Allstate and Encompass have agreed to settle a class-action suit that alleged that they used a faulty computerized medical bill review system to handle auto and homeowners’ medical claims.

The suit, Strazen vs. Allstate, was filed in Circuit Court in Madison County, Ill., nearly a decade ago, alleging that Allstate and all its entities used the medical bill review system, provided by ADP, that failed to correctly calculate medical expenses from automobile and homeowner’s claims, according to a statement from Allstate, the largest publicly held personal lines insurer in the U.S. The court approved the settlement Nov. 25, 2009, Allstate officials said this week.

Allstate “continues to believe its medical bill review practices were and are appropriate and fully comply with the law, but agreed to resolve the case on terms Allstate considered fair and appropriate to avoid the burden and expense of continued litigation,” the statement said.

“Allstate believes its bill review procedures help policyholders maximize their benefits by reimbursing providers the appropriate amount for services,” the insurer said. “Allstate’s policy is to try to resolve billing disputes with providers while protecting its policyholders’ interests.”

People seeking to participate in the settlement have until Feb. 8 to file a claim.