After a multi-state investigation,
The 18-month probe, however, also found Allstate had not systemically underpaid claims, a finding that could have had much more serious implications had it been proven true.
The target of the investigation centered on Allstate’s use of an in-house program called "Colossus" to review and manage claims for bodily injury following automobile accidents. One of the lead examiners, the New York State Insurance Department, said there was a lack of transparency in the way the program was used.
"The examination found that Allstate had failed to modify or 'tune' the software in a uniform and consistent manner across its claims handling regions," New York officials said in a statement.
Allstate has said it will strengthen its internal auditing of how Colossus is used, according to a Reuters report, to develop a single claims-handling manual and to refrain from establishing policies or rules that would force adjusters to settle claims based solely on Colossus' recommendations.
In a statement, Allstate said it fully cooperated with the review, and was "pleased" there was no evidence of systemic underpayment.
An Allstate spokeswoman told Reuters the settlement fund would primarily be used to fund training on claims technology for the staffs at state insurance departments.
