Allstate Corp. Chief Executive Officer Thomas Wilson said the U.S. government should regulate large insurers whose activities pose risks to the entire financial system instead of leaving the whole task to states.
Regulations might be modeled after the banking industry, which has federal officials handling larger companies while states oversee activities at smaller institutions, Wilson said today in an interview on the CNBC television network. His Northbrook-based company is the biggest publicly held auto and home insurer in the U.S.
"The United States has the most sophisticated capital markets in the world, with the most competitive and innovative financial instruments, yet our system for regulating them is a Depression-era hodgepodge," Wilson said in a separate statement. "We need real regulatory reform, better oversight and greater transparency."
Wilson had to cut Allstate's dividend by more than half last month as the credit crunch squeezed profit at insurers. Allstate had its first unprofitable year as a publicly traded firm in 2008 after more than $5 billion in writedowns and unrealized losses on holdings including mortgage-backed securities.