ALLSTATE TO PAY $34 MLN IN CALIF. OVERCHARGE CASE

 Mon Jun 27, 2005 01:02 PM ET -- By Jonathan Stempel - NEW YORK  (Reuters) - Allstate Insurance Co. on Monday said it will offer about
 $30 million in credits and pay a $4 million fine to settle allegations that it overcharged on about 250,000 auto and homeowner policies in
 California. The unit of Northbrook, Illinois-based Allstate Corp.
 (ALL.N) will pay the fine to California's insurance department, and  offer credits on policy renewals, Allstate spokesman Rich Halberg
 said.
 The No. 2 U.S. home and auto insurer did not admit wrongdoing.  Allstate said the settlement will not affect second-quarter results
 because the company had previously set aside reserves. The Los Angeles  Times previously reported the settlement. "This settlement closes the
 books on the ... administrative review and clears the way for an  improved relationship between Allstate and the department," said
 Robert "Hank" Barge, an Allstate vice president, in a statement.
 California accused Allstate of not always providing the best rates,  failing to provide multi-policy discounts to some customers who
 insured both homes and cars with Allstate, and improperly using a  credit score that it said could push some individuals into
 higher-cost plans. Norman Williams, a spokesman for California  Insurance Commissioner John Garamendi, said the $30 million "will be
 returned to policyholders as credits on renewals, or in the form of  returns of premiums." The practices at issue took place between 1999
 and 2004.
 Williams said "we have other investigations that are in the pipeline.  It does appear to be a significant problem, and we will continue our
 efforts to make consumers whole." The average credit per policy  covered by the settlement will be about $120, but individual credits
 will vary. © Reuters 2005. All Rights Reserved.