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Allstate once again suspended in Florida

by Biz Journal SF - May 15,2008

Florida's suspension of Allstate Cos. ability to do new business in the state is back in effect, and Insurance Commissioner Kevin McCarty said he expects a certification from the company offering access to its records.

The 1st District Court of Appeal on Wednesday denied the insurer's motion for rehearing, reiterating an earlier decision that said the state can, as a consequence of Allstate's refusal to comply with subpoenas seeking information on pricing strategies, bar the company from writing new policies in Florida.

"Allstate's willful, indeed potentially criminal, failure to comply with its disclosure obligations has prevented OIR from adequately investigating its reasoned belief that Allstate is systematically defrauding its policyholders," the court opinion read.

The Florida Office of Insurance Regulation said it is expecting a signed affidavit from Allstate, stating it has produced all documents requested. Upon receipt, McCarty would immediately stay the suspension, dependent on Allstate continuing to comply with Florida law and cooperate with the OIR investigation.

Allstate said has supplied a certification to the OIR for review and is working to resolve any remaining issues.

The OIR initially suspended Allstate on Jan. 16 after McCarty halted a hearing into its reinsurance program, relationships with risk modeling companies, insurance rating organizations and insurance trade associations. Allstate appealed the suspension to the courts, asserting the commissioner exceeded his authority. The court stayed the suspension until it could consider the issue, but lifted the stay, ruling on April 4 that the commissioner did not exceed his authority to suspend Allstate's licenses.

Allstate then released about 150,000 pages of documents related to a review of its claim practices in the 1990s on its Web site, though it said it still believes the documents contain trade secrets.

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