Florida court upholds Allstate suspension

By Michael Peltier

TALLAHASSEE, Florida (Reuters) - A Florida appeals court on Friday upheld a state regulator's order suspending Allstate Corp from writing new insurance policies in Florida.

The state's Office of Insurance Regulation (OIR) suspended Allstate in January, saying it had not fully complied with a subpoena to testify about its property insurance business. Allstate immediately appealed and won a stay allowing it to continue writing policies.

Florida investigators were trying to determine if Allstate and other companies colluded to prevent property insurance rates from dropping despite legislative action last year to reduce premiums.

In a statement issued immediately after the ruling by the First District Court of Appeal in Tallahassee on Friday, Insurance Commissioner Kevin McCarty said the suspension would be enforced immediately.

But at an afternoon news conference he pulled back, saying Allstate had 15 days to appeal and he was not sure when the suspension would take effect.

Allstate said it was reviewing the ruling but believed it was not yet final and would continue to write new business.

Nonetheless, McCarty said: "This is good news for the people of Florida. This is good news for all those law-abiding companies doing business in our state."

The suspension would mainly affect new auto policies, since Allstate had previously said it planned to reduce its homeowner policy exposure in Florida.