The Car and Truck Fleet and Leasing Management Magazine

Allstate Resumes Selling Auto Policies in Florida

May 22, 2008

TALLAHASSEE, Fla. --- Florida Insurance Commissioner Kevin McCarty last week ordered a stay of the suspension of the Allstate Companies' licenses to sell new business in Florida. As a result, the insurance company has resumed writing new auto policies in the state.

Allstate is the second largest auto insurer in Florida.

McCarty's decision comes as the result of Allstate's submission of an affidavit certifying that it has complied with Florida law by providing all documents requested by the Office of Insurance Regulation as part of its investigation of Allstate's business practices in Florida regarding property insurance.

Allstate spokesman Adam Shores told the Chicago Tribune that the company was pleased by the dispute resolution. "This allows us to resume offering insurance protection to Floridians," Shores said. "We're looking forward to having a continuous dialogue with the [state Office of Insurance Regulation] and other leaders about solutions to the property insurance market."

Earlier last week, the First District Court of Appeal issued an opinion denying Allstate's motion for a rehearing and affirming the insurance regulation office's action in issuing the January suspension.

"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 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."

Allstate has produced hundreds of thousands of pages of documents that McCarty's staff has been 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 suspension.

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

Allstate was ordered to provide all appropriate company documents related to the those topics by Jan. 15 and bring witnesses to testify about the documents and issues at the Jan. 15 hearing, but failed to do so. Instead, the insurance office received 51 pages of objections to the subpoenas.

Allstate appealed the suspension, 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 a April 4 ruling, replaced by last week's opinion, three District Court of Appeal judges unanimously agreed that the commissioner had not exceeded his authority when he issued the January order to suspend the Allstate licenses.  

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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