Allstate has agreed not to drop New York coastal home policyholders who don't also buy life insurance or auto coverage from the company, New York's insurance superintendent announced 12 days after citing the company over the tie-in requirement.
Superintendent Eric Dinallo on Aug. 31 had issued Allstate a citation for nonrenewing policyholders and refusing to comply with an Aug. 28 circular letter. That letter directed property-casualty insurers to discontinue the practice of nonrenewing homeowners insurance policies based upon whether the policyholder had tie-in business.
Allstate and its affiliates, which had faced the possibility of civil penalties, "have agreed to comply fully" with the tie-in sale directive, Mr. Dinallo said in a statement.
Mr. Dinallo's Aug. 28 letter had directed any company that had issued a notice of nonrenewal on that basis to immediately rescind it if it had not yet taken effect. Liberty Mutual, another company coupling tie-ins with renewals, immediately complied, but Allstate had balked.
Had Allstate not changed its position the company was due to appear next Wednesday for an insurance department hearing on its actions, where it faced the possibility of civil penalties.
"Since Allstate has now agreed to fully comply with the circular letter, the department will adjourn the hearing and engage in discussions with Allstate about resolving the issues raised in the citation," the announcement said.
Allstate issued a statement after it was cited, saying in part: "We respect our longstanding relationship with the [state insurance department] and remain committed to working with them regarding our continued compliance with the law as we continue our catastrophe management program. We are committed to being in a strong position for our New York customers, prudently managing our exposure to catastrophic risk and continuing our industry-leading presence in the state of New York."
The topic of home insurance coverage for New Yorkers has been a focus of interest from New York's U.S. senators.
Allstate has been the target of a call by Sen. Hillary Rodham Clinton, D-N.Y., to reconsider its decision to cut back on coverage it provides on Long Island. Ms. Clinton asked Allstate Chief Executive Thomas Wilson for an explanation of the decision to limit state business.
Sen. Charles Schumer, D-N.Y., has announced he wants legislation creating a commission to examine the insurance marketplace, "with the goal of increasing availability and affordability of insurance in communities like Long Island," because "they are being targeted by insurance companies for reductions of coverage."
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