chapter 11 – another e-mail

today from the Louisiana Insurance Commission

…as is stands now, our legal staff has been meeting with Allstate’s legal staff but nothing concrete has been decided. We hope to have something to relay to our complainant’s like you soon. I will keep you informed…

and the Saturday Times Picayune corroboration…

Attorneys for the Louisiana Department of Insurance and Allstate met Friday morning to discuss longtime policyholders who said they lost their wind and hail coverage in a bait-and-switch, but no agreements were reached about how to handle the situation.

Warren Byrd, executive counsel for the insurance department, said he met with Tom Clark, an attorney from Adams & Reese LLP who represents Allstate in regulatory matters.

“They’re still trying to get a handle of how many people may be involved,” Byrd said. “We obviously want to know how big the problem is.”

The insurance department has received complaints from policyholders of Allstate and Encompass , Allstate’s brand of insurance sold through independent insurance agents. Customers said that when they took advantage of discount offers, their policies were rewritten from Allstate Insurance Co. to Allstate Indemnity Co. or from Encompass Insurance Co. to Encompass Indemnity Co. , and then Allstate used these changes to redefine them as new insurance clients who were eligible to be canceled.

Under state law, homeowners insurance companies have wide latitude to cancel people’s coverage as long as they’ve been with the company for less than three years. After that, companies are essentially married to their customers.

Allstate said that when customers chose to take advantage of discounts, they chose to take out new policies, and they assume the risks of any other changes that may come with that decision.

In December, after studying the issue for several months, the insurance department wrote to Allstate and ordered the company to reinstate the wind and hail coverage for 17 longtime customers who had complained.

The insurance department does not know how many people in this situation have received, or are on the list to receive, cancellation letters, so Byrd said the department has been amenable to allowing Allstate to take some additional time beyond the original one-month reply period to get a handle on the situation, since it could ultimately help more people.

“My guess is we’ll meet next week again,” Byrd said.


~ by maringouin on Friday, February 8, 2008.

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