A former Allstate agent in Minnesota has filed a lawsuit against the insurer, alleging it violated state law when it terminated him for failing to meet life insurance quotas.
The National Association of Professional Allstate Agents (NAPAA), affiliated as a guild with the Office and Professional Employees International Union, says it has been working closely with Jerry Deleski, a former Allstate of 39 years.
NAPAA says the insurer was investigated by the Minnesota Department of Commerce was charged with violating two state statutes while dismissing Deleski. Allstate agreed to pay a $5,000 penalty in lieu of facing formal proceedings on the charges, NAPAA says.
Allstate spokesman Justin Herndon says, “Allstate cooperated fully with the Minnesota Department of Commerce's investigation of Mr. Deleski's claims, which the company resolved amicably with the department. [Allstate] believes Mr. Deleski's lawsuit is meritless and the company intends to defend against it vigorously.”
NAPAA alleges the problem is bigger than Deleski. The association says the number of Allstate agents has declined nearly 30 percent since 2007, and in 2006 the insurer imposed a new quota system requiring agents to meet specifc sales goals. Failure to meet the goals would results in the loss of the agents' contracts, says NAPAA.
“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,” says Jim Fish, NAPAA's executive director, in a statement. “We believe the firings were not only ill-advised, but have accelerated the company's fall from second to third place among top auto insurers.”
NAPAA estimates the number of agents in the state of Minnesota was about 158 in 2007. The count todays stands at 84 exclusive agents under contract.
NAPAA says Deleski's case, if it were to succeed, would set a precedent for other former Minnesota insurance agents to recover damages for the unlawful termination of their contracts.
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