Allstate suspended from writing new auto policies in Florida

TALLAHASSEE, Florida — Florida Insurance Commissioner Kevin McCarty has suspended Allstate companies from writing new car insurance policies in Florida for refusing to comply fully with a state subpoena.

McCarty abruptly ended a scheduled two-day meeting yesterday after just two hours.

He was angered that Allstate officials failed to turn over some information the state requested on property coverage rates and that company officials described the state's request as “irrelevant.”

Governor Charlie Crist praised McCarty's decision in a written statement.

"It is clear to me that Allstate must have something to hide if they are unwilling to comply with the Commissioner's requests," Crist's statement read. "This type of behavior is an unconscionable disregard for this process and their customers."

The decision affects all five Allstate subsidiaries in Florida.

McCarty said the order, which he will issue this afternoon, will only affect Allstate's ability to sell new automotive insurance policies, and has no impact on renewals or new home insurance policies.

There was no immediate response from Allstate — corporate spokesman Adam Shores, traveling today, could not be reached.

Allstate is one of six Florida insurers asked by the Office of Insurance Regulation to turn over records relating to its decision to not seek large rate cuts following the passage last year of HB1A, the Florida Legislature's answer to spiraling rate hikes. Investigators seek records to show whether the insurance companies used trade organizations, rating firms, hurricane models and reinsurance treaties to find ways to keep their premiums high.

Allstate in particular followed its initial 14 percent cut with a request to increase premiums more than 42 percent, while drastically cutting the number of homes in Florida it insures. At an investigative hearing in Tallahassee on Tuesday, company executives revealed Allstate's plan to sharply reduce its home exposure in Florida while pumping up profitable auto insurance sales — a plan code-named "Bermuda High."

However, most the of the hearing dealt with Allstate's refusal since October to turn over the majority of records that Florida seeks, prompting McCarty's announcement today he is suspending the insurer's certificate to do business in Florida.

The suspension will remain in effect until Allstate turns over the missing records, McCarty said.

He estimated that writing car insurance in Florida is worth about $1 billion a year to Allstate.

"We're going to hit them where it hurts. We're going to get their attention," McCarty said.