Posted on 07 Feb 2013 by Neilson
Louisiana Commissioner of Insurance Jim Donelon Monday rejected State Farm Fire and Casualty Co.'s request to hike its homeowner insurance rates 16.6 percent.
Donelon said the increase would have affected more than 300,000 policyholders and provided an estimated $71.3 million in additional premiums to the company.
Donelon said that after an extensive review, the increase could not be justified.
"There were a number of variables factoring into the decision to deny this request and the actuarial support was lacking prompting concerns regarding the magnitude of the profit provision," said Donelon.
"Additionally, State Farm's trend selections did not appear in line with actuarial data and that raised additional questions."
The company received a rate hike of 7.8 percent Feb. 15, 2012. It originally asked for 14.3 percent but it was declined.
State Farm Fire and Casualty Company is the largest homeowners policy provider in the state. As of December, it had a market share of 28 percent of all Louisiana homeowner policies.
Last week, Donelon rejected State Farm's request to assess regional named storm and hurricane deductibles.
Legislation passed in 2008 allows insurers to apply to the commissioner for different deductibles for different parishes.
The maximum would require that 4 percent of a home's insured value come out-of-pocket before the insurance would kick in.