McCarty regret? Filing plan let insurers ‘game the system’

Former Florida Insurance Commissioner Kevin McCarty

Former Florida Insurance Commissioner Kevin McCarty

Does outgoing Florida Insurance Commissioner Kevin McCarty have any regrets? Check out what he told the News Service of Florida about the way insurers were allowed to file their rates in recent years.

Q: Looking at your years running the Office of Insurance Regulation, what decision can you look back on and say, “This is something we should have done different and this is what we should have done?”

McCARTY: As insurance commissioner, you know, you make hundreds of decisions a day that affect a huge number of people in the state of Florida. People underestimate the impact of decisions made in the Office of Insurance Regulation on the daily lives of everyday people and businesses. You do try to make the best decisions … given the information and the resources you have at that time. In the fullness of time, you can come back and reflect, and say, “Well, I could have done differently” as the facts have changed and you have new information. With that as background, if I was to look at one incident, there was a period of time a couple of years ago where we embarked on a program of self-certifying homeowners’ policies for companies doing business in Florida.

The thought process behind that was that with the changes that had occurred in the PIP (auto insurance) law and homeowners’ law, and a number of other things, had precipitated thousands of new filings. We had the same resource restrictions or resource limitation in trying to process a significant increase in workflow. So as a consequence of that, we experimented with a provision in statutes that allowed us to suspend a review of filings for a period of time. It was necessary for them, and we thought that the companies would judiciously review that and use that for an opportunity to get their products to market and at the same time be consistent with Florida statutes. And then we renewed that for an additional six-month period.

I think in hindsight, one of the lessons learned, I think for me and for some of my colleagues in the office, it was a window of opportunity for some potential filings that were not filed consistent with Florida law. That was an opportunity for some companies to game the system, if you will, and actually file things that had been disapproved previously. We had hoped that companies that had been advised that something was in violation of Florida statutes wouldn’t turn around and file that very same thing. Although reasonable people can disagree, that was an unfortunate turn of events. And the part I regret is extending it the six months.

We were successful, however, in securing additional resources from the Legislature, which we were very grateful for, which we were able to then deploy and we’re now in a situation where we’re back to prior approval.

It was well-intended, but not the results we had intended.

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