Consumer eViews

Volume 4, Number 43, October 26, 2007

Fellow Floridian:

This week we’ve watched the tragic aftermath of disasters on both coasts - a tornado that hit Pensacola and the wildfires burning across Southern California.  We all must remember that tragedy can happen at any time and we must be vigilant about being prepared.
If you do not have a disaster plan for your family, make one now.  This is important not just during Hurricane Season but throughout the year.  Think of all the things that could go wrong and set a place where your family will meet.  Have copies of financial documents ready to go.  Remember to plan for family members with special needs, and pets, too.
This week we will be enjoying visits from “goblins and ghouls” who will prowl our neighborhoods for Halloween treats.  We wish everyone a safe and fun holiday. 


Company and subsidiaries settle multi-state bid-rigging and price-fixing claims

Florida Chief Financial Officer Alex Sink, Florida Attorney General Bill McCollum and Florida Insurance Commissioner Kevin McCarty announced that Florida and other states have reached a settlement with a large insurance carrier involved in a “pay to play” tactic used with Marsh & McLennan and other insurance brokers. ACE Group Holdings, Inc. and its subsidiaries will pay a multi-state task force $4.5 million to resolve allegations of bid-rigging and price-fixing in the commercial insurance market that resulted in higher premiums being paid by Florida governmental entities, companies and nonprofit organizations.

“It’s wrong that governments and businesses paid inflated insurance rates because they were led to believe there was competition when there wasn’t,” said CFO Sink, who oversees the Department of Financial Services which served a lead role in the multi-state investigation along with the Attorney General’s Office and the Office of Insurance Regulation. “I applaud today’s settlement, because policyholders deserve to know exactly what they are paying for and that they are paying a fair price for it.”

In addition to the financial settlement, ACE has agreed to a consent decree and final judgment in Leon County Circuit Court that will provide comprehensive injunctive relief, including the disclosure of any compensation that ACE pays to insurance brokers. This settlement marks the second agreement Florida has reached with insurance carriers involved with Marsh using “pay to play” tactics.

“The insurance industry must ensure that Florida policyholders are treated fairly,” said Attorney General McCollum. “We will continue our efforts to restore accountability and transparency to insurance markets.”

“Ensuring that there is full disclosure in insurance transactions is essential,” said Commissioner McCarty. “This settlement is another step toward establishing a national standard for transparency in insurance transactions and it helps to further the Office of Insurance Regulation's efforts and commitment to protect Florida consumers.”

ACE allegedly conspired with Marsh and other brokers by submitting fake bids to create the illusion of a competitive bidding process, even though the broker had already determined which insurer would receive a particular policyholder’s business. ACE was rewarded by brokers, who steered other lucrative business to it. ACE paid “contingent commissions” to these brokers, and these commissions were not disclosed to policyholders.

Prior to the settlement, ACE provided reimbursement to a nationwide group of policyholders and adopted significant business reforms that govern its bidding and underwriting practices. Under the consent decree and final judgment, ACE will be required to abide by those reforms and, upon the request of its customers or prospective policyholders, to disclose the actual amount of payments made to insurance brokers. ACE has cooperated with the multi-state task force and will provide assistance to the states as they continue their investigation of insurance brokers and other insurers.

In addition to Florida, the following states participated in the investigation and settlement: Hawaii, Maryland, Massachusetts, Michigan, Oregon, Texas, West Virginia and the District of Columbia.

A pdf version of the signed and dated Settlement Agreement between ACE and the Settling Attorneys General is available at


CFO Sink last Friday was the keynote speaker at an awards ceremony held by the Jacksonville Area Legal Aid, Inc., a law firm of 30 attorneys specializing in providing civil legal assistance to low-income persons. During the ceremony, the organization gave its Equal Justice Award, its highest honor, to Bob Beckham of Holland & Knight. Part of Beckham’s pro bono service includes representing clients for the Innocence Project, an organization dedicated to exonerating people who were wrongfully convicted through DNA testing.

Seven other individual attorneys from various law firms were also recognized for pro bono work during the past year. Sink told the audience it is critical to ensure that the justice system “works for all people, whether they can afford to hire a lawyer or not.”

Earlier that same day, Sink held a business roundtable meeting with members of the Jacksonville Regional Chamber of Commerce on current business and economic issues. The informal discussion touched on many issues, with emphasis on property insurance to property taxes, with the CFO renewing calls for balance and keeping the long view in mind.

MSFH Representatives to be on hand Thursday, Friday, Saturday and Sunday

On behalf of Florida Chief Financial Officer Alex Sink, representatives from the My Safe Florida Home (MSFH) program will be on hand at the Daytona Beach Home Show, October 25 – 28, 2007, signing up homeowners and discussing the financial and safety incentives of hardening their homes against hurricane damage. Homeowners are encouraged to bring their insurance policies to get the maximum benefit from their inspection report.

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 $5000 to make recommended improvements.

Representatives from the MSFH program will be at the Daytona Beach Home Show as follows:

Thursday – Sunday, Oct 25 – 28

LOCATION: Ocean Center - Booth WL2
101 N. Atlantic Ave.
Daytona Beach, FL 32118

TIME: Thursday, Friday and Saturday 10 a.m. – 6 p.m.
Sunday 10 a.m. – 4 p.m.

The MSFH program resumed offering wind inspections and expanded statewide this year after conducting a pilot program during the previous year. Since April 2007 the MSFH program has performed over 100,000 free wind inspections. More than 12,900 homeowners have been approved for matching grants and are working with the MSFH program to harden their homes. Statewide, the program has issued a grand total of more than 1,600 grants to homeowners for more than $5.2 million.

Recently, CFO Sink reported that many 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. To date, 70 percent of participating homeowners are eligible for an average discount of $235 on their wind insurance premiums, based on the current structure of the home during the free MSFH wind inspection.


Pensacola was surprised on October 18 by a weather event - a tornado that was rated an EF1 on the enhanced Fujita scale – that translates to 86-109 mph. The maximum width of the tornado was about 150 yards and the track length was about 7 miles. The tornado lasted for about fifteen minutes.

Damage began with touchdown along the water just northeast of Pensacola Naval Air Station. Boats were flipped over near the Boca Chica drawbridge and the twister tracked to the northeast. Minor tree and power line damage occurred along this track.

The tornado started causing a little more damage when several homes were heavily damaged and a church had part of its roof taken off. Four minor injuries also happened in this area.

A daycare center had been alerted to the tornado’s approach and had taken cover several minutes before it hit. The children were protected well and had no injuries. Ball field bleachers were turned over and power lines were down. Thirty cars in the Target parking lot were totally destroyed, with very little damage was done to the store.

The storm destroyed four structures, caused major damage to twenty-four structures and caused minor damage to fifty-eight structures. Including the 30 cars in the Target parking lot, the damage adds up.

Now would be an excellent time to purchase a NOAA all-hazards radio. A weather radio will alert you when a severe weather warning is issued and can be purchased at electronics, department and drug stores.

Being prepared for a storm can mean survival.


CFO Sink made a special trip last Friday to deliver a check for over $28,000 to  Baker County middle school nurse Shelly Bennett. When contacted by the Bureau of Unclaimed Property about the unclaimed cash in her name, Ms. Bennett thought it was a scam. But it was the real thing, mostly from certificate stocks that had been turned over to the state.

"I'm so glad we were able to find Ms. Bennett and give her this money back," said Sink. "I encourage all Floridians to visit our Web site. With nearly eight million accounts, the chances are good we are holding cash or property for you or someone you know."

Go to  to search for your name.

Consumer Services Helpline (800) 342-2762
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