California Insurance Commissioner Steve Poizner announced that he will seek refunds for Allstate customers if the Department of Insurance determines that the company’s rates are excessive.
Earlier this month, the insurer announced it would stop writing new homeowners and landlord package polices (LPP) in California beginning July 1. At the time of the announcement, Commissioner Poizner issued an Order to Show Cause requiring Allstate to demonstrate that its rates are not excessive. In Sept. 2006, Allstate filed a 12 percent increase homeowners insurance rating plan now pending with the California Department of Insurance, which it said would help it better prepare for natural disasters in California.
“I am drawing a line in the sand,” Poizner said. “If I find that Allstate’s rates are excessive, refunds will occur. I will take clear and decisive action to protect consumers.”
The Department of Insurance noted that several insurers have lowered rates in the past year equaling savings of $1 billion for consumers in 2006, in contrast to Allstate, which prompted the Order to Show Cause.
Proposition 103 prohibits excessive rates and directs the Insurance Commissioner to take necessary steps to lower them when excessive.
Meanwhile, since Allstate’s announcement to stop writing homeowners, others isurers such as Safeco and Farmers Insurance have announced plans to expand their presence in California.
“California remains one of our key markets,” said Mike Hughes, Safeco’s executive vice president for insurance operations. “Not only do we remain committed to our existing customers throughout the state but, with our more than 1,700 independent agents in California, we are determined to expand our presence there.” In particular, he said Safeco would be active in the homeowners market.
To view a copy of Allstate’s Order to Show Cause, visit http://www.insurance.ca.gov/0400-news/0100-press-releases/0060-2007/upload/Order_Allstate_PA200700011_05_23_07.pdf.
Source: Allstate, DOI, Safeco
Was this article valuable?
Here are more articles you may enjoy.
Dubai Floods Expose Weaknesses to a Rapidly Changing Climate 
Investment Funds File New Suits Over Lighthouse Insurance Collapse in 2022 
AIG General Insurance Chairman McElroy to Retire May 1 
Former Congressman Charged After Collision with State Trooper in Florida 
