FORT LAUDERDALE, FL. March 29, 2016. Gov. Rick Scott’s nominee for Florida insurance commissioner faced multiple questions Tuesday about a Palm Beach Post story on a lawsuit claiming he misled investors in a flood insurance venture, and Cabinet officials put off a decision until April.
Asked if he wished to respond to “media reports,” Jeffrey Bragg addressed issues raised in the story.
“I don’t believe anybody misled shareholders,” said Bragg, 67, former head of a federal terrorism insurance program and ex-executive with a Tampa-area company. “It was unfortunate our shares dropped.”
State Rep. Bill Hager, R-Delray Beach and a former Iowa insurance commissioner, heard his name put forward for the job that pays $190,000 a year in a motion by Florida Chief Financial Officer Jeff Atwater. But Scott declined to go along and the Cabinet agreed to open up the search again and see if they can settle on a pick by April 26.
To appoint a new insurance commissioner, the governor and CFO must agree as part of a majority in the four-member Cabinet. Outgoing commissioner Kevin McCarty has said his last day is May 2.
Various interest groups had expressed concerns about both candidates and the reaction in some quarters Tuesday was relief.
Hager is “anathema to the part of the Florida insurance industry that is actually writing policies,” said Jay Neal, president of the Fort Lauderdale-based Florida Association for Insurance Reform. Its members include representatives of Florida-based property insurers. The group has clashed with Hager about issues, including his past support for shrinking the state’s hurricane fund, which could raise consumer rates.
“Policyholders should breathe a short sigh of relief today, and then demand the new search include candidates willing to put consumers, not the insurance industry, first,” said Chip Merlin. He is president of a law firm with offices in Tampa and West Palm Beach that represents policyholders against insurers.
Bragg won praise from Cabinet members for his wide-ranging experience in government and private industry roles. He described himself as a “consensus-builder” who might be able to find creative ways to lower rates for Florida homeowners on flood insurance, for example.
But he stumbled when Attorney General Pam Bondi asked him about the role of “navigators,” government-paid helpers with health insurance under the Affordable Care Act.
“I guess I’m not familiar with what you’re asking,” Bragg said.
The Post reported Bragg, as executive vice president and chief operating officer of Insurance Management Solutions Group Inc. in St. Petersburg, signed a “false and misleading registration statement” in connection with a stock offering, according to a suit filed in U.S. District Court in Tampa in 2000.
“As defendants later admitted, the prospectus failed to disclose that (the company’s) flood mapping and flood zone determination subsidiary, Geotrac, was not compatible with the company’s other line of business and, as a result, could not be operated profitably or be integrated into the company,” the suit said. The suit was settled in 2003.
Bragg said such lawsuits are not uncommon if a stock does not perform as hoped. He said he lost money, too, in the venture and media scrutiny has to be expected in the public arena.
“It’s not good, but it is part of what we face every day as businessmen and leaders,” Bragg said.
For his part, Hager said he would bring “vigor” to the job. He talked of being “unafraid” if not “reckless” in taking on controversial fights, such as promoting regulations designed to limit what many in the insurance industry see as abuses by contractors and attorneys in water-damage claims, for example.
Prodded by Atwater, he talked about filing a bill that did not get very far this session to end the state’s no-fault car insurance requirement. Many drivers see it as a costly, fraud-prone system that in effect makes them pay twice for health insurance by covering minor injuries regardless of who is at fault.
Hager called Personal Injury Protection a system “whose time has come and gone” and ending it is “worthy of consideration” if legislators agree.
Asked about media scrutiny on soliciting business as an expert witness and arbitrator from firms he might regulate, Hager said, “I participated in the insurance marketplace.”
Atwater praised both men as “two of the most talented insurance minds I’ve been around,” but Scott and Atwater could not agree on a pick Tuesday. The Cabinet agreed to continue the search and open it up to more candidates.
“I’m not going to come to agreement right now,” Scott said. “I believe we ought to open up the applications until April 15 and come back April 26.”
That does not appear to rule out either candidate.
Hager said afterward: “I appreciate today’s important conversation with the Governor and Cabinet, and look forward to continuing those discussions. I respect the process and the Cabinet.”