Allstate May Finally be Held Accountable
Kevin McCarty, Florida's Insurance Commissioner, has been locked in what seemed to be a never ending battle with Allstate Insurance Company to force the company to comply with his subpeona for documents. To read more you can review my previous post. The fight started last year when the state began looking into why insurance companies in Florida were asking for rate increases of close to 42%. As part of the investigation McCarty requested that Allstate turn over documents that would allow his office to independently assess the need for its requested increase. Although Allstate has turned over upwards of 550,000.00 pages of documents, Commissioner McCarty has concluded the documents produced were not all the documents he requested. As a result, on January 16, 2008, McCarty issued a ban on Allstate issuing new insurance policies in Florida until it fully complies with his request. Allstate has, up until now, successfully skirted both the production of the documents and the ban on writing new insurance policies.
Florida personal injury lawyers are all too familiar with Allstate's tactics. Allstate's strategy was the same strategy it often employs in personal injury lawsuits. It objected to producing documents on trade secret grounds; it produced massive volumes of documents that were not relevant to the inquiry; it claimed it had fully complied; it publically asserted it was being treated unfairly by the state; and it appealed the Insurance Commissioners right to obtain the additional documents and ban it from writing new policies. The First Disrict Court of Appeal placed a stay on enforcement until it decided Allstate"s Appeal. The affect of the stay was to allow Allstate to hold on to the documents and continue writing new insurance policies from the time it appealed in January until now.
On May 14, 2008, the First District Court of Appeals finally ruled on Allstate's Motion for Rehearing of its April 4, 2008 denial of Allstates Appeal. Based on the Court's ruling, it appears Allstate's luck finally ran out. First District Court of Appeals Judge Paul Hawkes wrote "Allstate's willful, indeed potentially criminal, failure to comply with its disclosure obligations has prevented OIR from adequately investigating its reasoned belief that Allstate is systematically defrauding its policyholders." Not only did the Court deny Allstate's request for a rehearing of its April 4, 2008 decision to side with the Insurance Commissioner, but it refused to certify the matter to the Florida Supreme Court as a matter of great public importance. The decision will make it very unlikely that Florida's highest Court will take up the matter.
As a result of the Courts decision, it appears Allstate has finally gotten the message and provided all of the requested documents. Insurance commissioner McCarty said in a statement today, May 17, 2008, that after the court's ruling, Allstate provided an affidavit certifying that it complied with Florida law by providing all documents requested by his office. "I have stayed the suspension of Allstate, and I have accepted its affidavit as evidence that they have completely and unconditionally complied with Florida law and with our requests for documents," McCarty said. "I also, though, have made it perfectly clear that failure to cooperate with necessary, ongoing requests from the office will result in an immediate resumption of the suspension."
The Office of Insurance Regulation will now comb through the records and complete its investigation. We will have to wait to see what the documents show regarding the legitimacy of the rate hike requests that started this process. However, at the very least, the process has demonstrated that the state of Florida seems to have an Insurance Commissioner that is willing to put his own self interest aside to do what is right for the people of Florida.
Scott Distasio
Tampa Personal Injury Lawyer
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HELPING INJURED PEOPLE
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