Just a day after I told you about Allstate being banned from writing any new auto insurance policy in Florida the state went one step further and stopped them from writing ALL new policies including auto and homeowners! What a move!
According to a followup story by the St Petersburg Times, Florida's insurance commissioner Kevin McCarty decided Thursday to to throw the entire book at Allstate. A day after telling Allstate to stop writing new auto insurance policies he expanded his order to include all lines of insurance.
As of noon Thursday, Allstate could no longer sell any new insurance of any kind in Florida, including auto, homeowners, medical malpractice, workers comp, aircraft,and credit life and disability.
Allstate responded by filing an appeal in district court in Tallahassee seeking an immediate stay of the order.
"The commissioner met with our lawyers and it was determined the better decision was to apply the order to all new business," said Ed Domansky, a spokesman for McCarty's office.
The majority of business that Allstate writes in Florida is auto and homeowners insurance. The company's 1.7-million auto policies account for nearly $2-billion in annual premiums, or more than 75 % of Allstate's total written premiums in the state.
The order has no effect on current Allstate policyholders, who can renew their policies. Allstate must also continue to pay all fees and taxes on its remaining policies, and honor all current and future claims.
The core of the issue is the company's response to subpoenas, something regulators and lawmakers have described as arrogant and inadequate. Regulators want to know why Allstate didn't follow state law and lower its premiums for homeowners coverage. They also want to know the company guidelines regarding claims settlement.
The suspension will be lifted, McCarty said, when Allstate turns over the documents regulators want to see.
OK, that's an unprecedented move by any state official against Allstate but let's not get too happy until we see if it works or if they get an answer on their appeal. At least it shows them that they cannot continue to get by with being God when it comes to following court orders.
They always seem to be able to drop their pants and expose a clean spot on their ass for people to kiss. As with most insurance and oil companies, they think they are the Masters and we are the slaves. "Just pay your premiums and shut up. We'll pay whatever percent of a claim we want or not pay at all!"
Keep your fingers crossed.....but don't get too happy yet.
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2 comments:
allstate back writing insurance as of 1-18-2008. They stopped writing for maybe 4 hours. allstate hasn't been writing homeowners in FL in a very long time- so it was just auto.
Also- your idea of forcing Allstate to nonrenew the existing lines of business in Florida is a horrible idea. 30 days for them to find coverage else where? The only people writing FL new business homeowners policy would be Citizens, if I'm not mistaken which is heavily subsidized by the state of FL. FL almost at this point is self-insuring, and it's not a smart idea. They don't have enough surplus built up to cover the state of FL if it got hit by a bad hurricane. There would be a lot of heartbroken people out there. Plus, you'd actually be doing Allstate a favor by letting them out of old homeowners policies that they want out of ANYWAY. They don't want that exposure to risk. The same way they don't want the exposure to risk in Long Island, NY. If you REALLY wanted to do something about the situation in FL, it would be to enforce the policy of "If you write auto policies, you must also write homeowner policies"- although there would need to be much more direct language in the law there, so that they wouldn't be able to gut homeowners policies into worthless pieces of paper. That makes more sense.
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