Contact: Beth Scott
Tallahassee, Fla. - A Consent Order between Allstate Floridian Indemnity Insurance Company, Allstate Floridian Insurance Company and the Florida Office of Insurance Regulation (Office)includes a provision that could trigger refunds for policyholders in Florida.
"The Office disapproved the profit factor the company included in the original filing that would have generated a profit that was too high to be acceptable. Allstate will use that money to buy more reinsurance," Insurance Commissioner Kevin McCarty said. "If they don't use all of the funds for reinsurance, the money will be refunded to policyholders."
The companies will be responsible for accounting for the money that is spent for reinsurance.
McCarty apologized for his delayed response to the agreement and said he wants to clear up misinformation that has been circulating about provisions of the Consent Order signed in January. "After issuing a press release detailing the Notice of Intent to Disapprove the filing, the Office should have followed up with an announcement that an agreement had been reached about the rate increase," McCarty said. "After Wilma hit Florida in late October, the Office and the companies took another look at the future and the possibility of another active hurricane season."
However, information about rate filings can be accessed on the Office's internet site at http://www.fldfs.com/edms/
. Florida's electronic filing, I-File, allows access to any interested party who wants to look at any rate or form filings and is considered by our peer states as the most transparent system in the country. The Office continues to work to improve and update the system and the postings.
Allstate had requested arbitration after being notified in October that the Office intended to disapprove the rate filing the company had submitted. In an October press release, the Office indicated the Notice of Intent to Disapprove was premised on the company's failure to adequately respond to questions posed by the Office and the companies' failure to adequately support the rate filing. In the Consent Order, Allstate agreed to use the money originally designated as a profit factor to buy additional reinsurance to protect consumers and to refund to the policyholders any money not used for reinsurance.
In another provision of the Consent Order, the companies agreed to substitute the Office's published catastrophe factors for the private catastrophe model originally submitted.