Allstate on Wednesday dropped its appeal of a mandated 15.9 percent cut in auto insurance rates that was ordered by California Insurance Commissioner Steve Poizner in March.
According to the commissioner, the rate reduction creates a $250 million savings for policyholders.
Allstate in April had sought a stay of the rate cuts, but it was denied by Superior Court Judge Peter Busch in San Francisco, and Mr. Poizner called the ruling "a $250 million victory for consumers in California and for Allstate customers."
Yesterday a spokesperson said Mr. Poizner is "pleased that these rate cuts are no longer in jeopardy."
Allstate in April said that while disappointing, the ruling "has no impact on the merits of Allstate's appeal, and we believe we will ultimately win the appeal."
Mr. Poizner said the rates were in excess of what the law permitted.
The consumer group Consumer Watchdog hailed the ruling and noted that the rate cuts were called for after extensive hearings required under California's Proposition 103 regulation.
Consumer Watchdog filed an action in the case on behalf of the public and two million Allstate auto policyholders.
Consumers should see the reductions implemented on all policies renewed on or after April 28. The average annual policy premium will be reduced approximately $124.
Allstate Senior Corporate Relations Manager Peter DeMarco said in a previous statement, "Allstate wants to lower its auto rates and reduce the cost of auto insurance in California, especially during difficult economic times for our customers."
He said yesterday, "While Allstate believes it would have ultimately achieved a successful outcome of the appeal, this decision was made in the best interest of all parties involved."
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