Allstate maintained that its rate increase followed state law and that the Texas Department of Insurance acted improperly in trying to nullify it. A state district judge in Travis County agreed and issued an order Monday evening.
Bill Mellander, a spokesman for Allstate, said the insurer had been certain the judge would affirm that the increase was implemented correctly.
"We are equally as confident that the rate itself is competitive, justified and, more importantly, that it is attractive and good for the consumer," Mr. Mellander said.
Insurance Department spokesman Jerry Hagins said the agency is disappointed in the judge's ruling but stands by its decision that the new rate is excessive. The agency will continue to pursue an order requiring Allstate to roll back its rates and give refunds to customers.
At issue is the state's "file and use" law, which largely has unregulated insurance rates. As envisioned by lawmakers, insurance companies can file notice of new rates with the state insurance agency but don't have to wait for the regulatory process before using the new charges.
If the state found the new rates to be excessive, the insurance agency could order them rolled back and the insurer would reimburse its policyholders.