Court Moves up Allstate Deadline for Meeting Florida’s Terms

Allstate’s companies doing business in Florida will have to stop writing new policies after April 14 if the insurance giant fails to apply for a rehearing by then, state officials said Tuesday.

Allstate spokesman Adam Shores said the company would evaluate its legal options regarding a rehearing by the new deadline. Its 1,100 agents will continue writing business in Florida until the court rules on the pending stay, granted in January.

Current Allstate policyholders would not be affected by sanctions.

The 1st District Court of Appeals ruled last week that Florida insurance regulators have the authority to suspend Allstate’s companies because the insurer failed to comply with state subpoenas seeking information on the company’s pricing strategies.

But the Office of Insurance Regulation sought clarification on Friday’s ruling about when it could actually enforce the suspension.

“There was ambiguity in the order as to whether the stay had been lifted immediately or was subject to a motion for a rehearing,” OIR spokesman Ed Domansky said Tuesday.

Allstate carries roughly 300,000 homeowners policies in the state, many in central Florida away from the riskier coastal areas.

The court also said Friday the suspension would end if Allstate produced the documents sought by regulators.

Allstate almost immediately put 150,000 pages of documents on its Web site after the earlier ruling.

The state wanted documents to determine why Allstate seeks higher property insurance rates despite a new Florida law passed in 2007 that obligated the state to billions of dollars in increased risk to provide lower reinsurance to private insurers to keep premiums down.

Shores noted that Allstate reduced its rates by 14.2 percent statewide last year, but the company drew the ire of state regulators with a rate filing seeking increases of more than 40 percent.

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.
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On the Net:

http://opinions.1dca.org/written/opinions2008/04-04-08/08-0275.pdf