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Allstate Hearing Ends Early

January 15th, 2008 by Mike Vasilinda

A hearing into whether Allstate Insurance colluded with other companies to fix insurance rates ended abruptly today in Tallahassee after the company failed to provide thousands of documents sought through a subpoena. As Mike Vasilinda tells us, the lack of cooperation has regulators calling for stiffer penalties for insurers who ignore regulators.

Hear it here: Allstate Hearing Ends Early

The hearing began with Allstate withdrawing a request to hike rates 41 percent.  It had already been rejected, but was being appealed.

Then, from the moment three witnesses were sworn in, the hearing went downhill.

“You believe that filing a 41 percent rate increase adequately passed on the cost savings to Floridians?” Insurance Commissioner Kevin McCarty asked.

“We believed that the actuarial review would be accurate,” Allstate Assistant Vice President Ron Stouffer replied.

Forty thousand documents have already been turned over. Regulators say most are meaningless and that the company failed to fully comply with any of 59 specific record requests. Instead it filed objections.

“Directors and officers of Allstate Insurance Company made the decision not to comply with the subpoena as of today, is that correct?” Steve Parton, general counsel for Insurance Regulation, asked.

“Mr. Parton, I have already told you, I have not been involved in the decisions as to how we will produce and what we’ve been producing,” George Grawe with Allstate Governmental Affairs replied.

The overall lack of responsiveness prompted Senate President Designate Jeff Atwater to promise stiffer penalties for ignoring regulators.

“This dance is over,” Atwater said. “The people of Florida need immediate relief.

Finally regulators had enough.

“I really have no reason to believe that you will abide by the subpoena today,” McCarty said.

The hearing ended as it began: with no answers.

Allstate’s spokesman contended the company was happy to be there. The company will get another chance to tell its story under oath to Senators next month.

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