Allstate cannot write new policies in Florida

May 15, 2008

The state bars the insurer from writing policies till it complies with a subpoena.

Anika Myers Palm
Sentinel Staff Writer
Orlando Sentinel–May 15, 2008

No new policies for Allstate — at least for now.

The state has once again blocked the giant insurer from signing up new customers. Florida Insurance Commissioner Kevin McCarty reinstated his order after an appeals court Wednesday denied Allstate’s request for a rehearing in its three-month court battle with state insurance regulators.

The Florida Office of Insurance Regulation and the Northbrook, Ill.-based insurance company have been battling over whether Allstate should have to turn over thousands of pages of documents said to show how the company sets its homeowners-insurance rates. McCarty said he will lift the ban when the company submits an affidavit indicating that it has turned over all the requested documents.

An Allstate corporate officer must sign the affidavit, which also will obligate the company to produce any additional documents the insurance-regulation office requires, said Ed Domansky, an Office of Insurance Regulation spokesman.

"The stay is completely dependent on Allstate’s continued compliance," McCarty said in a Wednesday afternoon news conference. Allstate has submitted an affidavit, but it has not been approved by McCarty.

In its opinion, the Tallahassee-based 1st District Court of Appeal said the Office of Insurance Regulation has shown that Allstate’s unwillingness to supply all the documents was criminal and a danger to public welfare.

"Essentially, Allstate created the difficulty about which they now complain and attempt to use to seek relief," read the court’s opinion.

Allstate has said it is moving quickly to comply with the terms of the suspension, which does not affect current policyholders. It also said it has submitted many of the requested documents.

The company has asked its agents to stop writing new policies, Amy Moore, an Allstate spokeswoman, said Wednesday afternoon.

Gov. Charlie Crist has supported McCarty’s efforts. Speaking Wednesday during a session at the 22nd Annual Governor’s Hurricane Conference in Fort Lauderdale, Crist said he was pleased by the court’s decision. He said that there are some good insurance companies doing business in Florida, but "some of them, like Allstate, have been horrific."

The contentious relationship between state regulators and Allstate came to a head in January, when McCarty issued the order suspending the company’s authority to write any new policies in the state, an attempt to force Allstate to comply with a 2007 subpoena.

A ruling from the 1st District Court of Appeal lifted the suspension, but the Tallahassee-based court on April 4 reversed it and said state insurance regulators had the right to block Allstate from signing up any new customers.

The suspension has been on hold through a process that has included multiple court filings from both Allstate and the Office of Insurance Regulation and an April 21 ruling that seemed to approve the suspension but was later declared to be a clerical error.

McCarty’s suspension applies to all 10 Allstate companies doing business in Florida: Allstate Floridian Insurance, Allstate Indemnity, Allstate Property & Casualty, Allstate Insurance, Allstate Floridian Indemnity, Allstate Fire and Casualty Insurance, Encompass Insurance Co. of America, Encompass Indemnity, Encompass Floridian Insurance and Encompass Floridian Indemnity.

Allstate agents have been especially worried about what would happen if they couldn’t sell new policies.

Dale Revels, an Allstate agency owner and the Orlando-based president of the National Association of Professional Allstate Agents, said that as the insurance-regulation office and Allstate submitted dueling documents in the case, he had heard from several agents who were worried about their businesses.

"Guys like me that are agency owners that have thousands of clients . . . I won’t be able to write new policies, but I’m not going to go out of business because I’ve got existing clients. It’s not like that for the newer agents," Revels said.