But while declaring that it "respects the Insurance Department's authority to interpret and determine violations of New York state insurance law," the Northbrook, Ill.-based personal lines giant continues to assert its reading of state law demonstrated the company's practices never were in violation.
New York's largest homeowners' insurer, Allstate was cited for refusing to comply with an Aug. 28 circular letter from Insurance Superintendent Eric R. Dinallo instructing all property/casualty insurers in the state that they were prohibited from refusing to renew homeowners policies based on whether the policyholder held other coverage with the company. Liberty Mutual Insurance Cos., the state's fifth-largest writer of homeowners, was among the companies that said it would cease the practice.
Allstate initially resisted the order, denying the company's renewal practices were in violation of New York's anti-rebating and anti-discrimination laws. As part of the effort the company launched in October 2005 to reduce exposure to areas considered vulnerable to hurricanes, Allstate in early 2006 said it would not renew some coastal homeowners insurance policies in New York.
While it still believes its actions "were in full compliance" with state law, Allstate now "intends to comply fully with the department’s determination," spokeswoman Krista Conte said.
"Allstate values and honors its long-standing relationship with the department, and looks forward to working productively with the department as we effectively and efficiently address Allstate's need to prudently manage our catastrophe exposure in downstate New York," Conte said.
In light of its decision to relent, the department announced it has adjourned a planned "show-cause" hearing in which the company could have faced civil penalties and "other punitive, remedial, or preventive action."