BATON ROUGE, La. (AP) — State insurance regulators have rejected a request by State Farm Fire and Casualty Co. to raise homeowners' rates by 16.6 percent,
The rate revision would have affected more than 300,000 policyholders and generated an estimated $71.2 million in additional premiums to the company.
Insurance Commissioner Jim Donelon said Monday he declined the company's request after a review found the rate revision not to be actuarially justified.
"There were a number of variables factoring into the decision to deny this request and the actuarial support was lacking, prompting concerns regarding the magnitude of the profit provision," Donelon said in a statement. "Additionally, State Farm's trend selections did not appear in line with actuarial data and that raised additional questions."
State Farm spokesman Gary Stephenson said they were disappointed by Donelon's decision.
"This rate need is a real one. We all know the threat of severe coastal damage is ever present, but the on-going cost of hail, thunderstorm, wind, fire and other types of claims across the state is significant," Stephenson said. "We will continue to work with the DOI to seek resolution to the challenges we all face — as customers, providers, and regulators. Our customers expect State Farm to be strong and able to handle their covered claims when that time comes. That requires that we be responsible in balancing claims costs with premium income as we look forward."
The company's last rate request of 7.8 percent was implemented Feb. 15.
State Farm is the largest homeowners policy provider in the state. As of December, state officials said the company had a market share of 28 percent of all Louisiana homeowners' policies.