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Allstate suspended from business in Florida

Late Friday, April 4, 2008, the District Court of Appeals, First District, State of Florida upheld the Florida Office of Insurance Regulation’s suspension of Allstate from writing insurance in the State of Florida. The Office had suspended Allstate weeks before for a refusal to produce the McKinsey documents during an investigation of the company. That investigation, started as a result of the media surrounding Trial Guides From Good Hands to Boxing Gloves, and Robert Hunter’s reference to it, resulted in Allstate being cut off from a market comprising 17% of its national sales.

The court found Allstate guilty of arbitrary reductions of “bodily injury claim payments to its policyholders and beneficiaries by up to 20%.” It also determined that Allstate was engaged in ongoing criminal activity by failing to cooperate with the Office of Insurance Regulation’s investigation of a crime, and that this constituted a danger to the public health, safety or welfare of citizens.

Realizing the seriousness of this, given the pending shareholder lawsuit against the company for other problems resulting from the company’s refusal to turn over the documents in several cases nationally, Allstate posted 150,000 documents related to McKinsey on their web site. This number of documents is substantially more than the number they had represented were “all” of the McKinsey documents, to several courts in the country.

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