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State goes after Allstate on code violations

A broader pursuit alleges also seeks to block the insurer from writing new policies.

By TOM ZUCCO, Times Staff Writer
Published February 20, 2008

ADVERTISEMENT [Scott Keeler | Times] Insurance chief Kevin McCarty adds a new allegation: improperly certifying rate filings.

Florida Insurance Commissioner Kevin McCarty went after Allstate on a second, broader front Tuesday by filing an administrative complaint alleging multiple violations of the Florida Insurance Code and seeking to suspend the company's ability to write new insurance policies in the state.

The complaint comes after McCarty first tried to suspend Allstate through a direct order in January.

A state appeals court lifted that suspension and allowed Allstate to continue to write new policies while a state appeal is pending.

Now McCarty is back, repeating his arguments in the new complaint that Allstate failed to provide documents that his office had subpoenaed and labeled other documents as trade secrets.

Florida insurance regulators and a state Senate committee are looking into Allstate's reinsurance contracts and its relationships with risk-modeling companies, rating agencies and trade associations.

Tuesday's complaint adds the allegation that Allstate violated Florida law by improperly certifying its rate filings. Earlier this month, Allstate Floridian CEO Joe Richardson testified before the Senate committee that he signed only a summary of a recent filing.

Allstate spokeswoman Kathy Thomas said Tuesday the complaint "was not unexpected. The immediate final order remains stayed. Allstate continues to write insurance for Florida consumers."

Allstate's renewal business is not affected by McCarty's order. Florida's fourth-largest insurer with about 300,000 policies, Allstate had sought a statewide average 43 percent increase in homeowners premiums despite changes in Florida law designed to lower rates an average 24 percent.

The newly filed complaint will likely wind up at the Division of Administrative Hearings, where an administrative law judge will hear the case. If successful, McCarty could then issue a final order, which could include suspension of Allstate's license to do business.

Tom Zucco can be reached at zucco@sptimes.com or (727) 893-8247.

[Last modified February 19, 2008, 22:45:54]