What a day folks and now we have breaking news. Allstate has been less than forthcoming with insurance regulators and them boys are hoppin’ mad over Tallahassee way. First the AP news story and a copy of the subpeona Allstate saw fit to ignore.
Fla. Regulators Cut Off Allstate HearingTuesday
January 15, 4:45 pm ET
By Brent Kallestad, Associated Press Writer
Florida: Frustrated at Allstate, Regulators Shorten Insurance Hearing
TALLAHASSEE, Fla. (AP) — Florida insurance regulators angrily and abruptly ended a hearing with Allstate executives Tuesday, upset that the company and its attorneys failed to fully comply with a subpoena demanding information on property coverage rates.
The hearing was scheduled to last two days but state officials cut it short after just two hours during which company officials and lawyers were badgered by regulators about why they hadn’t supplied all the documents the state wants, and whether they are following a new law meant to lower premiums.
Insurance Commissioner Kevin McCarty said he planned to bring the Illinois-based insurance giant back later this year when it has answers to the state’s questions.
McCarty said the company faces severe sanctions, including the possibility of losing its license to operate its four Florida companies if it fails to comply again.
“We will take appropriate enforcement actions,” McCarty said. “Their certificates are certainly under review.”
Allstate’s response to some requests as “irrelevant” was “a slap in the face to the regulatory agency,” McCarty said.
Allstate’s legal team and company executives, who were under oath, largely avoided questions about whether it has complied with a Florida law passed last year to give consumers premium relief. That infuriated McCarty.
“What have you got to hide?” McCarty asked as the hearing opened.
Regulators were looking for information on Allstate’s relationships with insurance rating and risk monitoring companies and insurance trade associations.
The panel focused on a new hurricane model that Allstate began using to calculate its rates after Florida lawmakers passed new insurance legislation in January 2007. Under the new model, rates went up, although the company said that wasn’t its intent. That model wasn’t approved by the state.
At one point before taking a 10-minute break halfway through the testy testimony, McCarty laughed aloud at the response to one of the committee’s questions.
“Clearly they’re frustrated with the situation,” Allstate spokesman Adam Shores said. “And we’re frustrated too. We want to have an open and active dialogue to work this thing out.”
Allstate Floridian Indemnity and Allstate Florida Insurance Co. have requested rate increases of 28.3 percent and 41.9 percent respectively. Encompass Floridian Indemnity requested a 38.4 percent increase, and Encompass Floridian Insurance Company requested a 39.7 percent increase
While Allstate told McCarty it planned to drop its request for double-digit rate increases, that did little to assuage him or Sen. Jeff Atwater, R-North Palm Beach. Atwater is chairman of a newly created Senate panel investigating why so few companies have complied with the insurance law.
Atwater wasted little time inviting five insurance executives, including Joseph Richardson, Allstate Floridian Indemnity’s chief executive officer, to testify under oath at a Senate hearing Feb. 4-5.
House Democrats also want in the act.
Rep. Dan Gelber, the Democratic leader from Miami Beach, asked Rep. Ron Reagan, R-Bradenton, to schedule hearings and put insurance executives under oath to find out what’s causing the delays.
“The Florida House should not foster the perception that we are a ‘safe house’ for insurers,” Gelber wrote in his letter to the House insurance committee chair. “We have done very little to prove otherwise.”
Update: the Florida Office of Insurance Regulation has scheduled a news conference for tomorrow morning. Rumors are swirlin’ that Allstate will be kicked out of the State!