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Insurance Commissioner Steve Poizner reacted by issuing a statement calling the ruling by Superior Court Judge
Allstate 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 court, by denying a stay, had rejected an effort to delay immediate savings to consumers pending the court action Allstate has brought challenging his department's determination that Allstate's existing passenger automobile rates are 15.9 percent in excess of what the law permits.
"I will continue to fight to ensure that insurance rates in
The 15.9 percent decrease in auto insurance rates for Allstate Insurance Company and Allstate Indemnity Company was announced in March, and amounted to a $245 million reduction, according to the insurance department.
Action to cut the rate, the department said, was the result of months of negotiations and an administrative hearing, which began with Allstate requesting no change to their auto insurance rates, and mirrors reductions made by other major auto insurers. Allstate's request was denied
According to the department’s calculations, Allstate's customers will save on average approximately $124 per year.
The administrative law judge agreed with the California Department of Insurance (CDI) claim.
Before the court ruling, lawyers for the department had argued that Allstate's rates should be reduced significantly because they were overly excessive to begin with.
The department said many insurers in
Allstate, the department contended, should be held to the same standard as other auto insurers, based on data submitted to the department. It was noted that in October 2007, Commissioner Poizner approved $100 million in reduced auto insurance rates for AAA of Northern California and in July 2007, he approved a $65.8 million reduction for GEICO customers.
Allstate Indemnity Company is the fifth-largest auto insurer in
Allstate said its pending action asks the court to review “key evidence which was excluded in the underlying administrative rate hearing.”
Allstate Senior Corporate Relations Manager
The company, he said, is reviewing the details of the court’s ruling and will “continue to explore our options going forward.”
Mr. DeMarco noted that in requesting the stay, Allstate had committed to setting aside money in a separate account to be used for refunds if the appeal is ultimately denied.
However, he said that the department, by requiring Allstate to implement a 15.9 percent rate decrease before its appeal is heard, means that if Allstate eventually wins the appeal down the road and the rate order is set aside as erroneous, “there is no way to recover those losses.”
Allstate, according to Mr. DeMarco, is being asked to lower its rates by almost twice as much as any other similarly situated insurance company, “even though our rates are already competitive.”
“If all of Allstate’s evidence had been considered in that hearing, we believe the outcome would have been a fair and reasonable rate reduction for our customers,” he said.