FLORIDA CHIEF FINANCIAL OFFICER ALEX SINK'S WEEKLY
Volume 4, Number 41, October 12, 2007
Two momentous events occurred this week that are
generating more conversations about climate change and the urgent need to
understand and address the risks we all face. One of those events was the
death of Tim Wagner, Nebraska Insurance Director, who also served as
co-chairman of the Climate Changes and Global Warming Task Force of the
National Association of Insurance Commissioners. The other event was the
announcement that former Vice President Al Gore and a United Nation’s panel
won the Nobel Peace Prize for their global work on climate change.
For years, Tim's work has been at the forefront of
addressing the impact of social and environmental issues on the
insurance industry. In fact, through his wealth of insurance regulatory
knowledge, we became more aware about climate risk and the insurance
industry, re-evaluating the state’s risks in light of reports on the
potential impact of climate change.
Both Gore and the UN Panel deserve much credit for
their efforts to increase awareness about the growing reality of climate
change. If not for their efforts, many people would still be unaware of
its increasing presence and real threat to our way of life.
Nearly seven months ago, with Commissioner of
Agriculture Charles Bronson we began the first in a series of discussions on
climate change and its impact on our state with the Florida Cabinet.
Director Wagner was a speaker at the first workshop, and that meeting marked
the beginning of public conversations, among elected officials in Florida,
about the potential economic and environmental impacts and opportunities
climate change may bring.
Next month, we will hold our final "Conversation on Climate Change" in
Florida. This is a global issue, and we urge Floridians to participate and
make their voices heard. The world is finally listening.
CFO SINK UNVEILS PROPOSAL TO REFORM
FLORIDA’S CAT FUND
CFO’s proposal will allow Cabinet to reduce the potential for future
assessments and better safeguard the state’s financial risk
Holding up a stack of property, auto and other insurance bills full of
assessments, Florida Chief Financial Officer Alex Sink unveiled her proposal
today to reform the Florida Hurricane Catastrophe Fund (Cat Fund), which
could reduce the potential for future Cat Fund assessments on Florida’s
CFO Sink’s proposal would give the Governor and Florida Cabinet the ability
to set both the reinsurance levels and pricing of the Cat Fund’s optional
coverages, giving greater flexibility and accountability to the management
of Florida’s reinsurance fund. This move would also promote increased
competition in the private insurance market.
“I hear all the time from Floridians who are wondering why
they have to pay these taxes on their insurance polices,”
said CFO Sink, who oversees the Department of Financial Services. “If we
want to reduce the potential for future assessments, we need to reform the
Hurricane Catastrophe Fund to allow us to be more nimble and respond to the
volatile financial and insurance markets.”
CFO Sink is preparing legislation and will urge legislative leaders to
implement the proposal during the upcoming special session. Additionally,
CFO Sink announced that she will present her proposal at the Florida Cabinet
meeting on October 16, 2007.
If approved by the Legislature before the end of the month, the reformed Cat
Fund will begin evaluating financial and insurance market conditions and
will recommend to the Governor and Cabinet the level and pricing of Cat Fund
optional coverages for the 2008 Hurricane Season. The Florida Cabinet would
make a final decision on by February 15, 2008, well in advance of the time
when a majority of private insurers would negotiate their private
reinsurance contracts. While CFO Sink’s proposal will change the operation
of Florida’s Cat Fund, the structure and mandatory coverages created by the
Legislature will not change.
“We talk a lot about taxes, but we don’t talk much about the potential for
assessments,” said Florida’s Insurance Consumer Advocate, General Bob
Milligan. “Floridians are facing these taxes every day, and CFO Sink’s
proposal will allow us to better manage the state’s Cat Fund to benefit
Florida’s consumers and promote certainty and stability in Florida’s
In January 2007, the Florida Legislature created and provided for the
pricing of an additional $12 billion in optional reinsurance coverage
available through Florida’s CAT Fund in an effort to achieve rate relief for
Florida’s insurance consumers. Not only is the expected rate relief not
being realized, but Floridians have taken on substantially more risk for
future assessments from the CAT Fund.
CFO SINK ON GOVERNOR’S SIGNING OF
NO-FAULT REFORM LEGISLATION
On Thursday, Governor Charlie Crist
signed into law HB 13C, which makes crucial reforms to Florida’s Motor
Vehicle No-Fault Law.
Chief Financial Officer Alex Sink offered the following
“I applaud Governor Crist and our legislative leaders
for their success in reforming Florida’s Motor Vehicle No-Fault Law.
Today’s reforms will better protect Florida drivers, institute cost controls
and strengthen our anti-fraud efforts. While the new law will benefit
consumers, the reforms will not be in effect before January 2008. During
the next two months, I encourage every Floridian to contact their insurance
agent or company to ensure they have sufficient coverage to protect
themselves and their assets.”
ANNUAL FALLEN FIREFIGHTER MEMORIAL
Florida’s second female firefighter to die in the line of duty
Firefighters and families from all parts of Florida gathered Friday,
October 12, 2007, at the Florida State Fire College in Ocala to remember
the 137 firefighters who have lost their lives in the line of duty.
While there were no deaths in 2006, two firefighters will be added to
the wall this year, including the second female firefighter to lose her
life as a result of firefighting efforts.
“It is a tribute to the effective safety efforts of state and local fire
agencies that we had no on-the-job or job-related deaths last year, and
I thank everyone involved in that good work,” said Florida Chief
Financial Officer Alex Sink, who also serves as State Fire Marshal. “At
the same time, I extend my condolences and heartfelt appreciation to the
families, friends and communities who lost firefighters in past years.
Your sacrifice will never be forgotten.”
Linda Hernandez of the Miami-Dade Fire Rescue passed away in September
of 2001, following a long illness attributed to firefighting efforts in
1999. Also to be honored is J. Brinkley Price of the Seminole Fire
Rescue in Pinellas County. Price lost his life following an incident in
September of 1961. Both names will be added to the Fallen Firefighter
Memorial at the Fire College in Ocala and to the Fallen Firefighter Wall
of Honor in the Capitol in Tallahassee. The ceremony comes at the
conclusion of Fire Prevention Week, which began Sunday and continues
The annual Fallen Firefighter Memorial was held at the memorial site in
the Fire College courtyard. Honor guards, including bagpipes and drums,
from across the state took part in the event. In a tradition that dates
back more than 150 years, the ceremony concluded with the bagpipes
playing Amazing Grace.
On May 22, 1999, Firefighter Linda Hernandez of the Miami-Dade Fire
Rescue was injured while battling a two-alarm blaze in an apartment
complex. On September 18, 2001, Firefighter Hernandez died from
complications related to those injuries. Prior to joining Miami-Dade Fire
Rescue in 1997, Hernandez served her community for 13 years as a
correctional officer. She is remembered as a fighter and a person who loved
life and people.
J. BRINKLEY PRICE
On September 20, 1961, Volunteer Firefighter J. Brinkley Price of the
Seminole Volunteer Fire Department responded to a car fire. Price was first
on the scene in his personal vehicle and emptied two of his own fire
extinguishers on the fire prior to the arrival of the first fire apparatus.
Firefighter Price was in the process of taking equipment from the engine
when he collapsed and was not able to be revived. Price was a local
businessman and served his community as a volunteer firefighter and
publicist for the fire department.
CFO SINK ADDRESSES BRANDON CHAMBER OF COMMERCE
On Monday, October 8, 2007, Florida Chief Financial Officer Alex Sink
spoke to members of the Brandon Chamber of Commerce
about property insurance,
property taxes and addressing the reforms made to Florida’s Motor Vehicle
The CFO also discussed statistics that reflect that 74% of
homeowners receiving free wind inspections from the My Safe Florida Home
program are learning that they are eligible for $189 savings on their wind
insurance premiums, without completing any mitigation efforts on their
SENATOR ATWATER DELIVERS $5,000 CHECK FROM THE MY SAFE FLORIDA HOME
PROGRAM TO BOCA RATON RESIDENT
On behalf of Florida Chief Financial Officer Alex Sink and the My Safe
Florida Home (MSFH) program, Senator Jeffrey Atwater (R-North Palm
Beach) personally delivered a matching grant reimbursement for $5,000 to
a Boca Raton homeowner who hardened her home through the state’s MSFH
program. At the event, Sen. Atwater discussed the financial and safety
incentives available through the MSFH program and encouraged more
homeowners in South Florida to sign up for the program’s free wind
“Mitigation is the best way to protect your home. It will reduce the
state’s exposure to hurricane damage and it can result in savings on
your wind insurance premium,” said CFO Sink, who oversees the Department
of Financial Services. “I encourage more Floridians to follow Susan
Baumel’s lead and sign up for free wind inspections through the My Safe
Florida Home program.”
Susan Baumel, a 55-year-old resident of Boca Raton, received a grant
reimbursement Monday after hardening her home’s roof. After having her
home inspected by a MSFH inspector, Baumel received a report indicating
that the addition of an exterior roof-deck attachment and secondary
water barrier would help harden her home to hurricanes. Based on
information from her inspection report, Baumel made more than $30,000
worth of improvements to her home. Baumel was encouraged to harden her
home after Hurricane Wilma hit her area in 2004.
“In the event of a storm, you must take comfort in the fact that you
have done everything you can to harden your home and protect your most
prized possession—your loved ones, from nature’s destruction,” said
To date, the program has reimbursed 268 homeowners in Broward County for
a total of $896,312.86. In Palm Beach County, the program has reimbursed
218 homeowners for a total cost of $661,438.56. Currently there are
2,836 homeowners in Broward County hardening their homes through the
MSFH program. In Palm Beach County, 1,986 homeowners are hardening their
homes through the MSFH program. These homeowners are being reimbursed
for half the cost up to $5,000 on a variety of home improvements,
including hurricane shutters, reinforced garage doors and bracing gable
MSFH also partners with the Volunteer Florida Foundation (VFF) to
provide mitigation, at no cost, to the homes of lower-income Floridians
(those earning 80 percent or less than the area median income.) To date,
VFF has completed work on 892 homes in Florida, 60 of those homes are
located in Broward County and 50 are located in Palm Beach County.
Any Floridian who lives in a single-family, site-built home is eligible
for a free wind inspection through the program. Floridians can apply
on-line at www.MySafeFloridaHome.com or by calling the program toll-free
at 1-866-513-6734. Homeowners who receive free wind inspections through
the MSFH program will get a detailed inspection report, complete with
additional eligibility information on matching grants and estimated
insurance premium discounts, if the homeowner is eligible.
In order to be eligible for the program’s matching grant reimbursements
of up to $5,000, the Legislature requires that homeowners meet the
following requirements: have received a completed wind inspection after
May 1, 2007; live in a single-family, site-built home built before March
1, 2002; have a valid homestead exemption; have an insured value of
$300,000 or less; and be located in the wind-borne debris region.
Additionally, while the free wind inspections will still cover seven
potential wind-resistance improvements, matching grants may only be
applied to opening protections, including windows, exterior doors and
garage doors, as well as the bracing of gable ends.
SINK ADDRESSES NOLHGA
About 100 members of the National Organization of Life and Health Guaranty
Associations (NOLHGA) listened to CFO Alex Sink on Wednesday describe her
role as Florida’s chief financial officer, which is an office unique to
The speech was part of events at NOLHGA annual meeting for members and
leading insurance industry and government executives to discuss key
insolvency issues. The meeting, held this year at Amelia Island, features
panel discussions and/or presentations on pressing issues in the insolvency
arena and also features guest speakers from leading insurance companies and
consulting firms. The meeting regularly attracts more than 100 of the
leading figures in the insolvency and insurance field.
CFO Sink spoke about her role as one of four members of the Financial
Services Commission, which oversees the Office of Insurance Regulation, and
the Department of Financial Services, which receives hundreds of thousands
of consumer complaints each year regarding insurance and financial services,
investigates insurance fraud and oversees the Division of Rehabilitation and
Liquidation, which works to rehabilitate troubled insurers. She also spoke
about her efforts with Agriculture Commissioner Charles Bronson to bring
attention to the need to prepare for the risks of climate change, including
the potential impacts on the insurance industry.
NOLHGA is a voluntary association composed of the life and health insurance
guaranty associations of all 50 states, the District of Columbia, and Puerto
Rico. When an insolvency involves multiple states, NOLHGA assists its state
guaranty association members in quickly and cost-effectively fulfilling
their statutory obligations to policyholders.
REPRESENTATIVES FROM MY SAFE FLORIDA HOME PROGRAM TO SIGN
UP HOMEOWNERS IN JACKSONVILLE SATURDAY
On behalf of Florida Chief Financial Officer Alex Sink, representatives from
the My Safe Florida Home (MSFH) program will be on hand Saturday, October
13, at the Sheriff’s Advisory Councils (SHADCO) Safety Fair at the River
City Marketplace, signing up homeowners and discussing the financial and
safety incentives of hardening homes against hurricane damage. Homeowners
are encouraged to bring their insurance policies to get the maximum benefit
from their inspection report.
As CFO, Sink oversees the state’s MSFH program, which helps Floridians
identify how they can strengthen their homes and reduce the overall
potential for hurricane damage in our state. The MSFH program offers
eligible homeowners a free wind inspection by trained and qualified
hurricane mitigation inspectors. Homeowners who have received these
inspections and meet additional criteria set by the Legislature may also
have the opportunity to apply for matching grants of up to $5,000 to make
Representatives from the MSFH program will be at the SHADCO Safety Fair
DATE: Saturday, October 13, 2007
TIME: 11 a.m. – 3 p.m.
LOCATION: River City Marketplace, 13249 City Square Market Place,
Recently, CFO Sink reported that 74% of homeowners who have received a free
wind inspection from the MSFH program are eligible for discounts on their
wind insurance premiums without making a single improvement to their home.
Consumer Services Helpline