Consumer eViews

Volume 4, Number 41, October 12, 2007

Fellow Floridian:

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’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 insurance consumers.

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 insurance market.”

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.


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 statement: 

“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.”


Florida’s second female firefighter to die in the line of duty honored

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 through Saturday.

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. 

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. 


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 No-Fault Law. 

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 homes.


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 inspections.

“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 Senator Atwater.

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 ends.

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 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.


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 Florida.

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.


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 recommended improvements.

Representatives from the MSFH program will be at the SHADCO Safety Fair as follows:

DATE: Saturday, October 13, 2007
TIME: 11 a.m. – 3 p.m.
LOCATION: River City Marketplace, 13249 City Square Market Place, Jacksonville

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.

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