Department of Insurance Gets Nothing from Allstate
Allstate and other insurers are notorious for not complying with discovery seeking internal corporate documents which would expose corporate culture in bad faith cases. From the news yesterday and today, it appears the Florida Department of Financial Services has learned the same lesson most policyholder attorneys have known for quite some time.
This controversy results from the 2007 laws granting insurers access to state sponsored reinsurance. The Legislature expected lower premiums in return, and this has not occurred. Charlie Crist has been publicly critical as to why Florida was duped into this deal.The subpoenas issued to State Farm and Allstate were supposed to provide transparency on this. Neither insurer has been quick to provide the internal documents. Our firm tried to obtain a copy of the subpoenas, but the Department would provide only the notice and refused to provide the list of requested documents. To see the Allstate subpoena, click here.
State Farm's challenge to the Mississippi Attorney General may have emboldened Allstate. They simply may be flexing their financial muscle. Allstate has an army of attorneys and lobbyists. It has more money than most can imagine, and it certainly will not be eager to comply with requests that could lead to embarrassing revelations regarding how it operates to maximize profit. So while this controversy is making front page headlines throughout Florida, Allstate's willingness to accept sanctions rather than to comply with Court requirements to disclose documents and comply with the rule of law seems to be business as usual. See, Order Relative To Plaintiff's Motion for Sanctions, dated Sept. 17, 2004, Scroghan v. Wade and Allstate Ins. Co., (Bartholemew Cir. Ct., IN, 03C01-9909-CT-1317).
Great work Pardner. While you law men fight them crooks in court we is fightin' Allstate on the financial message board on Yahoo! This was posted today and we need a pacer if you could be so kind. Put it here and this Cowboy will steer you the traffic.
The case is called Fojas v. Ackerman, 08cv423, U.S. District Court, Northern Distrrick of Illinois, Eastern Division (Chicago). According to a poster there in today's Times Picayune it says:
"Allstate is mismanaged, suit says"
Conspiracy to withhold documents alleged
By Andrew Harris
Bloomberg News
Allstate Corp. Chief Executive officer Thomas Wilson and 12 other directors mismanaged the company, hurting its reputation with excessive litigatin, a shareholder said in a federal court complaint.
The directors, including former CEO Edward Liddy, conspired to withold documents from litigation and from regulatory agencies, subjecting the insurer to excessive fines and sanctions, according to the complaint filed Friday in federal court in Chicago.
"Allstate has been and will continue to be exposed to significant losses due to the wrongdoing," plaintiff shareholder Raul Fojas of Queens, New York, said in the complaint filed against the directors on the company's behalf.
Allstate, the largest publicly traded home and auto insurer in the United States, was barred this week from selling new auto policies in Florida by State Insurance Commissioner Kevin McCarty after the company failed to provide documents sought by regulators.
Friday, the Northbrook, Illinois-based company won a state court order lifting that ban. The Court gave McCarty 10 days to explain why Allstate's license should be suspended. Fojas' complaint sites the Florida suspension as an example of the company's "gross mismanagement and waste of corporate assets."
"We have not yet received the lawsuit and are unable to discuss it," Allstate spokeman Michael Siemienas said.
The suit, filed by Chicago attorney Clint Krislov, seeks corporate governance reforms and unspecified money damages.
Much obliged pardner.