Allstate Insurance Company, a subsidiary of Allstate Corporation ( ALL - Analyst Report ) , has filed a lawsuit alleging fraud against three companies – Gerald Surya, M.D., Sun Medical Care of Nassau, P.C., and Sky Medical, P.C. – in a U.S. district court in N.Y. As per the lawsuit, Sun Medical and Sky Medical forged false invoices and submitted them to Allstate to collect insurance benefit payments. These invoices charged an inflated amount for “unwarranted, unnecessary and undelivered medical treatment and testing”.

Allstate claims that the defendants were not eligible to collect the No-Fault insurance benefit payments that they received as the invoices were not accurate. Thus, the insurer is claiming refunds of about $1.7 million from the N.Y.-based companies.

This is the 2^nd insurance fraud lawsuit filed by Allstate in 2013. The company claimed damages of over $233 million through 46 lawsuits filed in N.Y. since 2003.

According to Allstate, as per the data provided by the Insurance Information Institute, the No-Fault system is being exploited by many companies. As a result, a huge amount of N.Y. taxpayers’ money is going to these fraudulent companies.

Allstate is not alone in seeking a remedy for this problem. Many other insurance companies and leaders in N.Y. are working toward a legislative reform to fix this critical problem.

Allstate currently carries a Zacks Rank #2 (Buy). Other property and casualty insurers worth considering are XL Group plc ( XL - Analyst Report ) ), RLI Corp. ( RLI - Analyst Report ) and Navigators Group Inc. ( NAVG - Snapshot Report ) . All these companies carry a Zacks Rank #1 (Strong Buy).