Allstate and Florida Settle Insurance Feud

Allstate Insurance Company has settled a ten month feud with Florida insurance regulators concerning outrageous homeowners’ premium increases in the state. The insurance company has agreed to pay $5 million in fines and adhere to certain terms that prevent it from increasing premiums for at least one year.

How the feud began

Last October, Florida’s Insurance Commissioner Kevin McCarty got fed up with Allstate. Really fed up. Allstate was supposed to turn over documents about why it had increased homeowners’ insurance premiums up to 40%. Allstate didn’t comply with the request for documents, alleging that they contained trade secrets. McCarty reacted by banning the insurer from writing any new business in the State of Florida until it complied with his requests. The two sides have been in a legal battle ever since, but have agreed to put it all behind them by settling the matter.

What the settlement entails

According to a press release on the McCarty’s website, www.floir.com, the settlement requires Allstate to:

  • Pay a $5 million fine to Florida’s Insurance Regulatory Trust Fund within 30 days.
  • Lower its homeowners’ insurance rates in all territories of the state by 5.6 percent within 30 days of the agreement, for a total reduction of 19.8 percent.
  • Write 100,000 new homeowners insurance policies over the next three years; and Allstate’s corporate office must cancel a $175 million surplus note it issued to the Florida Allstate companies.
  • Cooperate with the Office’s ongoing investigation into the relationships between insurers, trade associations, rating organizations, modelers, reinsurers, reinsurance brokers and other entities.
  • Continue to cooperate with the Office’s investigation of its claim-payment practices – including matters related to the 1992 McKinsey report – the documents that Allstate would not initially turn over to Florida regulators.

The settlement applies to the following Allstate companies:

  • 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.
  • Encompass Floridian Indemnity Co.

If Allstate or one its subsidiaries have acted in bad faith towards you, contact an attorney whose practice focuses in bad faith insurance litigation. Consultations are free, without obligation and are strictly confidential. To contact an experienced attorney to discuss your situation, please click here. We may be able to help.