6 03-22-88 06:54 pes (1grafadd x x x any price _ allstate denies wrongdoing) By JERRY

   6  03-22-88  06:54  pes  (1grafadd  x x x any price _ allstate
denies wrongdoing) By JERRY BERGER United Press International

   Eight states filed suits  Tuesday  charging  four  major  U.S.
insurance  companies and Lloyd's of London manufactured a 1984-85
liability insurance crisis that forced  small  police  forces  to
disband  and  threatened  cancellation of San Francisco's Chinese
New Year parade.

   Attorneys general in seven states filed suit in U.S.  District
Court  in Northern California and a similar suit was filed in the
Texas state court system charging violation of state and  federal
anti-trust  laws  by  collusion  to  restrict the availability of
liability coverage used by most businesses, public  agencies  and
non-profit groups.

   The  complaints charged the actions created a ripple effect in
thousands of communities across the nation that found  themselves
with skyrocketing insurance premiums or no protection at all.

   The  tiny town of Cleveland, Ala., was forced to park its only
police  car  and  fire  its  two  police  officers  for  lack  of
insurance, and San Francisco's traditional Chinese New Year's Day
parade  faced  cancellation  until  last-minute arrangements were
made.

   "Our investigation revealed the so-called liability  insurance
crisis  of  1984  and  1985  was  in  great  part  created by the
insurance industry itself," Massachusetts Attorney General  James
Shannon charged in one of a number of news conferences across the
nation.

   "In   an  elaborate  conspiracy,  these  companies  agreed  to
severely restrict the amount of coverage available  to  consumers
of commercial general liability policies," he said.

   Companies  named in the 68-page complaint include the Hartford
Fire Insurance Co., Allstate Insurance Co.,  Aetna  Casualty  and
Surety Co. and the Cigna Corp.

   Also  named  was  Lloyd's of London, the internationally known
firm  that  provides  protection  to  the   insurance   companies
themselves  and  the Insurance Services Office, a trade group for
1,400 companies that write 95 percent of the  casualty  insurance
in the United States.

   "We  consider  the  allegations  unfounded and without merit,"
said ISO spokesman David Ostwald in New York.

   Cigna  spokesman  David  Willis  said  from  Philadelphia  the
company  would not comment on pending litigation, but that it was
company policy to obey anti-trust laws.

   States bringing the federal action included Massachusetts, New
York,  California,  Minnesota,  Wisconsin,  West   Virginia   and
Alabama.

   A  similar  state  suit was filed in Texas although that state
and Arizona were expect to join the federal case within 24 hours,
said California Attorney General John Van de Kamp.

   "The conspiracy began when Allstate and Hartford joined forces
to create a new CGL policy  with  more  restrictive  terms"  that
changed   coverage   periods,  excluded  pollution  coverage  and
required the inclusion of legal fees within  the  policy  limits,
Shannon said.

   He   charged  the  defendants  used  "backroom  deals,  secret
communications and thinly veiled threats" to expand the scheme to
companies such as Lloyd's of London, which "threatened to boycott
the American market if they didn't get their way."

   Shannon said the suits do not list specific  monetary  damages
or the number of busisnesses and communities affected.

   "We're  looking  for  an end to the kind of collusive behavior
... that denies people the coverage that they deserve,  he  said.
"What  we're  saying  is  that they should play by the same rules
that everybody else in a free market economy is supposed to  play
by."

   West  Virginia Attorney General Charlie Brown, chairman of the
Antitrust Committee of  the  National  Association  of  Attorneys
General,  said, "We believe these discoveries of manipulation are
helping  to  unravel  the  mystery  of  the  continuous  and  the
troubling liability insurance crisis.

   "As a result of this conspiracy, some kinds of coverage _ such
as   protection   against  pollution  risks  _  became  virtually
imposible to obtain at any price."

   In Washington,  Robert  Brandon,  vice  president  of  Citizen
Action,  a  1.6  million-member public interest group, hailed the
legal action.

   "It will expose the collusive  anti-competitive  practices  of
major  insurance  companies," Brandon said, "and demonstrates the
need for greater  disclosure  and  regulation  of  the  insurance
industry."

   A  spokesman  for Allstate, based in Northbrook, Ill, said the
company had not seen the specific allegations  contained  in  the
lawsuits,  but  said  Allstate  "is  not  now, and never has been
involved in a conspiracy to fix prices or constrain  the  market.
Any suggestions to the contrary are patently false."