Florida regulators have denied a request by United Services Automobile Association Insurance Company for permission to increase their rates by an average of 40 percent statewide.

Florida Insurance Commissioner Kevin McCarty announced the denial yesterday, saying that USAA hadn't made its case for the increase to its residential property rates.

"During the public hearing we heard from many policyholders whose household budgets are extremely strained by rising property insurance premiums," said Mr. McCarty.

"If we are asked to approve even higher rates, we must demand that the request is fully justified, and that is just not the case with this filing."

Specifically, according to the Florida Department of Insurance, USAA did not provide sufficient supporting data for the catastrophe model it used to determine expected hurricane losses, and its model is not accepted by the state Commission on Hurricane Loss Projection Methodology.

Also, the department said USAA did not justify the inclusion of additional profit loading and failed to provide enough supporting data for the selected annual loss trends.

USAA has over 200,000 policies statewide in Florida. The five counties with the greatest amount of policyholders are Hillsborough with 18,169; Palm Beach with 14,128; Broward with 13,306; Brevard with 11,363; and Orange with 10,270.

A spokesperson for the company, Lynne McChristian, said USAA "felt that we provided significant data," to justify the increase. In light of the denial, she said that USAA was reviewing the denial order and "looking at our options."

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