Allstate Cites Potential Fla. Insolvency at Senate Hearing into Rates

Referring to what he felt were Allstate Insurance executives’ evasive answers to questions posed by Florida senators on Monday, Sen. Bill Posey, R-Rockledge, said he hadn’t seen so much bobbing and weaving “since Muhammad Ali’s rope-a-dope.”

Allstate Floridian Insurance Co., a subsidiary of Allstate Insurance, sent the first of five groups of executives in a two-day agenda to testify in front of the state’s recently formed Senate Select Committee on Property Insurance Accountability in Tallahassee.

The 12-member committee is co-chaired by Sen. Jeff Atwater, R- North Palm Beach, and Senate Democratic Leader Steve Geller, D- Hallandale Beach, but Atwater emceed the proceedings solo Monday while Geller attended to a family emergency.

Atwater repeatedly asked the Allstate team, led by Chief Executive Officer Joseph Richardson Jr., to explain a footnote attached to a statement in their 2007 PowerPoint presentation that seemingly contradicted an outlook of reduced rates for Allstate customers. According to Atwater, the footnote indicated that if reduced rates are a possibility based on 2007 legislation, then the company should invoke an accelerated short term forecasting model – one that resulted in a 43 percent rate increase filing.

Ryan Michel, Allstate Floridian chief actuary said it was a case of using “the latest and greatest science” to arrive at a rate that would support the company’s risk exposure in Florida.

The Allstate executives revealed that Allstate Floridian is on the brink of insolvency and has posted no profit in recent years. The revelation prompted Sen. Ronda Storms, to ask CEO Richardson how much he earns per year. After a brief consult with an Allstate attorney sitting at Richardson’s side, the executive testified that his annual salary is “confidential.” Storms then asked the attorney to reveal his annual salary – also privileged information, according to Richardson.

Another round of meetings is scheduled for Feb. 18 and Feb. 19, Atwater announced.

After the nearly six-hour, non-stop hearing with Allstate Floridian, Atwater said the goal of the hearings is to try to provide a vibrant insurance market with affordable products. “So we press forward,” he said.

Topics Politics