Court Rules Against Allstate’s Florida Unit
On Friday, a Florida appeals court ruled that Florida’s Office of Insurance Regulation had the right to suspend Allstate Insurance from writing new polices in the state. Allstate had been appealing a suspension that was imposed on Jan. 16 by the state’s insurance commissioner.
At the heart of the matter are the company’s internal documents that pertain to the company’s claims paying practices. Florida regulators have asserted that Allstate had failed to comply with their subpoena to release these documents back in October.
Allstate has maintained that these documents contain trade secrets it will not release. It is alleged that these documents detail a business strategy created by the consulting firm McKinsey & Co. back in the 1990’s that is believed to have been widely used in the insurance industry.
Supposedly the “McKinsey” strategy outlines practices to pay as little as possible for claims and how to keep costs down. It is believed to revolve around making low initial claim offers and using delaying tactics, with customers who refuse the initial offer, up to and including legal action if necessary.
Whether these documents show any illegality or not, they would certainly damage Allstate’s reputation if they were to come to light. They could also have a measurable impact on any ongoing or future lawsuits that the insurance industry has over claims.
