Florida Insurance Commissioner Kevin McCarty uses a credit card issued to him by an outside insurance group to fund travel, enabling him to avoid state transparency requirements on bills he racks up traveling the globe to industry-related conferences and events.
It is not uncommon for the heads of state departments and agencies to travel to conferences and events so they can stay updated on trends and training. But in most cases, the state pays for the travel, which means all expenses are public under state open record laws.
Those laws require agencies and departments to track and report spending, including when their employees travel for any work-related reason.
That’s not the case for the National Association of Insurance Commissioners credit card given to McCarty in 2009 when he became the Missouri-based group’s president. Though he no longer leads the group, he is still a member and has used the card to travel across the globe for association events attended by insurance company officials and industry lobbyists.
The association does not release credit card statements, and the Office of Insurance Regulation that McCarty oversees does not receive copies. That means the records for trips to places like Switzerland, Germany and the Cayman Islands are not publicly available.
The National Association of Insurance Commissioners released credit card statements covering six months at McCarty’s request after the Tribune/Scripps Capital Bureau asked about his association credit card.
Past presidents receive association credit cards “due to their continuing level of engagement which can be considerable if they travel internationally,” said Scott Holeman, an association spokesman.
Since September, McCarty has charged $10,037 to the credit card, including $2,158 at the Hilton Basel in Switzerland; $2,065 at Petits Plats, a Washington, D.C., restaurant; and $1,877 at Loews hotels in Santa Monica, Calif. The association also picked up the tab for travel to and from those events.
All the charges were travel-related, for expenses such as hotels, airfare and meals.
McCarty was appointed by Gov. Jeb Bush and the Cabinet in 2003 to lead the Office of Insurance Regulation. That office is overseen by the governor and three-member Cabinet.
Monte Stevens, the office’s deputy chief of staff, said because insurance is regulated by the states, not the federal government, it requires extensive travel.
“That means that regulators from every state and territory need to frequently meet in person to discuss the important issues facing the industry,” Stevens wrote in an email. “That is a dynamic that is unique in state government.”
Stevens said McCarty’s card is used only for expenses approved by the association, usually during travel to conferences and meetings.
“For example, if a group of commissioners and staff go to dinner together they may use the commissioner’s card to pay for the meal,” he said.
Stevens said McCarty did not disclose to the state that he has an association credit card, “and the Office is not aware of anything requiring him to do so.”
The National Association of Insurance Commissioners released the statements at McCarty’s request but maintains a policy of not releasing the spending information of other card holders. That includes current officers and past presidents, each of whom serves as their state’s top insurance regulator. Those public officials also use the association cards outside of their state’s public record laws.
“It’s not a policy change,” said Holeman, the association spokesman, after releasing McCarty’s statements. “In this case, we were asked by Commissioner McCarty to get information to him that he could provide you.”
McCarty’s travel for the association can be extensive. In 2012, during his second stint as the group’s president, The Florida Current, a since-shuttered website that covered state policy and politics, reported that he was out of state for travel 142 days, including trips to Switzerland, South Korea, the Cayman Islands and Germany.
State Rep. Bill Hager, a Boca Raton Republican who served as Iowa insurance commissioner from 1986 to 1990, said it’s imperative that Florida be involved with the National Association of Insurance Commissioners, which requires travel.
“Insurance is the only major area of commerce regulated by the states, not the federal government,” Hager said. “For the past 150 years the states, through the NAIC, have put in place a series of model regulations, model statutes, model administrative provisions.
“We have very unique insurance challenges here in Florida” he said. “I’m pleased to see the Office of Insurance Regulation seated at the table.”
McCarty has come under fire in recent weeks as Gov. Rick Scott has called for the resignation of three department heads, including McCarty. It would take a majority vote from that body to remove McCarty or any of the department heads.
Scott has not given a specific reason why he wants McCarty out, only that he wants “new leadership” over the state’s insurance industry.
State departments and agencies contacted by Tribune/Scripps say their leaders do not have third-party credit cards. Some said they would reject such an offer.
Leslie Palmer, chief of staff for the Department of Highway Safety and Motor Vehicles, said the department’s executive director, Terry Rhodes, would not “take something like this even if it was offered.”
In addition, associations with members in public office contacted by the Tribune/Scripps Capital Bureau said they do not issue credit cards to public officials. The National Governors Association, which represents the nation’s 50 governors, said it does not issue credit cards.
The Florida Sheriffs Association, whose membership includes the state’s 67 sheriffs, has bylaws that allow its top three officers to have an association-issued credit card, but spokeswoman Nanette Schimpf said “the sheriffs currently occupying these positions did not elect to receive a card.”
“I’ve never seen anything like this,” said Jamie Court, president and chairman of Consumer Watchdog, a California group focused on the insurance industry.
He said National Association of Insurance Commissioners conferences he has attended were packed with industry officials and lobbyists, which can make it even more important to see how public insurance regulators spend money attending the events.
“They can be cozy,” Court said. “The insurance industry is well represented at these things, and it provides easy access” to insurance commissioners.
Rep. Hager said that because the association helps set insurance industry regulations, Florida needs to be involved.
“It is a pivotal organization,” he said.
Original article here.