Mississippi to Block Coast-Only Insurance Rate Filings

Mississippi Insurance Commissioner Mike Chaney said he’s taking steps aimed at discouraging companies from seeking higher rates for the Gulf Coast or other specific areas of Mississippi.

Chaney said he will require insurance companies initially file requests for rate increases that would apply statewide.

He called this a departure from a long-standing insurance department practice of allowing companies to request higher rates only for south Mississippi. But he said past increases have driven rates high enough in south Mississippi for now.

In an interview with The Sun Herald newspaper, Chaney said that under the change, insurers would still be allowed to make their cases for higher rates in particular zones. But, he said, it will be harder to justify those.

“We’re trying to bring some reasonableness to how they handle their rates,” he said.

Allstate’s latest rate filing adheres to his decision, Chaney said.

The company has asked for a 65-percent rate hike statewide. Chaney said he expects to issue an order in January denying the increase as unjustified. He said Allstate can then file for a lower increase or have a public hearing on its request.

Allstate’s request follows one by State Farm Fire & Casualty Co. to increase rates on the coast by 45 percent. Chaney denied that increase but did grant State Farm a 19.5 percent increase only for Harrison, Jackson and Hancock counties.

A spokesman for the National Association of Insurance Commissioners said most states do allow zoning for rate requests.

Chaney said he does not believe statewide rate increases would mean people in north Mississippi are subsidizing coast rates.

Chaney said some insurance companies are trying to price themselves out of the catastrophe market. Should that happen, coastal risk would be concentrated in the state-run wind pool, the insurance of last resort for homeowners in high-risk areas where no private insurer will write policies.