Insurer Can't Stop Fla. Collusion Probe, Says Judge

A Florida judge yesterday rejected a Cincinnati insurer's efforts to stop a probe by the state Office of Insurance Regulation into "potential collusion" over rates by property insurers.

Leon County Circuit Court Judge Charles Francis dismissed petitions filed by the Cincinnati Insurance Co. and the Cincinnati Indemnity Co. on the ground that the court did not have appropriate jurisdiction to consider the matter.

Judge Francis, in a written ruling, said the law is clear and there is no "means for the petitioners to initiate review of the office's investigatory subpoenas in Circuit Court."

He also said he did not believe the legislature intended for his court to review "investigatory subpoenas issued by an administrative agency in the course of its regulatory duties."

In petitioning the court, the companies had sought to limit the scope of the OIR investigative subpoenas and to postpone an OIR hearing set for next Thursday concerning Cincinnati's business practices.

The companies had argued that the OIR was exceeding its investigative authority, and that the records sought would air policyholders' private information, discuss the company's proprietary information and disclose nonpublic information that investors could deem material.

A spokeswoman for Cincinnati Insurance Joan Shevchik, noted in an e-mailed statement while the court would not act unless OIR files an enforcement action, the company reached an understanding with OIR to narrow the scope of the subpoena.

The firm she said is "reasonably comfortable with the current status" and OIR assurances it will protect proprietary trade information and policyholders privacy of our policyholders.

Cincinnati will have representatives at the hearing next week and "We are confident we can demonstrate that our practices and our relationships with industry organizations are above-board and ethical, and our Florida homeowners rates are among the lowest in the state.

Auto-Owners Insurance Group in Lansing, Mich., also has been subpoenaed for similar material and has petitioned the court with similar objections. That action is pending. The insurer has also been called to appear for a hearing before the OIR that is now scheduled for Oct. 26.

"The office is happy that the court ruled in our favor," said OIR General Counsel Steve Parton. "The office thought all along that the petitions were spurious and were intended to delay the office's information-gathering process."

The OIR said the previously announced hearing for Cincinnati is scheduled for Thursday at 9:30 a.m. in the Senate Office Building, in Tallahassee. Cincinnati has the right to appeal Judge Francis' ruling to the the 1st District Court of Appeals.

This article updated 9:07 a.m. Oct.12.