislation, Senate Bill 2356 and House Bill 1325, reflecting the recommendations of the State Fire Marshal’s Office.

“Senator Baker and Representative Culp know the dangers meth poses to their communities, and their sponsorship of this legislation is a testament to their leadership,” added Gallagher.

“If we don’t do more than slap meth makers on the wrists, they will continue to produce this insidious drug and further endanger our communities,” said Sen. Carey Baker, who is sponsoring the legislation. “Moreover, removing children immediately from homes used as meth labs is their best, and maybe only, chance to get the medical care they need.”

Nearly half of all children rescued from homes or living areas used as meth labs test positive for meth and need urgent medical care and intervention. More than 130 children have been injured in meth labs in the last two years.

Rep. Faye Culp, the House sponsor, concurred and stressed that law enforcement and emergency responders are also at risk. “Fumes, fires and explosions from meth labs pose a serious threat to our law enforcement, firefighters and other emergency responders,” Culp said. “The children forced to live in these labs also urgently need our help and attention.”

The chemicals used to create meth are highly toxic and flammable. Many labs are also booby-trapped. As a result, more than 1,000 responders have been injured in meth labs found in 16 states, including Florida, since 2001. Gallagher said that the State Fire Marshal’s Office has responded to more than 50 meth lab fires and explosions around the state, including Jacksonville, Daytona, Lakeland and the Panhandle. Gallagher said meth labs are cropping up in suburban and rural neighborhoods, state parks, hotels and motels, and in vehicles traveling on our highways. In 2005, evidence of meth manufacturing was reported in 90 Florida communities.

Senate Bill 2356 and House Bill 1325 would:

• Authorize the Department of Children and Families to begin dependency proceedings for the immediate removal of children found at meth labs.

• Allow the courts to hold meth producers without bail while awaiting trial. This provision was included at the request of law enforcement because meth producers, once released on bail, immediately begin producing the drug again.

• Extend criminal penalties to include firefighters and other emergency response personnel injured or killed while responding to meth labs (third-degree felony if injured; second-degree felony if killed or severely injured).

• Prevent first responders from having life or health insurance canceled because they have tested positive for meth as a result of performing their jobs.

Gallagher has spoken to responders who have attended intensive training programs provided free-of-charge by the State Fire Marshal’s Office. Gallagher called for the training in early 2005 to teach officers and responders how to identify a meth lab after noting an increase in fires and explosions at these labs. Nearly 500 responders from more than 70 agencies have participated in the trainings. Two programs are planned next month, in Volusia and Manatee counties respectively.

Starting this June, the State Fire Marshal’s Office and FDLE will hold courses to certify 50 additional officers who can respond to and dismantle meth labs. These officers would come from various law enforcement agencies throughout Florida and would provide assistance to the six state task forces organized under the Governor’s Office of Drug Control.

“Meth poses a major threat to communities across Florida,” said William Janes, the new director of the Governor’s Office of Drug Control. “At the Governor’s direction, our office has taken aggressive action to combat the production and distribution of meth in our state. Our office supports any additional reforms that build on the foundation we’ve set.”

Lt. Kevin Fiedor, who is a fire and arson detective with the State Fire Marshal’s Office, relayed details from a recent investigation of a meth lab explosion at a Destin motel that destroyed the room and displaced several motel guests. One of the suspects in the Destin motel explosion was subsequently arrested weeks later in a motel parking lot in Niceville, fully equipped with the chemicals and equipment for making meth.

“We need to be able to keep these individuals behind bars,” Fiedor said. “As a 17-year law enforcement officer, enhanced penalties and additional protections are critical to helping me and my colleagues fight the spread of this drug.”

Also attending the press conference in support of the legislation were Guy Tunnell, FDLE Commissioner; Bob Carver, President of the Florida Professional Firefighters Association; and Frank Messersmith, on behalf of the Florida Sheriff’s Association.


Tom Gallagher, Florida’s chief financial officer, has revoked the license of a Tampa Bay-area insurance agent who used radio advertisements and seminars to lure senior citizens, ranging in age from 78 to 90, into buying annuities that cost them thousands of dollars in penalties, or were inappropriate for their needs, but generated high commissions for the agent.

Gallagher also ordered Bijan Razdar, 52, of Port Richey, banned permanently from transacting insurance in Florida.  Razdar had been a licensed agent in Florida since 1988.

“We have zero tolerance for insurance agents who deceive our seniors and cheat them out of their hard-earned retirement funds,” Gallagher said.  “We will continue to bring the full force of the law against unscrupulous agents and aggressively educate our seniors against these scams.”

Razdar’s license revocation follows an investigation by the Department of Financial Services’ Division of Agent and Agency Services, Bureau of Investigations, and the Division of Legal Services.  As Florida’s CFO, Gallagher oversees the department.  In the last three years, Gallagher has taken action against more than 110 agents for theft and fraud involving the elderly.

An annuity is an insurance contract that offers a guaranteed series of payments over a period of time.  Razdar, who operated American Independent Financial Services, located at 10633 U.S. Highway 19 in Port Richey, made his radio advertisements sound like a financial advice show.

One consumer, an elderly Clearwater widow who explained she needed to maintain access to her assets to meet daily living expenses, was led to believe that the investment she was purchasing would provide her much-needed immediate monthly income.  The 78-year-old Clearwater woman invested the bulk of her retirement nest egg, accumulated from 43 years of work at Sears, Roebuck & Co., in a deferred equity indexed annuity.  She later learned she could not collect a monthly income until age 92.

Razdar further advised four elderly widows to surrender or withdraw from in-force annuities to fund the purchase of other annuity products to generate hundreds of thousands of dollars in commissions for himself.  He convinced them that a “bonus” rate on new annuity purchases would make up for their losses.  His clients suffered hundreds of thousands of dollars in surrender charges and related penalties.  In some instances, the elderly consumers were unaware they suffered such losses.

Responding to calls and letters from hundreds of seniors robbed of access to their savings because they were convinced to liquidate CDs, stocks and savings accounts to fund annuities, Gallagher pushed for legislation that passed in 2004 requiring agents to document the basis for selling annuities to seniors and also gave the department authority to take corrective action if a company or agent violates the law.

“Sadly, seniors are targeted by scam artists because of their access to a lifetime of savings,” Gallagher said. 

As CFO, Gallagher also implemented a “Verify Before You Buy” campaign using websites, billboards, radio ads and various news shows and publications to encourage residents to take steps to protect themselves in financial transactions.  He also created a Senior Resource Center website, at, to help seniors address the diverse questions and financial challenges they may face.

Florida is currently home to more than 2.9 million Floridians over the age of 65, and Gallagher said the state’s senior population is projected to grow by as much as 30 percent over the next several years.  He urged seniors to take precautions to avoid becoming victims.

  • Do an assessment of your financial means and investment objectives.

  • Understand that all investments involve risk: generally, the higher the return, the higher the risk.

  • Ask the sales agent (broker) about commissions, fees, penalties, sales charges and any other costs.

  • Ask as many questions as you want and take notes.  Walk away if they avoid your questions.

  • Take your time. High-pressure sales tactics will rush you into an unwise decision. A sound investment will be just as good tomorrow or next week.

  • Document all transactions.

  • Carefully read and understand documents before you sign them.

  • Ignore “inside information,” “hot tips” and “rumors.”

  • Hang up on “cold calls” from strangers.

  • Beware of "bonus" interest rates as they are usually limited in duration and have strings attached.

  • Be cautious of sales pitches that claim you will "recoup" all penalties with the higher returns of a new policy.

  • Remember: if it sounds too good to be true, it probably is.


Florida continues to be national leader in job creation

Florida’s most recent employment numbers highlight the state’s continued success as a national leader in the number of new jobs created. Florida’s unemployment rate is 3.2 percent as compared to the nation's rate of 4.8 percent.

The Florida job growth rate is more than twice the national average, growing by 3.8 percent from February 2005 to February 2006, while the national job growth rate was 1.5 percent.

According to statistics released by the Florida Agency for Workforce Innovation, during the 12 months that ended in February, the state added 295,400 positions (seasonally adjusted). The national study, released annually, evaluates the business climate in the U.S. based on 26 factors important in conducting and succeeding in business

Based on the nationwide data, Florida had the fastest job growth and lowest unemployment rate of the 10 most populous states and the highest number of new jobs than any other state, according to the state agency.

The state has benefited from record population growth with some 400,000 people moving to the state annually.

Among the biggest job producers were the categories of professional and business services, construction and leisure and hospitality. The construction industry is being boosted by a statewide backlog of repair work from recent hurricanes.

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