Texas District Judge Allows Allstate Texas Lloyd’s Rate Increase

On Oct. 15, Travis County District Judge Margaret Cooper ruled in favor of Allstate Texas Lloyd’s in the company’s quest to preserve an already-implemented homeowners rate increase.

Cooper granted the insurer’s motion for a permanent injunction against a previous order by Insurance Commissioner Mike Geeslin disapproving the 5.9 percent rate hike the company initiated in August. The Texas Department of Insurance previously had had determined the company’s rates “to be excessive, unreasonable and unfairly discriminatory.”

Cooper did not rule on whether or not Allstate’s rates are excessive. The judge’s decision addressed whether the department followed proper procedure in denying rate hike.

Allstate Texas Lloyd’s began implementing the rate increase in August. At that time the Office of Public Insurance Counsel claimed the company implemented the rate hike before filing it with TDI as required by law. The OPIC filed a petition with the insurance department to deny the increase. Commissioner Geeslin subsequently disapproved the rate filing and placed the company under prior approval.

Jerry Johns, executive director of the Southwestern Insurance Information Service, praised Cooper’s ruling and defended the rate actions taken by Allstate Texas Lloyd’s.

Johns maintained that the job of Texas regulators is to “monitor insurer solvency and ethical conduct in the marketplace,” not to get in the way of insurers who take advantage of the state’s “file and use” law enacted in recent years by the Texas Legislature.

“These types of hearings would be pointless if Texas regulators followed the intent of the file and use law,” Johns said.

He said the Texas file and use law is similar to those in place in Illinois and South Carolina. “Regulators should take a close look at those states where fierce competition exists forcing prices downward,” Johns said.

Topics Trends Texas Legislation Excess Surplus Pricing Trends Lloyd's Allstate