California’s insurance specialist rejected a 22% home insurance premium rate for state farm generals on Friday due to an emergency caused by a Los Angeles wildfire, saying the company has not proven it is necessary.
Commissioner Ricardo Lara said the state’s largest home insurance company failed to demonstrate the need to add or explain how additional premiums affected its previous stop writing new home policies in the state rather than renewing existing policies The holder’s decision.
“My goal is to make sure policyholders don’t have to pay more than required. Given the recent LA wildfires, state farm clients need real answers about why they are paying more and what responsibilities are on the company’s leaders, given the recent Los Angeles wildfires. , to keep his financiers organized,” he wrote in a letter to the State Farm. Posted on the insurance department’s website.
Insurance companies demanded an emergency tax rate hike earlier this month, with rental homes up 38% and renters and apartment owners up 15% – the company went into effect on May 1. The company said it said it needed funds to supplement its funds due to the expenses of the fire, and capital was awaiting a decision on a decision to file an outstanding claim for tax rates proposed last year.
The insurance company, a subsidiary of Bloomington, Illinois, Farm Common Auto Insurance Company, said it has received at least 8,700 claims and paid more than $1 billion to its customers. S&P Capital IQ estimates that the losses will total $6.5 billion before reinsurance payments.
“We do our best to answer clearly the questions outlined by the Commissioner. While we have the right to deal with all claims related to the latest wildfires, the State Farm General must seriously consider its choice in the California insurance market,” the State Farm General said Friday.
Last March, the company announced that it would No renewal of 72,000 homes, apartments and other property policies In California, citing wildfire risks and other issues. It follows The decision in May 2023 In addition to personal car insurance policies, new businesses are also stopped writing, homeowners, and other personal property and casualty insurance.
Then, last June, the state farms asked their homeowner policies and other unspecified interest and tax rates to increase by 30%. The request surprised state officials, Lara said at the time it raised “serious questions about its financial situation.”
State Farm says its latest emergency request is necessary Rebuilding the capital base of a company Therefore, it does not have to “further limit” the company’s ability to provide home insurance in the state. Insurance industry rating agencies said they expect the premium to increase due to the fire premium.
The insurance company said it lost $2.8 billion over the past nine years, including the gains from investment income. It also noted that AM Best lowered the state farm general’s financial rating last year. However, the State Farm Group, led by the parent company of the State Farm General, was given an outstanding financial rating by the rating agency in December.
In his letter, Lara asked the state farm to provide further documentation to justify its interest rate request, more information about its allegedly deteriorating financial position and why State Farm Mutual Aid cannot provide its California sub-sub The company provides an explanation of financial support.
He asked for a February 26 meeting with state farms to address issues that Los Angeles advocacy group consumer watchdogs will also participate, which has stepped in to rate reviews and Urge Lala to refuse to raise interest rates. The group responded differently to Laura’s decision.
“We agree that the company needs to provide more information, but they need to be conducted during a formal hearing process where we have the right to discover and check state farm books and experts,” said Jamie Court, president of the group. We do not think he has the right to give temporary tax rates without a formal hearing.”
State Farms said it is ready to refund customers who pay temporary emergency rates if the department approves the reduction in interest rate hikes sought last year. The company previously received a 6.9% homeowner rate in January 2023, and took effect 20% in March last year.
State Farm General has about 20% of the homeowner insurance market in 2023, and the state has about 1 million homeowners in the state and has 1.8 million other policies.
The January 7 fire, which has been struggling with a series of large wildfires over the past decade, is expected to cost insurance companies up to $45 billion, despite not being as disastrous as the Los Angeles fire.
On Friday, the Insurance Department unveiled A package of fire-related bills Written by multiple legislators. These include legislation that will provide tax-free grants to residents to make homes more fire-resistant, requiring insurers to pay fire claims without a detailed inventory list and pay 15% of the public investigators employed by policyholders cap to file a claim with its insurer.
Another bill would grant commissioners the authority to suspend committees, prohibit insurance companies from renewing their signing and eliminate policies for businesses and other policyholders in the wake of the fire. It will expand the power of the already established homeowner policy, Laura waving after the Los Angeles fire.
