California automobile insurance units of Allstate Corp. will lower rates by 15.9 percent by a May 12 deadline, complying with an order by the state’s insurance regulator that it had challenged, a company spokesman said Wednesday.
“Yes, we are complying with the reduction and we expect to have it in advance of the May 12 deadline,” said Peter DeMarco, a spokesman for Allstate, the third largest provider of automobile insurance in California with about 2 million customers.
The reduction comes as California Insurance Commissioner Steve Poizner warned he would not accept further delays to his rate-cut order of earlier this year.
Northbrook, Illinois-based Allstate, the largest publicly traded car and home insurer in the United States, had contested the order.
Poizner had ordered the rate reductions in March after determining Allstate’s automobile insurance rates were excessive. The cuts were ordered to take effect on April 28.
“Allstate tried to get the court to delay implementation of the rate reductions last week and lost,” Poizner said in a statement. “I am taking action to ensure that Allstate expeditiously and fully complies with my rate reduction order and I will not tolerate any further delays in passing these savings onto consumers.”
The rate cuts will save consumers an estimated $250 million a year and average approximately $124 per year for Allstate customers, according to Poizner’s office.
(Reporting by Jim Christie; editing by Carol Bishopric)
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