Court Upholds McCarty’s License Denial To Dallas National

Days before the insurer and regulator were to meet with the DCA, Dallas National filed a federal lawsuit alleging that Commissioner McCarty has a "personal vendetta" against its owner, Charles David Wood Jr.

Mr. Wood allegedly loaned another company, Bankers Insurance Co., $5 million. In the mid-1990s Bankers hired a private investigator to follow Mr. McCarty in hopes of uncovering personal information about him to justify his firing from the OIR. Bankers had blamed Mr. McCarty for ruining its relationship with the state's Joint Underwriting Association.

The attempt by Bankers failed. Mr. McCarty sued Bankers and was paid $2.5 million by bankers as part of a settlement. However, Dallas National claims Mr. McCarty held a grudge against it and "fanatically determined that Wood would never engage in the business of insurance in Florida," according to Dallas National's lawsuit.

In its original denial of a license to Dallas National in September 2008, the OIR said its reasoning was based on the fact that Mr. Wood "has a pattern of behavior which the office finds untrustworthy" and that "there is good reason to believe he has acted in bad faith."

In its denial, the OIR outlined that Aspen Administrators Inc., an affiliated company also owned by Mr. Wood, would be serving Dallas National's claims in Florida. The OIR found that Aspen did not meet statutory requirements for timely payment of claims.

Information was given to the office from other states, which indicated "Dallas National's performance is consistently substandard."

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William Reid, representing Dallas National, said, "Regardless of the court's ruling, which is based upon established standard of review, the facts have not been changed. The Florida Office of Insurance Regulation has treated Dallas National and Dave Wood unfairly and with bias, and [has] acted improperly. Mr. Wood looks forward to receiving the opportunity to prove his case in Federal Court and to exercise his right to due process under the law."

According to Highline Data, Dallas National writes more than 61 percent of its business in Texas and recorded an underwriting loss of nearly $5.8 million as of September 2010. Net income was about $645,685, and the company's combined ratio was about 107.

Highline Data is a part of Summit Business Media, which also owns National Underwriter.

In prior statements to NU Online News Service, David Meehan, president of Bankers, said he was sorry that the company's sordid past with Mr. McCarty was being revisited. The company now has a good relationship with the OIR, he said.