Consumer eViews
FLORIDA CHIEF FINANCIAL OFFICER TOM GALLAGHER'S WEEKLY NEWSLETTER

Volume 3, Number 17, April 24, 2006

Homeowners scored a victory when appropriations committees in both the House and Senate recommended setting aside hundreds of millions of dollars to provide insurance rate relief to Florida homeowners.
 
Returning surplus revenue to Florida’s families is sound fiscal policy and common-sense tax relief, and I commend our state legislators for taking this first step. There is still much work to be done, and I’m going to do my part to ensure additional reforms are also approved.
 
Since 2004, I have been calling on the Legislature to use surplus tax revenues to offset any assessments by Citizens Property Insurance Corporation, rather than taxing Floridians twice for the damages incurred by multiple hurricanes. When the Legislature created Citizens, the state’s insurer of last resort, it mandated that any shortfalls in revenue be recovered through assessments on homeowners. 
 
Following revenue projections, House leaders recommended that $920 million be set aside to offset the burden of Citizens’ assessments on Floridians, with an additional $500 million earmarked for grants and no-interest loans to help Floridians strengthen their homes against hurricanes. Senate leaders are proposing $750 million be dedicated to offset insurance assessments, with another $50 million allocated for mitigation.
 
Helping Floridians strengthen their homes against catastrophes, moving people out of Citizens or keeping them from ending up in the insurer of last resort are all wise investments for our future.
 
I urge you to contact your area legislators to voice your support for meaningful insurance rate relief.


-- Tom Gallagher


GALLAGHER PRESENTS 2005 FIRE SERVICE AWARDS
Ten men and women, one school recognized for outstanding service

State Fire Marshal Tom Gallagher and Agricultural Commissioner Charles Bronson today honored 10 men and women and a school for exemplary dedication to the fire, rescue and emergency management service. The award recipients were chosen by their colleagues for actions last year ranging from pulling a woman from a burning house to training fellow responders how to safely handle hazardous materials.

“In the aftermath of back-to-back hurricanes and the threat of man-made disasters, in addition to daily duties of responding to fires, these individuals have valiantly responded to the needs of the people of Florida,” Gallagher said. “On behalf of the State Fire Marshal’s Office and the people of Florida, we give them and all who wear an emergency responder uniform our heartfelt thanks for their service.”

“Every year countless lives and millions of dollars’ worth of property are saved because of the dedication of these men and women,” Bronson said. “This annual ceremony is an opportunity to let them know how much we appreciate all that they do.”

Gallagher and Bronson presented proclamations signed by Governor Jeb Bush and other members of the Cabinet recognizing them for being named fire and rescue service personnel of the year for 2005 and declaring this week “Florida Firefighter Appreciation Week.”

The 2005 honorees are:

• Fire Chief of the Year — Chief Barry B. Baker, Ormond Beach Fire Department
• Fire Marshal of the Year — Wes Hayes, Polk County Fire Services
• Fire Instructor of the Year — Cindy Ferguson, Florida Department of Agriculture and Consumer Services, Division of Forestry, Bushnell
• Forestry Firefighter of the Year — Glenn Davis, Florida Department of Agriculture and Consumer Services, Division of Forestry, Suwannee
• Fire Inspector of the Year — Frank Raike, Orange County Fire Rescue
• Career Firefighter of the Year — Mike Presby, St. Cloud Florida Fire Rescue Department
• Professional Firefighter of the Year — Bob Saunders, Orange County Fire/ Rescue Department
• Fire Investigator of the Year — Juan Bailey, Bureau of Fire and Arson Investigations, Florida Department of Financial Services, Orlando
• Volunteer Firefighter of the Year — Robert L. Bush, Arcadia Volunteer Fire Department
• Emergency Manager of the Year — Robert “Chip” Patterson, Director, Jacksonville Emergency Preparedness Division
• Training Center of the Year — Gulf Coast Community College, Panama City

Gallagher also presented a proclamation recognizing a 50-year law enforcement veteran who is retiring from the State Fire Marshal’s law enforcement agency, the Bureau of Fire and Arson Investigations. Garrison began his career at age 21 in 1956 and served for more than 15 years with the Bureau, the last nine years as captain of the southwest Florida region.

As part of Florida Firefighter Appreciation Week, Gallagher also recognized Florida firefighters for their 2005 record-breaking “Fill the Boot” campaign. Last year’s campaign
raised nearly $2.3 million – almost $1 million more than in 2004 – for the Muscular Dystrophy Association. Their fundraising total last year led the nation.

Following the awards presentation, Gallagher led a ceremony at the Fallen Firefighter Wall of Honor to remember 135 Florida firefighters who lost their lives in the line of duty.

Recognizing that firefighters and emergency responders are facing increasing risks due to methamphetamine, or meth, labs in Florida, Gallagher this year is pushing for legislation that would apply strong criminal penalties to meth manufacturers whose labs kill or injure a responder, and would prevent insurance companies from canceling coverage for an emergency responder injured while responding to a meth lab. The chemicals used to make meth are highly toxic and flammable, and in the last two years there have been at least 50 meth lab fires and explosions. For more information, visit www.MyFloridaCFO.com/fightmeth.


GALLAGHER COMMENDS SENATE JUDICIARY COMMITTEE FOR APPROVING METH LEGISLATION IN FIRST STOP

State Fire Marshal Tom Gallagher commended the members of the Senate Judiciary Committee for unanimously approving legislation that would better protect children, emergency responders and communities from toxic and flammable methamphetamine labs. Gallagher, who first proposed these reforms last June, especially thanked Sen. Carey Baker, who is sponsoring Senate Bill 2356, and Rep. Faye Culp, who is sponsoring companion House Bill 1325.

“This legislation focuses on four basic but important measures in the fight against methamphetamine use and manufacturing.

“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. This legislation would authorize the Department of Children and Families to begin dependency proceedings for the immediate removal of children found at meth labs.

“Too many meth manufacturers post bond after arrest and go right back to making the drug. This legislation would allow the courts to hold meth producers without bail until trial.

“This legislation also would make it a third or second-degree felony if any emergency responder is injured at a meth lab, and prevent them from having life or health insurance canceled because they have tested positive for meth as a result of performing their jobs.

“We must do more than slap meth makers on the wrists, and today’s vote is an important step toward stronger, more meaningful protections for our communities and the responders who serve them.”


Fraud wrecks auto insurance for everyone
Big Florida cities hot spots for staged accidents and bogus claims

Automobile insurance fraud cost $14 billion in 2004, according to the Coalition Against Insurance Fraud.

Staged accidents and fake injuries claimed under Personal Injury Protection (or PIP) coverage account for the majority of auto insurance fraud, and recently the National Insurance Crime Bureau (NICB) identified the cities with the highest number of staged auto accidents. Florida has three cities in the top 10: Miami at No. 1, Tampa at No. 6, and Orlando at No. 8.

Why should you care? With what this fraud costs the typical Florida family each year, you could make a car payment, or buy a couple of bottles of Dom Perignon champagne.

Insurance fraud affects you, even if you are not involved in a fraudulent accident or claim.

• The costs are passed on through your auto insurance premiums.

• Cost of goods and services go up because businesses also pay higher premiums.

• Increased costs for law enforcement and prosecution.

Tom Gallagher, Florida's chief financial officer, announced in February the arrests of 21 people for allegedly staging 10 auto crashes. The investigation leading to the arrests uncovered more than 60 staged crashes throughout the Tampa Bay area. The staged crashes resulted in nearly $1 million in fake claims.

Just three months earlier, in Miami, a similar investigation uncovered an alleged staged crash ring accused of filing more than $100, 000 in fraudulent insurance claims for a single staged accident. Three medical clinics were also involved — including a chiropractor who was previously arrested for insurance fraud and grand theft.

Gallagher continues to work with the Florida legislature to strengthen laws to put more of these types of con artists behind bars. The Department of Financial Services, which Gallagher oversees, also offers a reward of up to $25,000 for information leading to an insurance fraud arrest and conviction.

If you suspect fraud, call the department's Fraud Fighters hotline at 1-800-378-0445. You may be the target of a scam if:

• Someone asks you to participate in a staged accident or let them claim that you were in a vehicle during an accident you were not involved in.

• At or following an auto accident, you get unsolicited calls urging you to visit a medical clinic or lawyer's office.

• You are offered a payment to go to a medical clinic, diagnostic center or lawyer's office.

• You are asked to sign blank treatment forms at a medical clinic.

• Following emergency room treatment after an auto accident, you get a call that the hospital has referred you to a clinic or diagnostic center for further treatment.

• Your physician waives the insurance deductible.

• You receive benefits statements from your insurance company that include treatments you don't remember receiving.

In the past five years the department's Division of Insurance Fraud has arrested more than 1,000 individuals for PIP fraud-related crimes. Several dozen are serving or facing a minimum mandatory prison sentence of two years for organizing or participating in a staged crash, to be followed by a year's suspension of their driver's license.

These aggressive measures have led to a decrease in auto insurance premiums in Florida, and the legislature continues to add tougher penalties and more law enforcement resources. Do your part by reporting if you have been solicited to participate in a scheme, or suspect someone else is involved in one.

Together we can put the brakes on this costly crime.


GALLAGHER BANS MIAMI AGENT FOR FRAUDULENTLY PROVIDING INSURANCE CERTIFICATE TO ACCIDENT VICTIM

Tom Gallagher, Florida’s chief financial officer, has revoked the license of a Miami area insurance agent who sold a fraudulent certificate of insurance to a woman who was subsequently injured in a car accident.   Francois Noel, 46, of North Miami, has been banned from selling insurance in Florida. 

“My heart goes out to this victim.  She sustained serious injuries in a car crash and learned from a hospital bed that the insurance she paid for was bogus,” said Gallagher.  “It is reprehensible to me that this poor victim is facing unpaid medical bills and lost wages as a result of this agent’s actions.” 

Investigators from the Department of Financial Services found that Noel not only took money for coverage he did not place with an insurance company, he was not even authorized to sell insurance for the company from which he wrote the phony certificate.  An appeal of the charges to a state court has been denied. 

“This is a tragic reminder that it may not be enough to review the documents, you may need to follow up with the insurance company to ensure coverage is in place,” Gallagher said. “Also, never pay in cash and never write a check to the insurance agent or agency.  Always make the check payable to the insurance company that will provide the coverage.”

The Department of Financial Services, Division of Agent and Agency Services, investigates insurance agents and agencies concerning violations of the Florida insurance regulations. Anyone with information or questions about this case should call the department’s Consumer Assistance Hotline at 1-800-342-2762.


SOUTH FLORIDA INSURANCE AGENT BANNED FOR SELLING BOGUS INSURANCE

Tom Gallagher, Florida’s chief financial officer, has revoked the license of a South Florida insurance agent for selling bogus health insurance. Gordon Arthur Esses, 64, of Aventura, was licensed to sell life and health insurance.

“A licensed insurance agent should know whether the product he or she is selling is illegal or properly licensed,” Gallagher said. “Although a majority of agents are not marketing unlicensed plans, unscrupulous agents selling bogus coverage will be held accountable.”

Esses represented N.A.P.T., an unlicensed entity that sold bogus health insurance policies to thousands of Floridians and subsequently left many with unpaid claims. Unpaid claims from unlicensed entities are not eligible to be paid from the state guaranty fund which covers the claims of authorized insurers that become insolvent. The former organizer of N.A.P.T. David A. Weinstein was sentenced to probation for three years, ordered to pay over $600,000 in restitution and costs, and banned from participating in banking and insurance industry activities in Florida.

The Department of Financial Services, which Gallagher oversees, has conducted an aggressive campaign to root out unauthorized insurance activity in Florida, acting against over 200 entities, operators, marketers and agents in the last five years.

Beginning in 2002, Gallagher implemented the 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. To verify if a salesman, agent or company is licensed to sell insurance or financial products in Florida go to www.MyFloridaCFO.com or call 1-800-342-2762.


FLORIDA’S STRONG JOB STATISTICS
Florida continues to be national leader in job creation

Florida’s most recent employment numbers support the state as a national leader in the number of new jobs created. According to statistics released today by the Agency for Workforce Innovation, Florida added 306,100 jobs (seasonally adjusted) from March 2005 to March 2006. Florida’s unemployment rate is 3.1 percent, and its job growth rate is more than twice the national average.

Florida continues to lead the U.S. in the number of new jobs created with the fastest rate of annual job growth and lowest unemployment rate among the 10 most populous states.

According to the most recent statistics released this week by AeA, Florida ranked 2nd in the nation in the number of new high-tech jobs created. Florida also retained its 3rd place ranking in the number of high-tech establishments.

According to statistics released today:

  • From March 2005 to March 2006, Florida added 306,100 new jobs, seasonally adjusted.

  • In March 2006, 8,585,000 were employed in Florida.

  • The unemployment rate was 3.1 percent, 1.6 percentage points below the national rate of 4.7 percent.


Consumer Services HelpLine (800) 342-2762