The State Farm may increase tariffs for homeowners in California if you stop cancellation and demonstrate the need

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California Insurance Commissioner Ricardo Lara said today that he will provide the request to the State Farm to increase housing premiums by 22% on average if the company adopts certain conditions and receives approval at the public hearing of the tariffs next month.

Lara’s terms are that the state farm, the largest provider of residential insurance in the state, is committed to stopping the cancellation and unregulation of policies by the end of this year. He also asks his mother, his mother, a state farm mutual, grant or loan to the California entity, a general farm, $ 500 million to strengthen their finances. In addition, the State Farm must demonstrate the need to increase the temporary audience rates on April 8, where you need to submit updated and more detailed data.

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

“I hope both the state farm and their mother company fulfill their responsibilities and do not transfer all the load to their customers,” Lara writes. “The facts will be revealed with an open and transparent audience.”

Lara is trying to reform the state insurance market while suppliers such as a state farm have canceled policy or packed the issuance of new ones, saying that they have not been able to gather bonuses that coincide with the increase in the risks of forest fire.

State farm requested increased percentages of emergency After the fires that swept the parts of Los Angeles County in January. He said he envisages more than $ 7 billion in claims for death fires, a drastic reduction in excess and a possible reduction in his credit rating, which may affect his ability to meet the insurance requirements of mortgage enterprises.

The company, which provides almost 3 million owners in the state, including over 1 million homeowners, was expecting a decision to increase the requested rates last summer that the insurance department did not approve after months of negotiations, so it requested special approval to increase temporary fees.

According to California’s law, insurers, who require an increase in rates by 7 % or more, must go through the hearing of the tariffs, if the interventions are opposite, as in the case of state requests. The speed audience is rare; The latter was held in 2015 and also participated in the state farm.

If the State Farm manages to demonstrate the need to increase the rates during the next month, its temporary rates will increase on an average of 22% on June 1 for housing owners, 15% for tenants and condominium and 38% for homes for rent. The company demanded that the tariffs come into force on May 1.

The State Farm will still have to go through a tariff hearing for its summer prices requests. The spokesman of the department Michael Soller only indicated that the listed hearing would be held at the end of this year.

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

Lara’s decision happened approximately two weeks after convening a Encounter Among his department, state farms and heads of consumer observers, a defense group, which presented a challenge against the insurer’s tariff demands. The same parties also met in practice on Tuesday, during which the commissioner presented an advance for his decision.

The Executive Director of Danish General Dan Krause said that at the meeting this week, the state farm general was ready to consider with his California branch for a capital injection of at least $ 250 million if applications for temporary rates were approved according to the transcription of the meeting.

Representatives of the state farm and the consumer guard did not immediately respond to a request for comments.

This article was originally published by CalmattersS