Louisiana Insurance Commissioner Jim Donelon has declined to approve a recent homeowners rate request filed by State Farm Fire and Casualty Co. (State Farm).
State Farm submitted the request for the +16.6 percent rate increase to its homeowners program in November 2012. The filed rate revision would have affected more than 300,000 policyholders and provided an estimated $71,297,954 in additional premiums to the company.
Rate filing requests are reviewed by the Louisiana Department of Insurance within a 45-day time period. Commissioner Donelon said that after an extensive review of the filing the rate revision was determined to not be actuarially justified.
“There were a number of variables factoring into the decision to deny this request and the actuarial support was lacking prompting concerns regarding the magnitude of the profit provision,” said Donelon. “Additionally, State Farm’s trend selections did not appear in line with actuarial data and that raised additional questions.”
The company’s last rate request of +7.8 percent was implemented on Feb. 15, 2012, after its initial rate request of +14.3 percent was declined.
State Farm Fire and Casualty Co. is the largest homeowners policy provider in the state and as of December 2012 had a market share of 28 percent of all Louisiana homeowners policies.
Source: Louisiana Department of Insurance