The Florida Department of Financial Services, the new agency resulting from the merger of the departments of Insurance and Banking and Finance, has opened its doors. The agency, headed by Chief Financial Officer Tom Gallagher, is responsible for serving consumers who need help or information related to financial services, including banking, securities and insurance, and for monitoring insurance agents. Appointed regulators will oversee companies in these industries. In addition to assisting consumers, the department will keep track of all money coming into and going out of state government—an amount totaling more than $50 billion annually.
As part of the restructuring of Florida’s financial and insurance regulation, the Florida Financial Services Commission announced its choices to head up the regulation of the state’s banking and insurance industries. The commission, made up of the governor and Cabinet, including Gallagher, approved the appointment of Don Saxon as director of the Office of Financial Institutions and Securities Regulation (OFISR). The commission also appointed Kevin McCarty as director of the Office of Insurance Regulation (OIR) for a period of 90 days.
“Some of the most critical functions of the new agency will be monitoring the state’s investments and serving as a watchdog for state spending,” said Gallagher, who will also continue to serve as the State Fire Marshal.
The new Cabinet post is the result of a constitutional amendment approved by Florida voters in 1998 consolidating the offices of the Treasurer and Comptroller. The Florida Legislature was responsible for deciding how to merge the state departments of Insurance and Banking and Finance, both formerly headed by elected Cabinet members. Legislation passed during the 2002 Session merging the two departments into the new Department of Financial Services.
The legislation placed the regulation of banking and securities and insurance under two appointed officials to be selected by the Financial Services Commission. Saxon and McCarty will report directly to the commission, and their offices will be administratively housed in the Department of Financial Services. The salary range for the appointed regulators is $73,000 to $149,000 and will be set at the next Cabinet meeting scheduled for January 28.
Saxon, who was formerly the director of the Division of Securities and Finance under the Department of Banking and Finance (DBF), has been involved with banking and securities regulation since 1981, As director of the OFISR, Saxon will be responsible for monitoring securities brokers, finance companies, and for regulating and authorizing state-chartered banks.
Saxon has also served as assistant director of DBF’s Division of Securities and Investor Protection and Director of DBF’s Division of Investigations.
McCarty, who had been serving as Deputy Insurance Commissioner, has more than ten years of experience in insurance regulation. As director of the OIR, he will be responsible for handling insurance rate filings and company requests for licenses to sell insurance in Florida.
The Office of Insurance Regulation will be responsible for regulation of all insurance companies and risk-bearing entities, including licensing, rates, policy forms, market conduct, claims, adjusters, issuance of certificates of authority, solvency, viatical settlements and premium financing.
The Office of Financial Institutions and Securities Regulation will be responsible for overseeing state-chartered banks, credit unions, financial institutions, finance companies and the securities industry.
Responsibilities that fall directly under the Chief Financial Officer include:
▪ Overseeing the state’s accounting and auditing functions, including review of state contracts and safeguarding unclaimed property.
▪ Monitoring the investment of state funds and managing the deferred compensation program for state employees.
▪ Investigating fraud, including identity theft and insurance fraud.
▪ Overseeing cemeteries and funeral homes that sell pre-need contracts.
▪ Licensing and oversight of insurance agents and agencies.
▪ Ensuring businesses have workers’ compensation coverage in place for employees and helping injured workers with benefit payments and re-employment.
“The merging of these two agencies will allow us to provide comprehensive information and assistance to consumers,” Gallagher said.