A Florida appeals court is expected to indefinitely suspend Allstate’s license to sell new insurance policies throughout the state until the company produces all the documents demanded by Office of Insurance Regulation investigators. It is a curious and complicated case. On April 21, Florida’s First District Court of Appeals did indeed issue such a ban, only to retract it later in the day citing a “clerical error.” A source familiar with the justices’ thinking said the court remains intent on suspending Allstate’s license — and the ruling’s premature release merely marked a violation of the court’s internal protocols on dealing with such matters. Once the suspension is officially released, Allstate’s only recourse is to either surrender the disputed documents or file an appeal with the Florida Supreme Court, which can decline to hear the case. ABRN’s source would not comment further, saying public discussion of the courts’ inner workings is frowned upon by the participants. In the meantime, according to Allstate spokeswoman Kathy Thomas, “We’re open for business.” She too declined comment about the supposed suspension, saying any observations about such a sensitive issue at this point would simply be speculation. Thomas stressed, however, that Allstate is eager to cooperate with the Office of Insurance Regulation. “We continue to work with the OIR to offer a solution.” The solution is to produce the documents, countered OIR spokeswoman Kirsten Klein. “That’s still a sticking point,” she says. “They are not cooperating fully.” Florida Insurance Commissioner Kevin McCarty will continue with his full-court press of the suspension. “They won’t give us the documents, and there’s no other way to get them to comply. We could fine them, but that would be like pocket change to Allstate,” Klein says. The anticipated statewide ban bars Allstate from selling any new policies, including auto and life insurance. Existing accounts and claims-settlement procedures such as collision repair payments are not affected. “As soon as we get the documents they can start writing again,” says Klein. Allstate has insisted that it considers some of the subpoenaed materials to be trade secrets. The company said it has already released some 150,000 pages of the controversial “McKinsey Report,” a consultant’s review of Allstate business practices dating back to the 1990s. “Public criticisms by people with a vested interest in creating an inaccurate picture of the Allstate’s claim practices have been based unfairly on only snippets from the documents taken out of context,” the company said in a statement announcing the availability of the report. “We continue to believe that the documents deserve protection as containing trade secret and confidential proprietary information and that our actions to protect them from general disclosure have been appropriate. However, because of the need to address misunderstandings resulting from the growing misplaced focus by our critics on very small pieces of the whole, we have decided to make the documents public,” the company said. “When aired in the unbiased setting of a court of law, allegations about the documents have been shown to be without merit. Most recently, some of the documents were seen and explained in context to a jury during a two-week trial in Kentucky. The jury unanimously ruled in Allstate’s favor in deliberations that lasted less than two hours,” the company added. McCarty is unmoved. “Although the company has been producing documents more consistently since I initially imposed the suspension, I remain seriously concerned with Allstate’s continued reluctance to comply with our subpoenas and their attempts to dictate which documents they believe are relevant to our investigation — as evidenced by the 196-page list of documents, which they have indicated they are withholding from our investigation,” he says. “Florida law is very clear that companies must ‘freely’ make available all documents requested by my office.” Efforts to enforce the ban through the courts therefore remain ongoing. “Our office will not tolerate companies that don’t follow the law, and this should serve as a warning to all of them that I am serious about my commitment to protect Florida consumers from unfair rates and unfair business practices,” McCarty says. “Allstate continues to be unwilling 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 requested in September,” he says. “The length of the suspension is up to them,” McCarty says. “I will immediately lift it when I am satisfied that they have provided all of the documents required by our subpoenas. Florida consumers deserve better, and I will see to it that companies do not act contrary to consumers’ best interests. This situation is not the norm. Most companies cooperate fully with the office.” Not surprisingly, Allstate’s Florida sales agents are in an uproar. If the appeals court ruling upholding the suspension sticks as expected, they have nothing to sell due to the actions of higher-ranking company executives. “That’s why the agents are so frustrated,” says Klein. “These are their documents to hand over.” McCarty met April 9 with several Allstate agents to hear their personal stories and concerns about how the ongoing legal matters are affecting them. “It is unfortunate that the company has put you in this position, jeopardizing your livelihoods. But, I cannot, and will not, allow any insurance company doing business in Florida to avoid their legal duties under the Florida Insurance Code,” McCarty told the group. “Suspending the Allstate licenses is a very serious action, but I had no other choice given that Allstate’s actions have been contrary to the best interests of Florida consumers and are in violation of the law. Allstate agents are encouraged to express their concerns to the Allstate corporate office in Northbrook (Ill.). Resolution of this matter is up to Allstate company officials,” he says. “As the District Court stated very clearly in its April 4 ruling, Allstate can comply with the law and produce all of the documents my office has requested, or I will continue to do everything I can to ensure that their license is suspended,” McCarty says. Afterward he said, “I reassured the agents that any suspension would be immediately lifted upon Allstate’s full compliance with the subpoenas.” |
