Allstate Pays $4.5 Million in Age Discrimination Lawsuit Settlement!

September 11, 2009: NORTHBROOK, Ill.—Allstate Insurance Co. has agreed to pay $4.5 million to about 90 former employees to settle an age discrimination class action lawsuit, said the U.S. Equal Employment Opportunity Commission on Friday.

The litigation with the EEOC, which was filed in 2004, stems from the Northbrook, Ill.-based insurer’s efforts in 2000 to convert its 15,000-member agent workforce to independent contractors from regular employees.

The EEOC said Allstate had adopted a hiring moratorium for a period of one year, or while severance benefits were being received, that had a disproportionate impact on workers over age 40 because more than 90% of the agents subjected to it were in that age group. Allstate has denied that its hiring moratorium violated the Age Discrimination in Employment Act of 1967.

An Allstate spokesman said in a statement that “while confident that we acted appropriately,” the insurer decided to settle the dispute “to avoid the burden and considerable expense of continued litigation for everyone involved.”

The spokesman said Allstate believes “its position is correct and that it would have ultimately prevailed in this case. The court has indicated, and the EEOC acknowledges, that the dispute is centered on a point of law over which there is substantial ground for difference of opinion.”

Running Clock Rant: “It Has Come To Our Attention”

July 23, 2009

It has come to our attention that some mortgage companies have recently mailed letters to Castle Key (formerly Allstate Floridian) property customers concerning the company’s recent downgrade by A.M. Best. We are in the process of contacting the two mortgage companies from which we have copies of customer notices to explain that Castle Key maintains a sound capital position and extensive reinsurance. Our emphasis in these discussions is that, despite the A.M. Best downgrade, Castle Key was recently reaffirmed with an A´ (A Prime), Unsurpassed financial rating from Demotech, Inc.  Demotech is an independent financial and actuarial services firm.  Many property insurance companies in Florida operate with only a Demotech Financial Stability Rating®.

One of the customer letters, from Midland Mortgage Company, indicated that they will accept a Demotech financial rating.  As stated above, we are having discussions with this company to advise them of our Demotech rating and will request that they discontinue sending customer notices.  We hope to resolve this issue with little customer disruption.  In the meantime, you or the customer may contact Midland and provide them a copy of Castle Key’s rating. The website www.demotech.com contains the ratings for Castle Key and other Florida property insurance companies.

The other letter, from Taylor, Bean, and Whitaker Mortgage Company, indicated that their company will accept policies written only by insurers who earned high ratings from A.M. Best.  We will contact them and request that they accept Castle Key policies based on the companies’ Demotech rating.  If they do not agree to accept Demotech for Castle Key, you may want to consider calling the customer and offering to place them with one of the available expanded market carriers.  If this transpires, we will provide you with an audit of policies listing this mortgage company that are associated with your agency.

Your agency can affirm to customers that the Castle Key companies are financially strong and stable companies.  At the end of 2008, the Castle Key group held $162 million in surplus and $233 million in cash and invested assets.  Our reinsurance program for 2009 was developed using methodologies supported by the Florida Office of Insurance Regulation (OIR).

We will provide you with additional details as they develop.  If you receive any additional customer calls involving mortgage companies other than those mentioned above, please contact your Product Management Consultant and if possible, provide a faxed copy of the mortgage company letter.

“Insurance Companies Would Face Millions of Dollars in Fines”

By DAVID EGGERT
Associated Press Writer

July 13 2009, 5:37 PM CDT

ALAIEDON TOWNSHIP, Mich. — Insurance companies would face millions of dollars in fines, damages and attorney fees for denying or delaying valid claims under legislation a state House committee is preparing to debate.

The complete article can be viewed at:
http://www.chicagotribune.com/news/chi-ap-mi-insurancedenials,0,1635193.story

Visit chicagotribune.com at http://www.chicagotribune.com

Running Clock Rant “This Guy Was Able to Move To A Small Town And Take Over My Life”

I live in a small town and had worked 1985-1999 years as a support staff for my dad.  In 1999 I was hired as an agent with the promise I would be able to purchase my dads book, much of what I helped grow.   Last May he was forced to retire and sell due to critical health issues.

Because I was not the top 25th agent in the country and did not have a 6/63.  I did not qualify to purchase it.   So a MDL  referred a guy with no insurance back ground from a much larger city to purchase it.   The following October my father died.  I was over whelmed by the number of customers (including my own family) upset that they were just sold with out a choice.  When they called 1-800-Allstate they were told, that they could easily change their agent.  However, My name was on over 200 policies which I was not being compensated for.

This past February I left TC (after 20 years of service)   and I could not find a buyer who wanted the headaches.  So I took the TPP.   My phone number was immediately rolled to the new agent within a day.  The customers were being told who knows what.   When I received my policy it had Allstate as the agent with the other agents address.   The irony of it all is I just found out that the new agent was moving to my previous office location next month.

So this guy was able to move to a small town and take over my life and I could not do a stinking thing.  I was afraid to contact my book of business and explain all this, due to my do not compete.  I was told they would stop paying the TPP if I did anything against them.  I have been offered several jobs with other insurers, but afraid to work until my 1 year in February is up.  I am afraid of what kind of conspiracy this guy and the Company have against me.  Now that I look back over the last few months I am wondering if I should have defended my honor with a note or just let them hang themselves.  I am still trying to decide whether to go back with the insurance market.  I have an offer from Farmers, but the contract looks a lot like the Allstate, just a little gun shy

Allstate Inside Information: HORRIBLE Business Opportunity

Take a look…people losing money right and left…

http://www.insurance-forums.net/forum/allstate-agency-opportunity-thread3634-2.html

Does Allstate Need a Bailout?

Could be! Someone sent this to us-a “bounced” check Allstate wrote them for a claim!

Allstate’s explanation? Bank computer error.

Rumor-someone who sued Allstate slapped a lien on Allstate’s accounts!

Allstate Sues Car Seller-And LOSES!

This happened in April 2008 and was submitted by an attorney concerned about Allstate’s unethical practices…

***

I thought I would share a story with you about a case I handled. I have a client who sold a car. (I am not naming her, but she has given me persmission to write about this.) A couple of days after the sale of the car, the new owner was in a car accident. He, of course, had no insurance and she had removed the car from her insurance, just as I recommend. Allstate insured the other party involved in the collision. 

Allstate sent her a letter demanding payment after pulling up state DMV records. Because of the short time frame between the sale and the collision, DMV still showed her as the owner. She provided the insurance adjuster with a copy of the DMV Transfer of Title that showed she had sold the car. The adjuster did not care and sent her to collections. A collection agency then called her. 

She provided the collection company with another copy of the DMV Transfer of Title. The debt collector did not care either. Allstate retained an attorney from Los Angeles and sued her. I then got involved and sent a letter to the attorney with ANOTHER copy of the Transfer of Title. He told me that it was not evidence that she did not own the car. Of course, by then, the owner as in prison. My client owned a house so Allstate tried to get a settlement out of her. The lawsuit was for about $3,500. 

I filed an answer and a cross complaint against the original owner. I served discovery on Allstate’s attorney. The responses were not sufficient so I had to file a motion to compel. My motion was granted with sanctions. Allstate dismissed the complaint, but ended up paying me $1,200 in sanctions. 

I then helped the client file in small claims court against Allstate for malicious prosecution. Today was the hearing for my client. An Allstate adjuster showed up and offered $5,000 to my client. She accepted and dismissed her case. 

So, in summary, Allstate tried to bully my client in to paying money she did not owe. Instead of collecting $3,500, they paid out $6,200. Amazing! This could have been all avoided if they would have just done the right thing and stopped pursuing her when they had proof she did not own the car. 

Do not let the insurance company, or an attorney or a debt collector, bully you. 

MONUMENTAL 2004 Decision: Allstate’s Threats of Retaliation are ILLEGAL

COURT RULES ALLSTATE’S THREATS OF RETALIATION ARE ILLEGAL

April 2, 2004

Insurance Giant Deprives Employees of Equal Opportunity, Says EEOC in Lawsuit

PHILADELPHIA – In a significant decision, the federal court here has ruled that Allstate Insurance Company unlawfully retaliated against approximately 6,200 of its employees by requiring them to give up their workplace discrimination claims in order to continue to work as agents with the Northbrook, Ill.-based insurance giant. The EEOC’s lawsuit charges Allstate with violating the non-retaliation requirements of several federal laws prohibiting employment discrimination, including Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967 (ADEA), and the Americans with Disabilities Act of 1990 (ADA).

EEOC’s suit alleges that Allstate implemented a mandatory policy at all of its U.S. facilities requiring employees to sign a release waiving all workplace discrimination charges against the company in order to be retained as independent-contractor agents. The effect of the policy, the EEOC says, has been to deprive Allstate employees of equal employment opportunities by attempting to prevent their participation in activity protected under federal anti-discrimination laws. The EEOC also contends that the alleged discriminatory policy was carried out with malice or with reckless indifference to the federally protected rights of Allstate employees who worked as insurance agents in violation of the Civil Rights Act of 1991.

The EEOC’s suit was consolidated with Romero v. Allstate, Case No. 01-3894 a private lawsuit which also addresses the issue of retaliation as well as numerous other challenges to company reorganization actions. The Court’s ruling also addressed other claims in the Romero case.

In its ruling, the Court held: “It is illegal to either retaliate, or threaten to retaliate, against an employee to prevent him from exercising rights under the EEOC, Title VII, ADEA, ADA, etc. Those employees who did not sign releases were in fact treated less favorably than those who did sign, and the signers had all been threatened with such an outcome if they exercised their right to refuse to sign the proposed release.”

“The Court’s decision here is monumental,” said EEOC Regional Attorney Robert G. Johnson. “It guarantees that employees cannot be coerced by the threatened termination of their employment into giving up their rights under the nation’s employment discrimination laws. This decision is crucial to the continued effectiveness of those laws. It sends a strong message to other employers not to try a similar scheme.”

“This decision has nationwide significance for virtually all working men and women,” said C. Felix Miller, the EEOC’s lead attorney on the case. “Had Allstate been allowed to get away with its plan, it would have gutted our country’s employment discrimination statutes. The Court by this ruling has told Allstate that it must obey the law. It cannot threaten its employees with the loss of their jobs for refusing to give up their rights.”

The EEOC enforces Title VII of the Civil Rights Act of 1964, as amended, which prohibits employment discrimination based on race, color, religion, sex, or national origin; the Age Discrimination in Employment Act, which protects workers 40 years of age and older; the Equal Pay Act; prohibitions against discrimination affecting individuals with disabilities in the federal sector; sections of the Civil Rights Act of 1991; and Title I of the Americans with Disabilities Act, which prohibits discrimination against people with disabilities in the private sector and state and local governments. Further information about EEOC is available on its web site at www.eeoc.gov.