The Florida Office of Insurance Regulation rejected State Farm Florida’s petition for a formal hearing on after the state disapproved the company’s 47.1 percent proposed statewide average increase.
Florida Insurance Commissioner Kevin McCarty said the OIR sent a letter to the company today (Sept. 5), regarding the state’s Aug. 25 disapproval.
In making its petition, State Farm was required by law to set forth all disputed issues of material fact and cite specific statutes or rules it believes supported its petition for reversal or modification of the OIR’s Notice. On the other hand, the OIR is empowered by the same statute to reject the petition if it believes the company has not properly specified any disputed material facts, McCarty said.
OIR General Counsel Steve Parton said State Farm’s petition for hearing was incomplete.
“In our opinion, they did not demonstrate that there were any material issues of fact in dispute,” Parton said. “They basically just said that they disagree with the reasons we gave in the notice.”
State Farm now has until Sept. 15 to amend its petition and resubmit it to the OIR. If State Farm fails to file a sufficient petition within the 10 days, it will not be entitled to a hearing. The company also could withdraw its rate filing and make a new filing that is appropriately supported in compliance with Florida law, according to McCarty.
The company’s 9 percent rate reduction that became effective in accordance with the Oct. 1, 2007, agreement remains in effect. With its March 2007 filing, State Farm initially planned to reduce its rates by 7 percent but agreed to reduce them by an additional 2 percent. State Farm received a 52.8 percent overall average increase in late 2006.
State Farm still cannot implement the proposed rate increases, because Senate Bill 2860 also prohibits companies from implementing rate increases through the “use and file” process, through Dec. 31, 2009.
Source: Florida Office of Insurance Regulation
Topics Florida
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