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Appeals court denies Allstate’s motion
Article published on Wednesday, May 14, 2008 |
TALLAHASSEE - First District Court of Appeals denied an appeal by Allstate Companies for a rehearing on May 14, resulting in an immediate suspension of the companies’ authority to write new insurance policies in Florida.
Shortly after the court made its decision public, Florida Insurance Commissioner Kevin McCarty announced the immediate resumption of the suspension of the certificates of authority of the Allstate Companies to write new insurance policies in Florida.
The suspension applies to all lines of business and will remain in effect until the companies fully comply with Florida law and produce the documents requested by the Office of Insurance Regulation.
“I’m pleased to report that the First District Court today has again affirmed the appropriateness of the Office’s action in issuing the January Immediate Final Order suspending Allstate’s licenses to sell new business in Florida; it has denied Allstate’s request for a rehearing and has lifted the stay of the suspension. As a result, the suspension now is back in effect,” McCarty said.
The suspension applies to Allstate Floridian Insurance Co., Allstate Indemnity Co., Allstate Property & Casualty Insurance Co., Allstate Insurance Co., Allstate Floridian Indemnity Co., Allstate Fire and Casualty Insurance Co., Encompass Insurance Co. of America, Encompass Indemnity Co., Encompass Floridian Insurance Co. and Encompass Floridian Indemnity Co., and it only suspends the companies from writing new business in Florida.
The suspension does not affect existing policyholders or consumers who were in the process of securing a policy when the Court’s opinion was issued will not be affected.
The Office of Insurance Regulation also was expecting an affidavit, signed by an Allstate officer, asserting that it has produced all documents requested. Upon receipt of that certification, Commissioner McCarty will immediately stay the suspension – with the understanding that the stay is dependent on Allstate’s continued compliance with Florida law and cooperation with the Office’s investigation.
“This case illustrates the effectiveness of an Immediate Final Order, such as the one upheld today by the District Court,” McCarty said. “Were it not for that order, we do not believe that we would have the documents available for our ongoing investigation. We now have received hundreds of thousands of documents that Allstate had not previously produced.”
The suspension was put in place Jan. 17 after the commissioner abruptly halted a Jan. 15 hearing that was to look into the Allstate Companies’ reinsurance program, their relationships with risk modeling companies, insurance rating organizations and insurance trade associations.
Allstate appealed the suspension to the DCA, asserting that the commissioner had exceeded his authority by issuing the Immediate Final Order to suspend its certificates of authority; the court stayed the suspension until it could consider the issue.
In its April 4 ruling, replaced by the May 14 opinion, three DCA judges unanimously agreed that the commissioner had not exceeded his authority when he issued the January Order to suspend the Allstate Companies’ licenses. The Court’s April 4 opinion, as well as the May 14 opinion, outlines explicitly Allstate’s failure to adequately comply at the Jan. 15 hearing.
In addition, the collateral legal matter with the Division of Administrative Hearings is set for hearing June 16. This proceeding involves Allstate’s alleged failure to comply with the document request; there also are two other counts - Falsely asserting trade secrets and false certification of its September rate filing.
Allstate agents are encouraged to contact the company’s corporate headquarters with questions or comments.
For more information about the Office of Insurance Regulation, visit www.floir.com. To review and compare homeowners insurance rates in Florida, go to www.shopandcomparerates.com.
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Article published on Wednesday, May 14, 2008
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