Allstate Corp.’s 2011 lawsuit against Goldman Sachs Group Inc. over the alleged fraudulent sale of residential mortgage-backed securities has been discontinued, court records show.

The insurer sued Goldman Sachs in state court in Manhattan over the sale of more than $100 million of residential mortgage- backed securities, asking for damages including the lost market value of the investments. The parties agreed to the suit’s dismissal, according to a filing yesterday.

Allstate, based in Northbrook, Illinois, the largest publicly traded U.S. home and auto insurer, filed similar suits against lenders including Bank of America Corp., Citigroup Inc., Deutsche Bank AG and Morgan Stanley in the same court, also in 2011.

Justice Eileen Bransten in March denied bids by Morgan Stanley, Deutsche Bank and Bank of America to dismiss the cases. The insurer and Citigroup agreed to a settlement in May.

Allstate said this week that second-quarter profit climbed on investment gains and reduced costs tied to natural disasters.

The company didn’t immediately respond to a voice-mail message left on its media line seeking comment on yesterday’s filing. Michael DuVally, a spokesman for New York-based Goldman Sachs, declined to comment on it in an e-mail.

The investments, pools of home loans securitized into bonds, were a central part of the housing bubble that helped send the U.S. into the biggest recession since the 1930s. The housing market collapsed, and the crisis swept up lenders and investment banks as the market for the securities evaporated.

The case is Allstate Insurance Co. v. Goldman, Sachs & Co., 652273/2011, New York state Supreme Court (Manhattan).

Editors: Charles Carter, Michael Hytha