Consumer eViews
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 financial issues.

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 department developed 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 protected

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 paid immediately.”

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 Florida.

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 www.floridainsurancereceiver.org.


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 or grass.
• Clear pine needles, leaves and debris from the ground in-between brush and trees.
• 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 outside.
• 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
• Medications
• 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.


OPERATION '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