Florida insurance commissioner still reviewing Allstate deal

May 16, 2008

Florida Today--May 15, 2008

By Paul Flemming
Florida Capital Bureau

Insurance Commissioner Kevin McCarty and his legal team today continue to review a proposed deal with Allstate Floridian to get the company back in business.

The company and its affiliates remain barred from doing new business in the state – no new auto, property or health insurance policies – as penalty for failing to turn over thousands of documents McCarty seeks in an ongoing investigation of policy cancellations, rates and business practices.

The ban doesn’t affect Allstate’s 2 million existing customers. The company’s 1,100 agents around the state have no new insurance policies to sell.

On Wednesday, the 1st District Court of Appeal ended Allstate’s legal fight when it denied the company’s request for a rehearing of a decision in favor of McCarty’s power to impose the sanctions. The court also rejected Allstate’s motion to send the case up to the Florida Supreme Court. With the court on his side, McCarty immediately reinstated the order he’d first leveled against Allstate in January when he said the company was not responding to subpoenas or cooperative in a public hearing.

A spokesman for McCarty’s Office of Insurance Regulation said this afternoon that lawyers are going over a proposal from Allstate to provide unfettered access to company records.

"They want to make sure all the words are the right ones and in the right order," said Tom Zutell, deputy communications director for OIR.

McCarty said Wednesday he’d accept nothing less than a signed affidavit from company officers promising "unconditional" access to Allstate’s books and records.

"We’re just sort of waiting to hear from them, too," said Allstate spokesman Adam Shores. "We’ve submitted the affidavit and are ready to answer questions they might have or whatever we may need to do."

McCarty said the company had turned over further documents since the court’s initial ruling in his favor but he wanted iron-clad assurances that all records would be turned over.

When that happens, he said, he’d lift the suspension. Zutell said that would happen as soon as McCarty signed off on a deal that satisfied him.

The Florida Supreme Court on Thursday issued a memo setting out a timetable for Allstate, if it chooses, to ask that the case be heard by the state’s highest tribunal. Without certification from the 1st District Court or a conflict with other appeal court decisions it would be rare for the Supreme Court to take the case. Zutell said the notice from the Supreme Court was a "matter of procedure" that happens whenever a district court case becomes final.

Allstate is barred from selling all lines of insurance. But the company, after years of dropping policies following huge hurricane losses in 2004, is not selling new property insurance in the state of its own accord. A company spokeswoman said it sells about 6,000 new auto policies in a typical week and about 900 policies covering such things as boats and renters’ contents.