Oct 16, 2007 1:57 pm US/Eastern
Allstate Called To Explain Record Profits To State
Allstate Expects Record Quarterly Profits
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MIAMI (CBS4) ―
Florida's insurance regulators have subpoenaed the Allstate companies for a January hearing when they can explain what state officials call runaway profits.
Gov. Charlie Crist and Insurance Commissioner Kevin McCarty complained that Allstate Floridian Indemnity and Allstate Florida Insurance Company are requesting rate increases of about 28 percent and 42 percent respectively.
Crist has been angry with the industry for not lowering rates as a new state law was designed to do. He referred to some insurance companies as "tenacious and greedy."
The hearings are scheduled January 15th and 16th at the capitol.
After the Gulf Coast hurricanes of 2005, Allstate pulled back from insuring property areas susceptible to severe storms. It did not renew many homeowners' policies.
Two years later, despite the continuing risk of a consumer and regulatory backlash, the strategy for them is paying off big despite substantial consumer criticism.
Allstate is on a pace to exceed last year's record annual profit of $5 billion as it gets set to report third-quarter results on Wednesday.
The shift has made Allstate more an auto insurer. Automobile insurance now accounts for more than double its revenue from homeowners.
(© 2007 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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