Florida Cabinet Meeting Report: August 12
Aug 12, 2008
The Florida Cabinet met on August 12, 2008 and considered various governmental agency agendas.
During the meeting, Florida Office of Financial Regulation (“OFR”) Commissioner Don Saxon announced he would resign Sept. 30 in the midst of an investigation into reports that his agency licensed thousands of mortgage brokers with criminal backgrounds, including racketeering and money-laundering.
Saxon announced his intention to resign at this morning’s Cabinet meeting after Chief Financial Officer Alex Sink made a motion to force his resignation and the panel approved it.
“We’ve seen very passive management… We’ve had real failures as identified in a damning report by the grand jury,” Sink said as Saxon stood at the podium. “The grand jury said there are billions of dollars being filtered — illegal money, dirty tainted money — that are being filtered through some of the money transaction businesses.”
The Cabinet also approved emergency rules that will prohibit felons who have committed crimes directly related to mortgage brokering, such as money-laundering, extortion and bribery, from ever getting licensed.
Florida Office of Insurance Regulation (“OIR”)
Florida Insurance Commissioner Kevin McCarty presented the OIR agenda to the Cabinet, which, acting as the Florida Financial Services Commission (“FSC”), approved all OIR agenda items except for Item 5, which was withdrawn from consideration.
To view the complete OIR agenda, click here.
Item 1: Request for Approval to Repeal Rule 69P-2.001, 002; Commercial Property Joint Underwriting Association
During the January 2007 Special Session, the Legislature passed House Bill 1A, which deactivated the Property and Casualty Joint Underwriting Association (“PCJUA”). In accordance with this legislation, all policies of the PCJUA were assumed by Citizens Property Insurance Corporation. Consequently, this Rule, which is the Plan of Operation of the PCJUA, needs to be repealed.
Item 2: Request for Approval to Adopt proposed Rule 69O-149.0025,.005,.006; Health Rate Filing Standards
Florida law states that the FSC may establish Rule procedures to be used in ascertaining the reasonableness of benefits in relation to premium rates. These Rules establish such procedures and are being amended to clarify the standards for credibility in using company experience as support for rate filings.
Item 3: Request for Approval to Repeal Rule 69O-220.001,.051,.201; Adjusters
When the Department of Insurance (“DOI”) was reorganized into the OIR and the Department of Financial Services (“DFS”), the regulation of insurance adjusters was assigned to DFS. However, the rules regulating adjusters were assigned to both agencies. The OIR does not have the statutory authority to regulate adjusters; therefore it recommended that this Rule chapter should be repealed. DFS actively regulates adjusters and has rules implementing the applicable statutes.
Item 4: Request for Approval to Adopt Proposed Rule 69O-149.003(2)(b)4.a.; Medicare Supplement Rate Collection
In 2007, the Florida Legislature appropriated funds to the OIR for the purpose of establishing a system to collect Medicare Supplement rates and publish a premium search and comparison tool on the OIR Web site. This tool allows consumers to shop and compare, Medicare Supplement rates online. This Rule change requires insurers to submit filings through the new system, called Medigap, which will enable the search and comparison tool to be functional.
Item 5 (withdrawn from consideration): Request for Approval to Adopt Proposed Rule 69O-157.301, .302, .303, .304; Long-Term Care, Rates 2007
Florida law provides that rates charged to an insured for renewal of an existing long-term care insurance policy may not exceed the price the insurer charges for newly-issued polices. The problem addressed by this statute relates to “closed blocks” of business, which occur when a particular approved policy is no longer being sold to new customers.
There will be a group of insureds who continue to be renewed but no new customers will be sold that policy. This statute protects those insureds in that closed block by precluding an insurer from having higher renewal rates than its rates for new business. This new Rule implements this statute by defining terms used in the statute and explaining how calculations are to be done so the insurer can be sure it is in compliance.
Item 6: Request for Approval for Publication of Proposed Rule 69O-170.0144; Hurricane Loss Projection Model; Fee Schedule
In order to implement Florida law, this Rule will establish a fee schedule for use of the Florida Public Hurricane Loss Projection Model by residential property insurers.
Should you have any questions or comments, please do not hesitate to contact Colodny Fass.
Media coverage regarding this morning’s Florida Cabinet meeting is below. To view a complete story, click on a headline below:
State’s top mortgage regulator, Don Saxon, to resign
Commissioner Don Saxon, under severe criticism for allowing bank robbers and racketeers to sell loans in Florida, resigned Tuesday morning during a Cabinet meeting in Tallahassee.
Crist, Fla. Cabinet approve mortgage rules
Criminals won’t be able to work in Florida’s mortgage industry under emergency rules adopted by Gov. Charlie Crist and the Cabinet.
Crist and the Cabinet also accepted the resignation of Don Saxon, who heads the Office of Financial Regulation.
State agency’s chief quits after probe of criminals licensed as mortgage brokers
Office of Financial Regulation chief Don Saxon announced he would resign Sept. 30 in the midst of an investigation into reports that his agency licensed thousands of mortgage brokers with criminal backgrounds, including racketeering and money-laundering.
Florida’s top financial regulator to retire
Don Saxon announced his retirement as the commissioner of the Florida Office of Financial Regulation.
After overseeing the state agency overseeing banking and securities for five years, Saxon is to step down on Sept. 30, according to a press release from the office.