Volume 5, Number 40, October  3, 2008


Following the lead of the U.S. Senate, the U.S. House of Representatives passed the federal financial rescue legislation by a vote of 263-171 Friday afternoon, with this version gaining more support from both Democrats and Republicans than the earlier bill. Speaker Nancy Pelosi signed the newly printed legislation and stated that the measure was essential to "begin to shape the financial stability of our country and the economic security of our people."

President Bush signed the bill into law this afternoon.

Following the U.S. House of Representatives passage of the legislation, Florida Chief Financial Officer Alex Sink offered the following statement:

“During the past few days, I’ve met with dozens of homeowners and small business owners around the state who have had difficulty getting access to credit. I applaud today’s passage of crucial legislation that will help stabilize the economy and bring more certainty to our financial and credit markets. Although far from perfect, this bill allows the Treasury to modify mortgages to help homeowners avoid foreclosure, has the potential to open access to credit for the everyday needs of Floridians, and limits the amount of pay given to CEOs who have contributed to the current crisis.”


Sink assembles diverse group to tackle solutions for protecting senior investors

Standing beside Mr. David Greene, an 81-year-old retired Army Master Sergeant and victim of annuity fraud, Florida Chief Financial Officer Alex Sink announced that she has created the “Safeguard our Seniors” (SOS) Task Force to review and recommend solutions to better protect Florida seniors against financial fraud, with an immediate focus on annuity fraud. The task force includes senior advocacy, legal, investigative, consumer, regulatory and industry representatives.

“Every year, my department investigates hundreds of bad actors who prey upon Florida seniors, luring them into inappropriate investments and draining their hard-earned savings,” said CFO Sink, who oversees the Department of Financial Services (DFS). “I have created the ‘Safeguard Our Seniors’ Task Force to identify how our state can better protect seniors from these financial threats, starting with annuity fraud.”

An agent targeted David and his wife, who suffers from dementia and is currently in a nursing home. Through a series of unsolicited home visits, the agent convinced David to cash out existing annuity policies and other savings. The agent then convinced David to purchase a number of life insurance policies and annuity policies, from which David was told he could access funds if necessary. Instead, the annuity payments are being utilized to pay the premiums on the previously purchased life insurance policies. David was also convinced to take out a reverse mortgage, which the agent advised him was in his best interest in order to provide for his wife’s medical care. More than $60,000 realized from the reverse mortgage was then used to purchase another whole life policy, at the urging of this immoral insurance agent.

“I trusted this professional to help me make wise investments,” said David Greene. “Instead, I’m locked out of my savings and my financial future is anything but secure.”

Unfortunately, David’s experience is similar to so many other seniors. Sink’s office recently recovered $300,000 for an 81-year-old woman from New Port Richey as well as nearly $325,000 for an 82-year-old senior living in Daytona who were both scammed into purchasing inappropriate annuity investments and called the department for help.

“It is an outrage that some unscrupulous agents are taking advantage of older Floridians by selling them unsuitable and complex annuities investments,” said Lori Parham, Executive Director for AARP Florida. “AARP is proud to work with CFO Sink and the ‘Safeguard Our Seniors’ Task Force to ensure Florida’s seniors are better protected.”

During the last 12 months, CFO Sink’s department has opened approximately 474 investigations on financial fraud committed against seniors, with 70 percent of cases related to annuity and life insurance transactions. More than 2,770 consumers called the department’s helpline with questions or complaints about financial products, including annuities.

Recovering funds for senior victims is typically difficult and can take many months to prosecute. Last session, CFO Sink advocated for legislation to increase the penalties against criminals who commit annuity fraud, but the Legislature failed to pass the bill. Without stronger penalties, it is incredibly difficult for state attorneys to devote the resources necessary to prosecute these offenders.

The SOS Task Force includes the following members:

  • Tammy Teston, Deputy Chief Financial Officer, Florida Department of Financial Services
  • Lori Parham, Executive Director, AARP Florida
  • Jana McConnaughhay , Treasurer, Elder Law Section of the Florida Bar
  • Mark Ober, State Attorney, Hillsborough County
  • Jim Brodie, Legislative Director, Department of Veterans' Affairs
  • Adora Obi Nweze, President of NAACP Florida
  • Jeffrey Helms, First Coast Financial Advisors
  • David Sisemore, Raymond James & Associates
  • Sean Stafford, Securities and Financial Services Industry
  • Curt Leonard, American Council of Life Insurers
  • Bill Reilly, Chief of Securities Regulation, Office of Financial Regulation
  • Lieutenant Glen Hughes, Division of Insurance Fraud, Department of Financial Services
    Discussion to be followed by the first roundtable meeting of the Safeguard our Seniors Task Force

    Florida Chief Financial Officer Alex Sink will be meeting with several senior victims of financial fraud on Monday, October 6, 2008, at the Hillsborough County Courthouse in Tampa. These Florida seniors will share their stories and discuss possible solutions with CFO Sink to better protect seniors against financial fraud.

    The discussion will start at 10:30 a.m. and conclude by 11:30 a.m. CFO Sink will then convene a meeting of the Safeguard our Seniors Task Force from 1:00 p.m. to 3:00 p.m. to evaluate the current status of annuity fraud in Florida.


    For those residents who still intend to receive an economic stimulus payment, the Oct. 15 deadline to file a 2007 income tax return is fast approaching.

    And according to the Internal Revenue Service, there were
    317,388 potential filers in Florida in mid-September who had not submitted a tax return to get the stimulus check.

    Nationally, the IRS is alerting the estimated 4.3 million retirees and disabled veterans who may be eligible to receive a stimulus payment, but who normally don't file a tax return. It's also the deadline for the approximately 10 million people who earlier this year received extensions to file their 2007 income tax return.

    My Family CFO
    Are you the chief financial officer of your family? Are you always looking out for the best deals, wise investments and smart moves for your family's financial security?

    As your family's fiscal watch dog, keep an eye on this column for money-smart ideas from the Chief Financial Officer of Florida, Alex Sink.

    Idea: Enroll uninsured children in Florida KidCare

    Florida KidCare is the state’s children’s health insurance program for uninsured children under age 19, including four different programs: MediKids, Healthy Kids, Children's Medical Services and Medicaid.

    When application is made for the insurance, Florida KidCare will check which program the child may be eligible for based on age and family income. Some of the services Florida KidCare covers are:

    • Doctor visits
    • Check-ups and shots
    • Hospital
    • Surgery
    • Prescriptions
    • Emergencies
    • Vision and hearing
    • Dental
    • Mental health

    There is no charge for Medicaid for children (KidCare Medicaid). For other Florida KidCare programs, monthly premiums depend on the household’s size and income. Most families pay $15 or $20 a month. Grandchildren who live with grandparents may be eligible for Florida KidCare.

    If you applied for Florida KidCare before, call 1-888-540-5437 to update your information by telephone, apply online or print an application and instructions.


    The designation of Florida City Government Week, October 15 through 21, 2008,
    provides an appropriate occasion for Floridians to recognize the significant role played by city government in the daily lives of all citizens by offering an opportunity to inform Florida citizens that through their involvement, they can shape and influence local, state and national government sectors. The week also serves to recognize all municipal employees and officials for their dedication and commitment to local governments and urge all Floridians to join in this recognition of excellence and public service.


    Special Agent Ellen Wilcox, in recognition of her devotion to duty, many accomplishments and exemplary service, was honored by FDLE as the 2007 FDLE Special Agent of the Year. Promoted to Special Agent in July, 1981, Wilcox regularly works with law enforcement agencies, regulatory agencies and industry organizations to identify strategies to combat mortgage fraud, is a member of several professional organizations such as the Association of Certified Fraud Examiners, and is a nationally-recognized expert in the field of mortgage fraud. She is recognized for her work as a case agent of a complex mortgage fraud investigation impacting Florida, as well as the nation, involving both brokers and lenders responsible for almost 200 fraudulent loans worth nearly $18 million.


    FDLE Crime Laboratory Analyst Leigh Clark, in recognition of her devotion to duty, many accomplishments and exemplary service, was honored as the 2007 FDLE Forensic Scientist of the Year for her extraordinary contributions to the protection of the citizens and visitors of the State of Florida.

    FDLE Crime Laboratory Analyst Leigh Clark volunteered to be the principal instructor of four Crime Lab Analyst Trainees and four Forensic Technologists and the new Biology/DNA section is now handling a large caseload which has assisted in cutting the state’s DNA backlog. The quality and comprehensiveness of the training provided to the Ft. Myers Regional Laboratory Biology/DNA section members was noted by inspectors as part of the accreditation of the lab, thanks to Leigh Clark.


    Rosa Gomez, in recognition of her devotion to duty, many accomplishments and exemplary service, was honored by FDLE as the 2007 Commissioner’s Award winner. Mrs. Gomez was appointed to her position in the department in December 2002, and since then has been an exemplary public servant, manning the front desk in the Headquarters building rotunda, requiring her to provide excellent customer service to visitors and telephone callers and provide the first-line of building security. She has received numerous accolades for her pleasant demeanor and hospitality, demonstrated a continued commitment to duty, and provided enthusiastic assistance whenever requested. Mrs. Gomez has consistently exemplified FDLE’s values of Service, Integrity, Respect and Quality through her actions.


    Nims was one of 25 Leon County schools that received more than $1.8 million for either earning an A or improving at least one letter grade on last year's FCAT test.  Through grit and  hard work, Nims was able to pull itself up from an F to a C.


    Energy tips  for Florida families - these actions represent ways to behave kindly toward Mother Earth, AND save money as well as energy.

    Presented by CFO Alex Sink's science advisor Meg Lowman, Ph.D., on the faculty at New College of Florida. Dr. Lowman has written numerous award-winning books and is an expert on the rain forests of the world.


    Did you know that 50 percent of the potable water used in Florida is devoted to watering lawns and other landscapes? Florida is facing a serious water shortage as more people come to live in the state. You can reduce your water use if you convert your water-loving lawn into a Florida friendly landscape. This practice is called xeriscape. Although the word comes from two Greek words, today it has come to mean "water conservation through creative landscaping."

    The fundamentals of xeriscape are easy to follow and implement. While the project can be as comprehensive as overhauling your entire lawn, it can be as simple as changing the plants you already use to include the beautiful native plants of your area. It is important to first identify the planting zone you live in - North, Central or South Florida.

    Then you can identify the Florida-friendly plants, including Florida native plants, that will work in your yard or landscape design. Nearly 380 trees, palms, shrubs, flowers, groundcovers, grasses and vines are recommended by University of Florida/IFAS horticulture experts and are identified in the Florida-friendly plant database. The plants  included in the database are available at nurseries throughout Florida.

    When you buy new plants, choose ones that don’t require much water. Instead of traditional fertilizers, consider using compost, manure or leaf mold. Mulch areas where you have planted to reduce evaporation and keep the soil cool. Also you might consider a sprinkler system that includes an automatic irrigation/drip system to save water.


    A Leon County Circuit Court judge late Monday ordered Tampa-based MD Medicare Choice (MDMC), a Medicare Advantage plan with more than 16,000 members in 23 Florida counties, placed into receivership for the purpose of liquidation. The Department of Financial Services (DFS) was named receiver, effective at 11:59 p.m. tonight, and will work closely with the Centers for Medicare and Medicaid Services (CMS) and Humana, which will provide replacement coverage effective Wednesday, October 1.

    Judge P. Kevin Davey ordered the receivership after reviewing financial records showing that MDMC is financially insolvent and has no cash flow. The company already was under administrative supervision with the Office of Insurance Regulation, but fell into further financial hardship last week when its access to $27 million in reserves, invested in The Primary Fund of Reserve Management Corp., was frozen by the Securities and Exchange Commission.

    “Our highest priority is to work with the appropriate agencies to ensure a smooth transition for policyholders,” said Florida Chief Financial Officer Alex Sink, who oversees DFS.

    As a result of the court order, CMS is terminating MDMC’s Medicare Advantage contract, and the CMS Medicare Advantage Prescription Drug contract with MDMC will be cancelled at 11:59 p.m. tonight, when policyholders will be switched to Humana policies that provide similar benefits. For information about Humana benefits, beneficiaries should call 1-800-758-4806 (TTY, please call 1-800-833-3301). For information about the receivership, call 1-800-882-3054 or visit http://www.myfloridacfo.com/Receiver/.

    MDMC has policyholders in Alachua, Brevard, Broward, Charlotte, Miami-Dade, Duval, Escambia, Hernando, Hillsborough, Lake, Lee, Manatee, Marion, Orange, Osceola, Palm Beach, Pasco, Pinellas, Polk, Santa Rosa, Sarasota, Seminole, and Volusia counties.

    In addition to the replacement coverage with Humana, members also have a special enrollment period if they wish to choose another plan before the end of 2008.


    The National Association of Insurance Commissioners (NAIC) suggests that you review your life insurance policies to determine if your coverage is still appropriate for your situation.

    The Basics

    Life insurance helps secure your family’s financial future in the event of the death of you and/or your spouse. It also helps ensure that the estate that you’ve worked to build will be allocated to the beneficiaries you have chosen.

    When purchasing life insurance, consider the financial responsibilities that your family will immediately inherit such as a mortgage or car loan. In addition, you’ll want to consider long-term goals such as your spouse’s retirement or your children’s education. If you decide that you need more coverage, determine whether you need term life insurance or a cash value policy.

    Term insurance generally has lower premiums in the early years, but does not build up a cash value you can access. Cash value policies come in the form of whole life, universal life or variable life insurance. It’s important to know which type of policy you own, and how the benefits are paid if something happens to you and/or your spouse.

    If you have questions about your current coverage, or about the type of policy to best fit your situation, contact your life insurance agent or the Florida Department of Financial Services at http://www.MyFloridaCFO.com/.

    Stop. Call. Confirm.

    Before consulting an agent or purchasing a life insurance policy, make sure the agent and company are licensed to sell insurance in your state. To check, call your the Florida Department of Financial Services 1-877-MY-FL-CFO (877-693-5236) or visit http://www.MyFloridaCFO.com/.

    What to Review

    As your life situation changes through the years, so do your insurance needs. A regular review of your life insurance coverage is important. To begin your review, read your policy carefully. Look for answers to these questions:

    · Do premiums or benefits vary from year to year?

    · How much do the benefits build up in the policy?

    · What part of the premiums or benefits is not guaranteed?

    · What is the effect of interest on money paid and received at different times on the policy?

    · In what situations and through what procedures can cash values be accessed?

    · Can the policy be converted into another form of insurance or annuity?

    When reviewing your policy, make sure the benefit covers your current needs. Changes — such as a birth, divorce, remarriage or even a new mortgage or job — are indicators that you might need to make changes to your life insurance policy.

    In the case of the birth of a child or a new marriage, you might want to increase your death benefit. Check with your agent to see if your insurance company requires a physical exam before increasing your coverage levels.

    Alternatively, your life changes might allow you to lower your life insurance coverage and premiums. The mortgage might be paid, you might have retired or your children might have completed college. At this stage of life, your life insurance company might be able to offer “conversion privileges” from your current term life insurance policy to a new whole life insurance policy. You might also be able to expand your death benefits so they can be used while you are still living. Ask your insurance agent or company about these options.


    One of the most important decisions to make regarding life insurance is to whom to leave your benefits. That’s why it’s important to review your beneficiaries every few years.

    There are two types of beneficiaries for your life insurance policy. Primary beneficiaries receive a portion or the whole policy benefit if they outlive you. Contingent beneficiaries (also referred to as secondary beneficiaries) receive proceeds if a primary beneficiary dies before you. If you name more than one beneficiary in either category, you should include the percentages of the death benefit proceeds that you would like each individual to receive, or stipulate “equal shares” to each.

    You can name your spouse, domestic partner, children, grandchildren, relatives, friends, charities, businesses, trusts or your estate as your beneficiary. Naming individuals rather than an estate allows those individuals to receive the proceeds immediately and, generally, without taxation. As part of your estate, however, proceeds typically will go through probate with the rest of your assets and might be subject to estate taxes. Your will does not affect the distribution of your life insurance proceeds unless the sum goes to your estate to be divided according to the will. Check with your insurance agent, tax advisor or family lawyer if you have questions about how the life insurance benefit will be paid following your death.

    Tips for naming beneficiaries:

    · Spouse: You should use the individual’s legal name, as in “John Wayne Johnson,” rather than “husband.” In case of a second marriage, “husband” could be interpreted either as the husband when you bought the policy or the current husband. When reviewing your policy, think about who will be in the best position to make financial and other important family decisions upon your death.

    · Children: You should qualify a specific class of individuals, such as “my children,” by the use of either “per stirpes” (according to the family tree or branch) or “per capita” (per head). A designation of “my children per stirpes” means that if your two sons have two children each, and your oldest son dies before you do, his children will each receive his share of your benefits. A designation of “my children per capita” means that the living son, in the case above, would receive the full amount and your oldest son’s family would receive none of the benefit.

    · Minor Children: Most insurance companies will not pay life insurance proceeds to minors. If any of your children are minors, one of your options is to designate a trust as the beneficiary, with an individual or institution to use the funds for the welfare of your children. You will need to set up your trust(s) carefully, with your family attorney or tax advisor’s assistance. Another option is to designate two individuals whom you trust as beneficiaries, who will make joint decisions about the care and welfare of your children. As your children mature, you should update your beneficiaries accordingly.

    If you are the owner of your life insurance policy, in most cases you can change beneficiaries at any time by completing a formal, written notification to your insurance company. During a regular review of your life insurance policy, take into consideration changes in your life, relationships and family — such as births, adoptions, marriages, remarriages, divorces and deaths — when updating your beneficiaries. Your family attorney, tax advisor or insurance agent can help you use specific wording to avoid unintended consequences.

    Locating the Company that Services Your Life Insurance Policy

    It’s possible the company that issued your life insurance policy has changed its name, merged with another company or sold your policy to another insurance company. You should have been notified of this change at the time it happened. For this reason, it’s important to make sure your mailing address is always current on your policy. However, if you did not receive an updated policy, you will need to locate the life insurer that services and pays claims on your policy.

    You will need this information to search for the new company information:

    · Make sure you have the entire legal name of the insurance company. This should be listed on the policy or binder.

    · Check to see if there is a mailing address and phone number on the policy or binder.

    · Determine in what state the policy was purchased and when the policy was purchased.

    Once you have this information, contact the state insurance department in which the insurance company was located at the time the policy was issued. Many times, the state insurance department will be able to track name changes and/or mergers that impacted the insurance company.

    To find contact information for your state insurance department, visit www.naic.org/state_web_map.htm.

    You can also use the Life Insurance Company Location System, https://external-apps.naic.org/orphanedpolicy/. Using the information you have gathered, answer five questions and the system will provide a list of suggested state insurance department contacts that might be able to assist with your search.

    More Information

    To learn more about your insurance needs throughout your life, go to www.InsureUonline.org.

    Get more information about life insurance by downloading the NAIC’s free “Life Insurance Buyer’s Guide” at www.naic.org/consumer_home.htm.

    Consumer Services Helpline 1-877-MY-FL-CFO

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