EDITORIAL: Office of Insurance Regulation

Apr 10, 2008

Watchdog shows it won’t let go of Allstate demand

By Staff Reports
Naples Daily News--April 9, 2008

Florida’s Office of Insurance Regulation is in this for the long haul.

The office said it was serious about learning the truth about Allstate’s home insurance rate-setting policies in January when regulators tried to block the firm from writing new policies of any kind, including auto, in Florida until it answered questions.

The questions, deflected by Allstate at a public hearing in Tallahassee, dealt with Allstate’s ledgers and dealings with others in the industry.

The questions came after Allstate sought a 40 percent rate hike despite efforts by Gov. Charlie Crist and legislators to keep rates down.

The Office of Insurance Regulation, unimpressed by Allstate’s claim that providing the information would disclose proprietary private business data, defended its stand in court — and has prevailed, at least for now.

Yet, thank goodness insurance regulators are vigilant. They looked at the 150,000 pages of background information posted on Allstate’s Web site in response to the court order — and have concluded key questions remain unanswered.

Details matter.

Insurance companies, like banks and lenders, are special businesses that offer vital services in a modern society, but history has shown they also need special oversight, particularly when it comes to consumer protection.

They are not like any other business and have successfully fought elimination of antitrust exemptions on such grounds. But that comes with the price of government being allowed to look under the hood, especially when something sounds a little off, and a 40 percent rate hike certainly raises alarm bells.

Lesser-motivated public servants might have thrown up their hands and shuffled away, especially in the presence of such a large, influential company and industry. Too often we see have seen a response after the fact, instead of preventing a disaster or problem.

The Office of Insurance Regulation is keeping its stand on the Allstate new-business ban simple and direct: “As long as they (Allstate) refuse to submit all documents requested in the subpoena, the suspension will resume. Allstate controls how long it lasts. All they have to do to end it is turn over all requested documents.”

It is refreshing to see government’s watchdog role actually flashing some teeth. Insurance customers’ applause grows louder by the minute.