Filing at a Glance · Filing at a Glance Company: Allstate Insurance Company Product Name: AIC PPA...

Filing at a Glance

Company: Allstate Insurance Company

Product Name: AIC PPA

State: Kentucky

TOI: 19.0 Personal Auto

Sub-TOI: 19.0001 Private Passenger Auto (PPA)

Filing Type: Rate/Rule

Date Submitted: 07/01/2013

SERFF Tr Num: ALSE-129101635

SERFF Status: Closed-Acknowledged

State Tr Num:

State Status: Filing Closed

Co Tr Num: R26213

Effective DateRequested (New):

09/16/2013

Effective DateRequested (Renewal):

10/21/2013

Author(s): Andi Colosi

Reviewer(s): Jeff Lamb (primary)

Disposition Date: 07/10/2013

Disposition Status: Acknowledged

Effective Date (New): 09/16/2013

Effective Date (Renewal): 10/21/2013

State Filing Description:

discussed w/ SH

SERFF Tracking #: ALSE-129101635 State Tracking #: Company Tracking #: R26213

State: Kentucky Filing Company: Allstate Insurance Company

TOI/Sub-TOI: 19.0 Personal Auto/19.0001 Private Passenger Auto (PPA)


Project Name/Number: Drivewise/1358970

PDF Pipeline for SERFF Tracking Number ALSE-129101635 Generated 07/11/2013 07:40 AM

General Information

Company and Contact

Filing Fees

Project Name: Drivewise Status of Filing in Domicile:

Project Number: 1358970 Domicile Status Comments:

Reference Organization: Reference Number:

Reference Title: Advisory Org. Circular:

Filing Status Changed: 07/10/2013

State Status Changed: 07/10/2013 Deemer Date: 07/31/2013

Created By: Andi Colosi Submitted By: Andi Colosi

Corresponding Filing Tracking Number:

Filing Description:

With this filing, Allstate is introducing the Allstate Drivewise® Program for the Allstate Insurance Company(AIC) Voluntary Private Passenger Automobile Program in the state of Kentucky. The Allstate Drivewise®Program is a voluntary program that allows participants to be rewarded using driving behavior informationthat is collected by an electronic device. Further information can be found in the enclosed attachments.

The rate level impact of this change is targeted to be revenue neutral. In order to achieve a revenue neutralchange, Rate Adjustment Factors and Miscellaneous Coverage base rates are being revised to offset the impactof the revisions.

Filing Contact InformationAndi Colosi, State Filings Project Manager [email protected]

2775 Sanders Road

Suite A2-W

Northbrook, IL 60062

847-402-5000 [Phone] 21839 [Ext]

847-402-9757 [FAX]

Filing Company InformationAllstate Insurance Company

2775 Sanders Road

Suite A2-W

Northbrook, IL 60062

(847) 402-5000 ext. [Phone]

CoCode: 19232

Group Code: 8

Group Name: Allstate

FEIN Number: 36-0719665

State of Domicile: Illinois

Company Type: Property andCasualty

State ID Number:

Fee Required? Yes

Fee Amount: $5.00

Retaliatory? No

Fee Explanation:

Per Company: Yes

Company Amount Date Processed Transaction #

Allstate Insurance Company $5.00 07/01/2013 71569899







Correspondence Summary DispositionsStatus Created By Created On Date Submitted

Acknowledged Jeff Lamb 07/10/2013 07/10/2013

Objection Letters and Response LettersObjection Letters Response Letters

Status Created By Created On Date Submitted Responded By Created On Date Submitted

Pending

Industry

Response

Jeff Lamb 07/02/2013 07/02/2013 Marisol Herrera 07/08/2013 07/08/2013







Disposition

Disposition Date: 07/10/2013

Effective Date (New): 09/16/2013

Effective Date (Renewal): 10/21/2013

Status: Acknowledged

Comment:

Company

Name:

Overall %

Indicated

Change:

Overall %

Rate

Impact:

Written Premium

Change for

this Program:

# of Policy

Holders Affected

for this Program:

Written

Premium for

this Program:

Maximum %

Change

(where req'd):

Minimum %

Change

(where req'd):

Allstate Insurance

Company

% 0.000% $0 40,583 $63,739,141 1.000% -9.100%

Schedule Schedule Item Schedule Item Status Public Access

Supporting Document Actuarial Memorandum (if applicable) Yes

Supporting Document Filing Fee Yes

Supporting Document LC-1 P&C (8/00) Calculation of Loss Cost Multiplier (if

applicable)

Yes

Supporting Document LC-2 P&C (8/00) Expense Constant Supplement (if

applicable)

Yes

Supporting Document SG-1 Synopsis for Personal Auto-Rate Comparisons Yes

Supporting Document Third Party Authorization (if applicable) Yes

Supporting Document Response to Objection Letter dated July 2, 2013. Yes

Rate CheckingList Yes

Rate ManualR26213 Yes







Objection Letter Objection Letter Status Pending Industry Response

Objection Letter Date 07/02/2013

Submitted Date 07/02/2013

Respond By Date 07/09/2013

Dear Andi Colosi,

Introduction:

Objection 1 - Actuarial Memorandum (if applicable) (Supporting Document)

- Filing Fee (Supporting Document)

- LC-1 P&C (8/00) Calculation of Loss Cost Multiplier (if applicable) (Supporting Document)

- LC-2 P&C (8/00) Expense Constant Supplement (if applicable) (Supporting Document)

- SG-1 Synopsis for Personal Auto-Rate Comparisons (Supporting Document)

- Third Party Authorization (if applicable) (Supporting Document)

- CheckingList, null (Rate)

- ManualR26213, null (Rate)

Comments: Can you help us understand what happens to enrollees who experience adverse situations during the datacollection period? Are they charged a premium? Are they automatically switched out of the program at next renewal?

Lastly, is there a charge for the telematics device? If so, what are the details?

Please respond prior to 7/9/13.

Conclusion:

Sincerely,

Jeff Lamb







Response Letter Response Letter Status Submitted to State

Response Letter Date 07/08/2013

Submitted Date 07/08/2013

Dear Jeff Lamb,

Introduction: Response to objection letter dated July 2, 2013.

Response 1

Comments: See attached document.

Related Objection 1 Applies To:

- Actuarial Memorandum (if applicable) (Supporting Document)

- Filing Fee (Supporting Document)

- LC-1 P&C (8/00) Calculation of Loss Cost Multiplier (if applicable) (Supporting Document)

- LC-2 P&C (8/00) Expense Constant Supplement (if applicable) (Supporting Document)

- SG-1 Synopsis for Personal Auto-Rate Comparisons (Supporting Document)

- Third Party Authorization (if applicable) (Supporting Document)

- CheckingList, null (Rate)

- ManualR26213, null (Rate)

Comments: Can you help us understand what happens to enrollees who experience adverse situations during the data collection period? Are they charged a premium?Are they automatically switched out of the program at next renewal?

Lastly, is there a charge for the telematics device? If so, what are the details?

Please respond prior to 7/9/13.

Changed Items:







Supporting Document Schedule Item Changes

Satisfied - Item: Response to Objection Letter dated July 2, 2013.Comments:

Attachment(s): R26213 and R26214 KY Resposnes.pdf

No Form Schedule items changed.

No Rate/Rule Schedule items changed.

Conclusion: Let me know if you have additional questions.

Sincerely,

Marisol Herrera







Rate Information Rate data applies to filing.

Filing Method: Use and File

Rate Change Type: Neutral

Overall Percentage of Last Rate Revision: 0.000%

Effective Date of Last Rate Revision: 10/24/2011

Filing Method of Last Filing: Use and File

Company Rate Information

Company

Name:

Overall %

Indicated

Change:

Overall %

Rate

Impact:

Written Premium

Change for

this Program:

# of Policy

Holders Affected

for this Program:

Written

Premium for

this Program:

Maximum %

Change

(where req'd):

Minimum %

Change

(where req'd):

Allstate Insurance

Company

% 0.000% $0 40,583 $63,739,141 1.000% -9.100%







Rate/Rule Schedule

Item

No.

Schedule Item

Status Exhibit Name Rule # or Page # Rate Action

Previous State

Filing Number Attachments

1 CheckingList New CheckingList - R26213.pdf

2 ManualR26213 Replacement Manual - R26213.pdf







Filing Number: R26213 Allstate Insurance Company

Kentucky

CHECKING LIST FOR PRIVATE PASSENGER AUTO

Enclosed:

Withdrawn:

Enclosed:

Withdrawn:

Enclosed:

Withdrawn:Page RP-15A dated 3-1-2005

INDEX

Page I-3 dated 9-1-2013

Page I-3 dated 10-1-2011

Printing dates are shown on each page to facilitate identification of differenteditions, but have no direct connection with the effective date of the page.

Page RP-2A dated 9-1-2013


RULES

Page 63-1 through 63-2 dated 9-1-2013

Page 63-1 dated 10-1-2011

PREMIUM SECTION


KENTUCKY PRIVATE PASSENGER AUTO INSURANCE MANUAL INDEX

9-1-2013 ALLSTATE INSURANCE COMPANY Page I-3

Rule 58 – Reserved For Future Use.………………………………….….…… 58-1





Rule 63 – Allstate Drivewise® Reward Program.…………………………….. 63-1

Rule 64 – Allstate Auto/Life Discount SM……………………………….…… 64-1

TERRITORIAL DEFINITIONS

Territorial Definitions…………………………………………………………… TD-1 AUTOMOBILE RATING SECTIONS Rating Section A - Private Passenger Automobile …..……………………….. RP-1A

Rating Section B - Other Vehicle Types …………………………………….. RP-1B

SYMBOL AND IDENTIFICATION INSTRUCTIONS Private Passenger Automobiles…………………………………………….…. SI-1 SYMBOL AND IDENTIFICATION PAGES FOR MODEL YEARS 2001 AND SUBSEQUENT Private Passenger Automobiles Domestic and Foreign Cars…..………………………………………...…..… SIYY-1* Utility Vehicles…...………………………………………………………….. SIUYY-1* SYMBOL AND IDENTIFICATION PAGES FOR MODEL YEARS 2000 AND PRIOR Private Passenger Automobiles Domestic and Foreign Cars…………………………………………………. Page 1 Utility Vehicles……………………………………………………………… Page 1 EXPERIENCE GROUP RATING PAGES Private Passenger Automobiles……………………………………………… EGRYY-1*

*YY refers to the year of the vehicle being rated

KENTUCKY PRIVATE PASSENGER AUTO INSURANCE MANUAL RULES

9-1-2013 ALLSTATE INSURANCE COMPANY Page 63-1

RULE 63 – ALLSTATE DRIVEWISE® REWARD PROGRAM A. Definitions

1. Enrollment Reward Date: The date a policy meets the eligibility requirements to generate an Enrollment Reward

2. Performance Reward Date: The date a policy is evaluated to determine a Performance Reward

3. Evaluation Period: The period ending on the Performance Reward Date. For the initial Performance Reward Date, it is the previous 6-month period and for subsequent Performance Reward Dates, it is the previous 12-month period.

B. Enrollment Reward

An active policy qualifies for the Enrollment Reward when it transmits data for one trip through the Allstate Drivewise

device. The Enrollment Reward is 10% of a policy’s total

premium as of the Enrollment Reward Date and will be returned to the insured. If a policy has previously earned the Enrollment Reward, it will no longer be eligible for an Enrollment Reward.

Note: If the Enrollment Reward is less than $5.00 but greater than $0.00, the Enrollment Reward will be rounded up to $5.00.

C. Performance Reward

Once an Enrollment Reward has been generated, a policy may qualify for a Performance Reward. The first Performance Reward Date is six months after the Enrollment Reward Date. Each subsequent Performance Reward Date is six months after the prior Performance Reward Date. To determine the Performance Reward, a vehicle’s performance during the most recently completed Evaluation Period determines a Driving Score Percentage (described in Part 1. below). On the Performance Reward Date, each vehicle’s driving score percentage is weighted with its respective premium to determine an average policy level Reward percentage. The policy level Reward percentage is then applied to the policy premium. The policy’s Performance Rewards will be returned to the insured. If less than 60 days of data is collected between Reward Dates, a Driving Score Group of 0 will be assigned for the completed period. Note: If the Performance Reward is less than $5.00 accumulated across all vehicles, but

greater than $0.00, the Performance Reward will be rounded up to $5.00.

KENTUCKY PRIVATE PASSENGER AUTO INSURANCE MANUAL RULES

9-1-2013 ALLSTATE INSURANCE COMPANY Page 63-2

1. Driving Score Percentage

A Driving Score Percentage derived from data collected by the Allstate Drivewise

device will be assigned as follows:

Performance Reward Driving Score Driving Score

Group Driving Score

Percentage N/A 0 0%

100-150 1 28% 151-200 2 20% 201-225 3 17% 226-250 4 16% 251-275 5 14% 276-300 6 13% 301-325 7 11% 326-350 8 9% 351-375 9 8% 376-400 10 6% 401-425 11 5% 426-450 12 3% 451-475 13 3% 476-500 14 2% 501-525 15 0% 526-550 16 0% 551-575 17 0% 576-600 18 0% 601-625 19 0% 626-650 20 0% 651-675 21 0% 676-700 22 0% 701-725 23 0% 726-750 24 0% 751-800 25 0% 801-850 26 0% 851-900 27 0% 901-950 28 0% 951-1000 29 0%

RP-2A ALLSTATE INSURANCE COMPANY SEPTEMBER 1, 2013

KENTUCKYVOLUNTARY PRIVATE PASSENGER AUTO

PREMIUM CALCULATION

PENNY ROUND ALL CALCULATIONS

STEP# AA BB VA* DD HH CX VB** CC

1 TERRITORIAL BASE RATE (RP-4A)2 RATE ADJUSTMENT FACTOR (PENNY ROUND) x 1.0548 x 1.2831 x 1.3952 x 0.9153 x 0.9143 x 1.3255 x 1.3952 x 1.32553 INCREASED LIMIT FACTOR/ADDEND (RP-5A) x + x x x x4 DRIVER CLASSIFICATION FACTOR (RP-7A) x x x x x x x x5 ECONOMY CAR DISCOUNT (RP-8A) x x6 HOUSEHOLD COMPOSITION FACTOR (RP-10A) x x x x x x x x7 PIP DEDUCTIBLE FACTOR (RP-6A) x8 MODEL YEAR FACTOR (RP-11A) x x9 DEDUCTIBLE BY PGS FACTOR (RP-11A) x x

10 EXPERIENCE GROUP RATING FACTOR (EGR PAGES) x x x x x x x x11 FIRE AND THEFT FACTOR (RP-15A) x12 NEW CAR DISCOUNT (RP-8A) x x x x13 UTILITY DISCOUNT (RP-8A) x x x x x x x x14 RESIDENT STUDENT DISCOUNT (RP-8A) x x x15 GOOD STUDENT DISCOUNT (RP-8A) x x x x x x x x16 PASSIVE RESTRAINT DISCOUNT (RP-8A) x x x x17 MERIT FACTOR (RP-12A) x x x x x x x18 MINOR VIOLATION FACTOR (RP-13A) x x x x x19 SENIOR ADULT DISCOUNT SUBTRACTIVE (RP-14A) -20 INEXP. OPERATOR SURCHARGE ADDEND (RP-14A) + + +21 MAJOR VIOLATION SURCHARGE ADDEND (RP-14A) + + +22 FARM DISCOUNT SUBTRACTIVE (RP-14A) - - -23 CAMPER UNIT ADDITIONAL PREMIUM (RP-15A) + +24 ANTI-THEFT DISCOUNT (RP-8A) x25 55 AND RETIRED DISCOUNT (RP-8A) x x x x x x x x26 DEFENSIVE DRIVER DISCOUNT (RP-8A) x x x x x x27 TIER (RP-9A) x x x x x x x x28 PREMIER PLUS DISCOUNT (RP-9A) x x x x x x x x29 PREMIER DISCOUNT (RP-9A) x x x x x x x x30 MULTIPLE POLICY DISCOUNT (RP-9A) x x x x x x x x31 SINGLE CAR DRIVING REC. SURCHARGE (RP-9A) x x x x x x x x32 EXCESS MEDICAL COVERAGE FACTOR (RP-5A) x33 CERTIFIED RISK SURCHARGE FACTOR (RP-8A) x x34 ANTI-LOCK BRAKE DISCOUNT (RP-8A) x x x35 THE GOOD HANDS PEOPLE DISCOUNT (RP-8A) x x x x x x x x36 ALLSTATE EASY PAY PLAN DISCOUNT (RP-8A) x x x x x x x x37 ALLSTATE AUTO/LIFE DISCOUNT SM (RP-9A) x x x x x x x x38 YOUR CHOICE AUTO OPTION PACKAGE (RP-8A) x x x x x x x x

39 TOTAL COVERAGE PREMIUM

40 UNINSURED MOTORIST (SS)POLICY UM BASE RATE (RP-4A) NOTESRATE ADJUSTMENT FACTOR (PENNY ROUND) x 1.3791UM INCREASED LIMIT FACTOR (RP-5A) xTOTAL UM COVERAGE PREMIUM = Territory #:

41 UNDERINSURED MOTORIST (SU) Tier:POLICY UIM BASE RATE (RP-4A) RATE ADJUSTMENT FACTOR (PENNY ROUND) x 1.3791UIM INCREASED LIMIT FACTOR (RP-5A) x Classification:TOTAL UIM COVERAGE PREMIUM =

Limits of Liability:

42 RENTAL REIMBURSEMENT (UU) Model Year:RENTAL REIMBURSEMENT BASE RATE (RP-15A)RENTAL REIMBURSEMENT LIMIT FACTOR (RP-5A) x PGS:TOTAL RENTAL REIMBURSEMENT COVERAGE PREMIUM =

DD/HH Deductibles:

43 PIP OPTION VA09 (RP-6A) TOWING (JJ) (RP- 15A) + PIP Option:SOUND SYSTEMS (ZA) (RP- 15A) +TAPE (ZZ) (RP- 15A) +

DEATH INDEMNITY (CM) (RP-15A) +TOTAL MISCELLANEOUS COVERAGES =

44 TOTAL SEMI-ANNUAL PREMIUM =

* Do not use if purchasing PIP Option VA09, see line 39 instead.

** May be purchased with PIP only. (Cannot be purchased with Medical coverage.)

RP-15A ALLSTATE INSURANCE COMPANY SEPTEMBER 1, 2013

KENTUCKYVOLUNTARY PRIVATE PASSENGER AUTO

MISCELLANEOUS COVERAGES RATING FACTORS

Number of years the vehicle's ModelYear is older than the calendar yearat time of purchase of NC coverage: Coverage DD Coverage HH< 1 year (0 - 11 months) 0.05 0.021 - 2 years (12 - 23 months) 0.05 0.022 - 3 years (24 - 35 months) 0.05 0.02

CAMPER UNIT ADDITIONAL PREMIUM - (Rule 49)Additional Rate

Original Cost New of Camper Unit Coverage DD Coverage HHUnder $1,200 $3.03 $3.03$1,200 to 1,799 $5.05 $5.05$1,800 to 2,399 $8.08 $8.08$2,400 and above $10.10 $10.10

TOWING AND LABOR COSTS (JJ) - (Rule 19)

LIMIT/OCCURRENCE RATE/AUTO$25.00 $2.12$50.00 $3.23

SOUND SYSTEM COVERAGE (ZA) - (Rule 19)

LIMIT/OCCURRENCE RATE/AUTO DEDUCTIBLE$0-250 $9.09 $50251-500 $18.19 $50501-1000 $33.34 $501001-2500 $61.63 $100

TAPE COVERAGE (ZZ) - (Rule 19)

LIMIT/OCCURRENCE RATE/AUTO$100 $5.05

AUTOMOBILE DEATH INDEMNITY (CM) - (Rule 20)

LIMIT PREMIUM/PERSON$7,500$15,000

FIRE AND THEFT COVERAGE (HG) - (Rule 19)

Percentage of $50 DeductibleTERRITORIES Comprehensive Rate

ALL 54%

RENTAL REIMBURSEMENT (UU) - (Rule 19)

LIMIT/OCCURRENCE RATE/AUTO$20 Per Day $11.21

$1.31$2.53

NEW CAR EXPANDED PROTECTION (NC) - (Rule 21)

Supporting Document Schedules

Satisfied - Item: Actuarial Memorandum (if applicable)Comments:

Attachment(s): R26213 KY AIC Actuarial Support.pdfItem Status:Status Date:

Satisfied - Item: Filing Fee

Comments: Fee submitted via EFTAttachment(s):Item Status:Status Date:

Bypassed - Item: LC-1 P&C (8/00) Calculation of Loss Cost Multiplier (if applicable)

Bypass Reason: NAAttachment(s):Item Status:Status Date:

Bypassed - Item: LC-2 P&C (8/00) Expense Constant Supplement (if applicable)


Satisfied - Item: SG-1 Synopsis for Personal Auto-Rate Comparisons

Comments: This has been submitted via the websiteAttachment(s):Item Status:Status Date:

Bypassed - Item: Third Party Authorization (if applicable)








Satisfied - Item: Response to Objection Letter dated July 2, 2013.Comments:

Attachment(s): R26213 and R26214 KY Resposnes.pdfItem Status:Status Date:







ALLSTATE INSURANCE COMPANY VOLUNTARY PRIVATE PASSENGER AUTOMOBILE

KENTUCKY

INDEX OF ATTACHMENTS

Attachment I – Allstate Drivewise® Program Page 1 Allstate Drivewise® Program Attachment II – Histogram of Estimated Impacts Page 1 Histogram of Estimated Impacts Attachment III – Summary of Manual Rule and Rate Changes Page 1 Summary of Manual Rule and Rate Changes

Attachment I

Allstate Drivewise® Program

Attachment I Page 1

Allstate Insurance Company Voluntary Private Passenger Automobile

Kentucky

Drivewise® Program

With this filing, Allstate Insurance Company (AIC) is introducing the Drivewise Program. Drivewise is a voluntary program that allows participants to be rewarded using driving behavior information that is collected by an electronic device provided by Allstate that will be plugged into their vehicle. Allstate believes that evaluating based on the two major aspects of the program, mileage and driving performance, will allow us to reward customers less likely to incur losses with lower premiums. In addition, the feedback made available from the personalized reports in the interactive website connected with the electronic device can in some cases help improve driving ability. This program allows participants to potentially reduce their premium as well as their likelihood of accidents. Drivewise Rewards will apply to all coverages on a vehicle. Enrollment Reward

When an insured selects to enroll in the Drivewise program, there is not yet sufficient information to determine a reward percentage based on driving behavior. However, an Enrollment Reward is applied to account for the propensity for policyholders with better expected loss experiences to self-select into the program. The Enrollment Reward amount of 10% was selected using actuarial judgment. A policy will be eligible to earn the Enrollment Reward only once. Please refer to Rule 63 for additional information on the Enrollment Reward.

Performance Reward

Once an Enrollment Reward has been generated, a policy may qualify for a Performance Reward. The first potential Performance Reward is six months after the Enrollment Reward. Each subsequent Performance Reward is six months after the prior Performance Reward. To determine the Performance Reward, a vehicle’s performance during the most recently completed Evaluation Period (six months for the first Performance Period and twelve months for each subsequent Performance Period) determines a Driving Score Percentage. The Driving Score Percentage considers the number of miles driven and the time of day those miles were driven, as well as braking information and speeding events over 80 miles per hour. Each vehicle’s driving score percentage is weighted with its respective premium to determine an average policy level Reward percentage. The policy level Reward percentage is then applied to the policy premium and the policy’s Performance Rewards will be

Attachment I Page 2

returned to the insured. Note that if the device transmits less than 60 calendar days of data between Reward Dates, a Driving Score Percentage of 0% will be assigned for the completed period. Please refer to Rule 63 for additional information on the Performance Reward.

Miscellaneous

The Rate Adjustment Factors (RAF) and Miscellaneous Coverage base rates have been updated in order to arrive at a revenue neutral change.

Attachment II

Histogram of Estimated Impacts

Attachment II Page 1

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

‐10% to ‐0% 0% to 10%

Num

ber o

f Policyholde

rs

Range of Impacts

Allstate Insurance CompanyVoluntary Private Passenger Auto

KentuckyHistogram of Estimated Impacts

Attachment III

Summary of Manual Changes

Attachment III Page 1

ALLSTATE INSURANCE COMPANY

VOLUNTARY PRIVATE PASSENGER AUTOMOBILE KENTUCKY

SUMMARY OF MANUAL RULE AND RATE CHANGES

Rules Manual:

I-3 Revised Rule 63 from “Reserved for Future Use” to “Allstate Drivewise® Reward Program”

63-1 – 63-2 Added new Rule 63 – Allstate Drivewise® Reward Program

Rates Manual:

RP-2A Revised Rate Adjustment Factors

RP-15A Revised Miscellaneous Coverage Rating Factors

July 3, 2013 RE: Allstate Property and Casualty Insurance Company and Allstate Insurance Company Kentucky Company File #R26213 and R26214 Can you help us understand what happens to enrollees who experience adverse situations during the data collection period? Drivewise is a program that rewards customers on driving behaviors. A customer who decides to enroll in the program will receive a one time Enrollment Reward. Subsequently, the customer is evaluated per their driving behaviors and every six months after the Enrollment Reward date a driving score will be assigned and a reward % will be applied to the total policy premium. Assuming the customer experienced an adverse situation that elicits unsafe driving behaviors, the customer could potentially receive a lower driving score, therefore, a lower reward % could be applied to the total policy premium. Please note, though, one event is unlikely to have a significant effect on the customer’s driving score. For example, Allstate understands that braking may be necessary to avoid an accident caused by another person or animal. However, a pattern of frequent hard braking could affect the customer’s driving score. Are they charged a premium? Customers will not be charged additional premium based on driving behaviors regardless of adverse situations. Are they automatically switched out of the program at next renewal? No, customers will not be switched out of the program due to adverse driving situations at any time or for any adverse reason. If a device collects data for a period less than 60 days the Performance Reward will be a 0% for that evaluation period. Lastly, is there a charge for the telematics device? If so, what are the details? At this time, there is no charge for the telematics device. If the customer is unenrolled from the Drivewise program and does not return the device to Allstate within 45 days of our request, our Customer Agreement states that Allstate reserves the right to charge a non-returned device fee in the future. However, we currently do not charge a non-returned device fee at this time. Customer Agreement is attached for reference.

Allstate Insurance Company Drivewise® Program Customer Agreement

Welcome to the Allstate Insurance Company Drivewise Program (the “Program”). Drivewise is a voluntary program designed by Allstate to improve driver safety. Enrollment in this program is dependent on your acceptance of the provisions of the Drivewise Program Customer Agreement (“The Customer Agreement”). Please read this important information about your rights, benefits, costs and limitations under Drivewise and save a copy of this document for future reference. Definitions: “You,” “your,” “customer”: means the policyholder named on the Policy Declarations and that policyholder’s spouse. “Enrolled vehicle”: A customer’s vehicle enrolled in Drivewise. “We,” “us,” or “our”: means Allstate. Program Acceptance By entering into the Drivewise Program Customer Agreement, you agree that: (1) you are the legal, authorized owner of the vehicle(s) on your policy and have the right to enroll the vehicle(s) in Drivewise; (2) you will be responsible for the installation and maintenance of the device(s) until the device(s) are returned to Allstate; (3) you will inform anyone you permit to drive the vehicle(s) about the proper use of this installed device and that Allstate or other third parties will have access to their driving behavior data; (4) you will ensure that the device is not used for fraudulent or abusive purposes, or in any way that risks damage to Allstate or its business or reputation; (5) you will install the device(s) in vehicles that are operational and in use; and (6) when exiting Drivewise, you will send the device back to Allstate according to the return instructions and by the specified return date. Allstate reserves the right to amend, modify, waive, supplement or terminate the Customer Agreement at any time and for any reason. Your ongoing use of the Drivewise telematics device indicates your acknowledgement and acceptance of the Customer Agreement. The Customer Agreement will apply to any additional or replacement vehicles that you enroll in Drivewise. Privacy Allstate’s privacy policy can be viewed at http://www.allstate.com/about/privacy-statement.aspx. The Drivewise Program Allstate created Drivewise with two primary objectives in mind: to reward drivers who exhibit certain safe driving behaviors, and to help save lives and reduce losses on our roads. Through the use of a telematics device, Drivewise promotes safe driving awareness and rewards safe driving behavior. Telematics Device The device was developed specifically for Drivewise by Allstate and its vendor and contains state-of-the-art technology and capability. It is plugged into the OBDII port of most vehicles made in 1996 or later and transmits driving data to Allstate or its authorized vendor via a wireless connection. Telematics Device / Vehicle Compatibility

http://www.allstate.com/about/privacy-statement.aspx

The device is not compatible with all vehicles. Hybrids, diesels, and various makes and models are not mechanically compatible with the device. The list of incompatible vehicles is regularly updated – these vehicles cannot be enrolled in Drivewise. Some vehicles are compatible with the device but present aesthetic or ergonomic issues for the driver. For such cases, you will determine if these issues prohibit you from using the device. Data Information Data is uploaded daily based on trip information. Trip information is one cycle of ON ignition to OFF ignition. Once the data is uploaded, it is no longer available on the device. A complete, detailed list of the data captured can be viewed at http://www.allstate.com/landingpages/drivewisedevice.aspx. Scoring data used to calculate your Performance Reward includes speed, miles, time of day, and hard or extreme braking events. This data can be viewed at www.AllstateDrivewise.com after the device has been installed. Use of Information Allstate gathers and combines data from the device for the purpose of analysis and risk evaluation as well as for rewards calculation. A reward may be provided to the customer based on the accumulated driving data in accordance with the rules and rates on file with the state insurance department where your vehicle is garaged. Drivewise data will be disclosed to third parties as required by law or regulation. Data from the device may be deemed discoverable by third parties and used in an accident investigation and/or litigation. Allstate and or Drivewise participant may be legally required to provide the data to others and /or their legal counsel, and you should not expect to retain data privacy or confidentiality. We will not disclose or use data obtained from the device to resolve any claims you or another driver of your vehicle may make with us. We will only use data obtained from the device for resolving a claim if you make a specific request to us in writing, asking us to consider the data. We may also provide certain information to insurance regulators to support rate or other insurance related filings. Property of Allstate Participants in Drivewise receive a telematics device from Allstate upon enrollment in the Program. All rights and title to the device, and software are retained by Allstate and its vendor. The software is protected by copyright and other intellectual property laws and is licensed, not sold. You agree that Allstate owns the data gathered by the device. Cellular or Wireless Service The device transmits data from the OBDII port to Allstate via a cellular network where it is gathered, combined, analyzed and stored. The service may occasionally be restricted, interrupted or discontinued due to conditions such as but not limited to device design, network coverage, government regulation or other situations beyond Allstate’s control. Additional Eligibility Requirements. To maintain enrollment of one or more vehicles in Drivewise: 1. Enroll through your Allstate Agent, through 1-800-ALLSTATE, or Allstate.com. 2. Provide a valid and active email address. 3. Read and accept the Customer Agreement. 4. Install the device in the enrolled, drive-able vehicle with a connected and working battery. Enrollment Reward

http://www.allstate.com/landingpages/drivewisedevice.aspx

http://www.allstatedrivewise.com/

An Enrollment Reward is contingent upon acceptance of this Drivewise Program Customer Agreement, installation of the device, and one trip. The Enrollment Reward is a percentage of your policy’s total premium at the time the above conditions are satisfied. If a policy has previously earned the Enrollment Reward, it will no longer be eligible for an Enrollment Reward. Changes to your policy affecting the amount of total policy premium may also impact the Enrollment Reward amount. Performance Reward Once an Enrollment Reward has been generated, you may qualify for a Performance Reward. The Performance Reward is a percentage of your policy’s total premium based on the driving data generated by the device. For each vehicle enrolled, Allstate will use up to 12 months of driving data (on a rolling calendar basis) to calculate the Performance Reward. The first Performance Reward date is six months after the Enrollment Reward date. Each subsequent Performance Reward date is six months after the prior Performance Reward date. The Performance Reward may vary from one period to another based on aggregate driving performance. Changes to your policy affecting the amount of total policy premium may also impact the Performance Reward amount. Multiple Vehicles If multiple vehicles are covered by a policy, enrolling only one of the vehicles on a policy is acceptable, but the Performance Reward will be weighted by the premium of all vehicles on the policy. This Customer Agreement will apply to any additional or replacement vehicles you enroll in Drivewise. Vehicle Replacement When replacing a vehicle, contact your Allstate Agent or 1-800-ALLSTATE to report the date of change and the new vehicle information (make, model, VIN). You will be advised if the device is incompatible with the new vehicle (based on the current vehicle compatibility list) and if so, the device must be returned and the Performance Reward will be discontinued effective the date of change. Disconnect / Reconnect You can remove the device without penalty prior to taking your vehicle in for service or for emission testing. As soon as the vehicle is back in your possession, check to ensure the device was reinstalled by the service person or reconnect the device if you removed it. Continuous or frequent removal and / or disconnection of the device may jeopardize ongoing participation in Drivewise and result in the loss of any reward applied to your policy. Switching the Device Switching the device between vehicles without prior approval is not permitted. The device is assigned to a specific VIN at enrollment and cannot be changed without notifying an Allstate Agent or an Allstate Representative at 1-800-ALLSTATE. The device is designed to send a VIN mismatch signal when moved to a different vehicle. If you wish to add a device to another vehicle, contact your Allstate Agent or an Allstate Representative at 1-800-ALLSTATE. Tampering You may not tamper (alter, modify, change, disassemble, reverse engineer, copy or duplicate in any manner or fashion) with the device or software. When tampering is detected, the device will be turned off and you will be directed to return the device to Allstate immediately. Further, you will be removed from Drivewise and forfeit any reward owed at the time of tampering. In addition, you may be subject to legal action and may be denied future participation in Drivewise.

Reporting a Defective Device If you believe your Drivewise device is defective, or in any way compromising the operation of your vehicle, you must contact us within 30 days of installation to report the problem, otherwise we will presume the device is operating properly and we may not reimburse you for future unproven defects. Device Damage Reimbursement If you believe the device has compromised the operation of your vehicle, you must submit a report from a qualified mechanic specifying his or her findings and the amount of repair. This amount will be limited to any repairs your mechanic has performed directly resulting from the operation of the device. We will evaluate your report and determine whether and how much to reimburse you, based on our investigation and your mechanic’s report. We reserve the right to contact your mechanic, and / or inspect your vehicle at a repair shop of our choosing to make our final determination on the merits of your request. Ending Participation in Drivewise You can cancel your participation in Drivewise at any time by notifying your Allstate Agent or an Allstate Representative at 1-800-ALLSTATE. We will update your policy information. We will also provide instructions on returning the device to Allstate, at no cost to you. Allstate reserves the right to charge a non-return fee if the device is not returned within 45 days of a formal request from Allstate to return the device. A vehicle that has been withdrawn may be permitted to re-enroll in Drivewise. Disclaimers, Limitations, Exclusions ALLSTATE MAKES NO WARRANTY OF ANY KIND REGARDING THE PRODUCT OR SERVICES WHICH ARE PROVIDED ON AN AS IS BASIS AND EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY THAT THE PRODUCT OR SERVICES WILL BE ERROR-FREE, SECURE OR UNINTERRUPTED. YOU AGREE THAT ALLSTATE’S LIABILITY FOR DAMAGES CAUSED BY THE DEVICE SHALL BE LIMITED TO PROPERTY DAMAGE TO THE VEHICLE IN WHICH IT IS INSTALLED. ALLSTATE WILL NOT BE LIABLE FOR ANY SPECIAL, INCIDENTAL, EXEMPLARY, PUNITIVE AND/OR CONSEQUENTIAL DAMAGES ARISING OUT OF, RELATED TO OR IN CONNECTION WITH THE DEVICE, SERVICES OR ITS USE. PARTICIPANT AGREES TO FILE ANY LAWSUIT OR OTHER ACTION DIRECTED AGAINST ALLSTATE OR ITS EMPLOYEES, SUBSIDIARIES, AFFILIATES OR PARENT COMPANIES WITHIN ONE (1) YEAR FROM THE DATE OF THE EVENT THAT CAUSED THE LOSS, DAMAGE OR LIABILITY. The Drivewise Program Customer Agreement is governed by and construed under the laws of the State of Illinois, excluding that body of law applicable to conflicts of law.

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