Where, I understand where you are coming from. It's difficult to really understand unless you've lived in FL and dealt with insurance problems.
State Farm is pissed because they weren't allowed to increase their rates by 67%. There was another request before that one that was also denied, it was for 47%. It was determined that those rate increases were not justified.
State Farm's 67 percent rate hike denied
By Julie Patel | SunSentinel.com
6:38 PM EST, January 12, 2009
State Farm Florida Insurance Co. homeowner insurance customers can breath a sigh of relief - for now.
Florida Insurance Commissioner Kevin McCarty shot down its proposed 67 percent property insurance rate increase Monday after months of deliberation.
State Farm, Florida's largest private property insurer, has 30 days to appeal to a Florida district court. The State Farm case is being watched closely as a test run of changes implemented by a sweeping property insurance law the state Legislature passed last year. The law changed the protocol for insurers appealing rate-adjustment decisions. Until the end of this year, it requires insurers to get approval for price increases before implementing them.
Consumer advocates say the State Farm case shows the process works well and that legislators should extend temporary parts of the law this year.
In August, McCarty rejected State Farm's 47 percent proposed rate increase and the insurer appealed to the state's Division of Administrative Hearings. It increased to 67 percent its rate boost request during that process, saying it originally asked for less hoping to "obtain quick approval." Administrative law Judge Daniel Manry denied the increase last month.
McCarty said in a statement Monday that the judge's ruling "will further help us in our endeavors to protect Florida consumers from unwarranted rate increases."
State Farm Florida spokesman Chris Neal said the insurer hasn't decided what to do yet. "We're very disappointed," Neal said. "We've got to look at all our options and take a hard look at what is a rapidly deteriorating situation for us."
State Farm said it needs a major price increase to build reserves for hurricane claims.
The state Office of Insurance Regulation submitted information to Manry alleging that, among other things, it appears State Farm spent more than needed for agent commissions, marketing and advertising at a time it is no longer taking new property insurance customers in Florida.
In his decision, Manry said it appears State Farm used "reasonable actuarial judgment" in calculating rates but that it didn't provide enough information to prove the increase is not "excessive, inadequate, or unfairly discriminatory."
Consumer advocates commended Manry and McCarty's decisions.
"The courts have backed up the insurance commissioner and the result is lower rates," said Bill Newton, director of Florida Consumers Action Network. "State Farm ought to play it a little straighter and ask for a realistic rate backed up by the numbers, not a speculative shoot-for-the-moon number."
I'll be genuinely happy for them.
