Florida OIR Blocks Allstate From Writing New Homeowner Business In Florida

What the Office of Insurance Regulation has done is wrong. If they wanted to punish Allstate, they should have done it monetarily and not slander the company which in turn leaves 4,000 Allstate Agency owners and support staff in fear for their jobs and lively hood.

America was founded on the idea that the Government should not be in competition with free enterprise. With Citizens taking application if the rate is 15% less that the private market carrier they are inhibiting the free market and driving more and more carriers out of the market, thus hurting competitive pricing. Then they run it so poorly that they need to surcharge everyone with a real insurance company because they do not charge enough, um duh... 

I think the previous commentor had some valid points, however there might be some personal interests involved.

First, we need to understand that Citizens was established for homeowners in which other companies would not insure.  Older structures, structures located within the high-velocity wind debris region and homeowners with poor credit.  As regard to Citizens' rates, they are somewhat reflective of an actual model and not the unapproved model in which Allstate used to request a 47% premium increase.

But let's get back to the story, the penalty against Allstate was valid.  They received a subpoena ordering certain documents to be sent to the OIR.  They failed to 100% comply with that order.  "Order" is the key word here.  They objected without a ruling and instead sent a 40,000 document paper blizzard.  In addition, considering Allstate is already being fined $25,000 per day in Missouri for similar acts, McCarty assumed that tacking on a financial penalty would be brushed off as well.

It is unfortunate for the independent agents within the state to suffer.  The agents have no control over how Allstate corporate officers handle their business.  The issue here is compliance.  But let's not assume that Allstate agents are going hungry.  Since the restructuring of whom Allstate will insure, agents have been given the opportunity to write policies under other carriers.  Some Allstate agents left and became true independent agents not having to be told who they can write for.  It is a fact, referring to an internal Allstate memo, that Allstate is intentionally reducing its risk in Florida by dropping homeowner policies and pushing other lines very hard.

Additional facts to consider.  Re-insurance costs to Allstate and all other carriers writing in Florida have recently decreased, in double-digits.  The state required carriers to pass that saviings to the policy holders.  To date, less that 20% of all carriers have fully complied with this LAW.  Over 50% haven't complied at ALL.  In my opinion, Allstate should not have been the only carrier to get slapped (if we're talking about compliance).

We cannot assume that corporate america will govern itself.  I think history has proven that.  Regulation is like a padlock, it keeps honest people honest.