Florida Insurance Commissioner Kevin M. McCarty will leave his post effective May 2 to pursue other career opportunities, his office has announced. McCarty served as the state’s only appointed insurance commissioner since the creation of the Florida Office of Insurance Regulation (OIR) in 2003
He led the state through a tumultuous period as it dealt with huge hurricane-related losses and insurance carriers subsequently leaving the Florida market. McCarty also played a key role in investigating abusive practices in the stranger-owned life insurance (STOLI) market.
STOLI policies are often marketed to senior citizens, many of whom live in Florida. In a STOLI policy, the elderly policyholder names another person, or an investor with no family connection, as the beneficiary but one who has no “insurable interest” in the life insurance contract.
McCarty prevailed in litigation against settlement companies fighting suspension and examinations, and eventually oversaw the shutdown of unscrupulous operators.
Darwin Bayston, president and CEO of the Life Insurance Settlement Association (LISA), recalled McCarty as a regulator open to compromise despite overseeing a complex insurance market environment.
While LISA and Florida regulators didn’t always see eye to eye, both sides “worked towards a common goal of providing a well-regulated and credible secondary marketplace where policyholders are able to sell life insurance policies that are no longer needed, wanted or affordable,” Bayston said in an email to InsuranceNewsNet.
In a news release posted to the OIR website, McCarty thanked his “outstanding and talented staff,” who helped his office weather some of the most turbulent years faced by any insurance regulator in the U.S.
“The privilege of serving the people of Florida as Insurance Commissioner has been the highlight of my professional career,” said McCarty said.
McCarty was one of several state insurance commissioners who launched investigations over the past three years into how life insurance companies go about returning unclaimed life insurance proceeds to policy beneficiaries.
Across the nation, about two dozen life insurance companies have returned an estimated $5 billion to beneficiaries as a result of the investigations.
McCarty’s tenure also was marked by broadening consumer choice and encouraging faster cycle times to bring products to market.
He established a program allowing regulators located thousands of miles apart in Florida, Texas and California to perform a simultaneous review of a single annuity policy form filing, a process that had to be finished within 60 days.
As aggressive as McCarty was at regulating life insurance carriers, he will be forever linked with the challenges he faced in stabilizing Florida’s property/casualty market in the wake of a series of brutal hurricanes.
In 2004, Florida suffered losses from hurricanes Charley and Ivan, and in 2005, Florida suffered still more losses from hurricanes Katrina, Rita and Wilma. These disasters led to big premium increases in that state’s homeowners market.
Between 1985 and 2014, Florida suffered $68 billion in insured catastrophe losses accounting for 13.6 percent of all insured catastrophe losses in the U.S. during that period, according to the Insurance Information Institute.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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