Florida Commissioner McCarty Has ‘Mixed Emotions’ as He Readies to Resign May 2
January 7, 2016 by Thomas Harman, Washington Bureau manager, BestWeek: Tom.Harman@ambest.com
TALLAHASSEE, Fla. – Florida Insurance Commissioner Kevin McCarty said he will resign effective May 2.
McCarty has been Florida’s only insurance commissioner since the Office of Insurance Regulation formed in 2003 and he was a past president of the National Association of Insurance Commissioners in 2012. “I have mixed emotions about leaving,” he told Best’s News Service. “In many ways, it’s like leaving your family.” He said he is looking at available options and has one in mind, but would not elaborate.
The next commissioner will likely inherit a good, stable insurance market, one whose residual property insurer of last resort, Citizens Property Insurance Corp., has seen its shares depopulated from 1.6 million to just slightly more than 500,000 in recent years, with hundreds of thousands more policies scheduled to be made available to private insurers. He said the automobile insurance market was strong, and workers’ compensation rates have been reduced, although the workers’ compensation arena has some court challenges ahead that could complicate matters.
The stability of McCarty’s position had been in some doubt last year, when Gov. Rick Scott said in a letter to Chief Financial Officer Jeff Atwater he wanted to replace McCarty along with others to seek “fresh ideas” in his new administration (Best’s News Service, Jan. 21, 2015). Scott subsequently sought the resume of Ron Henderson, deputy commissioner of consumer advocacy in the Louisiana Department of Insurance (Best’s News Service, Jan. 27, 2015). However, the Florida Cabinet ultimately decided to have top executives evaluated, including McCarty. McCarty said he cleared his 2015 evaluation with flying colors and it did not impact his decision. “I made this decision independent of any of that background noise,” he said.
McCarty said another of the high points has been his involvement in market investigations of life insurers that have resulted in settlements over numerous companies’ use of the Social Security Administration’s Death Master File database that have returned more than $5 billion to beneficiaries nationwide to date. Florida, Illinois, California, Pennsylvania, New Hampshire and North Dakota being lead states in the investigations and McCarty chaired the NAIC Unfair Claims Practices Committee that addressed the issue. He called it “one of the greatest achievements in state regulation.”
McCarty said he was proud of the OIR’s work to investigate and address with an interim solution, the inability of some insureds to obtain drugs for HIV/AIDS patients. Insurers had reclassified HIV drugs to high tiers and imposed significant new co-pays or co-insurance requirements, but most later agreed to revise their practices.
During his NAIC presidency, the nation’s commissioners narrowly approved a change toward principle-based reserving methodology for life insurers to use when calculating reserves. Those who supported the change believed reserves were redundant and that principle-based reserving will reduce the size of the reserves, ultimately helping to lower life insurance costs for consumers. He said the passage through NAIC and the subsequent legislative passage by Florida lawmakers is among his proudest achievements. States are expected to ratify principle-based reserving this year.
Before becoming commissioner, McCarty joined the then-Florida Department of Insurance in 1991. The following year, he became a leading player implementing strategies to improve the state’s private insurance marketplace after the damage caused by Hurricane Andrew.
