The Supreme Court has rejected Allstate Corp.'s request for a review of a lawsuit filed by Hispanic-American and African American policyholders who contend that the company's credit-scoring system discriminates against minorities. The company asked for a review by the nation's high court because the lawsuit involves both state regulations and a federal statute. The lawsuit now goes back to the lower court for trial, if the two sides do not settle. 

The plaintiffs contend that in the early 1990s Allstate began using credit formulas that require minorities to pay higher rates for homeowners and auto insurance.  In its filing with the Supreme Court, the company denied the allegations of discrimination and noted that credit scoring is widely used in the insurance industry to establish risks and set rates.  Allstate also said that other factors, such as where the consumer lives or the auto owned, are also used to set rates.  The company said that the plaintiffs are seeking court approval for a class action that could involve hundreds of thousands of claimants.

May 4, 2004