Louisiana Governor Expects Rate Hikes

Louisiana Governor Mike Foster hired an advisor to assist him and the Louisiana Insurance Rating Commission (LIRC) in their consideration of rate hike requests from insurers and consumer concerns. The Times-Picayune reports that Foster expects more efforts by insurance companies to raise rates.

Foster’s office will pay Chris Faser, formerly with the state insurance department, a salary of $49,900 for helping to determine which rate hikes are acceptable. Faser’s contract took effect July 23 and lasts through June 30, 2003.

The LIRC recently postponed a decision on a 16 to 21 percent auto insurance rate hike requested by State Farm, which has also placed a moratorium on new auto policies in Louisiana, contending it has lost $300 million in that state over the past two years.

Foster expects carriers across the board to raise rates to make up for investment losses and costlier reinsurance.