The state of Maryland fined Allstate $100,000 yesterday and ordered it to refund more than $17.5 million in premiums to personal auto lines customers after finding Allstate did not comply with state law in disclosing reasons for rate increases.

The refunds are being sent to more than 20,000 current and former Allstate customers, the state said.

The fines and refunds were ordered because Allstate sent premium increase notices between Jan. 1, 2003 and March 1, 2005 that did not comply with a provision of state law requiring a description of the accident or violation that led to the increase, the commissioner's office said.

The refunds average $850. State officials said they comprised one of the largest refunds in recent history. The $100,000 fine levied on Allstate is also just below the $125,000 limit the agency is allowed to impose.

The state said it acted based on a group of complaints to the Maryland Insurance Administration.

Debbie Pickford, a spokeswoman for Allstate's capital region, said that "We regret that some of our notices to policyholders were not in compliance."

She said the company "did everything necessary to correct the problem as quickly as possible to make sure our former and current policyholders receive compensation."

Maryland Insurance Commissioner R. Steven Orr said that after an investigation, Allstate was given until Oct. 3 to audit policyholder records between Jan. 1, 2003 and March 1, 2005 and make appropriate adjustments.

Ms. Pickford said all of the policyholders involved received letters advising them of an increase had a past accident or violation that warranted a rate increase.

"Maryland law requires very specific statutory language about why exactly you are raising the rates," Pickford said. "We regret some of the notices we sent were not in compliance with state language. As soon as we found out about it, we did everything we could to rectify it."

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Maryland Orders Allstate: Refund $18 Million

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