Florida chief insurance regulator Kevin McCarty
Gov. Rick Scott tried to force McCarty
out a year ago
Article Courtesy of The Miami Herald
January 7, 20156
TALLAHASSEE -- After more than a decade as Florida’s
chief insurance regulator, Kevin McCarty resigned Tuesday, nearly a year
after he overcame a failed effort by Gov. Rick Scott to get rid of him.
McCarty invited reporters from the Herald/Times and two other news
outlets to his office to break the news of his departure, which is
effective May 2.
|“Sometimes it’s good to leave on
top,” McCarty said.
He noted that the property insurance market has
stabilized and said he’ll leave on his own, not under
pressure from Scott.
But in a private meeting with Scott in October, McCarty
had made clear his plans to look for another job, he
said Tuesday. By staying in the job until May, just
before the start of the hurricane season, McCarty said
he’ll be able to review all insurance legislation out of
the 2016 session that opens next week and make
recommendations to Scott.
McCarty did not disclose his future plans. He is
considered a leading candidate to be the next chief
executive of the National Association of Insurance
Commissioners (NAIC), where he once served as president.
Kevin McCarty speaks at a public hearing for
Citizens Property insurance rate increases.
“I certainly would like to be in a position on the
national stage or on an international stage where I have spent a good
part of my career,” he said.
McCarty, 56, is the state official who decides how much money homeowners
in Florida pay for their property insurance. Over the past decade, he
has repeatedly borne the brunt of criticism for increased rates charged
to Floridians, and for controversies involving the powerful insurance
“This job is not for the faint of heart,” McCarty said. “A lot of people
have taken their shots at me over the years.”
By far the biggest shot came 20 years ago in a harrowing ordeal in which
Bankers Insurance Co. of St. Petersburg secretly tapped his telephone,
followed him and investigated his personal life after what it said were
unfavorable regulatory dealings with the state. McCarty won $2.55
million in an out-of-court lawsuit settlement in 2000.
He disclosed for the first time Tuesday that he used some of that
settlement money to buy his mother an oceanfront condo in Sarasota
which, he noted, is in a high-risk coastal zone, vulnerable to storms.
At least twice he survived calls for his ouster from legislators in both
parties who criticized his handling of industry rate increases.
In 2003, McCarty became Florida’s first appointed insurance
commissioner, after voters approved changing the position from an
elected Cabinet-level post. McCarty served three governors and helped
steer the state through a series of devastating hurricanes, ending with
Wilma in 2005, while also seeking to protect consumers, many of them
elderly, from unscrupulous peddlers of insurance products.
McCarty shrewdly navigated the capital’s perilous politics for an
extraordinarily long time, but was seen as vulnerable after Scott took
the oath as governor for a second time one year ago this week.
Weeks after Scott engineered the removal of Gerald Bailey as the state’s
top law enforcement official, an action the governor later said he
mishandled, Scott called for a new insurance commissioner, without a
critique of McCarty’s record.
Scott’s office already had a replacement in mind: Ron Henderson, a state
insurance official in Louisiana who was being pushed by Fred Karlinsky,
a Tallahassee lobbyist for insurance interests and a Scott supporter.
But consumer groups rallied to McCarty’s side, and in the furor
following Bailey’s ouster, which included public criticism of Scott by
Cabinet members and a lawsuit by media outlets, another controversial
personnel move by Scott became politically impossible.
McCarty earns $134,000 a year in his dual role as insurance commissioner
and director of the state Office of Insurance Regulation. His successor
must win the support of both Scott and Chief Financial Officer Jeff
Atwater in a vote by the governor and Cabinet.
The next scheduled Cabinet meeting is Jan. 21.
“Kevin McCarty has long served the people of Florida with the utmost
integrity,” Atwater said Tuesday. “Throughout his years of service, he’s
propelled and ushered in reforms across multiple facets of the industry,
including workers’ compensation, medical malpractice, health, and auto.
He helped navigate consumers and the industry through the hardships and
tumultuous effects of natural disaster.”
McCarty is the last surviving high-level appointee who has served
continuously since Jeb Bush was governor. Bush left office in 2007.
“What our office did was provide a steady hand in providing a path
forward that didn’t go too far in any direction,” McCarty said Tuesday.
He predicted that a sharp increase in water damage claims in South
Florida, a trend clouded by allegations of fraud, will be a persistent
problem. Partly as a result of those claims, McCarty’s office approved
rate increases for state-run Citizens Property Insurance Corp. that take
effect Feb. 1.
A persistent critic of the federal Affordable Care Act, McCarty said it
has expanded the number of people who have health insurance, but with
high deductible costs for prescription drugs.
McCarty’s departure will leave vacant one of state government’s the most
challenging jobs because of the political volatility surrounding the
cost and availability of insurance in a state that is highly vulnerable
to catastrophic hurricanes and ever-present insurance fraud.
“It’s been a state of fraudsters and hucksters,” McCarty told the
Insurance Journal in a recent podcast interview.
McCarty said a top deputy, Belinda Miller, is highly qualified to
succeed him, but that the decision rests with Scott and the Cabinet,
which oversees OIR in its role as the Financial Services Commission. He
said Scott and Cabinet members would likely conduct a national search.
McCarty’s resignation follows the departure of another state agency head
Scott wanted out, Marshall Stranburg at the Department of Revenue. Scott
last year also sought to replace chief banking regulator Drew Breakspear,
who recently underwent a successful Cabinet review of his job