Secret Allstate Documents Reveal Insurance Bad Faith Practices
January 23rd, 2008Allstate Insurance has for years kept secret documents on how to low-ball auto claims to keep profits high. Known as the McKinsey documents, they are now being highly sought by Florida insurance investigators who’ve launched a full scale look at the insurance giants rate-making and claims-paying practices. Florida’s Insurance Commissioner Kevin McCarty has suspended Allstate from doing business in the state after the company failed to turn over information on its business practices. An appellate court lifted the ban. A company spokesman tells the Tampa Tribune that Allstate will turn over the McKinsey documents, but they only concern auto insurance, not homeowners and they contain ideas that never became company policies. The McKinsey documents get their name from the consulting firm McKinsey & Co that Allstate hired in the early 1990s to help draft its business practices. A few lawyers who have sued Allstate have seen them. Most have protective orders from the court guarding the “trade secrets” of Allstate and cannot release them to the public. McKinsey and Co. also allegedly created documents about how to handle homeowners insurance, also highly sought by trial attorneys in property insurance litigation. The documents have been succesfully used by lawyers in proving bad faith claims against Allstate. However, the lawyers that have received the documents are under protective orders preventing the disclosure of the documents.