[November 17, 2007] State rejects Allstate Floridian bid to boost homeowner insurance rates: Insurer sought to raise premiums 43.4% statewide Tweet (South Florida Sun-Sentinel (KRT) Via Thomson Dialog NewsEdge) Nov. 17--Insurance Commissioner Kevin McCarty on Friday denied a request by Allstate Floridian Insurance Co. to raise customers' rates, saying the company didn't pass along enough savings to customers when it cut rates earlier in the year and didn't adequately justify an increase. Allstate Floridian, the state's fourth-largest property insurer, wanted to boost prices by a statewide average of 43.4 percent, after cutting them by 14.2 percent earlier this year. That cut wasn't deep enough, based on changes the Legislature made in January to allow companies easier access to backup catastrophe coverage from the Florida Hurricane Catastrophe Fund, McCarty said in a statement. "It was the intent of Gov. [Charlie] Crist and the Florida Legislature that the lower-priced reinsurance would enable insurance companies to pass along significant savings to their policy holders," McCarty said. The rejection comes one day after Allstate Floridian officials testified at a public hearing in Tallahassee. The rejection also affects proposed rate increases by subsidiary companies Allstate Floridian Indemnity Co., Encompass Floridian Insurance Co. and Encompass Floridian Indemnity Co. Allstate Floridian spokesman Adam Shores said the company's attorneys and executives are evaluating what the state's decision means. The company needs the increase, he said. "We need money in the bank to pay claims, and that's really what this is all about," Shores said. "... We stand by the [rate increase] filing that we made, we stand by the justification for it, we stand by the need that is behind that filing." Allstate Floridian has dropped roughly 321,000 customers since it began shedding policies in 2005. Shores would not say whether the state's rejection of the proposed rate increase would prompt another round of customers losing their coverage. Allstate Floridian's options now are to either petition for an administrative hearing through the state's Division of Administrative Hearings or keep the rates they have in place, said Ed Domansky, a spokesman for the Office of Insurance Regulation. To see more of The South Florida Sun-Sentinel or to subscribe to the newspaper, go to http://www.sun-sentinel.com/. Copyright (c) 2007, South Florida Sun-Sentinel Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. [ Back To TMCnet.com's Homepage ]