Timeline in the Florida Feud: Allstate v. Florida

On Jan. 15, Florida Insurance Commissioner Kevin McCarty abruptly halted a public hearing with Allstate Insurance officials, upset that they had not fully complied with subpoenas questioning their companies’ homeowners insurance rate filings.

That disruption made front page news of a feud that has been going on for more than a year and shows no signs of abating. It stems from a major reform measure (HB1A) that lawmakers passed in a 2007 special session. The law promised insurers would pass along savings from lower cost reinsurance to property owners. The Crist administration has complained that those savings have not materialized and McCarty has vowed to find out why.

Allstate and its subsidiaries have filed for insurance rate increases — including double-digit hikes ranging from 27.4% to 43.4% — which McCarty disapproved. Florida law requires the Office of Insurance Regulation to hold a public hearing for filings exceeding a statewide average of 15 percent.

On Oct. 16, McCarty issued subpoenas directing Allstate executives to appear at a Jan. 15 public hearing in Tallahassee to testify regarding their companies’ reinsurance, as well as their relationships with risk modeling companies, insurance rating organizations and insurance trade associations. The subpoenas required Allstate to supply all “appropriate company documents.”

On the first morning of the hearing, McCarty stopped the proceedings, citing “Allstate’s total lack of cooperation and responsiveness” in providing documents.

The next day, on Jan. 16, McCarty escalated the dispute when he suspended the Allstate Companies’ certificate of authority to write any new insurance in Florida until company officials fully complied with the subpoenas. “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.”

McCarty said that instead of providing all documents by the Jan. 15 hearing, Allstate sent the OIR 51 pages of objections to the subpoenas.

Crist Comment

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

“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,” said Crist.

On Jan. 16, Allstate released a statement that the company was surprised by McCarty’s actions but remained committed to “working diligently with the OIR to create solutions and ensure there is a healthy insurance market for Florida consumers.”

Since receiving the subpoenas, Allstate says it has produced nearly 40,000 pages of information.

On Jan. 17, the OIR issued a final order immediately suspending Allstate and its subsidiaries from writing any new business in all lines of insurance in Florida – including auto and commercial.

Allstate appealed the OIR order to the First District Court of Appeal on Jan. 17, for an immediate stay of the order. On the afternoon of Jan. 18, the court granted the stay and Allstate was back in business.

McCarty said the court move by Allstate “is just another step in the process that enables Allstate to further delay production of the documents we requested.”

In a written statement, on Jan. 18, 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.”

McCarty said the OIR is considering all legal options. He said that he will do everything within his authority to ensure that the suspension remains in effect and that Allstate produces the requested documents.