Allstate says it provided report

Jan 24, 2008

 Article published Jan 24, 2008 TAMPA TRIBUNE

Allstate says it provided report


Allstate said Wednesday it has handed over a controversial report on its claim practices, the same day Florida’s insurance regulators accused the company of breaking the law by refusing to release subpoenaed documents.

Spokesman Adam Shores said Allstate provided the Florida Office of Insurance Regulation with the so-called McKinsey Report, which is said to detail how the company saves money by paying less on auto insurance claims.

OIR spokesman Ed Domansky could not confirm late Wednesday that the agency had received the report, which encompasses thousands of pages of material.

The insurance company has been in a weeklong standoff with OIR over investigative subpoenas.

OIR was back in court Wednesday, filing a 12-page response to Friday’s court order that lifted Allstate’s suspension from selling new policies.

The state cranked up the rhetoric in its fight to obtain the documents from Allstate, Florida’s second-largest private homeowners and auto insurer.

"It is an ongoing crime, an ongoing violation of Florida law and harmful to Florida consumers," OIR general counsel Steven Parton wrote in the court filing.

The regulators suspended the insurer last Thursday from writing new policies because it had failed to comply with investigative subpoenas.

Allstate challenged the action, and the 1st District Court of Appeal in Tallahassee stayed what turned out to be a 24-hour suspension.

Regulators now want the court to issue an order lifting that stay so the suspension can resume.

Handing over the McKinsey Report, which Allstate claims is a trade secret, shows the insurer is complying with the subpoenas, Shores said.

"It demonstrates that we are working with them to satisfy their requests," he said.

But Insurance Commissioner Kevin McCarty says Allstate continues to maneuver to avoid turning over other key papers he wants in his inquiry into how the company sets rates on policyholders.

"Florida consumers deserve to know what is in the documents that Allstate is so aggressively guarding, and my office is determined to get them," McCarty said.

OIR contends that Allstate has falsely marked as "trade secret" many of the requested documents.

The insurer has said it has turned over nearly 40,000 documents to the agency and that it would continue to provide other information.

But OIR argued in Wednesday’s filing that the company only promises to release "certain" documents, a stance regulators say violates the law.

Last week, McCarty abruptly canceled two days of hearings he had scheduled on Allstate’s reinsurance program and its ties with risk modeling companies, rating organizations and trade associations.

He said the hearings could not proceed without all the subpoenaed documents and Allstate witnesses prepared to answer questions.

OIR has been taking a harder line since insurance reform legislation was passed last year. That law was designed to lower homeowners insurance premiums by what was touted as an average 24 percent, but many property owners have seen much less relief.

Allstate lowered its rates by 14.2 percent but then came back for a 42 percent rate hike, triggering OIR’s investigation into the company’s rate-making program.

Allstate has about 13,400 homeowner customers in Sarasota, Manatee and Charlotte counties.