Florida Chief Financial Officer Jeff Atwater’s ‘The Pulse’ Newsletter: August 2011 Issue
Sep 1, 2011
The August 2011 issue of Florida Chief Financial Officer Jeff Atwater’s “The Pulse” Newsletter is reprinted below, in addition to his updated “Compliance Corner” feature.
To view the complete newsletter in PDF format, which includes “Case Notes” on various recent enforcement actions, click here.
Should you have any questions or comments, please contact Colodny Fass.
Above: Florida Chief Financial Officer Jeff Atwater
Welcome to The Pulse!
Dear Friends,
We’re now in the peak of hurricane season and it’s been predicted to be an above-normal season this year, with 12 to 18 named storms and six to 10 hurricanes. We saw Hurricane Irene make a close sweep along Florida’s shores, which is a vivid reminder to make sure Floridians have a financial plan in place to protect their family, home and business. The Department of Financial Services is a valuable resource for you and your customers. You can go to our Disaster Preparedness website to download various tools and learn more.
Below are some good tips that can help you, your business and your customers prepare for an approaching storm:
- Withdraw enough money for three to five days, as power outages and closures can limit your access.
- Make sure prescriptions for all family members are filled.
- Take important financial papers with you in a waterproof container if you must evacuate, including insurance papers for home, auto, business, passports, birth certificates, mortgage and other important documents.
- Gather copies of your household and business inventory and other documentation, including photos. This will assist the adjuster in assessing the value of any destroyed property.
- Write down the names, addresses and claims-reporting telephone numbers of your home, business, and auto insurance companies. Make sure you have access to it if you are forced to evacuate your home or business.
Please be sure to share your thoughts via our online survey or by emailing me.
Thank you,
Jeff Atwater
Upcoming Changes to the MyProfile System
After receiving additional feedback from our licensee population and others in the industry, we want to issue one more reminder about the upcoming changes to MyProfile that will go live in the near future. We will email all licensees detailed information prior to implementation of the changes with guidance on creating their new account. For this reason, we are reminding you that it is essential to have your correct email address on file with us now through your MyProfile account so you do not miss this upcoming important communication (in addition to the fact it is legally required per s. 626.551, F.S.). If you also have an agency license, don’t forget to log in to your agency’s MyProfile account and update it as well. The major enhancement allows you to create your own username and password; eliminating the need for logging in with a social security number or federal employer identification number. You will only need to enter that information when you create your new username and password. At the same time, you will also set up security questions and answers to easily retrieve your password in the event you should forget it. Another enhancement stemming from feedback is a simplified license application, reducing the need to go through multiple screens, and allowing the applicant to review their answers to the questions on the application all at one time.
The new system will also allow you to use any internet browser you wish, including your mobile device. This means you can use Firefox, Safari, Chrome, or any of the other browsers in use today – and not limited to just Internet Explorer.
CFO Atwater’s Fraud Team Busts Accident Clinic Operator For Filing Claims on Behalf of a Dead Doctor
Florida Chief Financial Officer Jeff Atwater announced the Division of Insurance Fraud on Wednesday arrested Hialeah accident clinic operator Daysi Puigros on more than 30 felony counts stemming from allegations that she filed more than $200,000 in fraudulent Personal Injury Protection (PIP) claims using the name of a deceased doctor.
Click here to read the press release >>
CFO Atwater Announces Arrest of Tampa Man in an Accident Clinic Money Structuring Scheme
Florida Chief Financial Officer Jeff Atwater announced the arrest of Hillsborough County resident, Juan C. Borras, 55, an employee of American Best Clinic, LLC, on charges of intentionally structuring large cash withdrawals to avoid reporting or registration required by Florida law. This tactic has been linked as a common practice for automobile accident clinics suspected of Personal Injury Protection (PIP) fraud.
Click here to read the press release >>
CFO Jeff Atwater Announces Arrest of Central Florida Contractor in Sinkhole Repair Billing Scam
Florida Chief Financial Officer Jeff Atwater announced the arrest of an Oviedo business owner for overbilling State Farm Insurance Company for fraudulent sinkhole claim repairs. Michael Hodge, owner of A&M Contracting Company, is charged with multiple counts of racketeering and insurance fraud involving billings for materials he never used to repair properties in Orange, Seminole and Volusia counties.
Click here to read the press release >>
Insurance Consumer Advocate Creates PIP Working Group
Florida’s Insurance Consumer Advocate, Robin Westcott, today announced the creation of a working group to discuss and develop policy ideas to combat the skyrocketing costs of car insurance. According to Westcott, Personal Injury Protection (PIP) fraud is one of the biggest cost drivers for Florida families who are required by law to purchase PIP insurance coverage.
Click here to read the press release >>
CFO Atwater Names Citizens Property Insurance Corporation (Citizens) Board Appointees
Florida Chief Financial Officer Jeff Atwater announced the appointments of Nancy Baily and Rob Wallace to the Board of Governors for Citizens Property Insurance Corporation.
Click here to read the press release >>
The Florida Office of Insurance Regulation (Office) Announces Citizens Public Hearing
The Florida Office of Insurance Regulation (Office) will conduct a public hearing on September 13, 2011 to discuss Citizens’ proposed rate increases for the Coastal Accounts, formally known as the High Risk Accounts (HRA), and the Personal Lines Accounts (PLA). These accounts include, but are not limited to: homeowners and dwelling/fire lines of business.
Click here to read the media advisory >>
Office’s Statement on Citizens Rate Filing
The Florida Office of Insurance Regulation (Office) has received the first of several annual rate filings from Citizens Property Insurance Corporation (Citizens) – most notably the Homeowners filings related to the Coastal Account formally known as the High Risk Account (HRA), and the Personal Lines Account (PLA). The Office will carefully review the filings to ensure they are complete prior to beginning the rate review process. The rate review process will evaluate whether the rates are actuarially justified and that they are consistent with Florida law. Rate filings cannot seek rate increases to recoup past losses, but must reflect actuarially predicated future losses. Due to the potential impact of this filing, the Office will conduct a public hearing and will provide such details when available.
Click here to read the press release >>
CFO Atwater Calls for Review of Check Cashing Services Aiding in Workers’ Comp Fraud
At a recent Cabinet meeting, Florida Chief Financial Officer Jeff Atwater announced the creation of a working group to review the practices of certain bad actors in the check cashing services industry aiding in workers’ compensation premium fraud, which is putting pressure on rates and crippling the business community. The working group will include representatives from the CFO’s Division of Insurance Fraud as well as the Office of Financial Regulation, the Attorney General’s Office, and the construction and money services industries.
Click here to read the press release >>
Governor and Cabinet Appoint Tom Grady as Commissioner of Financial Regulation
Governor Rick Scott and the Florida Cabinet, seated as the Financial Services Commission, appointed Tom Grady of Naples as Commissioner of the Florida Office of Financial Regulation (OFR). The OFR protects the citizens of Florida by carrying out the state’s banking, securities and financial laws in an efficient and effective manner and providing business regulation that promotes Florida’s economic development.
Click here to read the press release >>
Make Sure You Don’t Miss Important Information From Us
Add FloridaAgentLicensing@MyFloridaCFO.com to your email software’s Trusted or Safe Senders List to ensure you are able to receive all notifications from us. Licensees who have a valid e-mail address on file with us, as required by law, receive important email notifications when something that affects your application, license, continuing education, or appointment(s) occurs. Additionally, we can keep you informed with warnings regarding new schemes and scams being marketed to licensees. You can update your contact information through your MyProfile account. We want to keep you informed in a timely manner of pertinent information important to you. You are still required to abide by the Florida Insurance Code regardless of whether you read the information we provide or attempt to provide.
FMAP: Florida’s Hidden Gold Mine
That’s how some agents refer to the Florida Market Assistance Plan (FMAP).
FMAP is a free referral service designed to match consumers with agents and insurance companies writing new policies in Florida. The goal of this service is to assist consumers in obtaining property and casualty insurance coverage from authorized insurers in the private market.
FMAP helps agents and insurance companies identify potential clients via the following programs:
- An online consumer referral program
- Commercial referrals
- Policy data reports
The online consumer referral program consists of an online database that matches people who are seeking property insurance with participating agents who may be able to write a policy outside of Citizens. Participating agents and insurers receive a nightly email notice from FMAP, alerting them to potential clients seeking coverage that matches their eligible policy criteria. Agents also can search the database at any time to identify potential customers.
The commercial referral program provides agent contact information to consumers seeking coverage for commercial residential or non-residential, marine or aircraft property insurance.
The policy data reports allow agents to review existing Citizens policies to identify policyholders with risks that may be eligible for placement with an authorized private insurer. In order to access these reports, agents must first complete a Policy Data Confidentiality Agreement.
There are two important restrictions of which agents interested in participating in FMAP should be aware: Participating agents are prohibited from using FMAP information to write a policy with Citizens; and cannot share FMAP information with anyone else, including other agents, for the purpose of writing a policy with Citizens.
To learn more about FMAP, register or access the confidentiality agreement, call 1.800.524.9023 or log on to www.FMAP.org.
The Division of Consumer Services Helps Agents and Adjusters, Too!
The Department of Financial Services’ Division of Consumer Services (Consumer Services) is available to answer questions and assist consumers in all lines of insurance, including homeowner’s, health, auto, life and warranties. Consumer Services handles an average of 20,000 calls a month and can help agents and adjusters better serve their customers.
An online Insurance Library, consumer guides, and many other resources are available to help consumers make informed decisions, and these resources are available for agents, adjusters, and agencies to provide to customers.
Consumer Services has helped recover more than $13.5 million in claim payments and premium refunds so far this year for Florida consumers. The following two cases are examples where Consumer Services assisted consumers in getting claim payments:
- A policyholder in Hillsborough County had coverage under a group health plan through their employer. In December 2010, the consumer was prescribed a drug for his cancer treatment, and for months the consumer’s wife went to pick up the prescription and only paid a $40 co-pay. In May 2011, his HMO plan renewed. When his wife went to pick up the prescription, she was shocked to be charged $2,500. The consumer contacted Consumer Services for assistance, who then communicated with the HMO and learned that in April 2010 the company had notified the employer of changes in their drug formulary that moved some drugs to a co-insurance basis. The employees had not been made aware of the change when their plan was renewed. After Consumer Services discussed the consumer’s situation with the HMO, they implemented changes to be sure employers are clearly made aware of major changes such as this so they can properly advise their employees. The HMO is implementing changes on a national scale to help make sure a situation such as this does not occur again. They are also placing a cap on the amount an insured will have to pay out of pocket if they need a Tier 3 drug that is on a co-insurance benefit. The family only had to pay for the one month but has not had to pay it since.
- A consumer in Pinellas County contacted Consumer Services after his 1990 Ford Aerostar was considered a total loss by his insurance company. He thought the company’s offer of $1,730.24 was not a fair value for his vehicle and felt the retail value was closer to $4,109. Feeling he could get the vehicle repaired for less than $4,109, he thought the vehicle should not be considered a total loss but should be repaired. A Consumer Services specialist contacted the company while the consumer provided copies of several estimates including the NADA value of his vehicle. Once all of the documentation was supplied, the company agreed to adjust the retail value of his vehicle to $2,772. Since the repair estimate was $2,211.67, the company agreed to repair his vehicle for that cost.
To ask a question, request assistance, or file a complaint, please visit www.MyFloridaCFO.com/Consumers or call 1-877-MY-FL-CFO or 850-413-3089.
CFO Jeff Atwater Offers Workshops for Women’s Small Business Month
In today’s challenging economy, business owners need to do more with less while expecting greater outcomes from their company finances. CFO Jeff Atwater is focusing on these real issues with a series of free small business workshops every Friday in October, which is Women’s Small Business Month.
Agents and adjusters will have the opportunity to learn alongside other local business owners how to improve an existing small business or launch one. These “Financial Friday” workshops will be offered in Jacksonville, Orlando, Tampa, and Fort Lauderdale and will address how to be a successful entrepreneur, how to avoid common money mistakes, and how to certify a small business for women and minority contracts.
CFO Atwater is sponsoring these workshops to have a positive impact on the financial success of Florida’s small businesses, which are the backbone of our state’s economy.
Haven’t started your business yet? Not a female business owner? That’s OK. Any small business owner or entrepreneur is encouraged to participate.
All workshops are from 8 a.m. to 12 p.m. Event dates and locations are:
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Orlando – Friday, October 7, 2011 |
Ft. Lauderdale – Friday, October 14, 2011 |
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Tampa – Friday, October 21, 2011 |
Jacksonville – Friday, October 27, 2011 |
For registration information, visit www.MyFloridaCFO.com/Consumers.
Compliance Corner
We continue to see a pattern of noncompliance in the areas noted below. This section has been created to assist you in keeping your insurance business in compliance. The items are intended as reminders only and are not necessarily the exact text of the Florida Statutes or Florida Administrative Code. The legal cites have been provided for your further reference.
Reporting of Actions – Administrative, Criminal and Other
Subsection 626.451(7), F.S., requires each licensee to advise the department within 30 days after having been found guilty of or having pleaded guilty or nolo contendere to a felony or a crime punishable by imprisonment of 1 year or more under the laws of the United States, any state of the United States, or any other country, without regard to whether a judgment of conviction has been entered by the court having jurisdiction of such cases.
Section 626.536, F.S., requires each agent and insurance agency to submit to the department a copy of the order, consent to order, or other relevant legal documents within 30 days after the final disposition of any administrative action taken against the agent or insurance agency by a governmental agency in this or any other state or jurisdiction relating to the business of insurance, the sale of securities, or activity involving fraud, dishonesty, trustworthiness, or breach of a fiduciary duty.
Subsection 626.6215(6), F.S., requires that agencies and their officers to advise the department within 30 days after an individual licensee’s violation is known or should have been known by one or more of the partners, officers, or managers acting on behalf of the agency. Actions taken against a license or registration for violations of state or federal securities or commodities law, such as an action taken by FINRA, are an example. Failure to do so could result in administrative action against the license(s) of the agency and/or majority owner, officer, partner, manager, director, or other person who manages or controls the insurance agency.
Actions may be reported via the NIPR’s Attachment Warehouse, or by mailing the appropriate documents to us at:
Florida Department of Financial Services
Division of Agent and Agency Services
Bureau of Licensing
200 E. Gaines Street, Room 419
Tallahassee, FL 32399-0319
[See 626.451(7), 626.536, 626.621(13), and 626.6215(6), Florida Statutes]
In-House Claims Adjuster Licensing Requirement
Regardless if an adjuster is in-house or not, they must be licensed and appointed as such prior to adjusting any claim. The only exceptions to this are:
- Attorneys that are duly licensed to practice law and in good standing with the Florida Bar.
- An executive officer of any insurer, or a regularly salaried employee of an insurer handling claims with respect to health insurance, or the duly designated attorney or agent authorized and acting for subscribers to reciprocal insurers, from adjusting any claim loss or damage under any insurance contract of such insurer. However, if there is a problem that is determined to be the result of misconduct of the employee, the insurer could be held responsible.
- A licensed and appointed insurance agent, if authorized to do so by the appointing insurer.
All adjusters and the company they represent should govern themselves accordingly with regard to adjuster licensing requirements. Any adjuster found not in compliance is subject to administrative and/or criminal action, in addition to the insurance company being referred for action against its certificate of authority by the Florida Office of Insurance Regulation.
[See 626.112(3), 626.860, and 626.861, Florida Statutes]
Non-residents and County Appointments
All agents and adjusters must be appointed in order to transact insurance or adjust claims in Florida. This applies to non-residents regardless of whether their home state requires an appointment or not. Non-resident agents also need a county appointment if they are physically coming to that county to engage in insurance activities.
[See 624.505 and 626.112(1)(a), Florida Statutes]
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