Excerpts from OIR’s Response to Reinstate Allstate Suspension

Following are excerpts from the Florida Office of Insurance Regulation’s (“Office’s”)response to the First District Court of Appeal seeking to have the suspension of the Allstate Companies’ certificates of authority reinstated.  To read the complete response, click here.

• “Appellants’ Corrected Motion fails to address the Office’s finding in the Immediate Final Order (“IFO”) that Allstate’s unlawful conduct and willful disobedience of the Florida Insurance Code is a threat to the health, safety and welfare of Florida citizens. The IFO seeks to bring Appellant into compliance with the Florida Insurance Code and to put an end to Allstate’s continuing unlawful conduct without injuring current policyholders.
• “Contrary to Appellants’ claim that they had no hearing or opportunity to address this matter, Appellants had the opportunity to comply with Florida law by producing competent knowledgeable witnesses on the subpoenaed topics and by freely producing subpoenaed documents. Allstate had the opportunity under oath, before the Agency Head, to respond to the Office’s concerns regarding their failure to produce the documents requested. Instead, it became abundantly clear that Allstate’s corporate representatives were unaware of what documents, if any, had been produced to the Office, had no reasonable explanation for their failure to make the requested documents freely available, and were otherwise unprepared to answer questions as directed by the Office’s subpoenas. The Office noted that Appellants failed to produce any of the subpoenaed documents at the Hearing.
• “Based upon the failure of Allstate to produce the requested documents and the testimony given at the Hearing regarding that failure, the Office issued the IFO finding that Appellants’ purposeful failure to freely produce documents to the Office, constituted a willful violation of the Florida Insurance Code.  Based upon the failure of Allstate to produce the requested documents and the testimony given at the Hearing regarding that failure, the Office issued the IFO finding that Appellants’ purposeful failure to freely produce documents to the Office, constituted a willful violation of the Florida Insurance Code and therefore a crime, the continuing nature of which is in and of itself a threat to the health, safety and welfare of Florida citizens.
• “Despite Appellants’ mischaracterizations of the Office’s IFO, the IFO does state with particularity the facts underlying the Office’s decision to suspend the Certificates of Authority of the Appellants. Those facts demonstrate a willful violation of the Florida Insurance Code by Allstate.
• “Appellants misconstrue their failure to comply with the Florida Insurance Code as nothing more than a discovery dispute; however, it is much more than that. It is an on-going crime, an on-going violation of Florida law and harmful to Florida consumers.
• “Over the three (3) month period since the Office issued its subpoenas to Appellants, they have produced sixteen (16) boxes of documents to the Office that included prior rate filings already in the possession of the Office and documents with missing pages. Moreover, Allstate falsely marked as “Trade Secret” many documents, including prior rate filings, which were already in the Office’s possession and available on the internet.
• “Despite multiple representations over the last three (3) months and again at the Hearing by both Appellants’ counsel and corporate representatives that they intend to fully cooperate and provide the Office with the requested documents, they have not.
• “The Affidavit of Maria S. Doughty, Managing Counsel of Allstate Insurance Company, states that: “Since October 16, 2007 Allstate employees have expended over 2000 personnel hours in searching for documents, preparing documents for production and in producing the documents to OIR.” In proper context, 2000 personnel hours is equivalent to 285 days. The Office finds it remarkable that it has taken Allstate the equivalent of 285 days to produce 16 boxes of documents to the Office. The question remains, how many boxes of responsive documents have Appellants withheld in reliance on their improper objections.
• “Contrary to Appellants’ statement that it “would produce documents responsive to categories 1-38 in the subpoenas…,” Allstate’s objections actually state that it “will produce certain documents responsive to” the Office’s subpoenas. (Emphasis added to “certain”) Such qualified production is unacceptable and in violation of Florida law. Allstate is a regulated entity and cannot be allowed to dictate to the Office what it will produce in response to the Office’s subpoenas.”

The response concludes:

“This power is not taken lightly by the Office. The Office is mindful of the impact the suspensions have on Allstate and its agents, however, the length of the suspension imposed by the Office is in Appellants’ hands. The Office narrowly tailored the IFO so as to not unnecessarily disrupt the marketplace and to bring Appellants into compliance with Florida law and to stop Allstate’s on-going unlawful conduct.”

 

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