TALLAHASSEE, Fla. – Florida Insurance Commissioner Kevin McCarty announced Friday that he will resume the suspension of the certificates of authority of the Allstate Companies to write new insurance in Florida until they fully comply with the subpoenas served Oct. 16 by the Office of Insurance Regulation (Office).
The announcement followed Friday’s First District Court of Appeal’s ruling to allow the suspension of Allstate’s certificates of authority to resume. The Office is seeking clarification from the court on exactly when the suspension resumes.
Allstate said it will continue to write new business because the court’s ruling is not final and the stay is still in effect.
The original suspension came after the commissioner abruptly halted a hearing into the Allstate Companies' reinsurance program, their relationships with risk modeling companies, insurance rating organizations and insurance trade associations. Allstate appealed the suspension, asserting the commissioner exceeded his authority. The court stayed the suspension until it could consider the issue, and lifted the stay, ruling that the commissioner did not exceed his authority to suspend Allstate Companies' licenses.
"I remain seriously concerned with Allstate's continued failure to comply with our subpoenas; as evidenced by its 196-page privilege log of documents that they have failed to provide us," says McCarty. "They have not been willing to explain to us their relationships with rating agencies, modeling companies and trade groups and how these relationships might have influenced the huge rate increases they requested in September.
"If Allstate is willing to accrue $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 by Jan. 16, but failed to do so. Instead, the Office received 51 pages of objections to the subpoenas.
Since then, Allstate said it has produced more than 400,000 pages in response to the subpoenas. “We are very disappointed in (the) ruling and disagree with the court’s opinion,” Allstate said in a statement.
Allstate released a link on its media Web site Friday to approximately 150,000 pages of a document known as the McKinsey Report, which pertains to a review of Allstate's claim practices conducted in the 1990s. Allstate was assisted in the review by business consulting firm McKinsey & Company. The documents were posted to dispel an inaccurate portrayal of its claims practices, the company said. |