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State Looking for “Insurance Hammer”

January 22nd, 2008 by Mike Vasilinda

The state said today it is still working on an appeal of a judges decision to allow Allstate to continue to sell polices while it defies state regulators requests for information. The state had two choices when the company refused to comply with a subpoena..it could fine them ten thousand dollars, or stop them from doing business. As Mike Vasilinda tells us, key legislators says they are ready to give the regulators a bigger hammer over uncooperative companies.

Hear it here: State Looking for “Insurance Hammer”

Insurance rates were supposed to drop like a rock. They didn’t. Allstate was asked for documents. It stonewalled. The state told the good hands people to stop selling insurance. The company went to court, and won.

There’s virtually no chance the first district court of appeal is going to change its mind and stop Allstate from doing business again. And that leaves the state virtually nothing in its enforcement tool bag.

In preparation of legislative hearings, property and casualty insurers brought in experts to justify the claim that they are still losing money. “We have a loss of 6.7 billion dollars…” said Dr. Bob Hartwick.

We asked industry spokesman William Stander why they are thumbing their noses at regulators.

“Our companies are always willing and able to cooperate with the office of insurance regulation. It doesn’t appear that way because, I think insurance companies, just like any natural person, still enjoy the rights given to us by the constitution of the United States.”

State Senator Jeff Atwater says more power is on the way. “You’ve gotta have a hammer. I mean can you imagine ignoring the state supreme court in Missouri, now to the point of two million dollars and come to a subpoenaed hearing in Florida, fearful that you might get slapped with a ten thousand dollar fine. They have ignored it.” says Atwater.

But until new regulations are on the book, it is unclear what more the state can do ut use its bully pulpit to shine light on companies it accuses of being bad actors. which is exactly what Charlie Crist did when he said “In Allstate’s case, they’re bad hands..not good hands”.

Both the Senate banking and Insurance Committee and a select committee on insurance met briefly this afternoon, but the real fireworks come next week when top executives from 5 companies, including Allstate, are put under oath.

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