Fla. Insurance Regulator Files Complaint to Suspend Allstate Licenses

Florida Insurance Commissioner Kevin McCarty today announced that the Office of Insurance Regulation has filed an administrative complaint on a non-emergency basis seeking to suspend the certificates of authority of the Allstate Companies to write new insurance policies in Florida.

The complaint is based in part on Allstate's failure to provide witnesses and documents as subpoenaed by the OIR; falsely labeling subpoenaed documents as trade secret and falsely certifying its rate filings.

"Seeking to suspend a company's license is not something we take lightly," said General Counsel Steve Parton. "However, in light of their defiance of the Florida Insurance Code, we think it is necessary to make the point that actions such as we have seen by Allstate will not be tolerated."

Allstate was to have provided all appropriate company documents related to the OIR's investigation at or before a Jan. 15 hearing. Instead, in late November, Allstate filed 51 pages of objections to the subpoenas. Allstate has been delivering documents to the OIR since the Jan. 15 hearing, but has not delivered all documents requested by the subpoenas and is maintaining claims of privilege to some of the documents.

The OIR has been asking for documents about Allstate's reinsurance program, its relationships with risk modeling companies, insurance rating organizations and insurance trade associations. The subpoenas also required appropriate witnesses to appear at the January hearing to be able to discuss issues that were subjects of the subpoenas.

The complaint also alleges that Allstate has violated Florida law by not properly certifying its rate filings as required by House Bill 1A, which passed in January 2007.

Filing the complaint is required under Florida law as part of the process that began when Commissioner McCarty issued a final immediate order Jan. 17, suspending Allstate from writing any new business – in all lines – in Florida. Allstate is expected to request an administrative hearing on the Office's complaint. If requested, a hearing would be held at the Division of Administrative Hearings.

An administrative law judge will hear the evidence and then make findings of fact. McCarty could then issue a final order, which may include a suspension of Allstate's certificates of authority. Allstate could then appeal to the First District Court of Appeal.

The DOAH hearing is separate from the ongoing matter that Allstate initiated in the First District Court of Appeal by filing its Jan. 17 notice of appeal of the commissioner's order. That matter is still proceeding in the DCA.

The Allstate suspension was the first time the OIR had suspended a company for failure to "freely" provide documents as required by Florida law.

The Order would apply to all Allstate companies on which the subpoenas were served:

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.

A copy of the subpoena is available to review at http://www.floir.com/pdf/AllstateSubpoena.pdf

Source: Florida Office of Insurance Regulation

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