Insurance regulator says he will deny homeowners' rate increase

November 26, 2007 As reported by Sen. Don Gaetz

TALLAHASSEE, Fla. – Florida Insurance Commissioner Kevin McCarty announced on Nov. 26 the Florida Office of Insurance Regulation (Office) has issued Notices of Intent to disapprove five rate filings submitted by Allstate Floridian Insurance Company, Allstate Indemnity Company, Encompass Floridian Insurance Company and Encompass Floridian Indemnity Company.

The Allstate companies were seeking double-digit state-wide, overall average rate increases for homeowners insurance:

• Allstate Floridian Insurance Company: 43.4 percent

• Allstate Floridian Indemnity Company: 27.4 percent

• Encompass Floridian Insurance Company: 39.7 percent

• Encompass Floridian Insurance Company: 36.5 percent (Dwelling Fire)

• Encompass Floridian Indemnity Company: 41.6 percent

Some Allstate policyholders could have seen increases of as much as 150 percent. On the other end, some of the requested increases were as low as 6 percent.

"Our action is based on a thorough review of the information previously provided by the companies and their testimony at the hearing," said McCarty. "The rates proposed by the Allstate companies do not pass along all the savings reasonably available as a result of the expansion of the Florida Hurricane Catastrophe Fund."

Special legislation, adopted in January, made lower-priced reinsurance available to insurers.

“It was the intent of Gov. Crist and the Florida Legislature that the lower-priced reinsurance would enable insurance companies to pass along significant savings to their policyholders,” added McCarty.

Reinsurance is the insurance that companies buy to cover large losses.

Allstate now may petition the Office for an administrative hearing through the Division of Administrative Hearings. In the meantime, homeowners’ insurance rates previously submitted by the Allstate companies will remain in effect until the process is concluded.

• Allstate Floridian Insurance Company: - 14.2 percent

• Allstate Floridian Indemnity Company: -13.2 percent

• Encompass Floridian Insurance Company: -13.0 percent

• Encompass Floridian Insurance Company: -12.3 percent (Dwelling Fire)

• Encompass Floridian Indemnity Company: -11.2 percent

The decision to deny the rate increases followed a public hearing on Thursday in which the Office questioned various aspects of the rate filings. Video of the hearing will be available soon on the Office’s Web site, www.floir.com

The Commissioner has the authority to hold a public hearing to question a company about its filing pursuant to Florida law. Florida law requires the Office to hold a public hearing for rate increase filings exceeding a statewide average of 15 percent.

To review and compare homeowners’ insurance rates in Florida, go to www.shopandcomparerates.com.

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