Allstate says government subpoena coming over Katrina probe

THE ASSOCIATED PRESS

The U.S. Department of Homeland Security intends to subpoena Allstate Corp. and other insurance companies as part of an investigation into Hurricane Katrina claims, the company said Thursday.

Allstate, the second-largest U.S. personal-lines insurer behind State Farm, made the disclosure in a regulatory filing related to homeowners’ claims arising from Katrina. It said it has cooperated with the government’s investigation to date.

Homeland Security is investigating insurers that sell policies under the National Flood Insurance Program, the company said. Spokesman Mike Siemienas said Allstate is just “one of a number of participants” in the program that will be subpoenaed.

Congress last year ordered an investigation into Katrina damage claims after allegations surfaced that some insurers had shifted the financial burden to the government by declaring that flooding, rather than wind, caused the destruction.

Allstate shares rose 17 cents to $63.02 last week, up 11 percent from a year ago.