Court Decision Puts Allstate Back in Florida Writing Business

In a court ruling that came out late on Jan. 18, Allstate was reinstated as a player in the state of Florida in spite of the suspension issued earlier by the Florida Office of Insurance Regulation (OIR).

Allstate and Allstate Floridian were pleased with the Florida First District Court of Appeal’s decision to grant an immediate stay from the Florida Office of Insurance Regulation’s order to cease writing new business.

In a written statement, Northbrook, Ill.-based Allstate said, “The ruling allows Allstate’s more than 1,100 Florida agents and their employees to continue to create jobs and serve their communities while we continue to provide the OIR with information.”

Allstate Floridian Insurance Company and Allstate Floridian Indemnity Company are independent subsidiaries of The Allstate Corporation and are the primary providers of personal lines property insurance in Florida for the Allstate group.

Property insurance policies sold by Allstate Floridian Insurance Company and Allstate Floridian Indemnity Company are not underwritten or reinsured by any other company in the Allstate group.

During the week of Jan. 14, Florida Insurance Commissioner Kevin McCarty suspended the certificate of authority of Allstate Cos. to write new property insurance in Florida until the company fully complies with the subpoenas served Oct. 16 by his Office of Insurance Regulation.

The decision by McCarty follows action when he abruptly halted the scheduled two-day hearing into the Allstate Cos.’ reinsurance program, their relationships with risk modeling companies, insurance rating organizations and insurance trade associations.

“In view of Allstate’s ongoing, blatant disregard of our subpoenas, I have little choice but to take an action that will send a clear message about how seriously I am taking this issue,” said McCarty. “Suspending their certificate of authority to write new business in our state should make my point.

“If Allstate is willing to pay $25,000 per day in fines to a Missouri court for its ongoing failure to provide similar documents, it’s obvious to me that it will take more than a monetary sanction to get them to comply with our subpoenas.”

Allstate was to have provided all appropriate company documents related to the above topics at or before a hearing on Jan. 15, but failed to do so, McCarty said. Instead, he said the OIR received 51 pages of objections to the subpoenas.

The suspension would have applied to Allstate Insurance Co., Allstate Indemnity Co. and Allstate Property and Casualty Co., and it only suspends the companies from writing new business in Florida. Existing policyholders would not be affected.

McCarty complained that it continued to trouble him that Allstate has not complied with the department’s subpoenas and is not willing to explain their relationships with rating agencies, modeling companies and trade groups and how these relationships might have influenced the huge rate increases they have requested.

This is the first time the OIR has suspended a company for failure to “freely” provide documents as required by Florida law.

Florida Gov. Charlie Crist said he believes Allstate is concealing something.

“I applaud Commissioner McCarty for sending a clear message to Allstate Companies and protecting Florida’s consumers. It is clear to me that Allstate must have something to hide if they are unwilling to comply with the Commissioner’s requests. This type of behavior is an unconscionable disregard for this process and their customers,” Crist said.

Allstate released a statement after McCarty issued the suspension saying that the company is committed to working diligently with the OIR to create solutions and ensure there is a healthy insurance market for Florida consumers.

At that time Allstate in a written statement said, “We were surprised at the OIR’s actions yesterday and today based on our dealings with them over the course of several months and dozens of phone conversations.”

Since receiving the subpoenas, Allstate has produced nearly 40,000 pages of information, the insurer said.