ALEX SINK'S WEEKLY NEWSLETTER
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
CFO SINK CREATES ‘SAFEGUARD OUR SENIORS’ TASK FORCE
Sink assembles diverse group to tackle solutions for protecting senior
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
“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
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
Lieutenant Glen Hughes, Division of Insurance Fraud, Department of
CFO SINK TO MEET WITH SENIOR VICTIMS OF
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
STILL TIME TO FILE FOR YOUR
ECONOMIC STIMULUS PAYMENT
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
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.
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 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
- Vision and hearing
- 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
If you applied for Florida KidCare
before, call 1-888-540-5437 to update your information by
apply online or
print an application and instructions.
CABINET RECOGNIZES FLORIDA CITY GOVERNMENT WEEK
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 -
2007 FDLE SPECIAL AGENT OF THE YEAR
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.
CRIME LABORATORY ANALYST
LEIGH CLARK IS 2007 FDLE FORENSIC SCIENTIST OF THE YEAR
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.
STAFF ASSISTANT ROSA GOMEZ -
2007 FDLE COMMISSIONER’S AWARD WINNER 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
MIDDLE SCHOOL RECOGNIZED BY CABINET AND GOVERNORNims 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
SAVING ENERGY, SAVING MONEY
Energy tips for Florida families - these
actions represent ways to behave kindly toward Mother Earth, AND save money
as well as energy.
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
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
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.
LEON COUNTY JUDGE ORDERS MD MEDICARE CHOICE INTO
RECEIVERSHIP FOR PURPOSES OF LIQUIDATION
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.
LIFE INSURANCE: COVERAGE CAN SECURE YOUR
Association of Insurance Commissioners (NAIC) suggests that
you review your life insurance policies to determine if your
coverage is still appropriate for your situation.
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
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
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
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
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
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
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
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
You will need this information to search for the new company
· 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
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
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