NU Online News Service, Nov. 9, 3:55 p.m. EST
An Allstate Insurance Company spokesperson confirmed that the company has filed a request for a hearing regarding the Mississippi Insurance Department's decision to reject a 44 percent average statewide homeowners insurance rate hike request.
Allison Hatcher, Allstate spokesperson for the southern region, said Allstate worked with the Mississippi department to explain the need for the rate increase, but she said the department denies the insurer's request.
Allstate then decided to file the notice for request of a hearing, she said. She noted that Allstate has asked for an outside individual to preside over the hearing due to public comments that Commissioner Mike Chaney made when rejecting the increase request.
Commissioner Chaney had said he would not approve the request without a court order to do so.
Allstate and Commissioner Chaney subsequently sparred over the decision. Allstate contended that Commissioner Chaney's comments were "perplexing" considering an actuarial report Allstate said was commissioned by the Mississippi Insurance Department (MID) found that the rate hike was appropriate and reflected Allstate's increase in non-hurricane and non-wind-related claims and claim costs.
Commissioner Chaney responded to NU Online News Service, noting that one actuarial report did reach that conclusion, but another found that Allstate as not justified to receive more than an 18 percent rate increase.
Commissioner Chaney said at the time, "These companies know how to work the system–you put garbage in the front side and get garbage out of the back side. But the fact is there is a lot more to approving rates, such as market disruption and unjustified use of certain models."
He also said he believes Allstate is attempting to price itself out of the Mississippi market based on comments made by George Ruebenson, former president of Allstate Protection. During a 2009 conference call, Mr. Ruebenson, who is now retired, said if the company could not reduce its exposure through risk management, it would "simply price our way out of the problem."
Ms. Hatcher responded at the time that Allstate wants to "remain in a strong position in Mississippi. We want to be there for our customers. We want a strong insurance marketplace in Mississippi where consumers have choices."
Regarding Allstate's decision to ask for a hearing, Commissioner Chaney said, "We are very disappointed that Allstate has taken this route, and as for a public hearing, this is the first time in the history of the department, since the abolishment of the old rating commission, that we have been asked to have a public hearing on a rate denial."
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