Crist: Allstate made offer
Apr 25, 2008
St. Petersburg Times–April 24, 2008
By Tom Zucco and Jennifer Liberto, Times Staff Writers
TALLAHASSEE — Hammered by the courts and threatened with a crackdown by Florida’s insurance commissioner, Allstate Corp. quietly offered the state millions to let the company off the hook and retract a pending order that would stop the insurance giant from selling new policies in Florida, state officials say.
Gov. Charlie Crist confirmed the Allstate offer was floated recently, and he promptly rejected it. Allstate officials said late Thursday that no offer had been made.
Florida regulators are trying to suspend Allstate’s license until the Illinois-based insurer turns over documents that regulators say are key to an investigation into Allstate’s ratemaking practices.
Insurance agents for Allstate said they heard the offer at one point reached as much as $10-million, but insurance experts familiar with the talks say the company’s offer wasn’t that high.
Asked if a figure of $10-million was accurate, Crist said, “something like that sounds familiar.”
”I can’t remember how it came about,” said Crist, who had been briefed on the negotiations. “But I rejected it out of hand. It sounded weird to me. Here we are at the precipice of getting to the truth and the company wants to throw money at you. That’s not acceptable.”
Allstate spokesman Adam Shores denied the company had made the offer but said negotiations are ongoing.
“We are in continuous conversations with (regulators) as to what specifically they’re looking for and what exactly they need,” Shores said.
Tom Zutell, a spokesman for Insurance Commissioner Kevin McCarty, who is traveling out of the country, initially confirmed a multimillion-dollar offer had been discussed. He later issued a statement to the St. Petersburg Times.
“A monetary settlement alone would not produce those documents (regulators) must have to determine if there has been consistent and systematic harm perpetrated on Florida’s consumers,” the statement said.
Earlier this month, a state appeals court upheld McCarty’s January order suspending Allstate from writing new business. But Allstate challenged the ruling. The court’s final decision could come as early as Tuesday.
As the drama plays out, Florida’s 1,100 Allstate agents and their staffs are caught in the middle, said Jim Fish, executive director of the National Association of Professional Allstate Agents, a group not affiliated with Allstate Corp.
“The company has tried to manage the collateral damage from this whole fiasco,” Fish said Thursday. “They’re trying to tell agents they’re taking care of it, so until just recently, the agents have been following company line.”
But the agents don’t know what will happen next and worry that the suspension will soon be reinstated, Fish said.
“We get dozens of calls every day from agents who are very concerned the company has not approved a plan for them in case this does go into effect,” Fish said. “We don’t know the company’s plan. The company seems to think everything will work out okay.”
Sen. Jeff Atwater, the incoming Republican Senate president from North Palm Beach who has lately been an unrelenting critic of the industry, said that he hadn’t heard of a multimillion-dollar offer but that he knew the parties were talking.
“It would seem to me that complying with the subpoena would be the best way to get a resolution,” Atwater said.