Allstate Warns Agents Of Errors In Their Tax Documents, Reports
February 10 2012 - 5:15PM
Dow Jones News
Allstate Corp. (ALL) warned its insurance agents Friday that it
had discovered separate errors in their tax documents and the
year-end reports that show data used to calculate their annual
bonuses.
The tax documents--the "Form 1099" that shows each agent's 2011
income--in some cases provided incorrect information about how much
agents had been paid, and in other cases listed pay data belonging
to another agent. A spokeswoman said about 5,600 agencies were
affected.
The company told agents they may have to file an amended tax
return if they had already paid their taxes, and promised to
reimburse them for the cost of resubmitting their returns.
The second mistake, which the company said was unrelated, was in
a December performance report that shows figures that will be used
to calculate annual bonuses.
The company hadn't yet told agents what their bonuses would be.
The company has pulled the report from the computer system that
agents use, and told the agents it is re-running the report and
will tell agents what their bonuses will be on Feb. 14.
The Allstate spokeswoman, Meghann Dowd, said the company
anticipates paying the bonus, which has historically been
distributed around Feb. 14, on Feb. 23. Under the agents'
contracts, the bonuses must be paid by March 15, Dowd said.
The error comes one month after a separate mistake in a pay
report set off an uproar among the insurer's sales force. The
report was amended, and the monthly commissions were paid on
time.
Even before that mistake, many of the company's agents were
already on edge about upcoming changes in the way their commissions
are calculated. The company partially backed down from its proposed
changes in December amid the outcry, but it still plans to cut base
commissions for agents by 10% in 2013.
In the notice posted on its agent computer system Friday, the
company said Allstate's "leaders understand and apologize for the
anxiety, concern and inconvenience that both of these issues may
cause some agency owners." It told agents the issues "are receiving
leadership's undivided attention until they are resolved."
Dowd said the issues were found "as part of our regular due
diligence."
Allstate agents are classified as independent contractors, not
employees. She said the errors did not affect Allstate
employees.
-By Erik Holm, Dow Jones Newswires; 212-416-2892;
erik.holm@dowjones.com
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