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Allstate Threatens to Leave Auto Market, Degrade Service in CA, Unless Motorists Continue Paying Excessive Premiums

**News Conference/Public Hearing Monday AM**

Despite Staggering Profits, Allstate Continues to Battle Regulatory Requirement To Lower Its Auto Insurance Rates by $304.2 million ($150 per Car) Per Year

The following was issued by the Foundation for Taxpayer and Consumer Rights

 WHAT:  News conference/ Dept. of Insurance hearing into Allstate auto rates
  WHO:   Pamela Pressley, litigation director, Foundation for Taxpayer and
           Consumer Rights
         Dan Zohar, FTCR outside counsel, Zohar Law Firm, P.C., Los Angeles, CA
         Todd Foreman, staff attorney, FTCR
  WHEN:  Monday, November 5 9:00 AM
  WHERE: 45 Fremont St., interior courtyard (near train)
         San Francisco 94105

SANTA MONICA - November 3, 2007: In a Department of Insurance hearing beginning Monday, consumer advocates will argue that drivers with Allstate insurance policies deserve an 18.8% rate cut -- an average of $150 per car -- under new rules that limit excessive profits by the industry. Allstate Insurance Co. seeks five separate exemptions to the regulatory formula that determines auto insurance rates, including one claiming that the company will suffer deep financial hardship if it follows the rule, despite the company's already above-average profitability and shareholder return. FTCR has determined that Allstate is overcharging auto insurance consumers over $300 million per year.

In written testimony, Allstate issued a thinly veiled threat to regulators suggesting that a company forced to abide by rules limiting excessive profit might have fewer offices, reduce the quality of its claims processing, or even stop selling insurance in the state entirely.

The hearing will be the first under new regulations issued by the Department of Insurance last year that revised the guidelines for profitability.

Consumers won an early victory in the case this week when Allstate withdrew its request to charge consumers an additional $15.5 million in premiums based upon its claim of "higher quality" customer service. Allstate's own internal polls showed that, since at least 2000, Allstate has consistently fallen below the industry average for customer satisfaction.