According to a report from NU Online News Service, a California court yesterday turned down a request by Allstate to stay a regulator’s demand that the firm cut its auto insurance rates by 15.9 percent.
Insurance Commissioner Steve Poizner called the ruling “a $250 million victory for consumers in California and for Allstate customers.”
"I will continue to fight to ensure that insurance rates in California
are not excessive, and when rates are found to be excessive, I will
work aggressively to ensure that those rates are lowered," Poizner said.
Although Allstate admitted the ruling was disappointing, the company said it “has no impact on the merits of Allstate’s appeal, and we believe we will ultimately win the appeal.”
The 15.9 percent auto insurance rate decrease for Allstate was announced in March, and amounted to a reduction of $245 million.
Months of negotiations and an administrative hearing aimed at cutting the rate started with Allstate requesting no change to its auto insurance rates, and resembled reductions made by other major auto insurers. Allstate’s request was turned down.
The California Department of Insurance said many insurance companies in California had significantly lowered auto insurance rates for their policyholders, and in 2007, Californians saved more than $700 million through reduced auto insurance rates. The department argued that Allstate should be held to the same standard as other auto insurers, based on data given to the department.
Allstate Indemnity Company is the fifth-largest auto insurer in California; Allstate Insurance Company is ranked ninth. Together, they earned $1.7 billion in auto premiums for insuring two million vehicles in 2007.
