Allstate Insurance Company has been suspended from doing future business in Florida until it complies with the state Insurance Commissioner’s request for documents. The news of Allstate’s bar has shocked the industry.

The controversy

The controversy over the documents began over a state investigation of Florida insurers whom regulators think are acting together to raise insurance rates in the state. Florida had passed legislation that basically provided insurance companies with more business and they were then supposed to pass that savings onto consumers. However, while insurance companies did lower their rates initially, they soon sought to increase them to levels higher than where they started.

The state began an investigation and Allstate was asked to produce certain documents in an October 2007 subpoena. However, Allstate had only produced a fraction of the documents by Tuesday’s meeting. Instead, they came to the meeting with 51 pages of objections to the subpoena. Needless to say, regulators got angry and told Allstate they were…

SUSPENDED!

Florida Insurance Commissioner Kevin McCarty explained his reasoning for suspending Allstate from doing any further business in Florida in this statement:

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. 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 (link to article - http://attorneypages.com/hot/allstate-fined-daily-for-not-producing-report.htm) 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.

McCarty has threatened to fine Allstate on top of suspension. Allstate has said that it was trying to provide the documents requested from the state, but that doing so was a difficult task. Unfortunately for Allstate, news agencies are reporting that the insurer was stalling the state and selectively excluded certain documents relating to the increases in what was produced.

Florida leaders tiring of games

It seems as though Florida’s leaders are tiring of the insurance industry’s practices – and they’re becoming embroiled in the controversy. In addition to the suspension by the Insurance Commissioner, Florida Governor Charlie Crist has allegedly summoned a group of lawyers to investigate whether bringing legal action against Allstate and other insurers involved in possible rate fixing should be pursued. In addition, a special committee has been created to take testimony from five executives of the state’s largest insurance companies – of which Allstate is one.