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State Lifts Suspension Against Allstate

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By JEROME R. STOCKFISCH

The Tampa Tribune

Published: May 17, 2008

It hurt to have to turn away the boat and motorcycle owners that approached him Thursday for new insurance coverage.

But Dale Revels, president of the National Association of Professional Allstate Agents and himself a working agent in Kissimmee, said he will make up the couple of hundred dollars he probably lost in commissions now that the state has lifted its ban on Allstate conducting new business here.

"It's tough sending away business," Revels said Friday, hours after Insurance Commissioner Kevin McCarty announced that agents could carry on after the 21/2-day suspension. "I'll make it up. I'll work harder. We have a good brand name."

McCarty said Friday that he had accepted an affidavit filed by Allstate as evidence that the company had "completely and unconditionally complied with Florida law and our requests for documents."

Allstate spokeswoman Amy Moore said the company was "definitely pleased" with McCarty's decision. "It allows our 1,100 agents to get back to business serving their local communities," she said. Including staff, the suspension had affected some 5,000 insurance employees.

It was not known how hard the suspension would hit Allstate's bottom line. The company writes about 6,000 new auto policies per week in Florida, along with another 900 policies covering such areas as boats or renters.

McCarty issued the order suspending Allstate on Jan. 17, but legal wrangling held up implementation of the ban. An appeals court ruled this week that McCarty had the authority to yank the business licenses of 10 Allstate subsidiaries, and he did so Wednesday morning.

Existing policies were not affected.

The dispute stems from legislation passed in a special session in January 2007. By allowing the state to take on more hurricane risk from the private markets, lawmakers expected homeowners rates to drop. But when some insurers, including Allstate, filed last year for rate increases, the state Office of Insurance Regulation launched an investigation.

Allstate and several other insurers were subpoenaed for records relating to how they set rates. McCarty accused Allstate executives of stonewalling on the subpoenas and in person at a Tallahassee hearing.

"As I said Wednesday, it is unfortunate for Allstate's agents, their staff members and their policyholders that it has taken court action to compel the company to comply with Florida law," McCarty said Friday.

In the affidavit, Allstate assistant general counsel David Nadig said the Northbrook, Ill.-based company had produced more than 825,000 documents.

"Accordingly, the Allstate Companies have completed production as requested by the Office of Insurance Regulation," he said in the sworn document, adding that Allstate would continue to make documents freely available and would cooperate and respond to questions related to the OIR investigation.

McCarty said of the 825,000-plus documents cited in the affidavit, Allstate had produced just 36,000 of them between the Oct. 16 issuance of the subpoenas and the January order of suspension.

He said he has made it "perfectly clear" that failure to cooperate with ongoing requests from OIR "will result in an immediate resumption of the suspension."

Meanwhile, Allstate will appear before the state Division of Administrative Hearings next month on three matters: Its response to the document requests, and OIR allegations that the company falsely asserted trade secrets as it turned over documents and that executives falsely certified its 2007 rate filing.

Those charges could also result in the suspension of Allstate's right to do business in Florida.

"This story's not over yet," said Jim Fish, spokesman for the agents' trade association. "The stay will be lifted, but it is quite possible that with the DOA thing going on, it could happen all over again. They Allstate agents don't feel very secure right now."

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

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