Allstate Resolves Dispute With Florida Insurance Commissioner
The Florida Insurance Commission has been investigating rate increases in Florida for over a year. As part of the investigation, the Commission subpeoned documents from Allstate in October of 2007. As described in a previous post, Allstate's refusal to honor the subpeona began a series of court battles that ended in May of 2008 with Allstate agreeing to turn the documents over. A hearing was set for September 15, 2008 before an Administrative Court Judge to decide whether all the documents were provided; whether Allstate falsely claimed the documents contained trade secrets; and whether Allstate falsely certified its original rate increase of more than 40 percent. The hearing has been cancelled because Florida regulators have reached a limited agreement with Allstate to resolve these issues.
The agreement requires Allstate to pay a $5 million dollar fine; lower its homeowners insurance rates in Florida by 5.6%; write 100,000 new homeowners insurance policies over the next three years; and cancel a 175 million dollar debt Allstate's Florida subsidiary owes the parent company. In exchange Florida will not pursue the issues that were set for hearing on September 15, 2008. Insurance Commissioner McCarty stated "It's unfortunate that Allstate's disregard for Florida's laws required the office to take such drastic actions, however, I'm glad that we've reached this agreement. We're looking forward to restoring the confidence of Allstate insurance companies."
The agreement does not end all investigations into Allstate's insurance practices in Flroida. Commissioner McCarty indicated an investigation into Allstates claims handling practices and potential collusion with rating organizations, trade associations and other entities will continue.
Scott Distasio
Tampa Personal Injury Lawyer
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