On Friday, August 15, 2008, Florida Insurance Commissioner Kevin McCarty announced that the Office of Insurance Regulation (OIR) had reached a limited agreement with the Allstate Companies (Allstate). As reported here and here, earlier this year, the OIR suspended Allstate from writing new policies in Florida. After the Florida Supreme Court refused to hear the matter, the suspension remained in effect (as reported here).
Allstate will pay a $5 million fine as part of the agreement to resolve the issues resulting from its September 2007 rate filing and the subpoena the OIR issued in response to the filing (as reported here and here). In addition, Allstate must lower its current homeowners insurance rates by 5.6 percent throughout the state within 30 days. Allstate also must write 100,000 new homeowners insurance policies over the next three years and cancel a $175 million surplus note it issued to the Florida Allstate companies.
The agreement settles the pending matters between OIR and Allstate and cancels the hearing before the Division of Administrative Hearings, which was scheduled on September 15th. Commissioner McCarty commented:
“It is unfortunate that Allstate’s disregard of Florida law required the Office to take the drastic actions that we did in order to bring Allstate into compliance. However, the terms agreed to by Allstate in the consent order go a long way toward restoring confidence in Allstate’s business practices and will provide a great benefit to their policyholders and future policyholders.”