Allstate Insurance Co. has paid $20,000 and promised to stop practices that Virginia insurance regulators found violated the company's duty to make fair settlements of small claims when the claimant was represented by a lawyer.

The company's handling of personal-injury cases involving minimal impact and soft-tissue injuries, usually referred to by the acronym MIST, has been the target of vociferous complaints by plaintiffs' attorneys for several years.

Examiners in the State Corporation Commission's Bureau of Insurance examined claims processed in the company's Glen Allen offices during 1998.

They found the company's policy in cases in which a claimant suffered soft-tissue injuries and had medical treatment for less than 90 days was to "make appropriate settlement offers."

But if a claimant with similar injuries had a lawyer, the policy was to deny the claim or to make a nominal settlement offer of $1,000 in all areas of the state except Northern Virginia, where the offer was $2,500.

Allstate took issue with many of the examiners' findings.

"MIST claims have historically been subject to inflated demands and overpayments," officials said.

George A. Lyle, a supervisor in the insurance bureau, said the concern about inflated demands did not justify the difference in the way represented and unrepresented claimants were treated.

"The mere fact that an attorney is involved does not justify an assumption that . . . the demand is inflated. Such a decision should be made on the merits of each individual claim."

In accepting Allstate's payment to the state, the commission noted that insurer did not admit that it violated the law.

Please don't believe "You're in Good Hands", or that "A Good Neighbor" will deliver "A Piece Of The Rock", if you buy their Insurance!