Fla. Insurance Regulator Files to Reinstate Allstate Suspension

January 24, 2008

The Florida Office of Insurance Regulation filed its response with the First District Court of Appeal seeking to have a suspension of the Allstate Companies' certificates of authority reinstated.

The 12-page response to a Jan. 18 order staying the suspension argued, among other things, that Allstate's failure to provide the documents is a crime and "further evidenced a continuing attempt by [Allstate] to improperly subvert, manipulate and undermine the regulatory process. There can be no more clearer threat to the safety and welfare of the public than a continuing willful violation of the law."

Florida Insurance Commissioner Kevin McCarty said, "Allstate has continued to do everything it can to keep from providing the documents requested in the subpoenas sent by my office Oct. 16, so now I am doing everything within my power to ensure that the documents are produced. They keep insisting that they are working to produce the documents, but the fact remains that all of the documents were due last Tuesday (Jan.15) at the hearing, and they were not there. I also am frustrated that Allstate keeps trying to tell us which documents are relevant to our investigation."

McCarty announced Jan. 16 that he was suspending Allstate from writing new auto business in Florida and then extended the suspension to keep Allstate from writing any new business in the state.

"The stay was only a minor setback," McCarty added. "Everyone needs to keep in mind that the full appeal is still pending before the court. Florida consumers deserve to know what is in the documents that Allstate is so aggressively guarding, and my office is determined to get them."

"It seems to me that providing the requested documents should be an easy decision, unless Allstate really has something to hide," said Bob Hunter, director of insurance for the nonprofit Consumer Federation of America and a former Texas insurance commissioner.

On Jan. 15, the commissioner abruptly halted a scheduled two-day hearing into the Allstate Companies' reinsurance program, their relationships with risk modeling companies, insurance rating organizations and insurance trade associations when company representatives were not prepared to answer questions about the documents that had not been provided.

Allstate was to have provided all appropriate company documents related to the above-named topics and to fully explain the companies' relationships with the named entities and issues at or before Tuesday's hearing, but failed to do so. Instead, the Office received 51 pages of objections to the subpoenas.

The suspension applied to the following Allstate companies:

Allstate Floridian Insurance Co.
Allstate Indemnity Co.
Allstate Property & Casualty Insurance Co.
Allstate Insurance Co.
Allstate Floridian Indemnity Co.
Allstate Fire and Casualty Insurance Co.
Encompass Insurance Co. of America
Encompass Indemnity Co.
Encompass Floridian Insurance Co.
Encompass Floridian Indemnity Co.

The filing can be viewed at OIR's Web site under the following link: http://www.floir.com/pdf/AllstateResponseFinal.pdf

Source: Florida Office of Insurance Regulation