Allstate falls after DOJ files civil complaint against National General

The Department of Justice said it has filed a civil complaint under the Financial Institutions Reform, Recovery and Enforcement Act against Allstate’s National General Holdings and its subsidiaries, alleging that, for over a decade, National General “erroneously force-placed its Collateral Protection Insurance product on vehicles financed through Wells Fargo, despite borrowers already having insurance through other carriers.” The government’s complaint, filed in the U.S. District Court for the Western District of Pennsylvania, alleges that, from at least 2008 and through the latter part of 2016, National General “systemically failed to accurately track whether cars financed by Wells Fargo had the requisite insurance coverage from an outside carrier, and thereby knowingly or recklessly force-placed its own, much costlier CPI on at least 655,000 vehicles that already had outside insurance.” Shares of Allstate, which acquired National General in 2021, are down 1% to $170.29 following the announcement.