Former Minnesota Allstate Agent Files Suit Against Company
July 18, 2013 by Best's News Service
ST. PAUL, Minn. – A former Allstate Corp. agent in Minnesota who was fired for not meeting life insurance sales quotas has filed a lawsuit against his former employer, according to a statement from the National Association of Professional Allstate Agents.
Jerry Deleski, who had worked for Allstate for 39 years, alleges the insurer violated Minnesota law when it terminated him. The company also allegedly did not offer Deleski a termination review process as required by state law, according to state records.
It’s unclear what Deleski, who now works as an independent insurance agent, is seeking with the lawsuit. Deleski referred questions about his case to his attorney, Christopher Daniels, who was not immediately available for comment. Allstate’s Minnesota spokeswoman, Meghan O’Kelly, was also not immediately available for comment.
The Minnesota Department of Commerce last year investigated Deleski’s claims and ultimately fined Allstate Insurance Co. $5,000. The department issued a consent order finding that Deleski was fired for not meeting quotas and that he was not informed of his termination process. The company chose to forego a formal hearing in the matter and chose an informal disposition, state records say.
The NAPAA, the Allstate agents’ association, said in their statement if Deleski wins his suit, it will likely encourage other former Minnesota agents to file suit for wrongful termination. The group estimates there are currently 84 Allstate agents in Minnesota, down from 158 in 2007.
The number of exclusive Allstate insurance agencies in the U.S. dropped in 2012 for at least the fourth consecutive year to about 9,300 agencies, the company said earlier this year in a regulatory filing (Best’s News Service, Feb. 21, 2013). Allstate said it wants to grow its agency force after several years of decline.
“While we know nearly 4,000 agents have parted ways with Allstate — many of them involuntarily — the company has been replacing them with new, but often less experienced, individuals,” said Jim Fish, NAPAA’s executive director, in a written statement.
The NAPAA said in the statement that in 2006 Allstate instituted a new quota system that required agents to meet goals. “When the economic downturn struck and businesses in nearly every industry were struggling, the company continued to demand that agents produce sales at pre-recession levels,” the group said.
Allstate Insurance Group in 2012 had about 5.11% of the Minnesota personal lines insurance market, according to BestLink, A.M. Best Co.’s online financial system. The group in 2012 in Minnesota had personal lines direct premiums written of $238.5 million. Group companies currently have a Best’s Financial Strength Rating of A+ (Superior). At market close July 17, shares of Allstate Corp. (NYSE: ALL) were trading at $51.03, up 0.06% from the previous close.
(By Michael Buck, senior associate editor, BestWeek: Michael.Buck@ambest.com) BN-NJ-07-17-2013 1626 ET #