Cracking down on those who abuse consumers is among the items on the legislative agenda of Florida's CFO.
By JEFF HARRINGTON
Published March 2, 2004
ST. PETERSBURG - If Tom Gallagher, Florida's chief financial officer, has his way, a crack-down on consumer rip-offs will be a key theme of the legislative session kicking off today.
Gallagher, who oversees the state's insurance and banking industries as part of his job, came to St. Petersburg on Monday to tout a legislative agenda that attacks abusive practices by debt collectors, annuity salesmen and guardians of private financial and medical records.
Against the backdrop of the Sunshine Senior Center in St. Petersburg, Gallagher called for a law to curb the sale of unnecessary and financially draining annuities to senior citizens.
An annuity is an insurance contract that offers guaranteed payments over a period of time. Although annuities have been effectively used as an investment tool, they often are not suitable for elderly investors who need greater access to their money. Hundreds complained to the state Department of Financial Services that they were talked into liquidatings CDs and savings or trading annuities in for new ones that were more restrictive.
"Some of our state's seniors are being preyed upon by agents who are motivated by commission payments, not consideration of a senior's financial circumstances," said Gallagher, who also met with the editorial board of the St. Petersburg Times.
The proposed legislation, sponsored by Rep. Dave Murzin, R-Pensacola, would require insurance companies and agents to clearly document the basis for selling insurance annuities to anyone over 65.
Among other proposals on Gallagher's agenda:
- A consumer bill of rights that would make it harder for insurance companies to drop paying policyholders. Insurers would have to reinstate policies that were canceled due to non-payment by a mortgage company, and they would not be able to deny coverage to a residence because of a previous owner's water damage losses. Insurance companies also would not be allowed to drop coverage because a claim was filed due to lightning strikes or another "act of God."
- New rules to curb identity theft by compelling financial service companies to properly destroy personal financial and medical information.
- Fines up to $1,000 per violation against abusive debt collectors. Gallagher said his proposal was spurred by a lawsuit against an Illinois company called Capital Acquisitions & Management, accused of badgering debtors to collect payments on debt that had been written off under the Fair Credit Reporting Act.
