January 16, 2008
Allstate Insurance Blocked from Writing New Business in State of Florida
Editors note: In my opinion, Florida is doing Allstate a tremendous favor. The Florida Office of Insurance Regulation, the state assembly and the Goveners office have done a terrible job of trying to reel in insurance costs by overregulating the insurance companies. Florida has the highest premium tax in the USA (an attempt to balance their state budgets) AND a premium sharing model; if a insurer makes an underwriting profit, any ‘excess’ profits are taxed and redistributed to a ‘insurance pool’. Socialism is alive and well in Florida. Watch as the state government chases off another large insurer:
From: Florida Office of Insurance Regulation
“Florida Insurance Commissioner Kevin McCarty suspended the certificate of authority of Allstate Companies to write new property insurance in Florida until the company fully complies with the subpoenas served Oct. 16 by his Office of Insurance Regulation.
Today’s decision by McCarty follows Tuesday’s action when he abruptly halted the scheduled two-day hearing into the Allstate Companies’ reinsurance program, their relationships with risk modeling companies, insurance rating organizations and insurance trade associations.
“In view of Allstate’s ongoing, blatant disregard of our subpoenas, I have little choice but to take an action that will send a clear message about how seriously I am taking this issue,” said McCarty. “Suspending their certificate of authority to write new business in our state should make my point.
“If Allstate is willing to pay $25,000 per day in fines to a Missouri court for its ongoing failure to provide similar documents, it’s obvious to me that it will take more than a monetary sanction to get them to comply with our subpoenas.”
Allstate was to have provided all appropriate company documents related to the above topics at or before Tuesday’s hearing, but failed to do so, McCarty said. Instead, he said the OIR received 51 pages of objections to the subpoenas.
The suspension applies to Allstate Insurance Co., Allstate Indemnity Co. and Allstate Property and Casualty Co., and it only suspends the companies from writing new business in Florida.
Existing policyholders will not be affected. Allstate must continue to service them and the companies must make all required statutory filings including, but not limited to, audited annual financial statements, quarterly financial statements and rate filings.
“The duration of the suspension is up to them,” added McCarty. “It will be lifted when I am satisfied that we have received each and every document we need to properly investigate the important issues before us.
“It continues to trouble me that Allstate has not complied with our subpoenas and is not willing to explain to us their relationships with rating agencies, modeling companies and trade groups and how these relationships might have influenced the huge rate increases they have requested. This clearly cannot be in the best interests of Florida consumers.”
This is the first time the OIR has suspended a company for failure to “freely” provide documents as required by Florida law.
Gov. Crist weighed in, saying he believes Allstate is concealing something.
“I applaud Commissioner McCarty for sending a clear message to Allstate Companies and protecting Florida’s consumers. It is clear to me that Allstate must have something to hide if they are unwilling to comply with the Commissioner’s requests. This type of behavior is an unconscionable disregard for this process and their customers.
“I am grateful to Commissioner McCarty for taking this bold action today and look forward to further progress through the Senate Select Committee’s work next month.”"
It would seem to me, if the state of Florida has a problem with so many insurance companies, maybe they are the problem not the insurers.
Wow, what great blog and I love the name too! You are dead on when you state that over-regulation here in Florida might drive the last of the companies out of here.
My view is that they should put the pressure on the rates as they have done, and give up on the political grandstanding associated with all of this sworn testimony.
The only thing I can do as a Florida homeowner insurance consumer is to shop my policy with the few companies that are left still writing new business.
Even that is a mystery here, but I finally found a website to help me with this.
It’s called The Home Insurance Buyers Guide
Anyway, Broward County is being killed with Florida home insurance companies moving out - But I found 20 companies in The Home Insurance Buyers Guide still willing to write a new homeowners policy in Broward County.
Check it out:
http://www.homeinsurancebuyers.org
Nice job with your blog!
Thanks Martha, good comment and nice plug of your webpage.
I suppose at some point Allstate will want thier profitable lines of business back and will play nice with Florida OIR.
If you’re interested in submitting an article on some topics of interest to my blog, email me at ernesto AT insuranceyak DOT com.
Thanks again