State Farm Rate Requests Concern Fla. Insurance Commissioner

May 19, 2006

State Farm Florida Insurance Company has filed two property rate requests totaling 71.5 percent. State Farm is seeking a statewide average increase of 58.8 percent to cover increased reinsurance costs and a 12.7 percent hike to cover overall increased operating costs. Insurance Commissioner Kevin McCarty released the following statement regarding the filing:

"This is a very significant rate request, and I am deeply concerned about the impact such a hike would have on the household budgets of Floridians," McCarty said. "As with all rate filings, I have to weigh this concern alongside my obligation to approve rates that will ensure Florida insurers have adequate resources to pay claims in the wake of a catastrophe. Unfortunately the bar for meeting that test has gotten higher following the past two hurricane seasons and not just for our state.

"This once again points to the fact that the difficulty of generating adequate insurance capacity and making property insurance more affordable for consumers will require national solutions. While we continue to work to alleviate the strains in Florida's insurance market, we will also continue to work for the passage of a national catastrophic plan."

Source: Florida Department of Insurance