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Gallagher Questions Allstate Rate Request; Independent Review Shows Flaws in Allstate's Request

8/5/2005

CONTACT:
Tami Torres or Bob Lotane
(850) 413-2842
 
TALLAHASSEE–Florida's Chief Financial Officer Tom Gallagher said today that an independent review of Allstate Floridian Insurance Company's request for higher rates shows deficiencies and raises troubling questions about the company's motives in seeking rate increases.
 
"The numbers do not add up," said CFO Gallagher, "It is becoming clear that their request for a rate increase is unjustified, and I think they need to reconsider their decision to raise rates on their policyholders. Allstate customers deserve accountability from their insurance provider."
 
CFO Gallagher is requesting that Allstate customers apply pressure to the company by participating in upcoming public hearings to review Allstate's rate requests.
 
The deficiencies in Allstate's rate request were discovered after an independent review was carried out by Gallagher's Consumer Advocate's Office. The independent review examined Allstate Floridian Insurance Company and its affiliated company, Allstate Indemnity. Both requests were submitted to Insurance Commissioner Kevin McCarty, who oversees the Office of Insurance Regulation and regulates insurance rates.
 
Based on the conclusions of the report, CFO Gallagher determined that these Florida-only companies are attempting to justify their rates based on losses from other states. In addition, Allstate Floridian did not adequately document how non-renewing 95,000 Floridians – a substantial reduction in exposure – impacts their rate request.   Finally, the report revealed that the companies are asking for an increase for reinsurance that is out of proportion with their previous rate requests.
 
Gallagher said that Consumer Advocate Steve Burgess plans to present the findings of the independent review during the first public hearing to be held today in Orlando, from 1 to 6 p.m., at Dr. Phillips High School.
 
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As a statewide elected officer of the Florida Cabinet, Chief Financial Officer Tom Gallagher oversees the Department of Financial Services, a multi-division state agency responsible for management of state funds and unclaimed property, assisting consumers who request information and help related to financial services, and investigating financial fraud. Gallagher also serves as the State Fire Marshal.