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September 2005

State: Florida

Area of Interest: Gallagher Announces Arrest of Miami Man For Selling Worthless Hurricane Insurance

Florida’s Chief Financial Officer Tom Gallagher today announced the arrest of Allen E. Weintraub, 40, of Miami, for selling worthless hurricane insurance to at least 45 consumers. Weintraub set up an unlicensed operation called Global Insurance Group and collected more than $100,000 for non-existent windstorm insurance. Three weeks ago, Gallagher warned Floridians to beware that Global was selling bogus policies. Weintraub was booked into the Miami-Dade County Jail early today on 45 counts of grand theft and 45 counts of transacting insurance activity without a certificate of authorization, in addition to one count of organizing a scheme to defraud. Bond was set at $510,000.

Weintraub’s arrest, at his multi-million dollar home in Golden Beach, follows on the heels of recent action taken against him by the Securities and Exchange Commission which barred him from the securities industry and ordered him to pay more than $1 million in restitution and fines.The Department of Financial Services, Division of Insurance Fraud, investigates various forms of fraud in insurance, including health, life, auto, property and workers' compensation insurance. Anyone with information about this case or another possible fraud scheme should call the department's Anti-Fraud Hotline at 1-800-378-0445. A reward of up to $25,000 may be offered for information leading to a conviction.

Source: State of Florida

State: Florida

Area of Interest: Gallagher Advises Floridians to Designate Emergency Contacts on Cell Phones

Florida’s Chief Financial Officer and State Fire Marshal Tom Gallagher is urging residents to identify emergency contacts on their cell phones.

As State Fire Marshal, Gallagher oversees the State Fire Marshal’s Office and search and rescue functions at Florida’s Emergency Operations Center. He is recommending cell phone users put the acronym ICE, an abbreviation for "in case of emergency," before the names of people they want to be contacted on their behalf in an emergency. The idea was developed by a British paramedic, and the idea is spreading across the nation.

An ICE entry could look like this: “ICE – Ann,” or “ICE – Mom.” Gallagher said you could also designate the order by entering ICE 1, ICE 2 and so on.

This could save paramedics, police and firefighters valuable time trying to figure out which name in a cell phone to call. First responders have reported calling an elderly parent who was not well and should not have received such a call.

Source: State of Florida

State: California

Area of Interest: Insurance Commissioner John Garamendi Announces 26.78 Decrease in Workers Compensation Filed Rates – Says Reforms are Working

Insurance Commissioner John Garamendi announced on Monday that workers’ compensation insurers in the state filed rate reductions averaging -14.6 percent for policies incepting on or after July 1, 2005 bringing the cumulative rate reduction to -26.78 percent since reforms were enacted.

The decreases indicate that employers should see lower workers’ compensation premium bills as workers’ comp claims costs continue to plummet. However, the industry’s premium reductions still lag far behind the cumulative pure premium rate decreases (claims costs) recommended by the Commissioner since the reforms went into effect in 2003 and 2004. Since then he has recommended reductions of -36.5 percent in the pure premium rate, while the industry has made reductions of just -26.78 percent during that same period.

As insurers have implemented the reforms, their loss ratios – the amount they pay for claims compared to premium – has dropped from 87 percent in 2002 to just 41 percent in 2005—an unprecedented reduction in the cost of claims. The intent of the reforms was to release employers from the burden of these costs, said the Commissioner, and insurers must lift that burden.

In addition to the Commissioner’s -36.5 percent cumulative pure premium rate reduction, the Workers' Compensation Insurance Rating Bureau has recommended a further -5.2 percent pure premium rate reduction to take effect on January 1, 2006. The Commissioner will hold a hearing to determine whether to adopt the recommendation on September 16, 2005.

Source: State of California

Area of Interest: OSHA Announces Targeted Inspection Plan for 2005 Agency targets about 4,400 high-hazard worksites

The Occupational Safety and Health Administration announced that its 2005 site-specific targeting (SST) plan will focus on approximately 4,400 high-hazard worksites for unannounced comprehensive inspections over the coming year.

Over the past seven years, OSHA has used a site-specific targeting inspection program based on injury and illness data. This year's program (SST-05) stems from the agency's Data Initiative for 2004, which surveyed approximately 80,000 employers to attain their injury and illness numbers for 2003.

This year's program will initially cover about 4,400 individual worksites on the primary list that reported 12 or more injuries or illnesses resulting in days away from work, restricted work activity, or job transfer for every 100 full-time workers (known as the DART rate). The primary list will also include sites based on a "Days Away from Work Injury and Illness" (DAFWII) rate of 9 or higher (9 or more cases that involve days away from work per 100 full-time employees). Employers not on the primary list who reported DART rates of between 7.0 and 12.0, or DAFWII rates of between 5.0 and 9.0, will be placed on a secondary list for possible inspection. The national incident DART rate in 2003 for private industry was 2.6, while the national incident DAFWII rate was 1.5.

OSHA will again inspect nursing homes and personal care facilities, but only the highest 50% rated establishments will be included on the Primary List. Inspections will focus primarily on ergonomic hazards relating to resident handling; exposure to blood and other potentially infectious materials; exposure to tuberculosis; and slips, trips, and falls.

The agency will include on the primary list some establishments that did not respond to the 2004 data survey.

Source: Occupational Safety and Health Administration

State: West Virginia

Area of Interest: OSHA Fines New Haven Companies Nearly $112,000 For Exposing Workers to Asbestos Hazards

The U.S. Labor Department's Occupational Safety and Health Administration has cited American Electric Power Company, Inc. and its subsidiary Appalachian Power Company for alleged worker safety and health violations involving asbestos at the Phillip Sporn generating plant in New Haven, W.Va., and proposed $110,000 in penalties.

American Electric Power (AEP) is an energy production and distribution company. Appalachian Power Company, one of seven regional utility companies owned by American Electric Power, has electrical generation facilities in Virginia and West Virginia that employ several hundred workers.

OSHA initiated its inspection on Feb. 24, 2005 in response to a complaint alleging that Fluor Maintenance Service, a contractor performing boiler repair services for Appalachian Power Company, exposed its employees to asbestos at the New Haven worksite. The investigation yielded two willful citations, with a penalty of $110,000.

"Appalachian Power Company did not notify Fluor Maintenance Service of the confirmed presence of asbestos despite knowing that the contractor's employees were going to work on the area in question," says Stan Elliott, area director of OSHA's Charleston office. "This was in direct conflict with the company's written asbestos program."

Source: Occupational Safety and Health Administration

State: New York

Area of Interest: Randolph is Appointed to Establish Liquidation Bureau’s Office of the Inspection General

New York State Insurance Superintendent Howard Mills today announced that he has named Randolph Mineo to establish and head the New York Liquidation Bureau’s Office of the Inspector General (OIG). In this new position, Mr. Mineo will be tasked with directing and controlling highly confidential and sensitive investigations and managing the OIG’s efforts to prevent, detect, and report fraud, waste, and abuse in the programs and operations of the New York Liquidation Bureau (NYLB) and the insurance companies placed in rehabilitation or liquidation pursuant to orders issued by the New York State Supreme Court. In his new capacity as the first-ever Inspector General, Mr. Mineo will be responsible for promoting economy, efficiency and effectiveness at the NYLB.

Source: State of New York

State: Florida

Area of Interest: TRG Operators Handed Sentences, Ordered to Report to Prison in October.

More than three years after Florida’s Chief Financial Officer Tom Gallagher ordered TRG Marketing, LLC., to stop selling its bogus health plans here and directed the Department of Financial Services’ insurance fraud detectives to pursue criminal charges against the operators, Floridians left with millions of dollars in unpaid claims have won their day in court.

Carmelo Zanfei and William Paul Crouse, who operated the Indiana-based company, were sentenced to two and four year prison terms respectively, for a scheme that left more than 7,200 people with unpaid medical claims in one of the most extensive and costliest insurance fraud schemes in Florida. The investigation by the department’s Division of Insurance Fraud led to today’s sentences. They are ordered to report to the Orange County Jail on Oct. 12. A restitution hearing is scheduled for Dec. 9.

Sentences were handed down by Judge Julie H. O’Kane in the Ninth Judicial Circuit Court in Orlando. Zanfei pleaded guilty to conspiracy to commit racketeering, and Crouse pleaded guilty to racketeering. Both men also pleaded guilty to four counts of unlawful transaction of insurance. Zanfei will be sentenced to two years in prison and Crouse will be sentenced to four years in prison. Both defendants will also be sentenced to 20 years of supervised probation. The Office of Statewide Prosecution prosecuted the charges.

More than 30,000 Floridians have reported being left with unpaid claims as a result of being duped, many by their agents, into buying coverage from unlicensed entities. Because these entities are not licensed in Florida, there are no assurances of their ability to pay claims. Although the health plan was illegally marketed in 43 other states, Florida was the only state to seek criminal charges.

Source: State of Florida

State: Texas

Area of Interest: OSHA Proposes $255,050 in Penalties Against Hobbs Bonded Fibers, Waco, Texas

The U.S. Department of Labor's Occupational Safety and Health Administration (OSHA) has cited Hobbs Bonded Fibers Inc., Waco, Texas, and proposed $255,050 in penalties for exposing workers to amputations and other serious injuries.

OSHA's citations against Hobbs alleged four willful, 26 serious and two other-than-serious violations following a comprehensive safety and health inspection that began Feb.10, 2005. The inspection was conducted under OSHA's Site-Specific Targeting plan which targets companies with high workplace injury and illness rates. Hobbs employs about 215 workers to manufacture bonded fiber products such as automotive insulation, quilt batting, fiberfill and Nomex insulation.

The willful citations were issued for failing to provide adequate guards on several different machines to protect workers from amputations and other serious injuries. Hobbs also failed to adequately maintain workplace injury and illness records. Willful violations are those committed with an intentional disregard of, or plain indifference to, the requirements of the Occupational Safety and Health Act.

Source: Occupational Safety and Health Administration

Area of Interest: OSHA Extends Comment Period for Lead in Construction Standard

The Occupational Safety and Health Administration is extending until Nov. 7, 2005, the comment period for its lead in construction standard that requires testing for lead exposures, provisions to protect workers from exposure where lead is present, and medical monitoring of exposed workers. The comment period extension will be announced in the Aug. 29, 2005, Federal Register.

OSHA is conducting its regulatory review of the lead in construction standard under Section 610 of the Regulatory Flexibility Act and Section 5 of Executive Order 12866. The 60-day extension will allow the public more time to help the agency determine if the standard is needed and if it should be amended. The original deadline for comments was Sept. 6, 2005.

The construction industry employs millions of workers in jobs where lead exposures are most likely to occur, like paint removal, building and bridge renovation, plumbing, and water system repair and replacement. Overexposure to lead can cause serious damage to the body's blood-forming, nervous, urinary and reproductive systems. OSHA's lead in construction standard establishes procedures for minimizing the level of exposure to lead for all workers covered.

People wishing to comment should submit written comments, postmarked no later than Nov. 7, 2005

Source: Occupational Safety and Health Administration

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