TALLAHASSEE, Fla. - Florida Insurance
Commissioner Kevin McCarty today announced that he is suspending the
certificate of authority of Allstate Companies to write new
insurance in Florida until they fully comply with the subpoenas
served Oct. 16 by the Office of Insurance Regulation (Office).
Today's decision by the commissioner follows Tuesday's action
when he abruptly halted the scheduled two-day hearing into the
Allstate Companies’ reinsurance program, their relationships with
risk modeling companies, insurance rating organizations and
insurance trade associations.
"In view of Allstate's ongoing, blatant disregard of our
subpoenas, I have little choice but to take an action that will send
a clear message about how seriously I am taking this issue," said
Commissioner McCarty. "Suspending their certificate of
authority to write new business in our state should make my
point.
"If Allstate is willing to pay $25,000 per day in fines to a
Missouri
court for its ongoing failure to provide similar documents, it's
obvious to me that it will take more than a monetary sanction to get
them to comply with our subpoenas."
Allstate was to have provided all appropriate company documents
related to the above topics at or before Tuesday’s hearing, but
failed to do so. Instead, the Office received 51 pages of objections
to the subpoenas.
The suspension applies to Allstate Insurance Co., Allstate
Indemnity Co. and Allstate Property and Casualty Co., and it only
suspends the companies from writing new business in Florida.
Existing policyholders will not be affected. Allstate must
continue to service them and the companies must make all required
statutory filings including, but not limited to, audited annual
financial statements, quarterly financial statements and rate
filings.
"The duration of the suspension is up to them," added McCarty.
"It will be lifted when I am satisfied that we have received each
and every document we need to properly investigate the important
issues before us.
"It continues to trouble me that Allstate has not complied with
our subpoenas and is not willing to explain to us their
relationships with rating agencies, modeling companies and trade
groups and how these relationships might have influenced the huge
rate increases they have requested. This clearly cannot be in the
best interests of Florida consumers."
This is the first time the Office has suspended a company for
failure to "freely" provide documents as required by Florida
law.
A copy of the
subpoena is
available to review.
A copy of Allstate's
response
is also available to review.
Allstate Floridian Indemnity and Allstate Floridian Insurance
Company have requested rate increases of 28.3 percent and 41.9
percent respectively. Encompass Floridian Indemnity requested a 38.4
percent increase, and Encompass Floridian Insurance Company
requested a 39.7 percent increase.
About the Florida Office of Insurance
Regulation
The Florida Office of Insurance Regulation
(Office) has primary responsibility for regulation, compliance and
enforcement of statutes related to the business of insurance and the
monitoring of industry markets. Business units within the Office are
organized based on regulatory expertise and include the areas of
life and health, property and casualty, specialty lines and other
regulated insurance entities. It is within the Office that the
mission of public protection is implemented through regulatory
oversight of insurance company solvency, policy forms and rates,
market conduct performance and new company entrants to the Florida
market.