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State Regulator Again Tries To Hobble Allstate

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By JEROME R. STOCKFISCH, The Tampa Tribune

Published: February 20, 2008

TALLAHASSEE - State insurance commissioner Kevin McCarty on Tuesday filed a complaint seeking once again to bar Allstate insurance companies from doing future business in the state.

McCarty filed an order on Jan. 17 yanking Allstate's licenses, but an appeals court lifted that ban and is considering a final determination.

The state Office of Insurance Regulation charges that Allstate has missed deadlines and failed to provide adequate documents and witnesses sought by subpoenas in an investigation of homeowners' insurance rate-setting.

"Seeking to suspend a company's license is not something we take lightly," said Steve Parton, general counsel for the office. However, he said Allstate's "defiance" of Florida insurance laws made the action necessary, he said.

The complaint filed Tuesday allows Allstate to request a hearing before an administrative law judge, who will hear evidence and make findings of fact. Any decision can be appealed through the court system. The complaint likely will take months to resolve.

A company spokeswoman said the move was "not unexpected."

McCarty's office issued subpoenas to Allstate and three other home insurers in October. Investigators want to determine why, after the state took on significant risk to provide cheap reinsurance to the private market, rates have not uniformly dropped.

Though the state presumed Allstate's rates would fall by 14 percent, the company requested a 42 percent increase. It was denied by regulators.

The Allstate subpoenas seek documents relating to the company's reinsurance program and its relationships with risk modeling companies, insurance rating organizations and trade associations.

The subpoenas required appropriate witnesses to appear at a Jan. 15 hearing in the Capitol.

At that hearing, McCarty announced with frustration that Allstate had failed to comply with the subpoenas, and two days later, he attempted to prevent the company from writing not only homeowners but other lucrative lines such as auto insurance in Florida.

Allstate's Florida auto business was worth $1.2 billion in premiums in 2006, the latest figures available, and it has increased business in the state by about $100 million in premiums a year.

Northbrook, Ill.-based Allstate says it has provided more than 160,000 pages of documentation.

"We remain confident that we are cooperating," spokeswoman Deb Clouser said Tuesday. "It's just a huge volume of information that they're asking for. It takes time. We have every intent of providing information until they're satisfied."

Regulators say relevant information was due Nov. 30, and they said Tuesday that Allstate has not delivered all documents requested by the subpoenas and is maintaining claims of privilege to some of them.

The complaint states that because Allstate falsely labeled documents as trade secrets, meaning it filed a false material statement in violation of Florida law, and because it failed to provide other documents, the "certificates of authority" for 10 Allstate companies now doing business in the state should be revoked.

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

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