McKinsey Allstate Documents continue to be requested…why did FL Ins Comm McCarty want them in 2008?

 Why are we still talking about the McKinsey documents prepared for Allstate back in 1995?

Adjusters need to stay abreast of current issues in the news as issues such as these are constantly in the news and insureds, public adjusters, and attorneys constantly bring up these issues while you are out there in the field handling claims. You need to understand these hot topics to deal with the constant comments from the public. As staff employees, it’s amazing how little the insiders handling these claims are told about what is going on. A typical scenario might involve a very brief “talking points” type corporate email advising of an upcoming press release so they can be prepared for questions a day or moments before the press release goes out but day-to- day, claims folks hear very little about ongoing current litigation on files. The internet has done much- especially with blogs and forums- to reveal court documents and news articles we rarely would have seen years ago at the regional claim management or adjuster level. Even today, speaking with former co-workers/management associates and adjusters alike, I’m amazed that they are not aware of current issues at all in many cases. If it is this difficult for staff claim employees to know, how are independent adjusters to be aware of current issues they will have thrown at them in the field?

Checking regularly the websites of many independent adjusting firms, they may have news reels going to some of the major news sites but rarely is anything published on their websites with details and court documents,etc… I continue to be amazed at the lack of information available for adjusters and try to provide links to important documents that they would care to know about if they had the time to do all of this constant research. How are adjusters to improve their claim file quality without a better understanding of what is happening in claim litigation? There is much to be desired about the current events education needed for insurance adjusters and claim managers out here. The majority of court documents on high profile claim lawsuits these days is coming from blogs and the press articles covering some of the major issues, not from the carriers or in claim training classes independents are attending.

If you are not familiar with the Allstate McKinsey documents issues, here are links to some links to many summaries by various law firms that explain them to bring you up to speed on the issue. They have even been the subject of a book as Merlin’s blog points out.

Although these documents were allegedly produced by McKinsey for Allstate back in 1995- they continue to come up repeatedly in lawsuits involving claims for Allstate and most recently that I am aware of during the FL Insurance carrier rate hearings in January and February of 2008. I find this particularly interesting that Fl Insurance Commissioner Kevin McCarty jumps right into asking Allstate during the rate hearing atleast 3 times if I count correctly about production of the McKinsey documents. Recent news stories indicate that Allstate has begun to produce them. Allstate during the hearing- prior to production (if they have in fact supplied them or in the process of doing so) was looking for assurances they would not be turned over into others hands. When you read the link below to the hearing transcript, note where McCarty seems to be using the fact Allstate is being fined by the MO Insurance Dept for not turning over the documents….seems to me he was using that fact as an example of why he thought Allstate was delaying submitting documents to the FL committee?

I’m curious about this since McCarty has now been named as the 2008 Committee chair for the Property and Casualty committee for the National Association of Insurance Commissioners (NAIC). I’ve written to Attorney David Rossmiller who had previously written three blog entries over on his blog to see if he can provide some opinion as to why these are being requested at the rate hearing. From reading the January and February 2008 blogs over at the Merlin Law Group blog, it possibly has to do with asking for higher rates after allegedly low balling claim settlements. Is it more to do with the fact he is over the Property committee for NAIC? You review these current activities and you decide. Personally, I think that they will become subject of even more Insurance Dept inquiries with McCarty’s new position. They are the subject of inquiries in NM, KY, MO, CO, and FL in recent years also though either lawsuits on claim files or insurance department inquiries. To anyone in claims- especially catastrophe adjusters- asking for 10 year old plus documents is inconceivable when you consider that things on catastrophe assignments can change as often as hourly as far as carrier guidelines for adjusters. Your lucky if your closed file can hit the closed basket and management review before estimating or file handling guidelines have changed!

Should Rossmiller find time to review the links I sent him and provide some clarity to the recent activities, I’ll provide an update and link to the new blog as an update to this topic.

According to this Merlin Law Group article, Allstate is paying fines in MO and CO for NOT turning over the McKinsey group documents for a substantial amount of fines:

http://merlinlawgroup.wordpress.com/2008/01/19/states-seek-mckinsey-reports/

Merlin also wrote two other recent blogs on the McKinsey reports and the hearing here:

http://merlinlawgroup.wordpress.com/2008/01/23/66/

http://merlinlawgroup.wordpress.com/2008/02/04/allstate-testifies-today/

Regarding the NAIC committee, here is the NAIC press release on McCarty and other committee chair announcements:

http://www.naic.org/Releases/2008_docs/2008_committee_leadership.htm

Here is a recent blog from the Charlotte Injury board reporting that Allstate is now producing the McKinsey documents to the Florida rate review committee:

http://http://charlottesville.injuryboard.com/defective-products/allstate-finally-begins-handing-over-important-mckinsey-documents-to-florida.php?googleid=14809

In this 2007 case in KY, Rossmiller writes about Allstate’s win in this case that involved the McKinsey documents:

http://www.insurancecoverageblog.com/archives/bad-faith-mckinsey-documents-smoking-gun-or-blowing-smoke.html  

Here us a link to Rossmiller’s list of McKinsey document blogs:

http://www.insurancecoverageblog.com/admin/search?IncludeBlogs=20&search=McKinsey+documents&Search.x=13&Search.y=4

Here is the link to the FL Allstate rate hearing transcript (initial hearing that drove McCarty to trying to suspend Allstates writing of new business):

http://www.flsenate.gov/data/committees/Senate/meeting_packets/spa.pdf

Thus far, the FL Senate recommendations have not again mentioned the McKinsey documents and I have not seen a link to the 2nd Allstate hearing this past Monday and will post when I do locate it on one of the blogs if it again brings up the McKinsey documents they were to produce like the first hearing did.

I expect we’ll be hearing much more this year in new cases about requests for the documents in spite of the KY win for Allstate linked to above.

So….what are your thoughts on the McCarty connection and request during the hearing? Interesting to say the least!