The Florida Office of Insurance Regulation announced yesterday that it has affirmed an administrative law judge ruling disapproving State Farm's rate increase request averaging 47.1 percent for homeowners insurance.
Administrative Law Judge Daniel Manry's ruling, which was affirmed by Florida Insurance Commissioner Kevin McCarty yesterday, was issued Dec. 12, 2008.
Mr. McCarty in a statement noted that Judge Manry's ruling was based on his conclusion that “State Farm Florida did not show by a preponderance of the evidence that either the indicated rate or requested rate in the rate filing is not excessive, inadequate, or unfairly discriminatory.”
The judge's ruling, Mr. McCarty said, was very thorough and “we feel strongly that this supportive decision will further help us in our endeavors to protect Florida consumers from unwarranted rate increases.”
According to the OIR, the rate request for Dec. 1, 2008 new business and March 1, 2009 renewals was initially filed July 16, 2008, rejected Aug. 25, 2008 and appealed Sept. 25, 2008.
After its July 16 rate filing seeking an overall average increase of 47.1 percent, State Farm during its hearing before the judge argued instead for what it said was its “indicated” rate need of 67 percent, according to Mr. McCarty's office.
OIR said a .9 percent policy rate reduction that went into effect after an Oct. 1, 2007 settlement with State Farm remains in effect. That settlement saw the company pay the state $1.5 million after reporting it had discovered overcollection of $23 million in assessments from policyholders and was refunding them the money.
State Farm is entitled to appeal Mr. McCarty's order to the District Court of Appeal within 30 days. It still cannot, however, implement the proposed rate increase, because Senate Bill 2860 prohibits companies from implementing rate increases through the “use and file” process through Dec. 31, OIR said.
A spokesman for the company, Chris Neal, said he did not know whether the company would appeal.
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