(Bloomberg) -- Allstate Insurance Co. agreed to settle a 2011lawsuit accusing Morgan Stanley of fraud over more than $100million worth of mortgage-backed securities in which the insurerinvested.

The largest publicly traded U.S. home and auto insurer suedMorgan Stanley and other lenders in 2011, alleging they soldpackages of risky home loans while claiming they conformed with“conservative” underwriting standards.

Northbrook, Illinois-based Allstate and New York-based MorganStanley have agreed to discontinue the suit, according to a Feb. 2court filing in New York State Supreme Court.

“The lawsuit has been settled on mutually agreeable terms,”Allstate spokeswoman Maryellen Thielen said in an e-mail.

Pools of home loans securitized into bonds were a central partof the housing bubble that helped send the U.S. into the biggestrecession since the 1930s. The housing market collapsed, and thecrisis swept up lenders and investment banks as the market for thesecurities evaporated.

Mark Lake, a spokesman for Morgan Stanley, declined to commenton the accord.

Other lenders sued by Allstate included Bank of America Corp.’sMerrill Lynch, Citigroup Inc., Deutsche Bank AG, Goldman SachsGroup Inc. and JPMorgan Chase & Co. Allstate settled withCitigroup in May 2013, dropped the cases against Deutsche Bank,Goldman Sachs and JPMorgan that same year, and resolved its claimsagainst Bank of America in April 2014.

The case is Allstate Insurance Co. v. Morgan Stanley,651840/2011, New York State Supreme Court.

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