Longtime customers of Allstate Insurance Corporation alleged that Allstate determined they were willing to pay higher prices than new customers with similar risk profiles and started hiking their auto insurance rates as a result. The customers sued Allstate, alleging that Allstate failed to disclose its practice of optimizing rates in this fashion when it filed its rates with the Illinois Department of Insurance. Allstate attempted to have the case dismissed under the filed rate and primary jurisdiction doctrines, but the circuit court denied the motion and the appellate panel affirmed.
Allstate Corporation sells property and casualty insurance, including private passenger automobile insurance, to consumers in Illinois. Several customers who had purchased insurance from Allstate for more than two decades sued Allstate, alleging that Allstate illegally increased prices for their insurance under a practice called “price optimization,” after it determined that longtime customers would be more willing to absorb price hikes than new customers. The plaintiffs alleged that as a result they were charged higher prices than new customers who presented the same risk and that Allstate’s use of price optimization was not disclosed in its rate filings with the Illinois Department of Insurance.
In the trial court, Allstate filed a motion to dismiss the complaint, arguing that the action was barred by the filed rate doctrine and the primary jurisdiction doctrine. Following a hearing, the circuit court denied Allstate’s motion to dismiss. The court determined that Allstate failed to establish that the plaintiffs’ complaint should be dismissed under either the filed rate doctrine or the primary jurisdiction doctrine. The circuit court noted that Illinois is unique in that insurers may select their own rates and merely inform the Illinois Department of Insurance of their selection. The circuit court then granted Allstate’s motion to certify the questions of whether either the filed rate doctrine or the primary jurisdiction doctrine barred plaintiffs’ suit to the appellate court and the appellate court granted interlocutory review. Continue reading ›