16.6% rate hike for 300,000 homeowners insurance customers was requested in November
Louisiana's insurance commissioner has rejected a proposed 16.6% increase in homeowners insurance rates requested by State Farm last November.
The rate hike would have affected 300,000 policyholders and provided an estimated $71.2 million in additional premium revenue to the company.
Donelon says the proposed increase was not 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,” said Donelon. “Additionally, State Farm’s trend selections did not appear in line with actuarial data and that raised additional questions.
The company’s last rate increase of 7.8% was implemented on February 15, 2012 after its initial rate request of 14.3% was denied.
State Farm Fire and Casualty Company is the largest homeowners policy provider in the state and as of December 2012 had a market share of 28% of all Louisiana homeowners policies.