8-KOther Events

ALLSTATE CORP 8-K Report, Corporate Update (Aug 19, 2008)

Filed August 19, 2008For Securities:ALLALL-PJALL-PBALL-PHALL-PI

Summary

Allstate Corporation (ALL) has filed an 8-K report on August 19, 2008, detailing the resolution of an administrative complaint filed by the Florida Office of Insurance Regulation (OIR). The complaint, initially concerning rate filing certification and responses to subpoenas, has been settled via a consent order entered into on August 15, 2008. Key terms of the settlement include a $5 million penalty paid by Allstate Insurance Company, a permanent capital contribution of approximately $175 million to Allstate Floridian Insurance Company, and a commitment to write a combined total of 100,000 new homeowners and renters/condo policies in Florida over three years. Additionally, base rates for homeowners and renters policies will be reduced by 5.6%, and Allstate affiliates will continue cooperating with ongoing OIR investigations. Allstate views this resolution as beneficial for its customers, agents, and shareholders, and as a step towards addressing long-term challenges in Florida's property insurance market.

Key Highlights

  • 1Allstate resolved an administrative complaint with the Florida Office of Insurance Regulation (OIR) via a consent order dated August 15, 2008.
  • 2Allstate Insurance Company will pay a $5 million penalty.
  • 3A permanent capital contribution of approximately $175 million will be made to Allstate Floridian Insurance Company.
  • 4Allstate committed to writing 100,000 new homeowners and renters/condo policies in Florida over three years.
  • 5Territorial base rates for homeowners and renters policies will be reduced by 5.6%.
  • 6Allstate's Florida affiliates will continue cooperating with ongoing OIR investigations into insurer relationships and claims practices.

Frequently Asked Questions

The Florida OIR filed an administrative complaint against ten Allstate affiliated companies concerning their rate filing certification process and their response to subpoenas issued during an investigation into residential property insurance rate practices.

The main financial implications include a $5 million penalty payment and a capital contribution of approximately $175 million to Allstate Floridian Insurance Company. There will also be a 5.6% reduction in homeowners and renters territorial base rates.

Allstate's Florida affiliates have agreed to write a combined total of 100,000 new homeowners and renters or condo insurance policies over a period of three years, with 50,000 specifically being homeowners policies.

This consent order resolves the administrative complaint concerning rate filing certification and subpoena responses. However, Allstate's affiliates will continue to cooperate with current OIR investigations regarding insurer relationships with various entities and claim-payment practices.