Florida Court Keeps Allstate Stay In Place For Now

The commissioner, who has challenged the company's requests for a rate increase and its rate-setting practices, ordered a suspension when the company did not supply all the material he subpoenaed for a hearing on the insurer's claims-handling methods and other business activity.

Allstate has argued to the court that the commissioner exceeded his authority, acted unconstitutionally and was "taking punitive, vindictive measures under the guise of a so-called emergency."

Further, the company said the commissioner "damaged Allstate's reputation" and harmed its companies, as well as "jeopardizing the livelihoods of agents and their support staff…"

Mr. McCarty, in response to the court's action, issued as statement: "While I am disappointed that the District Court did not decide to reinstate my office's suspension of Allstate, I am encouraged that the court on its own motion has decided to expedite the appeal process."

He added: "I remain committed to getting answers to questions about Allstate's business practices and relationships with rating agencies, catastrophe modeling companies and industry trade groups."

One controversial piece of evidence he has sought is a report by McKinsey & Company, which reportedly advised Allstate on how to use bare-knuckled tactics against policyholders who made claims. In Missouri, a judge has held the company in contempt for failing to turn over the report, issuing a fine of $25,000 per day.

The insurer has said it has been providing material for the Florida subpoena, but a voluminous amount is involved. The commissioner has said the company has in a large part provided material he already had on hand, and has raised many objections to other items.

The commissioner, in his statement today, said that "although my office has not yet received all the documents requested from Allstate, I remain confident that everything in our subpoenas will be produced in a timely fashion and that we will continue to work together toward an amicable resolution of this matter."

He said that "all the documents requested in our October subpoenas were due at the Jan. 15 hearing, but I am encouraged that as a result of my suspension order, Allstate within a week produced about 25,000 pages of documents."

"I remain ever committed to Florida consumers to get to the bottom of this issue and to ensure that Allstate is held accountable to the law," he said.

A spokesman for Mr. McCarty, Ed Domansky, said yesterday that as a matter of strategy the Office of Insurance Regulation is not revealing whether it will seek to have the court hear oral arguments. "We expect we will be filing our order and supporting documents in a few days," he said.

The appeals process is "clearly a more expedited time frame than we thought it could be," he noted.

Part of the court's opinion said it was denying a motion by the National Association of Professional Allstate Agents for leave to submit a friend-of-the-court brief supporting their company.

Allstate spokesman Adam Shores said the company was pleased with the latest court action, which "allows us to provide coverage and serve Floridians," adding the carrier would comply with the court's timeline. He could not say whether the company will seek to present oral arguments.