NU Online News Service, Sept. 27, 11:24 a.m.EDT

Recently, Mississippi Insurance Commissioner Mike Chaney said arate request from Allstate for a 44 percent average statewideincrease in homeowners insurance was not justified byactuaries.

Allstate said it found Mr. Chaney's comment perplexing, considering thefact that an actuarial report Allstate said was commissioned by theMississippi Insurance Department (MID) found that the 44 percenthike was appropriate to reflect the company's increase innon-hurricane and non-wind-related claims and claim costs.

Commissioner Chaney has denied the rate filing, saying he wouldnot approve a 44 percent increase without a court order compellinghim to do so.

"We are disappointed the department continues to deny ourrequest to charge a competitive price for the risks we face inMississippi," Allstate spokeswoman Allison Hatcher said in ane-mail.

Commissioner Chaney said that one actuarial report did concludethe rate request was sound but he has another that concludesAllstate is not justified to receive more than an 18 percent rateincrease.

"These companies know how to work the system–you put garbage inthe front side and get garbage out of the back side," CommissionerChaney told NU Online News Service. "But the fact is there is a lotmore to approving rates, such as market disruption and unjustifieduse of certain models."

Commissioner Chaney said Allstate used a catastrophe model "thathas never been proven to be correct."

The commissioner is also of the opinion that Allstate–based onthe company's own comments–is attempting to price itself out of theMississippi market.

The comment that remains stuck in Commissioner Chaney's craw isone made by George Ruebenson, former president of AllstateProtection, during an Allstate Corp. conference call to discusthird-quarter 2009 results.

In speaking of Allstate's risk management program, Mr. Ruebensonsaid that if the company could not reduce the exposure through riskmanagement, Allstate would "simply price our way out of theproblem."

Mr. Ruebenson is now retired.

Ms. Hatcher said Allstate wants to "remain in a strong positionin Mississippi. We want to be there for our customers. We want astrong insurance marketplace in Mississippi where consumers havechoices."

Commissioner Chaney said he believes Allstate "is asking itspolicyholders to pay for some management mistakes."

"Consumers shouldn't have to be held accountable for that," hesaid.

Allstate had 12.6 percent of the homeowners multiperil insurancemarket in Mississippi, third to State Farm (25 percent) andSouthern Farm Bureau (15.8 percent), according to Highline Data(www.highlinedata.com), part of Summit Business Media, which ownsNational Underwriter.