Florida authorities said today that Allstate is the latestinsurer to be subpoenaed for information and testimony abouthomeowners' rates in an ongoing investigation that is examiningpossible collusion by insurance groups.

Subpoenas have been served on 10 Allstate companies doingbusiness in Florida by the state Office of Insurance Regulation,which said it has directed their management to appear for two daysof public hearings Jan. 15-16, 2008 in the state capitol atTallahassee.

Meanwhile, the OIR said it was cancelling a hearing that hadbeen set for Cincinnati Insurance Co. and the Cincinnati IndemnityCo.

OIR said it wants Allstate testimony about its companies'reinsurance programs, their relationships to risk modelingcompanies, insurance rating organizations or companies andinsurance trade associations and “all appropriate company documentsrelated to the above topics also are to be provided.”

Allstate companies have put in requests for big rate increasesand Insurance Commissioner Kevin McCarty said, “The legislationenacted in January was very specific about its requirement thatinsurers reduce the rates they are charging for homeownersinsurance.”

That legislation provided insurers with discount reinsurancefrom the Florida Hurricane Catastrophe Fund, and officials saidthey expected to it to result in a rate drop.

“We are continuing to investigate those companies that appear tobe ignoring the intent of the legislature in its efforts to reducepremiums to consumers, and we want to hear the reasons behind thosecompanies' actions,” Mr. McCarty said.

Allstate Floridian Indemnity and Allstate Florida InsuranceCompany are requesting rate increases of 28.3 percent and 41.9percent respectively. Encompass Floridian Indemnity is requesting a38.4 percent increase, and Encompass Floridian Insurance Company isrequesting a 39.7 percent increase.

Adam Shores, a spokesperson for Allstate Florida operations saidthe insurer shared the concern of Republican Gov. Charlie Crist andthe OIR “over Florida's property insurance market. We haveadvocated for a national natural catastrophe fund.”

Asked about the OIR's prior statements that it is examiningpossible collusion among insurance interests, Mr. Shores said “Weremain very confident in our business practices and our adherenceto state law.” The firm, he said, “is committed to our customersand remaining financially solvent to meet the promise we've made tothem.”

Mr. Shores said company attorneys were examining the subpoenasand he could not immediately say there would be any courtchallenge.

Last week Cincinnati Insurance Co. and the Cincinnati IndemnityCo. lost a court battle to limit the scope of similar subpoenas.The court said it could not act unless OIR files an enforcementaction.

However, Cincinnati said it had reached an understanding withOIR to narrow the scope of the subpoena and is “reasonablycomfortable with the current status” and OIR assurances it wouldprotect proprietary trade information and policyholders privacy ofits policyholders.

Cincinnati said it would have representatives at the hearingthat had been scheduled for this Thursday. “We are confident we candemonstrate that our practices and our relationships with industryorganizations are above-board and ethical, and our Floridahomeowners rates are among the lowest in the state,” the companysaid.

In cancelling the Cincinnati hearing the OIR issued a statementsaying it “reviewed the materials provided to date by Cincinnatiand determined a need to issue additional subpoenas for additionalinformation,” adding, “this is the only information the Office isable to provide about the new subpoenas.”

Besides Allstate and Cincinnati, Auto-Owners Insurance Group inLansing, Mich., has been subpoenaed for similar material and ahearing.

The Allstate units given a subpoena were: Allstate FloridianIndemnity Company, Allstate Floridian Insurance Company, AllstateFire and Casualty Insurance Company, Allstate Indemnity Company,Allstate Insurance Company, Allstate Property & CasualtyInsurance Company, Encompass Floridian Indemnity Company, EncompassFloridian Insurance Company, Encompass Indemnity Company andEncompass Insurance Company of America.