State Farm’s Rate Increase Denied By La. Insurance Commissioner Jim Donelon
Commissioner Jim Donelon has rejected the insurance company's 16.6 percent hike to its homeowners program.
Donelon says the filed rate revision would have affected more than 300,000 policyholders and provided an estimated $71,297,954 in additional premiums to the company.
The rate increase was requested by State Farm Fire and Casualty Company in November 2012. These requests are reviewed by the Commissioner Donelon within a 45-day period. After his review, Donelon says he doesn't believe it was 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. Additionally, State Farm's trend selections did not appear in line with actuarial data and that raised additional questions.
In February 2012, after the insurance company's initial rate request of 14.3 percent was declined, their last request of 7.8 percent was implemented.
State Farm Fire and Casualty Company, the largest homeowners policy provider in the state, has a market share of 28 percent of all Louisiana homeowners policies.