Update: Governor Comments On Allstate Suspension Reinstatement

Update: Florida Governor Charlie Crist issued the following statement regarding the reinstatement of the Allstate Companies’ Florida suspension:

“Floridians across our state have suffered due to the high cost of insurance. I applaud today’s action by the 1st District Court of Appeal regarding Allstate. I also thank Commissioner McCarty and his office for their tireless efforts on behalf of the people of Florida.”

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Florida Insurance Commissioner Kevin McCarty announced today, May 14, 2008, the immediate resumption of the suspension of the Allstate Companies’ Certificates of Authority to write new business in the State of Florida.

The suspension applies to all lines of business and will remain in effect until the Allstate Companies fully comply with Florida law and produce documents requested by the Florida Office of Insurance Regulation regarding homeowners insurance.

A copy of Commissioner McCarty’s press release is reprinted below.

 

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

 

Florida Appeals Court Denies Allstate Motion for Rehearing, Suspension Resumes

TALLAHASSEE, Fla. – Florida Insurance Commissioner Kevin McCarty today announced the immediate resumption of the suspension of the certificates of authority of the Allstate Companies to write new insurance policies in Florida. The suspension applies to all lines of business and will remain in effect until the companies fully comply with Florida law and produce the documents requested by the Office of Insurance Regulation (Office).

In addition, however, the Office is expecting an affidavit, signed by an Allstate officer, asserting that it has produced all documents requested. Upon receipt of that certification, Commissioner McCarty will immediately stay the suspension – with the understanding that the stay is dependent on Allstate’s continued compliance with Florida law and cooperation with the Office’s investigation.

The commissioner’s announcement follows today’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.

“This case illustrates the effectiveness of an Immediate Final Order, such as the one upheld today by the District Court,” said Commissioner McCarty. “Were it not for that order, we do not believe that we would have the documents available for our ongoing investigation. We now have received hundreds of thousands of documents that Allstate had not previously produced.”

The suspension was 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 today’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 today’s opinion, outlines explicitly Allstate’s failure to adequately comply at the Jan. 15 hearing.

The suspension does not affect existing policyholders or consumers who were in the process of securing a policy when the Court’s opinion was issued will not be affected.

In addition, 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.

Allstate agents are encouraged to contact the company’s corporate headquarters with questions or comments.

 

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