Allstate to cut rates in settlement with Florida

MIAMI (Reuters) - The U.S. state of Florida said on Friday that insurer Allstate Corp would lower all homeowner insurance rates in the state by 5.6 percent under a broad settlement ending the state's disputes with the company.

Allstate, which has been battling efforts by the state government to force insurers to lower rates that soared after the devastating hurricane seasons of 2004 and 2005, would pay a $5 million fine as part of the deal, the office of Florida Insurance Commissioner Kevin McCarty said.

The agreement also calls for Allstate to begin selling more property insurance in the state.

The company must write 100,000 new policies, including 50,000 basic homeowners policies and 50,000 condominium, renters and other residential policies, over the next three years, the insurance commissioner said.

McCarty said the agreement resolves running disputes with Allstate that included allegations the company failed to freely provide documents requested by subpoena and falsely asserted trade secrets were at stake.

"It is unfortunate that Allstate's disregard of Florida law required the office to take the drastic actions that we did in order to bring Allstate into compliance," the commissioner said in a written statement.

"However, the terms agreed to by Allstate in the consent order go a long way toward restoring confidence in Allstate's business practices and will provide a great benefit to their policyholders and future policyholders," he said.

The $5 million fine was to be paid within 30 days by Allstate's parent in Northbrook, Illinois, not by the Florida companies under which it does business, the commissioner's office said.

"The resolution of this matter demonstrates our desire to work with the Office of Insurance Regulation and to put the issues in dispute behind us," Allstate said in a statement.

The two sides ended up in court earlier this year after Florida suspended Allstate's license to write policies in the fourth most populous U.S. state on the grounds the company had failed to turn over the information about its property insurance business.

State investigators were trying to determine if Allstate and other insurance companies colluded to keep rates high.

McCarty reinstated the license in May after Allstate said it had complied with the order, two days after an appeals court rejected the company's request for a rehearing in a bid to get the state ban lifted.

(Reporting by Jim Loney, additional reporting by Lilla Zuill in New York and Michael Christie in Miami; Editing by Gary Hill)