A state appeals court ruled Aug. 22 that Texas insurance regulators did not have the authority to issue a disciplinary order against State Farm Lloyds, the state’s largest home insurer, for charging rates it had filed with the state.
The ruling by the 3rd Court of Appeals in Austin is the latest in a five-year battle between State Farm and the Texas Department of Insurance, the Houston Chronicle reported.
A law passed in 2003 stated that insurance companies had to file their rates with the Insurance Department for review.
That year, State Farm was ordered by the department to reduce its rates by 12 percent. State Farm appealed the order in district court, which ruled in favor of the insurer.
The department appealed and pursued sanctions against the company for charging what the department called excessive rates. State Farm appealed the disciplinary order, but a trial court ruled in favor of the department.
The recent ruling reversed the trial court’s decision.
State Farm spokesman Kevin Davis said in a statement e-mailed to The Associated Press that they were pleased with the decision.
“We have maintained all along that we charge fair and reasonable rates to our policyholders,” he said. “This ruling is evidence that we have conducted our business within regulatory guidelines as intended by the existing legislation.”
The insurance department did not immediately respond to an e-mail from the AP after business hours on Aug. 22.
Topics Texas Legislation State Farm
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