In late May Texas Insurance Commissioner Mike Gees-lin signed an order requiring Allstate Texas Lloyds to reduce rates for all Texas policyholders by 5 percent and to refund to policyholders the amount overcharged since December 2004, including interest on the overcharged amount at the annual rate of 13.25 percent.
According to the Texas Department of Insurance, Geeslin took the action following a contested hearing at the State Office of Administra-tive Hearings after which the administrative law judges issued a Proposal for Decision regarding Allstate’s rates. Allstate, operating as Allstate Lloyds, is the second largest homeowners insurer in Texas.
The amount to be refunded is expected to be about $60 million.
In April 2006, Allstate Texas Lloyds filed a statewide 4.8 percent reduction with TDI. Under the order, the company must lower its current filed rate by an additional 0.2 percent.
The commissioner’s action stems from the original 2003 rate reduction and refund order, in which Allstate reduced rates and made refunds to policyholders. Part of the 2003 order required a rate filing subsequent to the initial rate reductions and refunds as a means of “true up” based on actuarial analysis. The subsequent filing was the subject of the recent contested hearing.
Joe McCormick, senior corporate relations manager for Allstate’s Texas region, said the company is “in the process of reviewing the details of the TDI order and considering available options.”
Topics Texas Pricing Trends
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