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Senators Request Allstate's Documents

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By JEROME R. STOCKFISCH, The Tampa Tribune

Published: February 14, 2008

TALLAHASSEE - State senators, who grilled Allstate executives under oath at a Capitol hearing last week, on Thursday requested a slew of documents relating to how the insurer sets its homeowners' rates.

The move mirrors subpoenas issued in October by the state Office of Insurance Regulation, which demanded documents from Allstate and other insurers relating to their reinsurance programs and relationships with risk modeling companies, insurance rating organizations and trade groups.

Sen. Jeff Atwater, R-Palm Beach Gardens, said the missions of his Select Committee on Property Insurance Accountability and the OIR differ. His panel is attempting to determine whether Allstate and other insurers are complying with state law that required them to pass along certain discounts to consumers. OIR, on the other hand, deals strictly with issues of rate filings and their validity.

Many of the documents the Senate panel is seeking have been presented to OIR, Atwater said, but are classified as trade secrets or are otherwise unavailable to non-regulators.

Atwater's committee summoned executives from Allstate and four other companies to Tallahassee on Feb. 4-5. The lawmakers are trying to determine why measures taken in a January 2007 special session on homeowners insurance, which were expected to lower rates, did not have the desired effect with many insurers.

The document request issued Thursday reflected lawmakers' lines of questioning. Last week, Atwater pressed Allstate executives on an internal February 2007 PowerPoint presentation to Allstate management on the legislative changes. A slide in the program contained a footnote that suggested to the senator that Allstate would consider shifting storm-modeling tactics to a potentially more expensive projection if the legislation produced a rate decrease. Allstate executives denied Atwater's scenario.

Thursday's letter to Allstate Floridian chairman Joseph Richardson asked for all drafts, e-mails and other documents related to that presentation. State senators have not seen the presentation, but have second-hand knowledge of it from testimony before OIR officials.

"Their own testimony left so much doubt that this can be a plausible story, that they ought to go ahead and provide us documentation that can confirm what they shared with us," Atwater said Thursday.

The letter also requests all documents and communications regarding House Bill 1A, which was approved in the January 2007 special session. The legislation provided billions in reinsurance coverage to insurers at well-below-market rates. That left the state with a significant financial risk, but the intent was for insurers to pass the cost savings along to customers.

State analysts concluded the changes would result in average statewide savings of 24 percent on homeowners' premiums. Allstate filed for a 42 percent increase, and was among several companies notified by OIR that their requests wouldn't be approved.

The letter requests Allstate documents on 11 different subjects.

An Allstate spokesman said the company was still reviewing the letter late Thursday.

"It's important to know that the state already possesses a significant amount of detail about our rate filings," said Adam Shores, an Allstate spokesman.

"We've provided in excess of 100,000 pages of materials to OIR to date," he said. "We plan to work with lawmakers on this request and be as responsive as we can."

Reporter Jerome R. Stockfisch can be reached at (813) 259-8402 or jstockfisch@tampatrib.com.

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