A Missouri lawsuit, which exposed Allstate to more than $7 million in fines and embroiled the company in a long-running battle to keep secret a report advising it on claims handling, has been settled.
The company, which is due to appear next Monday in Jackson County Circuit court to secure judicial approval for the agreement, said terms were confidential and would not say if it would pay any fines.
At issue is a bad faith action brought by former policyholder Paul Aldridge, who sued the company alleging the insurer had mishandled the claim against him from an accident he had in 2000.
In the course of his suit, Mr. Aldridge's attorney's sought to obtain a report produced by McKinsey & Company, which reportedly advised the insurer to adopt a bare-knuckled strategy of handling claims by delaying action on them, denying them and going to trial.
The report became in issue in Florida, where the insurance regulator asked for it along with other Allstate material, and cancelled the insurer's ability to write new business until it came to terms and agreed to provide the documents he asked for.
Mike Siemenas, a company spokesman, said the insurer was pleased to settle the case, but would provide no details.
When Allstate balked at providing the report, Circuit Court Judge Michael Manners imposed a fine of $25,000 a day. The company did not pay it, but Deborah Walker, judicial assistant to Judge Manners, said there had been no attempt to hold the company in contempt, so the money remained uncollected.
"I'm sure it will be dealt with," she said.
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