Florida's Office of Insurance Regulations has reached an agreement with Allstate where the company will pay a $5 million fine to resolve legal issues stemming from the company's fight over documents the department requested.
The agreement, announced late today, resolves allegations that the Northbrook, Ill.-based carrier failed to provide documents the department requested, falsely asserted trade secrets in its September rate filing and falsely certified that filing.
"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," Florida Insurance Commissioner Kevin McCarty said in a statement. "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."
Other terms of the agreement require Allstate to lower its homeowners insurance rates in all territories of the state by 5.6 percent within 30 days for a total reduction of 19.8 percent going back to 2007.
The company must write 100,000 new homeowners insurance policies over the next three years. Half will be basic homeowners policies and the other half condominium, renters and other residential property.
Allstate's corporate office must cancel a $175 million surplus note it issued to the Florida Allstate companies. Cancellation of the note is expected to enable the company to solidify its Florida capital base and to write more policies for Florida consumers, the department said.
The $5 million fine will be paid by the Allstate corporate office, not the Florida companies, to the Insurance Regulatory Trust Fund.
The company also agreed to cooperate with the OIR's ongoing investigation into the relationships between insurers, trade associations, rating organizations, modelers, reinsurers, reinsurance brokers and other entities. It must also cooperate with other investigations.
Allstate's license to sell insurance was suspended in the state in January after the company failed to cooperate with investigations. The suspension was lifted after the company cooperated later this year.
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