Homeowners Insurance Increase Denied by Delaware Insurance Commissioner

March 14, 2017

A request by Windsor-Mount Joy Mutual Insurance Company (WNMJ) to increase insurance rates on more than 2,000 manufactured housing policyholders in Delaware by 20%-30% has been denied by Delaware Insurance Commissioner Trinidad Navarro, according to a press release issued by the Delaware Department of Insurance.

“When I ran for this position, I promised to thoroughly review and deny any requests for rate increases that I deem to be excessive,” Commissioner Navarro said in a statement. “I have already negotiated lower rate increases in other cases, however, this is the first that I have had to outright deny. In the future, I will not hesitate to apply strict standards and scrutiny to any rate filing. I will also continue to deny any request for rate increase that I find excessive.”

The release stated that many of the homeowners within the scope of the proposed rate increase have already received premium increase notices from WNMJ effective March 15, 2017. Because of the Insurance Commissioner’s denial, those increases will not go into effect. For reasons outlined in his order, Commissioner Navarro stated that he found the request to be excessive and unreasonable.

WNMJ’s requested increase would unfairly impact manufactured homeowners in one geographic region – Eastern Sussex County – according to the release. The Delaware Department of Insurance subsequently hired an independent actuary to determine the fairness of the requested rate increase. After reviewing 10 years of claims files for the company, the Department contracted actuary concluded that this geographic area, receiving the largest proposed increase, is also the area that has had the fewest claims. The company’s cost for reinsurance and brokerage fees were also indicated as being higher than the industry average.

“As Insurance Commissioner, it is my duty to look out for and protect consumers,” Commissioner Navarro further explained in his statement. “After our analysis, we believe it is unfair for a company to pass on its negotiable reinsurance costs and negotiable brokerage fees to its policyholders by increasing their rates. At this point, there are several routes we can take. WNMJ can either negotiate a better rate for consumers, or file for a public hearing on this matter. That decision will be forthcoming.”

Source: Delaware Department of Insurance

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