Paul Swider, a staff writer for the St Petersburg Times recently wrote that a joke in Massachusetts 20 years ago was that Allstate Insurance Group had changed its name to "All-but-one-state."
Despite rate increases of 34% over two consecutive years, insurance companies said they couldn't make money on auto policies. They blamed overbearing state regulation. Allstate's response?
It stopped writing all insurance policies in the Bay State, claiming it was losing millions of dollars. A move by Florida regulators to ban Allstate from writing new auto insurance policies here recalled the company's reactions when faced with similar demands in other states.
In some cases, Allstate rebelled against regulators; in at least one, the company simply left town.
In 1993, Allstate returned to Massachusetts.To get back into that state's insurance business, Allstate agreed to pay $19.9-million for its portion of the state's shared-risk pool that insures motorists that insurance companies don't want to cover.
Last year, the company stopped writing homeowner policies in New Jersey, just as it had in 2006 in New York City, Long Island and Westchester, N.Y. In those cases, the company said its hurricane modeling suggested those areas were newly at risk.
Today, Allstate is paying $25,000a day in fines for failing to produce documents in a Missouri lawsuit that claims it did not adequately pay a claim.
The files, called the McKinsey documents for the consulting company that prepared them, supposedly contain thousands of slides full of secrets revealing how the company profits at policyholders' expense.
This year the company is butting heads in California over its decision in 2007 to stop writing new homeowner policies because of risk of natural disaster, and its 2006 request to raise rates on existing policyholders, even while its competitors seek to lower their rates.
California's insurance commissioner is also asking Allstate for refunds to policyholders for overpayments. The state says the company paid less in claims than others.
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