08.22.07
Allstate Gets Smacked Down, Again, On Rate Hike
My new hero in Texas Department of Insurance Commissioner Mike Geeslin, Insurance commission halts Allstate’s homeowner rate hike.
Allstate’s increase in home insurance rates was abruptly canceled by state Insurance Commissioner Mike Geeslin on Tuesday, just one day after the company announced it was raising them to cover potential increases in property losses.
Besides rejecting the insurer’s proposed 5.9 percent statewide rate hike, the commissioner also slapped the company with a related order that blocks Allstate from raising premiums without prior approval from the Texas Department of Insurance. Only one other company – State Farm – is under such state supervision of its rates.
Mr. Geeslin said he had no choice but to act quickly since Allstate announced Monday that it would immediately increase the cost of its homeowner policies as they came up for renewal.
Anyone that takes on insurance companies like this is great. There’s more.
Ben Gonzales of the insurance department said the decision to put Allstate under greater supervision was based on the pattern of their recent filings. The company filed for a 6.9 percent rate hike earlier this summer and then withdrew it when regulators balked at its size. Allstate lowered the increase to 5.9 percent in its second filing on Monday.
Consumer groups applauded the action but also called for the commissioner to take further action to reduce Allstate’s rates.
“Rejecting this latest rate hike doesn’t guarantee that Allstate’s policyholders are no longer being overcharged. It simply means they won’t be overcharged 5.9 percent more than they already are,” said Alex Winslow of Texas Watch.
In another rate case involving Allstate, the company has been ordered by a state judge to reduce its current rates for home insurance and refund more than $56 million in overcharges dating back to 2004 to its Texas customers. Allstate has appealed the decision.
Great quote from Alex Winslow. Now if we can just get the insurance companies out of health care then everyone can have health care.
Eye on Williamson » File And Abuse said,
August 25, 2007 at 11:26 pm
[…] It’s about Allstate going to the courts, and around a Texas Department of Insurance (TDI) ruling earlier in the week, to get a restraining order to stop the TDI from doing it’s job - regulating the insurance […]