Florida Insurance Commissioner Kevin McCarty’s successor has yet to be announced, but whoever takes over will have his or her work cut out for them when McCarty leaves office after 12 years on May 2.
“These are some pretty huge shoes to fill and it’s going to be tough,” said Jay Neal, president and CEO of the Florida Association for Insurance Reform (FAIR). “We need someone who is experienced in that role or we will see problems.”
No candidates have been confirmed as potential replacements, as of yet, but a few names have been floated so far. Two Florida movers rumored to be in the running include Florida State Rep. Bill Hager, a former Iowa Insurance Commissioner, former president and CEO of the National Council on Compensation Insurance (NCCI) and current vice chair of the state Insurance and Banking subcommittee; and Tom Grady, former interim president of Florida’s Citizens Property Insurance Corp.
Hager has been vocal for flood insurance reform in the state, an issue that has also been a major focus for McCarty over the last six months. Hager told Insurance Journal last fall that lawmakers were “turning up the heat” on the National Flood Insurance Program’s ratemaking practices.
Grady is currently awaiting confirmation by the State Senate to the Florida Board of Education after he was appointed by Florida Gov. Rick Scott in Oct. He was accused of allowing “excessive” travel expenses during his short-lived position with Citizens.
There is also the possibility that a candidate Scott considered last year, Louisiana Deputy Commissioner of Consumer Advocacy Ron Henderson, could be in the running again.
The decision, however, is ultimately up to the Florida Cabinet, which was created in 2003 through a change to the Florida State Constitution. The Cabinet consists of the governor and three constitutionally elected state executives – the chief financial officer, the state attorney general, and the state commissioner of agriculture. The current Florida Cabinet – CFO Jeff Atwater, AG Pam Bondi, and Commissioner of Agriculture Adam Putnam – is now tasked with appointing the next insurance commissioner.
According to the rules of the Florida State Constitution, the commission appoints or removes each director by a majority vote consisting of at least three affirmative votes, “with both the Governor and the Chief Financial Officer on the prevailing side.”
The minimum qualifications for the Director of the Office of Insurance Regulation include “5 years of responsible private sector experience working full time in areas within the scope of the subject matter jurisdiction of the Office of Insurance Regulation or at least 5 years of experience as a senior examiner or other senior employee of a state or federal agency having regulatory responsibility over insurers or insurance agencies.” The experience must be within the previous 10 years, according to the Florida Constitution.
Atwater’s office wouldn’t comment on any potential McCarty successors, saying the news just happened and “these conversations will take place as time moves forward.”
This is the first time the position has opened up since former Gov. Jeb Bush chose McCarty back in 2003 after the constitutional change.
“This is a new ball game in terms of how this person is selected. Florida hasn’t done this before,” said Jeff Grady, president of the Florida Association of Insurance Agents (FAIA). “[McCarty] was in the job and it became his and no one else has been in that position since.”
While the cabinet is not required to seek input from other interested parties, they will likely get their fair share of feedback.
When asked about Hager and Grady as potential successors, Grady wouldn’t comment, but said they would provide their opinion if asked by the Cabinet.
“We are part of the industry and have a voice in the industry and want to see someone with experience there. If we have an opportunity to weigh in we would certainly welcome it,” he said.
FAIR’s Neal said the association would not support Grady or Hager if appointed, “Neither one of these choices would be in the best interest of Florida consumers,” he said.
Neal said he hopes the process will be fair and not “politicized.” He said his group will be watching closely to see how it plays out and will be ready to challenge the Florida Constitution, if necessary.
“If the process is overly-politicized and if there is an agenda and someone who is not a capable regulator is selected, we will look at going back to the way it was and having an elected regulator,” Neal said. “But if the process is one where the selection is transparent and a credible regulator for this huge market comes in we can say OK, we have established a new precedent now and there is no need for a constitutional change.”
Neal said FAIR plans to reach out to the Governor and CFO offices and ask to be a part of the decision making process. He hopes his group’s input and that of other stakeholders will be considered, especially in light of the backlash Scott received last year when he toyed with removing McCarty.
“I am confident that the people we have elected will learn from that mistake and the process will be open and transparent with a lot of people considered. That will be the best direction for Florida,” Neal said.
- Florida Insurance Commissioner McCarty to Resign After 12 Years in Job
- McCarty Earns Lifetime Achievement Award from Florida Association
- Florida Commissioner McCarty Touts State Regulation Before Congress
- Florida Insurance Commissioner McCarty’s Reappointment in Doubt
- McCarty Deserves Some Credit for Stabilizing Florida Market
- Consumer Group Urges Florida to Keep McCarty as Commissioner
- Florida Commissioner McCarty May Have Survived Scott’s Ouster Bid
- Flood, Fraud & the Florida Market: McCarty Talks Hot Insurance Topics in 2015
- McCarty Receives ‘Insurance Man of the Year’ Award from LAAIA
- Florida Commissioner McCarty Asks FEMA for NFIP Rate Data by Dec. 15
Was this article valuable?
Here are more articles you may enjoy.