U.S. District Court Judge Affirms Allstate's Right to Free Speech; Allstate and Sterling Autobody Centers Can Communicate Benefits of Its Shops

NORTHBROOK, Ill.--March 10, 2006--On March 9, 2006, the judge in Allstate, et al. v. Abbott, et al. delivered a split-decision. The United States Federal District Court for the Northern District of Texas affirmed that while portions of Texas House Bill 1131 are constitutional, it also ruled that certain sections of the law violate Allstate's and Sterling's First Amendment rights to free speech. Allstate and Sterling are evaluating all options with respect to this ruling, including an appeal.

"The judge has upheld our constitutional right to free speech, meaning that Allstate and Sterling can communicate and market the benefits of an insurer-owned auto repair facility with our customers and claimants in the State of Texas," said Jim Murray, assistant vice president of claims for Allstate. "However, we strongly disagree with the judge's decision to uphold provisions of Texas H.B. 1131 which we believe violate the commerce clause of the U.S. Constitution."

While Allstate and Sterling must abide by the requirements of Texas H.B. 1131, including not opening any new Sterling stores in Texas, Allstate remains committed to Sterling and its employees. Sterling continues to provide the opportunity of a superior vehicle repair experience for Allstate customers and claimants. This is shown in a recent independent customer satisfaction survey where Sterling performs better than the industry in Texas.

"Allstate and Sterling continue to believe Texas H.B. 1131 unconstitutionally limits Texas consumers of access to a lawful and legitimate, high-quality, customer-focused, cost-effective repair option," said Murray. "We will continue to fight the special interests that are trying to suppress fair competition in a free marketplace."

Allstate and Sterling filed a legal challenge to Texas H.B. 1131 on Aug. 2, 20069, 2003, alleging that Texas H.B. 1131 was unconstitutional because it violates both Allstate's and Sterling's First Amendment right of free speech and the Commerce Clause by interfering with interstate commerce.

Sterling Autobody Centers is a non-insurance subsidiary of The Allstate Corporation. In 2001, Allstate Non-Insurance Holdings purchased Sterling Autobody Centers, an innovative countrywide network of auto body repair facilities, to provide Allstate Insurance Company customers and claimants the option of a superior automotive claims experience with guaranteed high-quality repairs. Sterling Autobody Centers now operates 64 state-of-the-art vehicle repair facilities in 16 states.

Now celebrating the 75th anniversary of the founding of Allstate Insurance Company, The Allstate Corporation is the nation's largest publicly held personal lines insurer. Widely known through the "You're In Good Hands With Allstate(R)" slogan, Allstate helps individuals in approximately 17 million households protect what they have today and better prepare for tomorrow through approximately 14,100 exclusive agencies and financial professionals in the U.S. and Canada. Customers can access Allstate products and services such as auto insurance and homeowners insurance through Allstate agencies, or in select states at allstate.com and 1-800 Allstate(R). Encompass(SM) and Deerbrook(R) Insurance brand property and casualty products are sold exclusively through independent agents. The Allstate Financial Group provides life insurance, supplemental accident and health insurance, annuity, banking and retirement products designed for individual, institutional and worksite customers that are distributed through Allstate agencies, independent agencies, financial institutions and broker-dealers.