ALBANY, N.Y., September 4 – The New York State Insurance Department (NYSID) has issued a citation to Allstate Insurance Company and its affiliates for failing to comply with a department circular letter regarding the practice of non-renewing homeowners insurance policies based upon whether or not the policyholder had other lines of business placed with the insurer (see related story on page 8).

According to the citation, after the department had issued the circular letter directing property/casualty insurers to cease the practice of tying in homeowners renewals with other lines, Allstate sent a letter through its regional counsel to the department stating that it would not comply with the directive, and that the company intended to continue to make homeowners insurance non-renewal determinations based upon whether or not a policyholder had additional insurance coverage with Allstate as of a certain past date.

Allstate has been directed to appear at an administrative hearing at the Insurance Department on September 19 to show cause why a formal order should not be made requiring [the company] to discontinue its practice of conditioning homeowners insurance renewals on the existence of other insurance business, to reinstate policies that were improperly non-renewed, and to pay civil penalties for violating the Insurance Law, according to the department.

In a statement, Allstate spokesperson Krista Conte said that, upon receiving the circular letter, the company responded in writing to the department and also tried to contact NYSID Superintendent Eric Dinallo directly. In our written communication, Conte said, we believe we addressed the concerns raised by the department. On Friday, August 31, we received a hearing notice from the department. We are reviewing the document and will respond accordingly.

Conte added, We respect our longstanding relationship with the [department], and remain committed to working with them regarding our continued compliance with the law as we continue our catastrophe management program.