Mississippi’s insurance regulator has given State Farm another 30 days to try to justify its request to raise coastal homeowners insurance rates an average 45 percent even though he has already indicated he won’t approve that big of an increase.
Chaney said his agency has given State Farm 12 questions to answer about its rates and added that he hopes that the insurer will seize this move as an opportunity to come back with a lower figure.
“They’ve got to give a little bit. I’m not going to approve 45 percent. If that happens it’ll be because of a court order, not because I’ve done it,” Chaney told Insurance Journal, reiterating the stance he took last month when State Farm first filed for its hike. He said at the time the filing was riddled with “serious issues” and did not justify a 45 percent hike.
The increases would affect as many as 26,000 policyholders in the coastal counties of Hancock, Harrison and Jackson, according to Chaney.
State Farm has stopped writing new coastal business in the state and Chaney said he is concerned the insurer may be positioning to now drop the 26,000 if it doesn’t get what it wants.
“Look what they did in Florida,” Chaney said, referring to the decision by the insurer to withdraw from that state.
State Farm says it will “fully cooperate” with Chaney and that “hopefully” it will be able to come to terms over rates.
The company also says it has no current plans to leave the state.
“We are committed to the Mississippi marketplace,” spokesman David Majors told Insurance Journal. As for a withdrawal, he said ,”We haven’t really talked about it and it is not part of our plans at this point.”
He didn’t know what the insurer’s reaction might be if it fails to get its requested rates.
Chaney said he and his actuaries are “determined to protect” his state’s policyholders but that state regulators can be at a disadvantage dealing with large insurers. “The budget of the department is $10 million,” he said. “The CEO of State Farm makes more than that.”
Majors said State Farm realizes that Chaney has to “walk a fine line” between protecting consumers and making sure insurers are solvent.
Topics Mississippi
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