Released: July 21, 2006

Commissioner of Insurance Jim Donelon has announced he is preparing to take legal action against Allstate Insurance Company.

Commissioner Donelon was told by Allstate officials today: either ignore the state’s consumer protection statute and allow the company to exclude wind and hail coverage on policies in 18 parishes, or the company will totally withdraw from the Louisiana homeowners market. Allstate is Louisiana’s second largest homeowners insurer with approximately 220,000 policyholders statewide.

Allstate officials told the Commissioner today that on January 1, 2007 they intend to renew an estimated 30,000 homeowners insurance policies in 18 coastal parishes without wind and hail coverage. According to Donelon, such a unilateral reduction in coverage would be a direct violation of Louisiana law.

“The company’s management needs to reevaluate its position in favor of policyholders rather than corporate profits,” said Donelon. “This action is reprehensible. On the one hand, Allstate is dragging its feet paying claims, and on the other hand, they want me to sanction a move that could help them make higher profits,” Donelon added.

“I am duty bound as Commissioner of Insurance to uphold the laws of this state, and I fully intend to do so,” Donelon said. “It is my contention that such actions are prohibited by Louisiana law. This consumer protection statute is the strongest in the nation and was enacted for the express purpose of avoiding this kind of anti-consumer action,” said the Commissioner. “Allstate’s trying to kick policyholders when they’re already down.”

Department of Insurance records show Allstate has 1,287 hurricane-related consumer complaints, the highest number of the top 10 property insurers in Louisiana following Hurricanes Katrina and Rita. Donelon also says he finds the company’s timing disturbing considering Allstate recently announced second-quarter profits of $1.21 billion.

“I hope that the top management of this company reassesses the situation and if there is any way I can help them stay in the state, obey the law and serve consumers, I am at their disposal,” Donelon added.

-30-