State farm can conditionally perform insurance premiums in California

California Insurance Commissioner Ricardo Lara said today that he would provide State Farm’s request to increase home insurance premiums by 22% on average if the company agrees to certain conditions – and won the approval of a public percentage hearing next month.

Lara’s terms are that the state farm, the largest supplier of state housing insurance, is committed to pause for cancellation and not renewing policies by the end of this year. He also wants her mother company, Mutual’s state farm, to provide or occupy the California Formation, General State Farm, $ 500 million to help increase his finances. In addition, state farms must prove its need for an intermediate increase in the hearing rate on April 8, where it must present updated and more detailed data.

Lara said she had to “make an unprecedented decision in the short term.”

“I expect both the State Farm and her mother company to fulfill their responsibilities and not completely transfer the weight to their customers,” Lara wrote. “The facts will be revealed in an open, transparent hearing.”

Lara is trying to reform the insurance market of the state, as suppliers such as the state farm have canceled policies or are pauses, writing new, stating that they have not been able to charge bonuses that correspond to the increased risks of fire.

State farm Requested for “emergency” intermediate increases After the fires burned through parts of Los Angeles County in January, stating that it expects more than $ 7 billion in claims from deadly flames, drastically reduced excess and potentially reducing its credit rating, which can affect its ability to meet the insurance requirements of hypotherapy. The company, which provides nearly 3 million property owners in the state, including over 1 million homeowners, was waiting for a solution to raise the rates it requested last summer, which the insurance department had not approved after months of discussions, so sought special approval to temporarily increase the rates.

According to the California Act, insurance companies that require an increase in a percentage of 7% or more must go through a rate of rate, if there are objections to interventions, as in the case of the state farm’s requests. The percentage hearing are rare; The latter was in 2015 and also participated in the State Farm.

If the State Farm manages to prove its need to raise the rates when hearing next month, its intermediate prices will rise on June 1 average 22% for homeowners, 15% for tenants and apartments and 38% for rent housing. The company asked the percentages to come into force on May 1.

The State Farm will still have to go through a hearing for its summer tariff requests. The spokesman of the department Michael Soller only said that this hearing will happen later this year.

A judge of administrative law will chair the court hearing for the request for a temporary rate at the Ouckland office in Oukland and is expected to provide a proposed decision to the Commissioner within 10 days, according to Lara’s order.

Lara’s decision came about two weeks after he called at meeting Between his department, the heads of the state farms and the consumer guard, a advocacy group that challenged the insurer’s tariff demands. The same parties also met in practice on Tuesday, during which the commissioner visualized his decision.

State CEO Dan Krause said at the meeting this week that the state farm general was ready to consider California for a capital infusion of at least $ 250 million if requests for intermediate tariffs were approved, according to the copy of the meeting.

Representatives of the state farm and the consumer guard did not immediately return a request for comment.

This is a developing story and will be updated.