NU Online News Service, June 21, 3:12 p.m. EST

State Farm has come back to the Louisiana Department of Insurance and has asked for an 8.5 percent average statewide homeowners’ insurance rate increase.

In March the state’s largest writer of homeowners’ insurance with nearly 30 percent of the market was denied a 14.3 percent average statewide increase. Insurance Commissioner Jim Donelon questioned the company’s use of hurricane models. State Farm uses models from all three risk modeling firms (Risk Management Solutions, AIR Worldwide, and EQECAT).

The newest rate filing is the product of meetings with state regulators since the last denial, says Molly Quirk, State Farm spokeswoman.

“This resubmission was made after looking into their concerns,” she says.

The insurance department has 45 days to approve or deny the filing, but the clock starts again if regulators come back to the insurer with questions, adds Quirk, who says she could not talk about the details of the filing because they remain proprietary until Donelon approves or denies the request.

In the filing, State Farm indicates it plans to use the new rates on renewed policies starting Oct. 1 and on new policies starting mid-August. If approved, the rate increase would bring in an additional $32.7 million to the insurer.

Quirk says the request was made so the insurer could “move toward rate adequacy” in Louisiana.

Last year Donelon rejected State Farm’s request for a 19.1 percent hike but later approved a 9.9 percent average statewide increase.

According to Highline Data, State Farm was the top writer of homeowners’ insurance in Louisiana in 2010 with 28.6 percent of the market, followed by Allstate Insurance Group (13.4 percent), Liberty Mutual Insurance Group (6.5 percent), Louisiana Farm Bureau (5.9 percent, and Louisiana Citizens Property Insurance Corp. (5.3 percent).

Highline Data is owned by Summit Business Media, which also owns National Underwriter and PropertyCasualty360.com.

Special Reports /

State Farm Returns to Louisiana Regulators With 8.5% HO Hike

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