The Tampa Tribune reported Friday that the Florida Department of
Insurance is seeking McKinsey & Company consulting reports which are allegedly tied to an Allstate
plan to underpay claimants. These
documents are at the heart of contention in a Colorado case where
Allstate is being fined for not providing them, and also
in a Missouri
Department of Insurance investigation where Allstate is being fined
$25,000 per day for refusing to cooperate with the state regulator's
investigation. I am seeking similar documents
in an Indiana case in which Allstate has been already sanctioned and ordered to provide them.
For over a decade, I have criticized Allstate's reliance on a claims
program which appears to unethically calculate the value of an
individual's bodily injury claim and not honestly disclose how Allstate
arrived at its determination. The situation is
analogous to an
Emergency Hospital charging you too much and then not providing the
details of the bill nor an honest explanation as to how it arrived at
its numbers. Allstate has understandably been reluctant to disclose its claims practice and expose itself to the Civil and Regulatory penalties that should accompany such a breach of the public trust and its knowing failure to act in good faith.
In case after case, Allstate simply refuses to fully comply with legal
requests for the internal memoranda or ties up compliance through delay
and stonewalling.
The amazing aspect of the Department of Insurance request is that it has
come so late after Allstate's claims processes were changed. The McKinsey
documents were primarily generated over a decade ago, and I obtained them when I chaired a Bad Faith Litigation Group.
See, Mark Ballard,
Allstate's Master Plan?, Nat'l Law Rev., November 9, 1998, at A1, (col.2). One of
my colleagues, David Berardinelli, wrote
a book on
this topic
: From "Good Hands" to Boxing Gloves - How Allstate Changed Casualty Insurance in America. We suspect the most revealing documents are contained in management emails regarding the performance and profits of Allstate's claims programs. In our experience, internal emails by management are more revealing than reports generated for display to many employees. The
Department should seek these in
addition to the McKinsey documents.
It is refreshing that regulators are finally seeking transparency of
Allstate's claims practice. Still, one has to wonder why it has taken so
long and if the Department is looking in all the right places.
They
should
visit our law office to obtain some of what they are seeking;
we've had some
, but not close to all, of these documents for 10 years.
Based on past experience,
Allstate will not
be in a hurry to provide anything which would
expose how it treats its customers and which could expose it to
further penalty or criticism. It is unlikely Allstate will voluntarily allow a third party to challenge its claim that "you're in good hands with Allstate."
