Florida Puts Brakes on Allstate Auto & Home Insurance Sales
Posted on May 15, 2008
Allstate agents in Florida can’t sell new auto insurance policies this morning. Or homeowners coverage. State regulators have put them out of business in an effort to strong-arm information from the company in an ongoing battle over high rates and business practices. With the muscle of a favorable court ruling behind him, Florida Insurance Commissioner Kevin McCarty expects Allstate Floridian will soon allow his office free access to its records and thus end the shutdown. With a signed affidavit from company officers promising unconditional compliance, McCarty said Wednesday he’d lift the then hours-old order against Allstate doing any new business in the state.
“The timeline is in their hands,” McCarty said. “Clearly they have indicated a willingness to provide further documents. It’s unfortunate that it takes a succession of court cases . . . to get their attention.” For now McCarty is enforcing the suspension he first issued in January to wrest documents and testimony from the company in an ongoing investigation of rates, policy cancellations and business practices. The sanction does not affect Allstate’s existing 2 million customers. Allstate officials said they’re moving to fix things.
“We are taking steps to comply with the (court’s) order,” a company statement said. “We have supplied a certification to the (Office of Insurance Regulation) for review and are working to resolve any remaining issues.”
The company said its agents have been told to stop selling new policies.
McCarty’s sanction went into force Wednesday morning when an appeals court shot down Allstate Floridian Insurance Company’s request for a rehearing in its lawsuit to head off the discipline. The court earlier said the state was within its power to put Allstate out of business.
“The substance has always been to compel the company to make their books and records completely available,” McCarty said. “We have since received hundreds of thousands of documents. Most of those came after the (court) made its initial ruling” in favor of regulators.