New York to Receive $1.2 Million in Allstate Regulatory Settlement

The following is a guest post by George Williams, lead blogger for Colorado car accident lawyer Daniel R. Rosen.

New York will be getting a $1.2 million payment as part of a $10 million regulatory settlement being paid out by Allstate.  New York State Insurance Superintendent James J. Wrynn made the announcement last Wednesday in the wake of an 18-month targeted multi-state market conduct examination of Allstate’s claims handling practices. The examination was performed by the National Association of Insurance Commissioners (NAIC).

Karl Truman, a lawyer and contributor to the Injury Board Blog Network, brings us some of the details:

‘Allstate has agreed to implement procedures to ensure transparency and fairness for consumers who have bodily injury claims,’ Wrynn said. ‘The new processes ensure that claims will be handled consistently in different regions of the country, and consumers will have the right to get the information they need in order to understand how Allstate evaluates their claims and make sure they are fairly treated.’

New York was one of the lead states in the NAIC examination, which focused on Colossus. Colossus is the claims handling software used by the insurance giant. Truman provides a succinct explanation of both Colossus and the inconsistencies in its implementation:

Colossus is a software program Allstate used to guide its settlement offers for bodily injury claims after automobile accidents. The examination found inconsistencies in Allstate’s management and oversight of the Colossus software program. In particular, the examination found that Allstate had failed to modify or ‘tune’ the software in a uniform and consistent manner across its claims handling regions.

Wrynn takes pains to note that no systemic underpayment of bodily injury claims was found during the examination. He also stressed that Allstate cooperated fully and is acting now to correct the discovered deficiencies.

The money paid out by Allstate will be used to establish a regulatory fund. This fund will be accessible to the 45 signatory states, within the strictures of applicable state laws. They will be used to fill a critical niche in the modern administration of claims: training examiners to review and monitor the use of software technology in adjusting claims.

People across the country suffer disabling injuries every day, and in many of these cases claims are filed. At the same time, the adoption of new technology continues to accelerate faster and faster while the cost of adopting said technology decreases more each day. In such a setting it is vital to have consistency in the way the software and technology are implemented.

Source: “Allstate Agrees To $10 Million Regulatory Settlement Over Bodily Injury Claims Handling Processes,” Injury Board Blog Network, 10/27/10

The Law Offices of Daniel R. Rosen, PC is a Denver-based personal injury firm with 10 offices throughout Colorado. Dan Rosen has over 25 years experience as a Colorado personal injury lawyer, specializing in car and motorcycle accident cases. He personally handles every single case that comes across his desk. Call 303.454.8000 for a free consultation.