Florida Court Keeps Allstate In Business

A Florida appeals court last week said that Allstate can keep doing business in the state, putting off a final decision on whether Insurance Commissioner Kevin McCarty has cause to lift the insurer's license.

Mr. McCarty issued a suspension order on Jan. 17, but the company went to the First District Court of Appeal in Tallahassee and secured a temporary restraining order, which is in effect until an expedited appeal is heard.

The court, in rejecting an immediate lifting of its stay of the commissioner's order, said it was expediting a final appeal process. On Jan. 31, the court directed the filing of a record within 15 days, the initial brief within 10 days after that, the answer brief 10 days after that, and the reply brief five days thereafter.

A decision will be rendered at any time after the reply brief is filed, the court said.

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.

The commissioner–who has challenged the company's requests for a rate increase as well as 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, said in a statement that “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 that he remains “committed to getting answers to questions about Allstate's business practices and relationships with rating agencies, catastrophe modeling companies and industry trade groups.”