Frauds, Fakes, Or Fabulous
Aug 15, 2008 7:52 pm US/Eastern
Allstate Settles With Florida, Drops Rates
TALLAHASSEE (AP) ―
Florida homeowners insured by Allstate Corp. will get an extra 5.6 percent rate cut, state regulators announced Friday.
With this latest cut, Allstate policyholders will be paying 19.8 percent less since June 1, 2007. On that day, a 14.2 percent cut was created when a new law designed to lower windstorm insurance premiums went into effect.
The Northbrook, Illinois company has also agreed to forgive a $175 million loan to its Florida subsidiaries, pay a $5 million fine and insure 100,000 more Florida homeowners, according to Insurance Commissioner Kevin McCarthy. Half of the new policies will be sold to homeowners; the other half will be made available to condominium owners and renters.
Allstate currently has 2 million auto and property insurance customers in Florida, including 250,000 with homeowner policies. Only those with homeowner policies will get the new rate cut.
The agreement satisfies McCarty's complaints that the company failed to provide rate-related documents regulated has demanded, falsely claimed the material held trade secrets and falsely certified a request to raise rates by more than 40 percent. McCarty says his office will continue to investigate the company for other possible violations of state law.
If the company is found guilty of any other violations of law, Allstate could face fines, suspension or revocation of its licenses to do business in Florida.
Allstate was prohibited from writing new policies for all forms of insurance in May of 2008 for its failure to cooperate with the investigation. That prohibition was lifted after the company began turning over business practice documents.
(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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