Make us your home page
Instagram

Today’s top headlines delivered to you daily.

(View our Privacy Policy)

State Farm pleads case for rate hike before judge

TALLAHASSEE — State Farm Florida began to plead its case Monday, explaining to a judge why it needs to raise property insurance rates by 47.1 percent, an increase regulators turned down.

State Farm is appealing the rejection with a hearing before an administrative law judge in Tallahassee, a process expected to last most of this week. A final decision on rates could be more than a month away.

"This is driven by declining premiums," said Cynthia Tunnicliff, a Tallahassee attorney for State Farm. "State Farm has had to dip into profits or surplus to make ends meet. We can't keep doing that."

She said State Farm's costs have increased, and it is collecting less in premiums because of big discounts given to customers who strengthen their homes against hurricanes. She said State Farm has evidence that it needs a 67 percent rate increase, but it asked for only 47 percent.

The Office of Insurance Regulation disagrees.

It says State Farm didn't follow state law and properly pass on to their customers savings from buying the state's cheap back-stop insurance.

Officials also dispute whether State Farm can give itself a special kind of profit for assuming risk for hurricanes by buying backup insurance from its parent company.

State Farm of Bloomington, Ill., has a significant presence in the Tampa Bay area with about 100,000 policyholders, or almost one out of every six homeowners.

Because rates vary greatly depending in large part on location, the proposed rate hike would hit Pinellas the hardest in the Tampa Bay area, with increases from 55 to 91 percent. It could also mean increases of as little as 10 percent in parts of Pasco County, but up to 79.4 percent in Manatee County.

Administrative law judge D.S. Manry has about a month to issue a "recommended order" for or against State Farm's rate hike.

Insurance Commissioner Kevin McCarty will then review the law judge's decision. McCarty can either accept or reject the recommendation. However, he can throw out the judge's ruling only if he finds the facts don't support the decision. That rarely happens.

Earlier this year, administrative law judges ruled against Florida Farm Bureau and Hartford Insurance, which were some of the first companies to appeal the state's rejection of their rate hikes after lawmakers made it tougher for insurers to raise rates in 2007.

Insurers used to be able to appeal rate rejections by going to an arbitration panel, a preferred way of settling rate disputes, because it was quicker and insurers often ended up with a compromise on rates. But lawmakers passed a law that got rid of arbitration earlier this year.

State Farm pleads case for rate hike before judge 10/27/08 [Last modified: Friday, October 31, 2008 7:15pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. AP: Rick Scott to name Jimmy Patronis CFO on Monday

    Blogs

    From the AP's Gary Fineout:

    Florida Gov. Rick Scott is turning to a political ally and former legislator to take over one of the top jobs in state government. 

    Then state Rep. Jimmy Patronis, R-Panama City Beach, left, and Gov. Rick Scott, tour downtown Panama City, Fla. on Tuesday, April 19, 2011. Scott will name Patronis CFO on Monday.
  2. Despite Pride success, Grand Central business owners upset over losing parade

    Events

    The Grand Central District was packed with people Sunday, there to enjoy the St. Pete Pride Festival.

    Patrons eat lunch and cool off inside of the Community Cafe during the St. Pete Pride Street Festival along Central Ave. in St. Petersburg. LUIS SANTANA   |   Times

  3. Rays blow another lead, lose rubber match to Orioles (w/video)

    The Heater

    ST. PETERSBURG — The Orioles rallied past the Rays on Sunday, winning the rubber match of the three-game series 8-5.

    Baltimore Orioles second baseman Jonathan Schoop (6) scores in the eighth in the final game of a three-game series between the Tampa Bay Rays and AL East rival the Baltimore Orioles at Tropicana Field in St. Petersburg, Fla. on Sunday, June 25, 2017.
  4. Tim Tebow heads back to Sunshine State with promotion to St. Lucie

    Blogs

    Tim Tebow is coming back to the Sunshine State.

    Columbia Fireflies outfielder Tim Tebow looks out from the dugout before the team's game against the Augusta GreenJackets on April 6 in Columbia, S.C. Columbia defeated Augusta 14-7.
  5. 'Sharknado' coming to Tampa Theatre with director Q&A

    Blogs

    A movie about a tornado filled with man-eating sharks has to be better on the big screen, right? You'll have a chance to find out for yourself when the Syfy network's original Sharknado screens at Tampa Theatre.

    The original 'Sharknado,' which premiered in 2013, will screen at Tampa Theatre.