Florida Court: Allstate Insurance Back in Business…Again

Allstate Insurance Co. filed a motion Monday with Florida’s First District Court of Appeal requesting a rehearing of an opinion the court issued on April 4, which lifted a stay of suspension to write new business.

The suspension of Allstate remains stayed until final disposition of the case, meaning the company can continue writing new business in Florida – for now.

In keeping with the court’s April 7 clarification order, the Florida Office of Insurance Regulation must now submit a response to the motion by 5 p.m. on April 16. OIR spokesman, Ed Domansky, said Insurance Commissioner Kevin McCarty will file the response in accordance with Wednesday’s deadline.

On Jan. 17, the OIR suspended Allstate’s certificate of authority on all lines of business in Florida. On Jan. 18, the Florida First District Court of Appeal granted an immediate stay from OIR’s order.

Domansky said McCarty will continue to pursue this matter until Allstate complies with subpoenas issued to Allstate on Oct. 16, 2007. To date, Allstate has submitted hundreds of thousands of pages of documentation, although according to Domansky, the submitted documentation represents only a portion of the information originally requested.

“The documents Allstate submitted do not satisfy the subpoenas,” Domansky said. “The documentation was due in January but Allstate never asked for an extension.”

McCarty cut short a scheduled two-day January hearing when he discovered that Allstate came unprepared for the session’s intended purpose, which was to provide all appropriate company documents related to their reinsurance program, their relationships to risk modeling companies, insurance rating organizations and insurance trade associations.

On April 4, Allstate publicly released approximately 150,000 pages of documents pertaining to a review of its claim practices conducted in the 1990s. Allstate was assisted in the review by business consulting firm McKinsey & Co.

Mike Siemienas of Allstate said the insurer’s release of the McKinsey & Co. report had nothing to do with the Florida subpoena. He said the release of the 150,000 page review of the company’s claims practices happened to coincide with the Florida legal issue, but added that a combination of unrelated factors prompted the action.

“The growing mischaracterization of these documents and their contents represented a future threat to our brand and Allstate’s claims handling process,” Siemienas said.

Another Allstate spokesperson, Amy Moore, said the company established a “rolling schedule” of document submission which she said is active and ongoing.

“We are continuing to produce documents as quickly as possible,” Moore said. “We’ve produced more than 400,000 pages of documentation already.”

Moore said the company is concerned about its agents who she said are primarily small business owners. The message the company is sending to their independent agents is “they can sell as they normally would,” Moore added.

McCarty met with several Allstate agents last week to discuss their apprehension related to the legal actions.

“It is unfortunate that the company has put you in this position, jeopardizing your livelihoods. But, I cannot, and will not, allow any insurance company doing business in Florida to avoid their legal duties under the Florida Insurance Code,” McCarty said.
“Suspending the Allstate licenses is a very serious action, but I had no other choice given that Allstate’s actions have been contrary to the best interests of Florida consumers and are in violation of the law.”

McCarty encouraged the agents to express their concerns to the Allstate corporate office, saying that a resolution is at the discretion of company officials.

“As the District Court stated very clearly in its April 4 ruling, Allstate can comply with the law and produce all of the documents my office has requested, or I will continue to do everything I can to ensure that their license is suspended,” McCarty said.