Florida Insurance Commissioner Kevin McCarty on Monday 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 the subpoenas served Oct. 16 by the Office of Insurance Regulation (Office).
The commissioner’s announcement follows Monday’s First District Court of Appeal’s Order denying Allstate’s motion for a rehearing.
“This is a very meaningful ruling for the state of Florida,” said McCarty. “Our office will not tolerate companies that don’t follow the law, and this should serve as a warning to all of them that I am serious about my commitment to protect Florida consumers from unfair rates and unfair business practices.”
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 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, the 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.
“Although the company has been producing documents more consistently since I initially imposed the suspension, I remain seriously concerned with Allstate’s continued reluctance to comply with our subpoenas and their attempts to dictate which documents they believe are relevant to our investigation – as evidenced by the 196-page list of documents, which they have indicated they are withholding from our investigation,” added McCarty. “Florida law is very clear that companies must ‘freely’ make available all documents requested by my office.
“Allstate continues to be unwilling to explain to us their relationships with rating agencies, modeling companies and trade groups and how these relationships might have influenced the huge rate increases they requested in September.”
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. The Court’s April 4 ruling outlines explicitly Allstate’s failure to adequately comply at the Jan. 15 hearing.
Existing policyholders will not be affected by the suspension. Allstate must continue to service them, and the companies must make all required statutory filings including, but not limited to, audited annual financial statements, quarterly financial statements and rate filings.
“The length of the suspension is up to them,” McCarty continued. “I will immediately lift it when I am satisfied that they have provided all of the documents required by our subpoenas.
“Florida consumers deserve better, and I will see to it that companies do not act contrary to consumers’ best interests. This situation is not the norm. Most companies cooperate fully with the Office.”
McCarty met April 9 with a group of Allstate agents and assured them that the suspension would be lifted as soon as Allstate complied with the law.
A copy of the subpoena is available to review.
The suspension applies to the following Allstate companies, and it only suspends the companies from writing new business in Florida:
Allstate Floridian Insurance Co.
Allstate Indemnity Co.
Allstate Property & Casualty Insurance Co.
Allstate Insurance Co.
Allstate Floridian Indemnity Co.
Allstate Fire and Casualty Insurance Co.
Encompass Insurance Co. of America
Encompass Indemnity Co.
Encompass Floridian Insurance Co.
Encompass Floridian Indemnity Co.
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