Florida wants answers on Allstate profit

Florida wants answers on Allstate profit

	Published : Tue, 16 Oct 2007 20:53 By : Agencies Print this Story

TALLAHASSEE, Fla. (AP) - Florida's insurance regulators have subpoenaed the Allstate companies for a January hearing to explain why they want to boost premiums in the wake of record profits.

Gov. Charlie Crist, who campaigned largely on getting property insurance rates and homeowners' taxes reduced, said Tuesday that some insurance companies he described as 'tenacious and greedy' may be violating Florida law.

Crist has been angry with the industry for not lowering rates as a new state law passed in January was designed to do.

The nation's largest publicly traded personal-lines insurer, Allstate is on pace to exceed last year's record profit of $5 billion. It was to announce its third-quarter earnings Wednesday.

Allstate spokesman Adam Shores said Tuesday that the company shares Crist's concerns.

'We are all trying to work through this and find solutions that work for everyone,' Shores said. 'We are committed to our customers and the promise we have made to them, to pay their claims when a major catastrophe strikes and to do that we need to have an appropriate rate and an appropriate amount of money in the bank.'

Crist and Insurance Commissioner Kevin McCarty complained Tuesday that Allstate Floridian Indemnity and Allstate Florida Insurance Company are requesting rate increases of about 28.3 percent and 41.9 percent respectively.

The hearings for Allstate executives are scheduled for Jan. 15 and 16 at the Capitol.

McCarty also said Encompass Floridian Indemnity is requesting a 38.4 percent increase, and Encompass Floridian Insurance Company is requesting an increase of almost 39.7 percent.

'The insurance industry is tenacious. They are greedy, they are working hard and they are skilled so we have to be just as tenacious and work as hard,' Crist said.

Earlier this month, State Farm bowed to Florida regulators by agreeing to lower rates by an average of 9 percent, give refunds to make up for an overcharge, and make it easier for some car insurance customers to save money.

Florida's largest private home insurer, State Farm, has more than 1 million policies in force statewide. The company said its rate decrease would be effective 'as soon as practical,' and customers would see the decreases when they renew.

'There are a lot of companies believe it or not, that are actually dropping rates,' Crist said Tuesday.

Lawmakers in January passed legislation that was meant to force insurance companies to lower their premiums.

Companies have said that one of their biggest costs is backup insurance, or reinsurance, to protect them against big losses. In January, lawmakers made available cheaper state reinsurance to alleviate the need for insurers to purchase so much private reinsurance. The new law says the companies are supposed to pass the savings on to customers. But since then, many companies, like Allstate, have filed for higher rates, rather than lower ones.