Mississippi Rejects Allstate Rate Hike
Mississippi’s insurance regulator, as he earlier indicated he would do, has denied a request from Allstate Property and Casualty Insurance Co. for a statewide home insurance price hike of about 60 percent.
The increase would have affected about 50,000 policyholders.
Mississippi Insurance Commissioner Mike Chaney said his department’s actuaries decided that Allstate did not justify its bid. Allstate said the filing would have raised rates statewide an average of 59 percent, but the state said the change would have had a rate impact equal to a 65.1 percent increase.
“Our ruling is without prejudice,” Chaney said in a statement in which he vowed that his department will continue to work with any company wishing to do business in the state. “We have a very good business climate in Mississippi; however, it is also my duty as insurance commissioner to protect the consumers of the state from excessive or unjustified rate increases.”
Mississippi operates under a prior approval law, requiring that all insurance companies must have rates approved before using them.
Allstate has the right to ask for a hearing on the rejected filing or submit a new request.
Allstate spokeswoman April Eaton told Insurance Journal the company will withdraw the current filing and submit a new one.
“We’re certainly disappointed with the decision that was made,” Eaton said in a statement. “Allstate is committed to a healthy insurance market in Mississippi, one in which consumers have access to high quality insurance that reflects the risks facing the state at the most affordable price possible.”
She said Allstate will continue to work with Chaney and his staff to find solutions.
Eaton said the insurer is seeing an increase in claims due to fires, burglaries, water damage and other causes.
Allstate’s last homeowner rate change in Mississippi — about 14 percent– was in September 2008.
Earlier this month, Chaney also rejected a request by State Farm to hike rates on the Gulf Coast by 45 percent, although he did approve an increase of 19.5 percent for the south coastal counties of Harrison, Jackson and Hancock.
“I would have preferred that there be no rate increases at this time, but our role is to make sure the rates requested are not excessive and are justified and actuarially sound. I believe we have fulfilled that role,” Chaney said at that time.
Chaney has since advised insurers that in the future he will not look favorably on rate filings that single out coastal areas or other specific zones for large increases but will ask for statewide recommendations. Allstate’s recommendation was a statewide filing.