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More Business news
Fla. lifts ban on Allstate selling new insurance policies

ASSOCIATED PRESS

3:27 p.m. May 16, 2008

TALLAHASSEE, Fla. – Allstate Corp.'s subsidiaries can resume selling new car insurance and other policies in Florida after the insurer turned over documents showing how it sets homeowners rates, the state said Friday.

Insurance Commissioner Kevin McCarty lifted the suspension because he said Allstate has handed in documents that regulators demanded along with an affidavit that all the information sought was included.

The state had said since January that Allstate hadn't sufficiently complied with subpoenas seeking information about how it sets the rates. McCarty moved then to suspend the company, but it appealed. An appeals court this week upheld the suspension, which took effect Wednesday.

State insurance regulators have battled insurers for more than a year, since lawmakers passed a law in January 2007 that was aimed at lowering property insurance premiums. Companies were compelled to lower rates by a certain amount, but then were allowed to file updated “true up” filings meant to reflect their true rate needs.

Many companies, including Allstate, filed for increased rates, much to the chagrin of state officials and politicians, who promised relief from spiraling property coverage premiums in the wake of the big hurricane seasons of 2004 and 2005.

Allstate spokesman Adam Shores said Friday the company was telling agents they could immediately sell policies again and that Allstate officials were pleased at the dispute's resolution.

“This allows us to resume offering insurance protection to Floridians,” Shores said. “We're looking forward to having a continuous dialogue with the (state Office of Insurance Regulation) and other leaders about solutions to the property insurance market.”

It's unclear how much business Allstate may have lost when sales were suspended for a little more than two days. But the company is the second-largest auto insurer in Florida, with about 1.7 million policies in force. The existing policies weren't affected by regulators' actions.

McCarty made it clear the company must keep cooperating to continue its business.

“Failure to cooperate with necessary, ongoing requests from the office will result in an immediate resumption of the suspension,” McCarty said in a statement.

Officials said the Northbrook, Ill.-based company has produced more than 825,000 pages of documents – most of them since the agency moved to suspend the company Jan. 17.

Allstate had initially asked for a rate increase of more than 40 percent, despite the new law meant to make insurance cheaper.

The request was part of the buildup to the Office of Insurance Regulation trying to investigate how the company sets rates.

In January, the company went before agency officials in a hearing that was scheduled to go two days. But officials from McCarty's office cut it short after two hours during which company officials and lawyers were pressed by regulators about why they hadn't supplied all the documents Florida wanted. McCarty moved a couple days later to suspend the company.

In a separate case arising from the same investigation, Allstate is accused of falsely representing that some information was protected as trade secrets. Company executives are also accused of falsely certifying to the accuracy of some documents.

That case is before an administrative judge. If the judge rules the company broke additional laws, the state could again pursue a suspension, said McCarty.

A hearing in that case is scheduled for June 16.


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