April 07, 2008
In a follow up to an earlier report, the 1st District, Florida district court of appeal has lifted the appeal to the stop order issues by Florida Office of Insurance Regulation (OIR). Allstate must stop issuing new policies in Florida, but must continue to service existing policies. Allstate can lift the stop order by producing documents requested by OIR.
Citing reports that Allstate ”used a computer program which “immediately reduce[s] the size of bodily injury claims by up to 20 percent.” (otherwise known as the “McKinsey report” (sounds like a topic for another blog posting)) , Allstate willfully refused to turn over any documents supporting or refuting the accusation. It was also pointed out that Allstate chose to pay $25,000 per day in fines to the state of Missouri rather than produce the “McKinsey report” related documents.
ALSO
The court pointed out that when subpoenas were issued requesting documents, Allstate failed to produce meaningful documents OR request an extension to produce meaningful documents. What OIR received was mostly public record documents stamped “Trade Secret” and 51 pages of objections.
Editors note: My feeling of this whole matter is that OIR has been heavy handed and obtuse when dealing with Florida insurers. Despite all the legislation coming out of Tallahassee, the situation in Florida has gotten worse and it will only be a matter of time before hurricanes bankrupt the Florida insurers, leading to a request for a federal bailout.
That said, the accusations of the McKinsey report have what Stephen Colbert would call “Truthiness“. What OIR is accusing Allstate of would leave a bad taste in the mouth of any policyholder. Wouldn’t it make sense to produce documents showing that it’s not true?
