UPDATE: Florida Insurance Commissioner McCarty Stays Allstate Suspension

UPDATE: Please note the corrected hyperlink to the Allstate stay of suspension Order.

Florida Insurance Commissioner Kevin McCarty today, May 16, 2008, announced that he has ordered a stay of the suspension of the Allstate Companies’ licenses to sell new business in Florida.

Commissioner McCarty’s decision comes as the result of Allstate’s submission of an affidavit certifying that it has complied with Florida law by freely providing all documents requested by the Office of Insurance Regulation (“OIR”) as part of its investigation of Allstate’s business practices in Florida.

To view a copy of the Order staying Allstate’s suspension, click here.

To view a copy of Allstate’s affidavit, click here.

To view a copy of the First District Court of Appeal’s opinion dated May 15, 2008, click here.

To view a copy of the OIR’s January Immediate Final Order, click here.

A copy of Commissioner McCarty’s announcement is reprinted below.

 

Should you have any questions or comments, please do not hesitate to contact this office.

 

Florida Insurance Commissioner McCarty Stays Allstate Suspension, Continuing Compliance Required

TALLAHASSEE, Fla. – Florida Insurance Commissioner Kevin McCarty today announced that he has ordered a stay of the suspension of the Allstate Companies’ licenses to sell new business in Florida. Commissioner McCarty’s decision comes as the result of Allstate’s submission of an affidavit certifying that it has complied with Florida law by freely providing all documents requested by the Office of Insurance Regulation (Office) as part of its investigation of Allstate’s business practices in Florida.

The commissioner’s announcement follows Wednesday’s First District Court of Appeal’s (DCA) Opinion denying Allstate’s motion for a rehearing and affirming the Office’s action in issuing the January Immediate Final Order (IFO).

“I have stayed the suspension of Allstate, and I have accepted its affidavit as evidence that they have completely and unconditionally complied with Florida law and with our requests for documents,” said Commissioner McCarty. “I also, though, have made it perfectly clear that failure to cooperate with necessary, ongoing requests from the Office will result in an immediate resumption of the suspension.

“As I said yesterday, it is unfortunate for Allstate’s agents, their staff members and their policyholders that it has taken court action to compel the company to comply with Florida law. The District Court’s Order enables the Office to investigate whether Allstate has engaged in claims practices that have been harmful to its policyholders.”

Allstate has produced hundreds of thousands of pages of documents that Office staff members have been thoroughly reviewing. Of the more than 825,000 pages mentioned in its affidavit, Allstate produced only 36,000 pages between the Oct. 16 issuance of the subpoenas and the Jan. 17 issuance of the IFO.

The suspension was initially put in place Jan. 17 after the commissioner abruptly halted a Jan. 15 hearing that was to look into the Allstate Companies’ reinsurance program, their relationships with risk modeling companies, insurance rating organizations and insurance trade associations.

Allstate was to have provided all appropriate company documents related to the above topics by Jan. 15 and was to have brought appropriate witnesses to testify about the documents and issues at the Jan. 15 hearing, but failed to do so. Instead, the Office received 51 pages of objections to the subpoenas.

Allstate appealed the suspension to the DCA, asserting that the commissioner had exceeded his authority by issuing the Immediate Final Order to suspend its certificates of authority; the court stayed the suspension until it could consider the issue.

In its April 4 ruling, replaced by Wednesday’s opinion, three DCA judges unanimously agreed that the commissioner had not exceeded his authority when he issued the January Order to suspend the Allstate Companies’ licenses. The Court’s April 4 opinion, as well as Wednesday’s opinion, outlines explicitly Allstate’s failure to adequately comply at the Jan. 15 hearing.

The collateral legal matter with the Division of Administrative Hearings is set for hearing June 16. This proceeding involves Allstate’s alleged failure to comply with the document request; there also are two other counts – falsely asserting trade secrets and false certification of its September rate filing.

 

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