Allstate Still Writing in Fla. But For How Long?

Allstate insurance companies can keep on writing new policies in Florida under an appeals court ruling that rejected the state’s attempt to stop them, but which also potentially sets up a quick resolution to the standoff.

The state’s 1st District Court of Appeal gave regulators 40 days (from Jan. 30) to submit all paperwork supporting their decision to suspend the insurance giant’s licenses.

Regulators want Allstate to explain why it hasn’t reduced property insurance rates enough under a state law passed last year that was designed to lower premiums. The company, which has 1,100 agents in Florida, carries roughly 300,000 homeowners policies in the state.

Insurance Commissioner Kevin McCarty suspended the insurance carrier on Jan. 17, a day after he abruptly ended a scheduled two-day hearing in frustration over what he called the company’s failure to comply with a subpoena to produce pricing records.

The court halted the suspension on Jan. 18, and McCarty appealed.

McCarty sees the court’s agreement to expedite the process “as a positive thing, that they want to get to the bottom of the issue,” Ed Domansky, a spokesman for the Office of Insurance Regulation, said.

Allstate said the ruling “allows Floridians to continue to have choices when it comes to their insurance options.”

If reinstated, the suspension would apply to all types of insurance sold by Allstate’s 10 insurance companies doing business in the state, but does not affect existing policy owners.

Lawmakers thought reforms they passed in January, 2007 would lower rates, but many companies including Allstate have instead sought increases.

Topics Legislation