Allstate Insurance Company has agreed to pay a $4 million fineand provide more than $30 million in policy credits and premiumreturns to customers whom California regulators say wereovercharged for home and auto coverage.
California Insurance Commissioner John Garamendi announced theagreement with the company. The Northbrook, Ill.-based insureradmitted no wrongdoing in the matter.
The case involved Allstate's practices from Jan. 1, 2000 toApril 12, 2002. During this time, Allstate employed a "FinancialStability" process for rating customers, which in the opinion ofCommissioner Garamendi was a form of credit scoring that placedsome consumers in programs with higher rates. California does notpermit credit scoring for auto insurance.
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