Department of Financial Services re SIU Description 6/26/06

We have received some inquiries from several people regarding the applicability of the proposed Anti-Fraud Rules (Chapter 69D-2) issued by the Department of Financial Services (DFS). For your reference, I have attached the proposed Rules and the guidelines proposed by DFS for anti-fraud plans and SIU descriptions pursuant to these proposed Rules.

The deadline set forth in the proposed Rules for submission of appropriate anti-fraud documentation is July 1, 2006. However, please note that the Rules have been subject to an administrative challenge and have never been finally adopted. The proposed Rules are currently under review in connection with the administrative proceeding that is pending. If DFS decides to proceed with adoption of Rules on this subject, it is likely that changes in the proposed Rules will be necessary. Accordingly, DFS would be required to issue and publish a Notice of Change of the proposed Rules and additional procedures will be necessary before the Rules become final.

At this point, we have been advised by DFS that the deadline set forth in the proposed Rules of July 1, 2006 is not in effect and does not need to be complied with. Additional communications from DFS will be forthcoming if it decides to proceed with promulgation of Rules on this subject. We will continue to monitor this matter and provide updates as we receive appropriate information. In the meantime, you should periodically review the DFS website at: www.fldfs.com/fraud for updates.

Please note that this information is for general purposes only, and any specific questions or issues should be individually addressed with legal counsel. Should you have any questions or comments, please do not hesitate to contact this office.

Regards,

Fred E. Karlinsky