AAggeenntt IInnffoorrmmeerr News stories of interest to Allstate Agency Owners published by the National Association of Professional Allstate Agents, Inc. This Special complimentary issue of Agent Informer is designed to acquaint

you with our email publications. NAPAA members have already received all of this news in their inbox over the last 4 weeks. You could also receive weekly news in the DirectExpress newsletter – exclusively for NAPAA Members.

January 18, 2011

NAPAA Introduces Elite Membership New membership tier offers value added resources that strengthen professionalism, agency potential January 1, 2011, Press Release The National Association of Professional Allstate Agents (NAPAA) announced the creation of a new Elite Membership package, which will offer membership enhancements not available at other membership levels. The new plan provides Elite members with professional resources that will allow them to extend their property and casualty insurance knowledge, expand their professional potential, and create additional sales opportunities. An exclusive arrangement between NAPAA and The Rough Notes Company, Inc., makes it possible to offer the insurance industry’s most respected technical and sales tools to NAPAA member agents. The Elite Membership package provides access to 13 Rough Notes products, including sales aids, training courses, technical analysis of coverage forms, a letter library, website content, and marketing assistance. “We are truly excited about the Elite Membership program” said Jim Fish, executive director of NAPAA. “Our arrangement with Rough Notes allows NAPAA to offer best-in-class professional resources at an exceptionally reasonable membership rate.” The National Association of Professional Allstate Agents, Inc., is a nonprofit organization whose membership consists primarily of agents under contract with Allstate Insurance. NAPAA is dedicated to the success of Allstate Exclusive Agents. The Rough Notes Company, Inc., headquartered in Carmel, IN, is a 133-year-old insurance publishing company that equips agencies in all phases of their operations. They understand the needs of the insurance agent and continue to develop innovative products and services to assist the growth of agencies. Interested agents should contact Gerry Flores, member benefits representative, at 563-564-1800 for more information regarding becoming an Elite NAPAA member.

The National Association of Professional Allstate Agents, Inc. is a nonprofit professional trade association for Allstate agents. NAPAA provides its members with reliable communications on issues that affect agency owners and their customers every week. NAPAA further serves its members by acting on their behalf and speaking with a distinct and unfettered voice on a wide range of issues. Our operations, including our publications, Website and office expenses are funded by member agents who pay membership dues.

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Letters to NAPAA It is NAPAA's editorial policy to publish letters submitted by our readers. Just because we publish a letter, does not mean the NAPAA Board agrees with, supports or endorses the letter's content or the writer's opinion. Also, NAPAA reserves the right to edit any material submitted for offensive or inappropriate language, length, tone and civility.

Update on Allstate Canada vs. Rod LaRocque Editor’s comment: Readers familiar with Allstate Canada’s actions over the past few years will be glad to know that, for at least one former Allstate Canada agent, there is a happy ending. Following is a letter we received from Rod LaRocque, whom Allstate sued for $4.5 million for violating his non-compete agreement. As most of you know, LaRocque was victorious in the initial case and on appeal. Allstate Canada appeared fully prepared to take the matter further, but apparently had a change of heart. Here is Mr. LaRocque’s letter: Letter to my Colleagues: On behalf of Monique and my family I would like to thank each and every one you for your support through the past 3 years. This support clearly exemplified a commitment to change and we were blessed to reunite with so many friends of the past and meet so many new friends through the process. It is with great pleasure I write you today to advise you that I have reached a settlement with Allstate Insurance. While I cannot share the details, I can say I believe this is a sign of some positive undertakings as we all move toward the future. I would like to thank Ken Alexander and his team for their efforts. Ken and I became friends through all of this and while his golf game needs more work, he is a very great lawyer and most importantly, person! It takes a very special skill-set and individual to handle the likes of me and his patience led us through. I would also like to thank all the industry executives (you know who you are) for not wavering and holding course. This was no small undertaking. With a 4.5 million dollar bounty on my head it took some special people to understand and support that. Not once did you buckle! Finally, I would like to thank Jim/Nancy Fish, Bob Isacsen, Dale Revels and all the wonderful people I met through my travels with the Allstate Agents Association in the United States and Jack Duff, Richard Gibbons, Al Tupper and all the colleagues with the Canadian State Farm Agents Association. They have become friends and business contacts I have and will cherish for the rest of my life. While I cannot change the past, I will share that my 22 years at Allstate was a wonderful experience. I had many more highs than lows; raised a family; made significant changes along the way; met some wonderful people who remain in my life and it is all of this who made me who I am today. No one can ever take that away! Remember, life is what we make it. We cannot blame anyone for our individual position except ourselves. My position is excellent and it is a direct result of the people around me. We are as good as they are. Merry Christmas to each and every one of you and your families. May 2011 be a wonderful year. Kind regards, Rod LaRocque

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Allstate sues BofA, Mozilo over Countrywide losses December 28, 2010, By Jonathan Stempe, Reuters NEW YORK (Reuters) – Allstate Corp has sued Bank of America Corp, its Countrywide lending unit and 17 other defendants for allegedly misrepresenting the risks on more than $700 million of mortgage securities it bought from Countrywide.

Allstate, the largest publicly traded U.S. home and auto insurer, alleged it suffered "significant losses" after Countrywide misled it into believing the securities were safe, and the quality of home loans backing them was high.

The lawsuit also names several former Countrywide officials as defendants, including longtime Chief Executive Angelo Mozilo. Countrywide was the largest U.S. mortgage lender before Bank of America bought it in July 2008.

Allstate said that starting in 2003, Countrywide quietly decided to boost market share and ignore its own underwriting standards by approving any mortgage product that a competitor was willing to offer, in a "proverbial race to the bottom."

Countrywide then passed on the added risks to investors who bought debt backed by the mortgages, Allstate said.

"Defendants knew the loans offloaded onto Allstate were a toxic mix of loans given to borrowers that could not afford the properties, and thus were highly likely to default," said the 150-page complaint filed on Monday in Manhattan federal court.

Allstate seeks to undo its securities purchases, which took place between 2005 and 2007, plus unspecified damages.

The Northbrook, Illinois-based company joined Charles Schwab Corp, the Federal Home Loan Banks and others in suing lenders for allegedly misleading them about mortgage securities.

Bank of America, the largest U.S. bank by assets, last month said it faced lawsuits over $54 billion of such debt.

A spokesman, Bill Halldin, in an email said the Charlotte, North Carolina-based bank is reviewing the complaint. "This unfortunately appears to be a situation where a sophisticated investor is looking for someone to blame for a downturn in the economy and losses on an investment it made," he said.

David Siegel, a partner at Irell & Manella LLP who represents Mozilo, said in an email that Allstate has "retread allegations with no merit; and certainly no basis to name Mr. Mozilo other than to try to capture publicity."

Daniel Brockett, a partner at Quinn Emanuel Urquhart & Sullivan LLP who represents Allstate, did not return a call seeking comment.

PROBES

Mozilo agreed in October to a $67.5 million settlement of a U.S. Securities and Exchange Commission civil fraud lawsuit.

The SEC accused Mozilo of misleading investors about Countrywide's health and risk-taking, and generating roughly $140 million of improper gains from insider stock sales.

Mozilo was the first top executive personally punished over alleged wrongdoing tied to the nation's housing collapse. Bank of America agreed to cover two-thirds of his penalty. Mozilo did not admit wrongdoing in agreeing to the SEC accord.

Bank of America also is among banks including Citigroup Inc, Goldman Sachs Group Inc, JPMorgan Chase & Co and Wells Fargo & Co to face SEC subpoenas as the regulator examines how mortgages were packaged for sale to investors, people familiar with the probe said.

The U.S. Justice Department and all 50 U.S. state attorneys general also are probing wrongdoing in mortgages, while Arizona and Nevada accused Bank of America in a lawsuit of misleading borrowers about home loan modifications.

Shares of Bank of America closed up 7 cents at $13.34, while those of Allstate closed down 9 cents at $32.

The case is Allstate Insurance Co et al v. Countrywide Financial Corp et al, U.S. District Court, Southern District of New York, No. 10-09591.

(Reporting by Jonathan Stempel in New York; Additional reporting by Dan Levine in San Francisco and Joe Rauch in Charlotte, North Carolina; Editing by Steve Orlofsky and Carol Bishopric)

Safest Illinois Drivers Save With New Allstate Drive Wise(SM) Performance-Based Auto Insurance Discount Program Seeks to Create Safer Roads by Rewarding Long-Term, Safe Driving Habits December 27, 2010, PRNewswire Allstate today announced the launch of Drive Wise, a voluntary program that rewards safe and low-mileage Illinois drivers with discounts of up to 30 percent. The company plans to expand Drive Wise to other states as early as Q2 2011. Consumers can learn more and sign up for the program by visiting www.allstate.com/DriveWise or by contacting their local Allstate agent. "Seat belts, air bags, teen and distracted driving – they're all examples of Allstate's leadership as a safe driving advocate. That legacy continues with the introduction of Drive Wise," said Alice Byrne, field vice president, Midwest region for Allstate. "By rewarding drivers on a variety of safety factors, the roads become safer for everyone and the safest drivers reap the most benefits." Drive Wise rewards begin immediately when participating customers receive a 10 percent discount just for joining during the first policy term. Subsequent policy terms shift to a performance rating approach, where customers' driving behavior and total mileage driven over the course of the policy term determine the discount. Rates will not go up based on driving scores, but savings of up to 30 percent can be earned by drivers with the safest driving and low mileage scores. Program enrollees receive a small, wireless telematics device that plugs into their vehicle's onboard computer via the diagnostic port - under the dash in most car models. No GPS data is collected. The device tracks only those factors used to calculate a performance rating, including:

• Mileage • Driving time of day • Hard/extreme braking • Maximum speed (speeds over 80 mph affect ratings)

The design of Drive Wise is the result of extensive consumer research and hundreds of employee volunteers logging almost two million test miles. In one employee test measuring hard stops, aggressive starts and swerving, the percentage of participants scoring in the ideal "safe zone" tripled from 25 to 75 percent over the course of the test. Adopted broadly, Allstate believes Drive Wise has the potential to save thousands of lives and millions of dollars in injury losses and property damage each year.

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[Ca.] Allstate Halts California Your Choice Auto Sales After Consumer Complaints January 11, 2011, By Andrew Frye, Bloomberg Allstate Corp., the largest publicly traded U.S. home and auto insurer, halted sales of its Your Choice Auto product in California after a consumer group said drivers were cheated. Allstate will no longer issue new Your Choice Auto policies in the state and will phase out the coverage by November, according to a statement yesterday from the Consumer Watchdog group. Northbrook, Illinois-based Allstate agreed to the wind- down under a deal with the group and the state regulator. “It is clearly a negative for Allstate,” Paul Newsome, an analyst with Sandler O’Neill & Partners LP in Chicago, said in an e-mail. “The company has been struggling to build its policy count for some time and this will not help.”

Allstate Chief Executive Officer Thomas Wilson touted the insurer’s Your Choice products to investors as a way to limit price competition as the U.S. market for property-casualty coverage contracted. The program costs consumers more while cutting deductibles the longer a driver goes without a claim. It also allows a policyholder to report an accident without it affecting rates.

“Your Choice Auto became a cash cow for Allstate by charging customers more than they should be paying under California’s good driver law,” said Todd M. Foreman, in-house counsel for Consumer Watchdog. “Allstate was receiving $20 million a year in extra premiums since it began selling the program in California in 2008.”

Newsome, who has a “hold” rating on Allstate stock, said pulling the Your Choice Auto product from the most populous U.S. state probably won’t have “a significant effect” on earnings in coming quarters. Allstate will continue to sell Your Choice Auto in other states, Consumer Watchdog said.

Your Choice was created by Allstate after considering “what would the consumer want and what would they be willing to pay for?” Wilson told investors in a conference call in February. The insurer had been introducing new offerings “so we don’t compete just on price,” he said.

“Transitioning away from YCA and putting this debate behind us puts us in a stronger position to introduce even better, stronger pricing and products for California consumers,” said Bill Mellander, a spokesman for Allstate, in Sacramento. The company has about 100,000 YCA policies in force in the state, Mellander said.

“The matter is closed from our perspective,” said Ioannis Kazanis, a California Department of Insurance spokesman. “It comes down to being a business decision on Allstate’s side.”

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Letters to NAPAA It is NAPAA's editorial policy to publish letters submitted by our readers. Just because we publish a letter, does not mean the NAPAA Board agrees with, supports or endorses the letter's content or the writer's opinion. Also, NAPAA reserves the right to edit any material submitted for offensive or inappropriate language, length, tone and civility.

Another year of thinning the ranks?

Approximately 40% of our market received a threatening letter from our Regional Sales Leader. This represents approximately 40 Agents of various agency sizes (mainly Medium and Large) with tenures as long as 30 years who received this letter. Most of them are VERY good agents, but have missed a portion of their "Expected Results" due to non-competitiveness, and/or unreasonable goals. Needless to say there are some very good Agents who are concerned they will not be representing Allstate next year. _______________________________________________________________

I was contacted by an agent yesterday whose FSL told him that all agents assigned to her were required to grow in the one year under her or be fired. She started out with 50 agents now has 30. She anticipates losing 15-20 more at the end of the year. More agents will then be cycled in and the fired agents will be replaced with new agents the beginning of the year. So it appears that Allstate has a plan to hold agents to quotas and fire them if they do not reach them. ______________________________________________________________________

New round of letters circulating New York. This occurs after Vince Fusco states in upward communication--"no agent terminations are on his radar screen". The targeted agents seem to be non PSA, older, non 6 & 63. Agents are all extremely profitable and one agent made all the trips. Time to decide can we live with this threat over our heads every year. Is it worth it? ____________________________________________________________________________

And from a New Jersey Agent: Letters are being sent out to about 40 agents in NJ asking us to meet all minimum expected results by 6 months or be given 90 days to sell our books! I understand this comes directly from corporate....previously these letters were sent out to the very worst producers giving them one year to comply.

Looking to Make a Career Change in 2011? Allstate New Jersey Provides Opportunities for New Jerseyans to Reinvent Themselves as Entrepreneurs January 4, 2011, Company Press Release

BRIDGEWATER, N.J., Jan. 4, 2011 /PRNewswire/ -- Making a change in your current job situation often tops one's list of New Year's resolutions. This year, Allstate New Jersey Insurance Company (Allstate New Jersey) is making it easier for entrepreneurs to commit to career changes by launching an aggressive recruitment campaign to appoint 30 new agency owners in New Jersey by the end of 2011.

Allstate New Jersey, one of the state's largest insurance companies, is targeting successful, self-motivated professionals for a career as an Allstate exclusive agent (independent contractor). Unlike typical entrepreneurships, Allstate New Jersey provides its new agents with essential tools and resources to help them get off to a great start, including: insurance product education, expertise from company sales consultants, customizable marketing and advertising materials, and performance incentives. The company currently has approximately 270 agents and financial representatives throughout the state.

In addition, new and existing Allstate New Jersey agencies are projected to hire hundreds of licensed sales professional (LSPs) and 20 personal financial representatives. These positions involve selling life insurance, annuities, mutual funds, and other financial services products.

"Our industry is experiencing significant change and innovation, which should excite those with an entrepreneurial spirit," said Dale Schueller, regional sales leader, Allstate New Jersey. "If you do not have an insurance background, we will provide you with education to help position you for success."

Agents will have the opportunity to sell the company's wide range of insurance and financial products, including auto and financial services. Ideal candidates should have the skills to run their own business, the drive to meet business objectives, and $150,000 in liquid capital to invest in a new Allstate New Jersey agency.

Interested candidates can apply to become an Allstate New Jersey agent by logging on to www.allstateagent.com or calling Jeff Mowell at 908-252-5022.

[Idaho] More than 1,000 Jobs Headed to Pocatello and Chubbuck January 9, 2011, By Stuart Summers, KPVI News [Excerpt] Idaho's jobless report came out Friday showing a rate of unemployment higher than the national average. Despite this unwelcome news here in the Gem State, 2011 is already being called the year of job creation and growth. Both Chubbuck's mayor and Pocatello's mayor say they are excited about a number of things expected to take place this year. Speaking during their state of the city addresses, the two mayors had a positive outlook about future growth, job creation, and development. This year major job creation is expected to take place in the region, which could result in more than one thousand jobs. Over the next 12 months Hoku and Allstate will begin hiring for hundreds of newly created jobs. Also, places like Premier Technology and On Semiconductor are expected to bring on additional workers. This news also comes at a time when the Pocatello Airport unveiled their remodeled facility and a number of new businesses have opened their doors in the gate city. This coming Tuesday Allstate will meet with city leaders to discuss pre-construction at their new site in Chubbuck. Hoku will also be hosting a job fair at the end of this month. That job fair will take place at the Idaho Department of Labor in Pocatello on January 25, 26, and 27.

Visit NAPAA online at www.napaausa.org Check out the market place – NEW listings appearing every week! Go to Buy or Sell Agency listings to list your agency for sale, or find someone interested in buying an

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Allstate Insurance Company Files $1.9 Million Medical Fraud Case Against Fraudulent Medical Corporations Lawsuit Is Company's Seventh this Year in NY for Total of Nearly $11M in Damages December 28, 2010, PRNewswire, HAUPPAUGE, N.Y. As detailed in a lawsuit filed today, its seventh this year, Allstate Insurance Company seeks to prove that professional service corporations are actually owned and operated by a layperson, rather than by licensed physicians or medical professionals. Allstate is committed to fight insurance fraud in New York and has sought to recover damages totaling $10,534,093.56 during 2010. Since 2003, Allstate has filed 27 fraud lawsuits in New York, seeking damages totaling $161,000,911.11

The complaint names eleven defendants, including the owners of those companies, a physician, three medical professional corporations, as well as a series of companies used to control the medical professional corporations and siphon its profits.

The pleadings allege that New York medical professional corporations known as Quality Medical, P.C., Spartak Medical, P.C. and Richmond Medical, P.C were fraudulently incorporated through a scheme using the name of a licensed medical physician, and that Michael Kipnis, Julia Kipnis, Gennady Belzer and Igor Tsimmerman, none of whom were physicians, secretly own and control the professional corporations through a series of companies that they own and control, including ITA Family, L.P., LGB Corp. and KYDS, L.L.C.. The pleadings further allege that these defendants submitted or caused to be submitted or otherwise facilitated the submission of fraudulent claims to Allstate through medical professional corporations that were never eligible to bill or collect No-fault benefits.

"Allstate is aware of the economic pressures that consumers face," said Jim Murray, Allstate Assistant Vice President in charge of the company's Special Investigation Unit. "Insurance fraud adds to the cost of the product, and Allstate is aggressively pursuing the fight against insurance fraud to protect consumers and help keep insurance costs down."

Fitch Affirms Allstate's IDR at 'A-', P&C IFS at 'A+' and Life IFS at 'A-' January 11, 2011, BusinessWire [Excerpt] CHICAGO--(BUSINESS WIRE)--Fitch Ratings has affirmed the 'A-' Issuer Default Rating (IDR) of The Allstate Corporation (Allstate) as well as the 'A+' Insurer Financial Strength (IFS) ratings of Allstate Insurance Co. and its property/casualty subsidiaries and the 'A-' IFS ratings of Allstate Life Insurance Co. and the other life subsidiaries. The Rating Outlook is Stable. A full list of ratings can be found below.

Allstate has shown improvement on all three key rating issues in 2010, namely: capitalization, profitability and investment valuations. The company has grown its stockholders' equity through profitable operations and a greater net unrealized investment gain position. Stockholders' equity reached $19.3 billion at Sept. 30, 2010, up from $16.7 billion and $12.7 billion at year-end 2009 and 2008, respectively.

Financial leverage ratios have benefited from the growth in equity and debt-to-total capital was less than 24% at Sept. 30, 2010 ignoring equity credit to the company's $1 billion in subordinated debentures. At Sept. 30, 2010, Allstate had $3.5 billion of net holding company invested assets which provide significant flexibility to the enterprise. These assets cover fixed charges greater than 5x.

Consolidated net income improved to $632 million through the first nine months of 2010, up from $336 million in the same period in 2009, driven by better results from the life insurance operations. Property/casualty results were relatively stable period-to-period, but continue to be hindered by severe weather losses. The P/C combined ratio was unchanged at 97.2% through nine months, including 8.6 percentage points of catastrophe losses. Allstate's life operations reported a modest $18 million net loss over the first three quarters of 2010 compared to a net loss of $346 million over the same period in 2009.

Gross unrealized investment losses continue to shrink, amounting to $2.4 billion at Sept. 30, 2010 compared to $5 billion and $11 billion at year-end 2009 and 2008, respectively. Concentrations continue to be in asset-backed securities, which are more heavily focused in the life insurance operations. The net unrealized investment position on a pre-tax basis has changed to a positive $2.7 billion as of Sept. 30, 2010 compared to net losses of $2.3 billion and $8.8 billion as of year-end 2009 and 2008, respectively.

The Stable Outlook reflects considerable improvement in consolidated unrealized losses in invested assets and Fitch's belief that Allstate's property/casualty operations continue to offer favorable cash flow and earnings potential. Concern remains regarding the impact of catastrophe losses on earnings. Specifically, catastrophe losses amounted to 8.6 percentage points of Allstate's 97.2% combined ratio through the first nine months of 2010.

The rating on Allstate's life operations reflects Fitch's assessment of its limited strategic importance within the Allstate enterprise and view that the 'standalone' Insurer Financial Strength rating is in the 'BBB' range. The ratings of the life operations continue to benefit from the Capital Support Agreement from Allstate Insurance Co. and its access to the holding company credit facility. Strategic changes meant to strengthen the risk profile of the life operation have been in place for more than one year. The company has de-emphasized spread-based products, instead focusing on traditional underwritten products. Further, the company exited the bank and broker/dealer distribution channels and is focusing on the Allstate Exclusive Agent distribution channel to align with the P&C organization.

Key rating drivers for Allstate's ratings that could lead to an upgrade include:

--Growth in surplus leading to an improved capitalization profile. --Reduced volatility in earnings from catastrophe losses and better operating results consistent with companies in the 'AA' rating category. Key rating drivers for Allstate's ratings that could lead to a downgrade include:

--A prolonged decline in underwriting profitability that is inconsistent with industry averages or is driven by an effort to grow market share during soft pricing conditions. --Substantial adverse reserve development that is inconsistent with industry trends. --Significant deterioration in capital strength as measured by Fitch's capital model, NAIC risk-based capital and traditional operating leverage. --Significant increases in financial leverage to a debt-to-total capital ratio greater than 30%.

For the entire list of Fitch affirmed ratings on Allstate and subsidiaries: http://www.businesswire.com/news/home/20110111007201/en/Fitch-Affirms-Allstates-IDR-A--PC-IFS

“Frank’s Take” ----An Independent Viewpoint of Current Issues----

January 12, 2010, by Frank DeMayo

Be Resolute in 2011 Here we go again! One more year to pile on the heap and the light at the end of the tunnel seems dimmer than ever. Making a living during difficult times takes a lot of intestinal fortitude and gets harder each year. So here are a few suggestions that may help you in 2011. Pick and choose whichever you think best applies to your current situation. 1. Get a full physical for you and your loved ones. This is where everything begins. Health is your biggest asset, and time is your greatest liability. Do it now. 2. When's the last time you fixed up the office? A coat of paint covers a multitude of sins. And while you’re at it, get some feminine advice to help with color choices. Remember, an insurance office doesn't have to look like the Motor Vehicle Department. 3. Go out and buy some new clothes. If your suits have a little shine to them and your sweaters are covered with little fuzzy balls of fabric, it’s time for change. Personal appearance is every bit as important as good service. In a world of casual attire, attractive clothes are even more important. 4. Try to get new prospects by purchasing someone’s mailing list. Computers at local gas stations, doctor's offices and other businesses have lists of potential new customers that are ready to be marketed. Make a deal with these guys and see what happens. 5. Everyone has a few tough clients. Make sure your staff is aware that a tough client is just as important as a nice client. Picking and choosing who you want as a customer is a luxury businesspeople can ill afford. 6. A couple of plants are nice too. One of my pals has a fish tank with an automated feeder. It's the little things that can make an office attractive. 7. Are there any dark areas in your office? If so, brighten them up. Asking a client to sign something in a dimly lit area does not create a positive impression and may lead the customer to think you have something to hide. Some of these suggestions may seem unimportant for your business. But the fact is, there are many things in our businesses we can’t control – we just have to put up with them. Of the things we can control, it is procrastination that holds back progress. So if there are problems you can control in your business or in your personal life, resolve to fix them now. Otherwise, you’ll slowly begin to disregard them and then accept them as the status quo - and they’ll never get fixed. F. J. DeMayo has been in the insurance business for 48 yrs. He has held positions as an underwriter, Executive Manager, Director, Broker, and Consultant. Frank has been employed by the Travelers, American Intl. Undw., Chubb, Resolute Reinsurance, and the R.J. Isacsen Agency. He resides in East Northport, N.Y. with his wife. If you have a comment for the author, please email him at elbahome@optimum.net.

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Allstate Files Federal Lawsuit Against Alleged Vegas Fraud Ring December 22, 2010, By Chad Hemenway, NU Online News Service Allstate Insurance said it was the victim of fraud by a sophisticated group of doctors and lawyers, according to a federal lawsuit filed in Las Vegas. The insurer said a medical center, law firm, and their owners and practitioners allegedly engaged in a scheme to defraud the company by exaggerating symptoms and injuries of people involved in about 100 accidents from 2004 to 2010. Peter Mario Belle, operator and manager of Accident Injury Medical Center (AIM), solicited clients involved in accidents, prepared bogus treatment reports and worked with local law firms such as Accident Trial Lawyers to increase financial gain from inflated billing statements paid by insurers such as Allstate. Allstate said it seeks more than $1 million in actual, treble and punitive damages. The company filed the lawsuit in U.S. District Court on the basis of federal and state Racketeer Influenced and Corrupt Organization (RICO) Act laws. According to the lawsuit, patients at AIM would allegedly be required to sign a waiver stating that all payment for treatment was to be sent to the patient’s attorney. “AIM’s first avenue of recovery was to look to the proceeds of settlements or judgments paid for by insurance companies such as Allstate,” the suit states. AIM would give a referral to a local attorney involved in the alleged scam. The law firm would then pay AIM a kickback or referral fee, Allstate alleges. The company’s Special Investigative Unit investigated the suspect claims. One of the men allegedly involved in the scheme, Richard Charette, was involved with Accident Trial Lawyers and management and marketing firms also listed as defendants. Mr. Charette is currently awaiting trial after being indicted in April on federal charges he disclosed personal health information to attorneys. The suit also names doctors Sebastian Balle and Arthur Rossi, who with Peter Balle would allegedly prepare “boilerplate” patient reports that included the exact same language. Patients “were diagnosed and treated with the intent of creating or exaggerating insurance claims, rather than legitimately assessing their true condition,” Allstate said.

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FEMA Announces Transition Flood Policy Available Jan. 1 December 22, 2010, By Arthur D. Postal, NU Online News Service WASHINGTON—The Federal Emergency Management Agency is making available a new flood insurance low-cost transitional program for properties that have been newly mapped into high-risk areas due to a flood map revision on or after October 1, 2008. The agency sent out a bulletin Monday reminding insurance companies that the new Preferred Risk Policies (PRPs) will be made available starting Jan. 1. The National Association of Professional Insurance Agents (PIA) recently sent out a bulletin to members regarding the PRP. The bulletin notes that not only will the new policies reduce the financial burden on some property owners whose buildings are newly mapped from a low-hazard zone into a high-risk flood area, but that the changes will directly affect many agencies that sell flood insurance and could affect some of their current policyholders. PIA said in its bulletin that the changes apply on select new and renewal policies with effective dates on or after January 1, 2011. As of October 1, 2010, FEMA/NFIP (National Flood Insurance Program) began sending notices to current policyholders, PIA officials said. According to FEMA, the PRPs will allow owners of properties subject to new, higher rates because of new maps to pay as low as $129 a year for two years. Agency officials said the new PRPs are typically only available for properties in moderate- to low-risk areas. FEMA officials estimated that it will reduce rates for the two-year period for “thousands who own homes and businesses in locations recently designated as high-risk flood areas.” The costs for standard flood insurance policies vary, with the average policy costing approximately $570 a year, FEMA officials said. PRPs will offer the same quality of protection and can include coverage on a building's contents at a fraction of the cost, the officials added. In addition to the eligibility requirement that properties must have been mapped into a high-risk area on or after Oct. 1, 2008 due to a flood map revision, all buildings must also meet PRP loss history requirements. After two years at the reduced PRP rates, policies will increase to standard rates, FEMA officials said. However, there are additional NFIP saving options—including a grandfathering provision, use of elevation ratings and higher-deductible policies—that can help reduce costs, FEMA officials said.

Car Insurance Shoppers Still Prefer To Deal With Local Agents Over Direct Carriers January 6, 2011, PR Web A recent study by an online auto insurance comparison site, CoverHound.com, concluded that car insurance shoppers still prefer to work with a local agent when buying a policy versus buying from a direct carrier. In a survey of the US market, CoverHound found that 39% of shoppers prefer to deal with a local agent, 32% prefer to work with carriers directly, while 29% are indifferent. While carriers such as StateFarm and Allstate, who primarily sell insurance through local agents, still dominate US market share, national carriers such as Geico and Progressive, who focus heavily on the direct-to-consumer model, continue to capture more of the market. As expected, younger shoppers in the sample were most likely to prefer to work with carriers directly, while older shoppers prefer to deal with a local agent. 50% of 18-25 year olds surveyed indicated that they preferred a direct carrier to a local agent, while only 27% of 41-50 year olds held a similar preference. Since younger populations tend to be more comfortable transacting online, it may come as no surprise that they would exhibit a preference for direct carriers who typically offer sophisticated online capabilities to purchase and manage car insurance policies. It remains to be seen how the consumer behavior will trend out over time. As younger populations age, they will represent a bigger share of the overall market, but will their preferences shift as their assets and responsibilities increase? Carriers who primarily utilize local agents tend to have more robust product offerings such as homeowners insurance and life insurance policies, which may make them more attractive as younger populations age. The study also concluded that renters are more likely to prefer dealing with a direct carrier than homeowners. 36% of renters surveyed prefer to work directly, compared to 25% of homeowners. In addition, responders who were looking to insure more than one driver on their policy were more likely to prefer working with a local agent (45%) than single driver policies (37%).

[Tx] Allstate sues sewer line maker over flood at client's home December 21, 2010, By John Suayan, Galveston Bureau, Southeast Texas Record GALVESTON - Allstate Insurance Co. has filed suit against Everlotus Industries Co.; Zhejiang Metals & Minerals Imp. & Exp. Co. Ltd.; and Interline Brands after flooding reportedly took place last year at a client's residence. The insurer argues that a toilet supply line designed, manufactured or distributed by the defendants is to blame for the alleged Dec. 2, 2009, incident at William P. Spragg's Galveston home. Court papers were filed Dec. 3 in Galveston County Court at Law No. 3. The toilet supply line in question was defective when it left the defendants' watch and made its way to a store shelf before it was installed at the Spragg's house, the original petition states. It additionally shows the residence and Spragg's personal belongings sustained damage, which prompted the insured to file a claim under his homeowner's policy. Allstate insists Spragg did nothing to cause the disputed malfunction, stressing the defendants' alleged negligence as the primary and direct cause. Consequently, the suit seeks unspecified monetary damages. Attorney Paul Vigushin of Dallas is representing the plaintiff, and Galveston County Court at Law No. 3 Judge Roy Quintanilla is presiding over the case.

Report: Some Insurers 'Low-Balling' Auto Ins. Claims for Bodily Injury December 29, 2010, www.InsuranceJournal.com Some insurance companies that use computerized systems to process their claims are making unfair, "low-ball" claims offers to people injured in automobile accidents, according to a consumer advocacy group. The Consumer Federation of America (CFA) is warning Americans that Colossus software and other similar programs used by insurers evaluate general damages for many bodily injury claims such as pain, suffering and anguish, but fail to estimate "special" damages such as past or future bills related to losses and reductions in wages or liability-related questions, or issues like the credibility of witnesses. Advising consumers to protect themselves against underpayments, J. Robert Hunter, CFA director of insurance, said, "Consumers should be very vigilant when dealing with automobile bodily injury claims generated by computer programs." He said insurers can adjust their computer systems to generate claims' 'savings' without adequately examining the validity of each claim. When adjusting a bodily injury claim, an adjuster typically sorts through medical records and determines which of the approximately 600 Colossus injury codes best reflect the bodily injuries sustained by the consumer, according to CFA. Depending on the severity value accompanying the injury code and dollar value that has been assigned by the insurer for each severity value point, the software provides a dollar value range to the adjuster for general damages. "Some insurers also can tune the programs so that the claims that are made are 'low-balled' to save costs, even if a higher offer may be justified for some consumers. Further, adjusters sometimes receive incentives for settling claims at or near the range stipulated by Colossus," CFA said. Insurers that CFA says use Colossus include: AAA Mid=Atlantic, ACE INA, Allstate, American Family, American National, Atlantic Mutual, California State Auto, CAN, Grange, Great American, Hartford, HDI, Horace Mann, ICW, Motorists, Nationwide, Ohio Casualty, Safeco, State Auto, USAA, Utica, Westfield, White Mountain and Winterhur Swiss. Insurers that use IQ, a similar software, include Allianz, Fireman's Fund and GEICO. Insurers that use COA, a similar software, include Automobile Club of CA, Liberty Mutual and Progressive. A copy of CFA's alert is available at www.consumerfed.org/pdfs/Claims_Consumer_Alert_12-8.pdf.

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