FLORIDA CHIEF FINANCIAL OFFICER ALEX SINK'S WEEKLY
Volume 4, Number 49, December 7, 2007
Colorado State University hurricane
forecaster William Gray announced today his prediction that seven storms
will form into hurricanes during the 2008 hurricane season. Fortunately,
Florida did not experience severe hurricane damage during the 2007 hurricane
season. However, Floridians know all too well how destructive these
powerful storms can be.
By offering free wind inspections, the My Safe Florida Home (MSFH) program
helps Floridians learn how to harden their homes against windstorm damage.
But did you also know that the MSFH program might be able to help you get a
discount on your windstorm insurance?
Many insurance companies provide discounts to homeowners who take steps to
fortify their homes against the strong winds a hurricane can bring. In
fact, many homeowners are already eligible to save money on their
insurance-- without making any improvements-- because their homes have
additional protections, such as shutter protection on windows and doors.
Approximately 75 percent of the homeowners who’ve applied for a free wind
inspection have learned they are eligible to immediately save money on their
windstorm insurance. On average, the savings is $200, but we’ve heard from
homeowners who are saving as much as $2000 each year!
And it's easy to apply. Any Floridian that lives in a single-family,
site-built home is eligible. Just fill out an application at
or call our toll-free number at 1-866-513-MSFH (6734). In just two
minutes, you can be on your way to learning how to harden your home and
determining if you are eligible for a discount on your wind insurance
FLORIDA SCHOOL BOARDS ASSOCIATION
HEARS FROM CFO SINK
CFO Sink spoke today to more than 200 members of the Florida School
Boards Association and representatives of several other education
organizations gathered for their 62nd Annual Joint Conference in
Tampa. She asked to speak to the group as she knew many had concerns about
recent events with the Local Government Investment Pool operated by the
State Board of Administration (SBA). The CFO serves along with Florida’s
Governor and Attorney General on the SBA Board of Directors that oversees
the SBA. After a brief speech in which she said she intends to work with
her SBA board colleagues to bring more transparency and communication
between SBA fund managers and investors, she took several questions. She got
a hearty round of applause when Bill Montford, Chief Executive Officer of
the Florida Association of District School Superintendents, thanked her for
her “unprecedented access.”
STATEMENT FROM SBA TRUSTEES
After the first morning’s activity in the Local Government Investment
Pool, Governor Charlie Crist, Attorney General Bill McCollum and Chief
Financial Officer Alex Sink released the following statement:
“We are pleased to see the Local Government Investment Pool opened on
time today and we are encouraged by the fact that new deposits were made
into the fund. Withdrawal activity in the fund this morning was below
expected levels, which continues to demonstrate cooperation among the
fund’s investors and an interest in preserving the fund. We hope to see
continued deposits from fund investors and remind local governments that
all new subscriptions are fully available for withdrawal under the new
SBA TRUSTEES SEEK TO RESTORE
• GOV. Charlie Crist, Chief Financial Officer Alex Sink and Attorney General
Bill McCollum serve as trustees for the State Board of Administration, which
handles investment and trust management services for the state. They issued
this statement collectively on Thursday:
A decline in the real-estate market and the growing subprime mortgage
lending crisis have impacted the U.S. financial market. In Florida, we are
keeping a watchful eye over the state's investment funds, particularly our
model pension fund.
As part of this oversight, the three of us, sitting together as the State
Board of Administration's (SBA) Board of Trustees, took steps this week to
address a lack of investor confidence in one of the investment pools.
The Local Government Investment Pool (LGIP) is a short-term investment pool
used by a number of counties, school boards and other government entities in
Florida. Withdrawals escalated at a significant pace over the past few
weeks, decreasing the pool's original balance of $27 billion to $14 billion.
Whether or not this "run on the bank was fueled by legitimate concerns, we
immediately acted to temporarily suspend withdrawals and hire a
world-renowned asset management firm to conduct a thorough review of the
LGIP and recommend a proposal with the best chance at preserving investors'
After reviewing the pool's assets, the firm issued a report with several
recommendations that we, as the SBA Board of
Trustees, enacted Tuesday. In the simplest terms, we supported a plan to
isolate any distressed assets into a secure fund that will be allowed to
mature and increase in value over time. The rest of the assets are of a
high-grade money-market quality and will be placed in a fund that is open to
current and new investors. We also voted to create
relationships with financial institutions to provide loans to investors
seeking immediate access to capital.
In passing this reform, we had three guiding principles. Our primary goal
was to adopt a plan that would provide the
best opportunity for investors to ultimately retrieve every cent they
originally placed in the fund. We also knew that it
was essential for investors to have access to their assets as soon as
possible, so that local entities could cover immediate needs such as issuing
payroll for teachers and other public servants. Additionally, we understood
importance of restoring confidence in the new fund, which will be managed by
independent financial asset managers
and rated like many other money-market funds.
We believe the actions taken this week will best protect the investments of
hundreds of local governments in a manner that is fair and secure to all
investors. Above all, we
commend the local-government entities that have worked with us over the past
week to help craft an innovative and
As trustees, we will work to increase transparency in the state's investment
funds and require the SBA to increase its
communications with local governments and other investors as well as the
Florida League of Cities, Florida Association of Counties, Florida Tax
Collectors Association, Florida Sheriffs Association and others. Together,
we can overcome the current crisis and provide a model to other states
facing similar circumstances.
CFO SINK ANNOUNCES ARREST OF SCHOOL
PRINCIPAL FOR ALLEGEDLY STEALING VOUCHER FUNDS
Florida Chief Financial Officer Alex Sink announces the arrest today of a
Pinellas County resident for allegedly stealing more than $256,897 from a
school voucher program under the Department of Education (DOE).
Marva H. Dennard, 68, owner of the private school Bishop Academy II – GSFA,
Inc. in St. Petersburg, is charged with first-degree grand theft and
first-degree aggravated white collar crime following an investigation by the
Department of Financial Services (DFS), Office of Fiscal Integrity, in
connection with the State Attorney’s Office, Sixth Judicial Circuit. Dennard
is accused of taking the funds from the John M. McKay Scholarship for
Students with Disabilities Program (McKay) and the Corporate Tax Credit
“Stealing money intended to provide educational opportunities for Florida’s
students cannot and will not be tolerated, and I commend the investigators
and prosecutors for holding this individual accountable,” said CFO Sink, who
oversees the department.
Investigators said Bishop Academy II targeted the low-income minority
population of Pinellas County by pursuing students who qualified for McKay
and CTC scholarships by offering “free scholarships.” From July 2002 through
June 2005, Bishop Academy II received $782,896.75 in McKay funds and
$225,904 in CTC funds.
Dennard is accused of inflating student numbers, submitting scholarship
applications that falsely indicated tuition at $3,500 or $7,500 when the
actual tuition was $2,600, simultaneously collecting funds for students
receiving both McKay and CTC scholarships, submitting inflated fee schedules
for individual students to DOE in order for Bishop Academy II to receive the
maximum McKay scholarship payments, and failing to provide the professional
services prescribed and paid for by DOE.
The Office of Fiscal Integrity is responsible for statewide investigations
of allegations of fraud, waste, or abuse involving State of Florida property
and money. To report fraud, waste, or abuse of State of Florida resources,
call 1-800-GET-LEAN (1-800-438-5326) or the Office of Fiscal Integrity
directly at 850-413-5514.
CFO SINK IMPLEMENTS NEW TOOL TO SAVE MONEY, IMPROVE
Florida Chief Financial Officer Alex Sink announced that Florida is the
first state to implement the use of a new program that will improve services
and save money in the administration of insurance company receiverships.
The Department of Financial Services (DFS), Division of Rehabilitation and
Liquidation, recently used ClaimNet, a Web-based application that makes it
easier for claimants in a receivership to submit a claim, update a claim or
check on the status of an existing claim. The National Association of
Insurance Commissioners (NAIC) launched ClaimNet in December 2006 to provide
a uniform method for collecting and processing a receivership's claims data.
Florida recently used the program for a receivership with more than 1,400
policies, and nearly half of the claimants used the program to submit their
claims on line, saving money and time.
“As Florida’s fiscal watchdog, I am continually working to improve services
and find ways to save taxpayer dollars,” said CFO Sink, who oversees the
department. “Processing claims is one of the largest and costliest tasks
associated with a receivership or liquidation, which can be a financial and
emotional burden for consumers. With this program, we have improved the
process and will have more funds to pay claims.”
DFS serves as receiver of any insurance company placed into receivership in
Florida. The Division of Rehabilitation and Liquidation is responsible for
performing the duties of the Department of Financial Services in the
department's capacity as receiver. The basic responsibilities of the
receiver include the collection of assets or debts due to the company and
the evaluation of all known claims against the company. For more information
on the duties and responsibilities of a receiver, log on to http://www.MyFloridaCFO.com/Receiver/
or call 1-877-MyFLCFO.
CFO SINK ISSUES IMMEDIATE FINAL ORDER
TO N.J.-BASED NATIONAL TRADE BUSINESS ALLIANCE OF AMERICA, AFFILIATES
Sink urges consumers to avoid doing business with any of the companies
Florida Chief Financial Officer Alex Sink announced the Department of
Financial Services has issued an Immediate Final Order against New
Jersey-based National Trade Business Alliance of America (NTBAA), National
Alliance Association (NAA) and several affiliates, ordering the entities to
stop the unauthorized sale of health insurance in Florida.
The department became aware of the unauthorized activities when consumers
began to complain about unpaid claims and problems getting premium refunds,
and the department’s Division of Agent and Agency Services, Bureau of
Investigation, launched an investigation.
“Floridians deserve the most ethical, upfront services from insurance agents
and agencies, and that is why Florida requires agents and agencies to be
licensed,” said CFO Sink, who oversees the department. “Any consumers who
have purchased coverage from these entities are urged to call my office.”
Nearly 800 Florida consumers have signed up for the health plans marketed by
these entities, which have been selling their unauthorized products in
Florida since at least August 2006. The agencies marketed the insurance via
blast facsimile and collected premiums by automatic bank withdrawals. The
marketing Web site for the entities is www.naaus.org.
Consumers can file a complaint or verify licensure of an insurance agency or
company by calling the department’s Consumer Helpline at 1-877-MyFLCFO or
logging on to www.MyFloridaCFO.com.
Neither NTBAA, nor NAA nor their president, Thomas J. Sullivan, has an
insurance agent license issued by the department. Similarly, neither
Affinity Health Plans nor National Alliance Healthcare, operating as the
affiliated insurance companies, has ever been granted a Certificate of
Authority from the Office of Insurance Regulation, which also issued an
Immediate Final Order. The department’s Order requires the entities to
provide a detailed list of the names, contact information and claims
information for all Florida policyholders within 10 days.
Consumer Services Helpline