Allstate kept its Florida companies in operation yesterday, filing a motion with an appeals court asking it to reexamine the state insurance commissioner’s order to stop writing new business.
By making the request for a rehearing by the Florida First District Court of Appeal in Tallahassee, the company can keep selling new policies while the case, sparked by a state request for Allstate documents, is pending.
The First District had lifted a stay of Commissioner Kevin McCarty’s order on April 4; however, it gave the company until yesterday to file for a rehearing.
Allstate submitted its motion shortly before a 5 p.m. deadline, which if missed would have meant the suspension order would have taken effect. The appellate court on April 4 found that Mr. McCarty was within his authority to suspend the company, and that the suspension would take effect unless Allstate pursued the matter further.
Florida ’s court battle with the insurer has been underway since October of last year, when the commissioner issued a subpoena seeking thousands of company documents in advance of a hearing looking into company business practices and rate setting.
On Jan 16 he suspended the company when it failed to provide the documents he sought as part of the long-delayed hearing. Among the information sought was material that critics said outlined a bare-knuckled approach to claims handling.
The company eventually disgorged a report from the McKinsey consulting firm it had long argued was privileged, involving trade secrets, but it has continued to balk at other document requests, according to the Office of Insurance Regulation.
In its latest motion, Allstate argued that the panel erred in its decision to grant the suspension by allowing Mr. McCarty to subpoena information without prior judicial review, which meant Allstate was not given its due process.
Additionally, the company argued that the suspension order was vague regarding specific incidents of harm or danger, and that the court erred in its interpretation of certain facts and Allstate’s ability to comply with the order.
While the court had ruled that Allstate “can determine the duration” of its suspension by simply complying with the subpoena, Allstate argued that doing so would require the company to produce attorney-client privileged information that, under precedent, does not have to be produced for agency review.
OIR officials have disputed a 196-page list of objections that the company has filed to maintain secrecy. Allstate has argued that it has cooperated with the department and has provided over 400,000 pages of documentation.
Edward Domansky, a spokesman for the OIR, said the office has until 5 p.m. tomorrow to file its response to the latest Allstate motion, but “it’s up to the court to decide what happens next.”
Mr. McCarty, according to Mr. Domansky, “will continue to pursue this matter until Allstate has complied” with the subpoenas and provided the requested documentation. “The commissioner remains committed to doing everything he can to protect Florida consumers,” he said.