On November 8, 2007, Louisiana Attorney General Charles C. Foti, Jr. announced that his office filed a petition in New Orleans Civil District Court suit against Allstate Insurance Company, Lafayette Insurance Company, Xactware, Inc., Marshall & Swift/Boeckh, LLC, Insurance Services Office, Inc., State Farm Fire and Casualty Company, USAA Casualty Insurance Company, Farmers Insurance Exchange, Standard Fire Insurance Company and McKinsey & Company for alleged violations of the Louisiana Monopolies Act.
According to the Louisiana AG’s press release, the petition alleges that the Defendants participated in “an on-going scheme to rig the value of property damage claims paid by insurance companies to their insureds.” Foti’s office further alleges that the Defendants used “damage-estimating software programs to engage in horizontal price-fixing as well. The combination allegedly artificially held down property damage claim payouts with the intended goal of increasing the profits of each company involved.” The Louisiana AG’s Office claims that the Defendants were setting premiums and adjusting claims under this alleged scheme when Hurricanes Katrina and Rita struck in 2005. The Louisiana AG noted that “these abuses were not new to the recent hurricanes.”
