Allstate complies on release of papers

Apr 8, 2008

Miami Herald--Apr. 08, 2008

After years of defying court orders and racking up fines, Allstate has released about 150,000 pages of documents it had staunchly protected as proprietary.

Allstate’s Florida-based companies are facing an order that bars them from writing new business because they haven’t fully complied with a subpoena for information, which included documents prepared by business consultant McKinsey & Co. in the mid-1990s.

Allstate said the documents were released to dispel misunderstanding and misinterpretations of the company’s policies based on just ”snippets” of the full review that McKinsey did for the insurer, said Michael Siemienas, a company spokesman.

These documents, posted on Allstate’s website late Friday, have been aggressively sought by regulators and plaintiffs’ attorneys in recent years. The company has racked up more than $4 million in fines since it refused to turn over the McKinsey documents to a Missouri court last fall.

Siemienas noted that many attorneys misinterpreted the information from McKinsey that refers to how the company deals with claims from other parties, not from policyholders. Many of the sections often referred to by plaintiff attorneys refer to claims-handling practices for auto claims, but they were taken to be applied to homeowners policies as well.

But the company said Monday that numerous attorneys, and even one jury in Kentucky, have reviewed the portions of the documents that advised the insurer on how to make its claims handling more efficient.

Siemienas said Allstate’s goal is to provide quick and fair settlements on claims. But it won’t overpay a claim when a consumer is “demanding a settlement we believe is unfair.”

Allstate still believes that the documents contain trade secrets and should be considered confidential.

Florida Insurance Commissioner Kevin McCarty issued the suspension — a move rarely taken by the commissioner — in January after Allstate failed to produce documents or testimony to clarify its procedures for paying claims. The Office of Insurance Regulation’s subpoena was issued last October.

Florida’s First District Court of Appeal in Tallahassee upheld McCarty’s order in a decision issued Friday.

The appeal court issued a stay of the suspension until it reviewed Allstate’s appeal. Allstate now has 15 days to request a rehearing.

The OIR believes its ban on Allstate writing new business will be effective April 19, unless the court keeps the stay in place pending a rehearing.

Allstate gave the McKinsey documents to the OIR in late January, shortly after the suspension was issued.

But releasing the McKinsey documents to the public or turning them over to the OIR doesn’t let Allstate off the hook with Florida’s regulators, said Ed Domansky, an OIR spokesman.

In its release, Allstate said the McKinsey documents demonstrate “a careful, fact-based analysis to better enable the company to more promptly investigate and more consistently and effectively evaluate claims based upon their own merits.”