FLORIDA CHIEF FINANCIAL OFFICER TOM GALLAGHER'S WEEKLY NEWSLETTER
Volume 3, Number 20, May 15, 2006
From balancing a checkbook to running a business,
financial literacy is important to all Floridians. This year, the
Legislature passed a bill that would create a Financial Literacy Council
to serve as a central resource for consumers and small businesses on
Championed by Sen. Jeff Atwater and Rep. Thad Altman, the council is
charged with creating a comprehensive state resource to provide
financial-planning assistance to Floridians. The resource will include
user-friendly information on savings, loans, investment products,
managing debt, and planning for college expenses and retirement.
Over the past several years, the Department of Financial Services has
been actively involved with groups such as the Florida Council on
Economic Education and the Florida Jumpstart Coalition to conduct more
than over 60 presentations in high schools across the state to improve
students’ financial knowledge and money management skills.
While promoting financial literacy is critical among our young people,
Floridians of all ages and economic levels need access to information
they can use to make solid financial decisions. To that end, the
www.yourmoneyyourlife.org, a website resource on a wide range of
topics to help Floridians make knowledgeable financial decisions.
Now, with the creation of the Financial Literacy Council, Florida will
have a central resource and clearinghouse for families and small
businesses to obtain the information and resources they need to make
informed financial decisions.
-- Tom Gallagher
GALLAGHER PETITIONS COURT TO PUT POE
INSURANCE COMPANIES INTO LIQUIDATION
Gallagher says liquidation will ensure claims get paid and policyholders are
Tom Gallagher, Florida’s chief financial officer, announced that he has
petitioned a court to order three financially troubled property insurers of
the Tampa-based Poe Financial Group into liquidation. All three insurers –
Southern Family, Atlantic Preferred and Florida Preferred – have refused to
consent to liquidation. Gallagher said the companies’ refusal only drains
company resources that should be directed to pay outstanding claims.
“These insurance companies have not presented a viable plan to get back on
their feet financially,” Gallagher said. “Our focus now needs to be getting
outstanding hurricane claims paid as quickly as possible. Once the companies
are in liquidation, the department can tap into guaranty funds so claims get
If approved by the Leon County Circuit Court, the Department of Financial
Services would be appointed receiver for the three insurers in liquidation.
As receiver, the department would take over the company’s operations and
liquidate its assets to pay outstanding claims. The Florida Insurance
Guaranty Association (FIGA) is also activated to help pay claims. FIGA is
funded by insurers with written premiums in the same lines of coverage.
Southern Family primarily wrote commercial residential and personal
residential coverage, and covered approximately 43,000 policyholders.
Atlantic Preferred and Florida Preferred together provided coverage to
nearly 280,000 homeowners and condominium unit owners, mostly in South
In the coming weeks, Gallagher will also petition to the court to allow Poe
policyholders unable to secure coverage in the private market to
automatically transition to Citizens Property Insurance Corporation by July
2 without the need to fill out a new application. Citizens’ rates would be
applied when a policyholder’s anniversary date arrives, which is when their
current policy is scheduled for renewal.
For more information, policyholders can contact the Department of Financial
Services at 1-800-342-2762 or log onto
www.MyFloridaCFO.com. The order is posted at
GALLAGHER: AGGRESSIVE ACTION WILL BE
TAKEN FOR ACTS OF ARSON THAT DESTROY PROPERTY, HOMES
State Fire Marshal Urges Floridians to Fire-Proof Homes as Precaution
Wildfires fueled by extra-dry conditions have burned nearly 61,000 acres and
several homes in Florida so far this year, prompting State Fire Marshal Tom
Gallagher to warn that anyone who intentionally causes a fire will face
aggressive action. Gallagher also is urging Floridians to take steps to
protect their families and property.
“It is critical that we not only protect our homes and property, but that we
make sure we do nothing that could put anyone else’s home or property at
risk,” Gallagher said. “Anyone who starts a wildfire can expect aggressive
action from the State Fire Marshal’s Office.”
Governor Jeb Bush has issued an executive order declaring a state of
emergency and called in the National Guard to assist with firefighting. The
State Fire Marshal’s Office is assisting the Division of Forestry in
coordinating heavy equipment to protect homes and is assisting in the
investigation to determine if the fires were the result of arson.
This week is Arson Awareness Week in Florida, and Gallagher said parents
must teach children to never play with matches or lighters, as juveniles
have been charged in some of this year’s wildfires, including a large one
that destroyed numerous homes in Lee County. He is urging anyone who
suspects arson to call 1-877-662-7766 (1-877-NOARSON).
Topography, fuel sources, and weather all influence the spread of wildfire,
but statistics show that trimming and cleaning vegetation around your home
can profoundly improve a home’s chances of surviving a wildfire. Gallagher
said the first step is to fire-proof your home and the area around it.
• Remove limbs, leaves, and pine needles from the roof.
• Trim tree limbs away from each other and from roof eaves.
• Remove dead and diseased trees and prune lower branches away from shrubs
• Clear pine needles, leaves and debris from the ground in-between brush and
• Keep grass mowed to under four inches.
• Do not use the area under decks for storage.
• Install smoke alarms and make sure they are working.
• Establish a home escape plan and practice it. Designate a meeting place
• Plan several escape routes away from your property.
Gallagher also advised gathering important insurance and financial documents
in a waterproof container. He also said it is a good idea to videotape your
home and property, and document your recording by holding up a newspaper,
then keep the videotape in the same container with your important documents.
Also create a disaster kit in case you have to evacuate and include:
• Flashlight with extra batteries
• Portable, battery-operated radio with extra batteries
• First-aid kit
• Non-perishable food and water
• Non-electric can opener
• Cash and credit cards
• Sturdy shoes and extra clothing
• Food and supplies for pets
If a fire is threatening your home or nearby area, Gallagher said:
• Keep a radio on for updates.
• Remove combustible items from around your home, including lawn and
poolside furniture, umbrellas, fabric awnings, tarp coverings, firewood,
fuel tanks, and fuel-powered equipment.
• Place valuables that will not be damaged by water in a pool or pond.
• Close all doors and windows inside to prevent draft.
• Take down flammable drapes, curtains, and close Venetian blinds.
• Close gas valves and turn off all pilot lights.
• Turn on a light in each room for visibility in case of heavy smoke.
• Leave sprinklers on roofs or anything that might be damaged by fire,
including fuel tanks.
• Be ready to evacuate family and pets when fire nears or when instructed to
do so by local officials.
“Wildfire is a very real threat for many Floridians right now, and we need
to do all we can to protect our homes and communities,” Gallagher said.
'BOGUS BINDERS’ LEADS TO 28 ARRESTS IN FAKE INSURANCE CARD SCHEME
Tom Gallagher, Florida’s chief financial officer, announced that a
multi-agency operation called “Bogus Binders” has led to the arrests of 28
individuals for manufacturing, selling, or buying fraudulent insurance
binders and insurance identification cards. Most of the arrests involved
dump truck owners and operators, but it is also suspected that these fake
insurance cards were also sold to private vehicle owners.
“If one of these uninsured drivers had injured someone, it could have
resulted in financial devastation for the innocent victim,” said Florida’s
Chief Financial Officer Tom Gallagher, who oversees the Department of
Financial Services, Division of Insurance Fraud. “I commend the law
enforcement officers who uncovered this fraud and worked to quickly bring
those involved to justice.”
The agencies involved included the Department of Financial Services,
Division of Insurance Fraud (DIF); the Miami-Dade State Attorney’s Office;
the Miami-Dade Police Department (MDPD); the Florida Department of
Transportation, Motor Carrier Compliance Office; and the United States
Postal Service, Office of Inspector General.
In December 2005, the MDPD Organized Crime Section received information that
an individual by the name of Roberto Dominguez was providing fraudulent
motor vehicle certificates of liability insurance for $1 million and
insurance identification cards to owners of dump trucks in Miami-Dade
County. Dominguez allegedly sold fraudulent $1 million liability
certificates for $300, when actual certificates of liability for $1 million
normally range in price from $8,000 to $10,000.
Dominguez has never been a licensed insurance agent in the state of Florida
and was arrested in 2003 and 2005 by DIF for similar violations. Dominguez
was arrested again and charged with 110 counts of fraud, uttering a forged
instrument and transacting insurance without a certificate.
On June 15, 2005, DIF conducted an investigation of an insurance agency
known as “Insurance Express,” which was determined to be a phony insurance
agency in Miami owned and operated by Rosa and Peter Bajdor. This
investigation revealed that the Bajdors were writing and selling numerous
fraudulent certificates of liability insurance binders listing Canal
Insurance Company and Lincoln General Insurance Company as the insuring
companies. Canal Insurance Company and Lincoln General Insurance Company are
legitimate insurance companies, but company representatives advised that the
liability insurance certificates issued by the Bajdors were fraudulent.
Rosa and Peter Bajdor were arrested on July 25, 2005, but failed to appear
for court and are currently considered fugitives.
In March and April, “Operation Bogus Binders” was initiated to identify
owners of dump trucks in possession of these fraudulent insurance
identification cards. The investigation identified 25 individuals who
presented false and fraudulent cards to law enforcement officers during
routine traffic investigations.
Consumer Services HelpLine (800) 342-2762